Wednesday October 8th – Pullbacks!

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SPX – Just as a reminder:

1. I have already mentioned this, but we are in a strong bull run and it is now longer than that 2023-2024 run that I have been comparing it to.

2. We do not have an ICL dip yet, but we could start one at any time since we are 6 months along. I have mentioned that too, that maybe we dip in OCT and then rally out of the Fed mtg.

3. In strong bulls like 2024, you can see that the ICL dip was ‘mild’, but yes- you gave some gains back. The next rally then made up for that, since it rallied very sharply too. Please study the chart.

 

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NASDAQ – I am starting to see divergence at new highs. We don’t use that as a ‘sell signal’, but it is often a sign that a pullback could occur. Add that to our timing and it makes sense (but that doesn’t mean that we are NOW going to sell off, but we could. We simply have various clues about market conditions.

On this chart…

1. We saw higher highs in price with divergence in the RSI in early August. It got choppy and sold off a bit.

2. I see that now.

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So, we’re within the timing for a dip and we could put in a L.T. daily cycle and drop into an a-b-c down ICL as drawn here. We could still power higher too and drop after the Fed, right? Right now, we haven’t even broken the 10sma, so we’ll see how things play out, but I’ll show you something interesting with Tuesdays dip…

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  I’ll show you something interesting with Tuesdays dip and that is that MJ Stocks remain bullish and most were up by a decent amount. So…

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You can see that as the markets sold off, SNDL was up and seems to be forming a bullish triangle after a very solid run up. Also…

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TLRY popped up 8% at the 10sma, and that is following that 60% POP last week. Do I see a bullish set up in an MJ Stock that isn’t extended, but looks good? I do…

 

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Take a look at CGC.  The markets were down but CGC was up 4% (pop and drop, it was up even more earlier). This is a nice long base and a ‘triangle’ or ‘wedge’ has formed. TLRY, OGI, SNDL, etc already ran higher out of their bases (See  charts above), but this lagger may be a bullish set up – set to play catch up. The only problem would be the dreaded public offering.

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So I decided to take a look at The CGC WEEKLY and it has been riding on the 30 week ma for 7 weeks. THAT is bullish.  This is a buy and hold and you can use a stop under the red weekly 30 ma (it hasn’t broken it for 7 weeks). $3.00 is a double.

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As a sidenote:

I was asked about POET yesterday. When I looked at Poet at 10 a.m. and saw volume that equals the entire days of prior trading days, it often means something special. My advice was not to sell, but I would use a stop if the markets sold off sharply and it dropped with the markets. POET looks like a very nice set up as it forms a cup out of recent lows. ALSO…

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POET went on to close up 23.5% higher and looks ready to breakout and run.

 

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RKLB Some of our bullishly set up stocks were not affected by yesterdays selling, so you can just raise stops along the way.

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I had a long list of stock picks in yesterdays report and last weeks reports, so you can review those if you want to review trade ideas.

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THE USD moved higher as expected. Is that bad news for Gold like it used to be?

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No. GOLD is doing whatever it wants to, and so far, that is continuing to run higher with the USD.

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So I want to look at the cycle count for GOLD:

Using either the low at the end of July as a dcl, or the last low in the triangle as the dcl, we still get the mild dip 2 trading days before Sept 22 as a dcl. That means that we would be on day 13 of a second daily cycle, and that also means that this can continue to run higher.  I called for possibly $4000, but we are there now, so Gold can continue higher than $4000. The breakout from that long choppy triangle is full of energy and the bull is running.

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SILVER would be on day 14 Tuesday and that means that Silver can continue to run higher too. That said…

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EXK: Why are some of the Silver stocks just chopping sideways? Sometimes that is what happens during a nice run. We get both buyers and sellers and a consolidation forms, which can break out higher and run too. This may tag that 20 ema and then make a run higher again.

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AG: So Silver looks to be going straight up and some of the Silver stocks look a bit choppy, but when you look at the prices you do see good gains. AG, for example, was chopping in June – September at $8-$9, but now it is near $13, so the gains are there, they just aren’t coming in each and every day. That was $8-$13 from August 1st to October 6.

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GDX was sloping lower in April – May, then it  popped and started to consolidate sideways for months too. Those consolidations can then build up energy and we are now in a vertical ascent. This is a very strong bull that isn’t breaking below the 9 sma yet. It will when it puts in a dcl, but this should only be day 14 today. 

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The General Markets have had pullbacks here and there, but it has basically continued to be a very strong run out of the April ICL. When will a deeper more prolonged pull back take place? We can’t know for sure, but we do have a Fed meeting coming up at the end of October, and that might factor into the markets direction. If you have big gains and hate the thought of giving it back, then you can always think about position size and sell some to lock in gains and let the rest rise with a stop. The Precious Metals sector is still running stronger than ever too, with new all-time highs for Gold rising above $4000 and Silver tagged the $49 area. I’ll discuss Bitcoin and crypto below. Enjoy the ride and profits!

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~ALEX

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BITCOIN:

On Tuesday I said–  Bitcoin reached new all-time highs and at times, similar to when you see a cup and handle form, we can get some sideways chop below the next push higher. That may or may not happen here, but if it stalls, it does not mean that the peak is in place. We do have ‘time’ to run higher. So basically I expected ‘chop’…

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So basically, I expected ‘chop’ and not a big drop. We got a fairly big drop though…

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BITCOIN can still chop around though, because that drop is day 38. We could have 20+ days left for this to break out, but for now I see a large channel formation. Crypto stocks have been running with Bitcoin many actually dropped and fully recovered yesterday, despite this ugly candle.

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Crypto stocks have been running with Bitcoin many dropped and fully recovered yesterday. I’ll post a few examples below, but most of the Crypto Stocks acted this way. They dropped and recovered.