Tuesday November 25th – Just a Bounce, or…?
Rate cut chances in 2 weeks (Dec 10th) jumped to 85% chance in favor of a cut after several Fed remarks. Last week I was hearing that rate cuts were unlikely in December, but likely in 2026. The markets like that hope of a December rate cut, but the Fed Mtg is still 2 weeks away, so anything can happen. The markets are on day 30 and I thought that it would be perfect timing for a low on that Dec 10th Fed day, but now we have a convincing reversal. Is a day 30 low possible? It is slightly possible, but based on experience I have to view it as less likely. With our charts, I will entertain both sides of the idea in todays report.
.
THE SPX is putting in a good bounce and that was expected following Friday’s reversal. What I didn’t really expect was the volume and amount of stocks on my watchlists that I saw up 10-20% or more. Day 30 is usually just too early for a dcl, so we often get another drop into day 35, 40, 45, etc. But…
.
But a break of that 50sma and then the orange downtrend line is bullish, and a move above day 13 would be very bullish.
I wouldn’t view a break of day 13 as becoming R.T., because the dcl was already broken (Failed daily cycle). It would likely indicate a mild ICL, and a new daily cycle breaking to new all-time highs. I do see an a-b-c down, but again, 30 days is pretty short. Right now, many of the stocks that I saw jump 13-20% are still under their 50sma too, so we’ll see how this plays out.
.
I saw BBAI, LAES, PONY, HOVR, APLD, RR, POET, OPEN, ONDS, and MANY MORE start moving without a gap up. You could buy them and they ran up 10-30%. I bought after the first hour of trading, and many were up 3-5%. Closing up 15-30% seems like a lot for a bounce while dropping into an ICL. It seems more like a buying frenzy coming out of an ICL.
ONDS was up 22% in the first 2 hours, and closed up 30%.
.
OPEN started to slowly move higher (no gap up) and ran up 14%. When I look at OPEN, it looks like it may be leading the way, because it actually already has a higher low and a higher high, so THIS caught my eye too. Are we seeing a Mild ICL drop…or what?
.
QBTS was climbing up slow and steady all day, so it was up 8% by noon, and closed up 13%, and so did RGTI, IONQ, QUBT, etc. These really took a beating and this could easily just be a good bounce. When an ICL is in place, however, and if they rally back upward to prior highs, the gains will be great! Even if you wanted to play it safe and wait for it to gain the 50sma again, the gains would be great from $29 to $46+.
.
WKHS has ignored the selling, so this is worth owning or watching. I bought it early Monday and…
.
WKHS -The bigger picture looks good too. I didn’t grab a big position, because I’m not sure of the General Markets, a public offering, etc, but it has ignored the market sell off so far. I will say this: WKHS popped above the 50sma and then closed back where it is here. It had much lighter volume, so I am keeping an eye on that.
..
Back to the Markets: Could this possibly be a mild ICL in a strong bull market? Deep down inside, I have to think that it’s a bounce, and please remember that the ‘bounce’ out of day 20 was very convincing gap up, but that rolled over. Now, let’s take a look at what that would look like if this was a mild ICL.
.
Using The NASDAQ, we see that it is L.T., with a peak on day 13. Then we had the drop to day 20, a strong gap up that was still only a bounce, and that was followed by the sell off into day 30. So…
.
We can see the a-b-c down into day 30. The stochastics is quite oversold, so a stronger bounce may occur. The RSI is quickly healing. People are talking about rate cuts in December again. So far this is a reversal, a swing low as of Monday, and price closed above the green 10sma. It does look like a dcl. I bought some stocks for trades and will sell if we drop quickly.
.
Finally, this does still look a lot like another time that the markets dropped into an ICL. The markets bounced up and above the Red 50sma in July 2024. It rolled over for a final drop to the 200sma though. Let’s keep that in mind. A bounce during this holiday shortened week of trading and a drop like that next week might be perfect timing for an ICL. Some of the leading stocks may try to hold up better than others.
.
WTIC – It would appear that Oil has a half cycle low and should make a run for the 50sma. A new high above day 4 would change this to R.T. and identify that an ICL is in place.
.
THE USD is R.T., it is above the 200sma, and is gaining strength.
.
GOLD made a nice move on Monday and it is starting to look like a triangle. ICLs can form in triangles, so …
.
GOLD – has a day 12 peak at $4245. Day 19 popped higher. If Gold breaks above that day 12, it becomes R.T. and breaks out of that triangle. That would mean that this choppy drop lower in October and triangle formation likely formed an ICL. let’s examine Silver and the Miners.
.
SILVER looks like a bullish set up. The idea of a rate cut in December may be causing buyers to step in and Silver is not dropping below the 50sma.
.
SILVER – For silver to move above its day 12 peak, we would have a break to new highs, so lets look at Miners.
.
GDX -This was the GDX 2 trading days ago (last Thursday). It looked ready to plunge into a large a-b-c down. An ICL. The RSI was losing 50% and volume increased on the selling. It was rumored that a rate cut in December was off the table.
.
GDX -Suddenly this sector is perking up with the rate cut at 85% chance of happening, and we may be ready to continue higher (Gold looks set up bullishly suddenly too, with a triangle). Notice the MACD and RSI now.
.
AG – This was First Majestic just 2 trading days ago. No rate cut made things look ugly and weak.
.
AG suddenly surged 8.45% and looks like it wants to recover.
.
EGO – 2 trading days ago EGO broke down and lost the 50sma. This also looked like it would do a deeper a-b-c down.
.
EGO popped above the 50sma yesterday and may be breaking the downtrend line. Suddenly this sector looks to be strengthening.
.
EXK – Last Thursday EXK lost the 50sma and this looked ready to make new lows.
.
EXK – On Monday it looks ready to run higher.
.
We have true market chop here. Just last week everything looked weak and as though it was failing. Miners lost the 50sma and it also looked like buyers were gone and selling was taking over. The general markets really should only be on day 31, but then a few Fed spokesman/spokeswoman declared that they were voting to help the labor market, and things started to look bullish again. IN CHOPPY MARKETS we can see knee jerk reactions to news, and we can see changes take place if the news is real and will affect the markets one way or the other. We just have to see how things play out. So far, buying near the lows yesterday (There were no gaps up) was rewarding for traders, but for longer term investors, we need to wait and see if the ICL is in place. Confirmation could be a downtrend break or a break above day 13. If we break day 13, it would likely be a new daily cycle, since the dailys already failed. Then an ICL is likely in place. It has been very mild and seems less likely, but we’ll take it a step at a time. Enjoy your Tuesday trading!
.
~ALEX
.
BITCOIN – This is a live shot of Bitcoin. We see a swing low and the Crypto stocks started to bounce nicely, but in the long run I have to only expect a bounce here. It will be worth a trade, but as mentioned in the weekend report…
.
As mentioned in the weekend report, Bitcoin gave back months of gains and is very weak…
Just to show how much of a sell off it was that we just witnessed, BITCOIN pretty much gave back all of 2025’s gains since the peak in October! Wow! That may be a capitulation high volume low and a reversal that rallies higher, but again, we may get a H&S pattern and roll over after a few weeks. You could try a long trade here, and if you happen to own any crypto stocks now, you could sell the bounce to $100,000 (or more).
I mentioned that
Bitcoin could even run up toward $100,000 again, chop sideways and then drop, giving us a clear H&S before rolling over.
