Tuesday November 4th
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SPX- We have a peak on day 13 and we are on day 17. This choppiness could be a half cycle dip and it may even dip down to fill that gap at the blue 20 ema level. If this is a half cycle dip, …
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SPX– As a half cycle dip, we could tag the 20 ema, fill a gap, and then see something trigger buying again. Price could then run up to new highs and become R.T.
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SPX- We keep in mind that an ICL is due according to the timing of this intermediate cycle. That may play out something like this chart shows us.
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The NASDAQ looks stronger, since the dip was only down to the first gap and then price went back up toward the highs already.
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And The IWM actually dropped back to the lows, so we are seeing a mixed picture here. Various sectors and stocks are also playing out this way, with some pulling back and others near the highs.
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RKLB was a buy for us at the 50sma, but it was extremely choppy. Buying and holding would actually have paid off though, since it ran from $40 to almost $80. This is one off the strong stocks that is pulling back like the IWM, not chopping at the highs like the Nasdaq. It could become a buy if it reverses at the 50sma again, and also as long as we are not heading into the ICL.
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PLUG had that strong rally when Energy stocks were running (PLUG, BLDP, FCEL, WWR, etc). Those stocks followed the IWM more than the Nasdaq too. It has worked its way back down to the 50sma, so this can be bought with a stop. It has become oversold and hopefully it will make another run. IN FACT…
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PLUG has a bullish base that really does have some nice upside potential if this sector remains bullish. An ICL drop COULD possibly drop it down to the red 30 week ma, but this looks much like the crypto stocks when they ran from $3 to $40 or $3 to $70! I’ll show you that next…
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PLUG looks much like the crypto stocks like WULF for example, when they started to run from bases. WULF was $2.06 in April and now it tagged $16+. IREN and CIFR ran to $70 & $24! So we know that ‘bases’ are great for giving good gains over time, but it may take some time along with some choppiness to get moving in a more steady manner.
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With PLUG we also traded BLDP, FCEL, etc.
FCEL rallied from $4 to $12 (Triple) and has now dropped back to the 50sma too. Last week it surged on Wednesday, paused on Thursday, and then surged again on Friday, above that 50sma. The volume is strong on the rally days. It paused on Monday.
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AREC – I had recommended this a week ago and it did a strong Pop & Drop, but I just want to mention that the other Rre Earth stocks are pulling back sharply so selling that Pop may have been a good idea. I would tighten the stop to the blue 20 ema (take a look at UAMY, REEMF, USAR, etc. They look very weak. I’ll show you USAR…
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I had mentioned in the comments last week that these (USAR, UAMY, REEMF, etc) seem to be breaking down quickly with the new Rare Earth and Specialty Metals agreement with China. Those 3 all lost the 50sma (sorry, I have the 30 here, but they lost the 50 also), so I am cautious with AREC. I sold it.
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Metals stocks still look healthy. AA, TGB, WRN, STLD, CENX etc are climbing up higher and holding up at support levels. They can be bought at support.
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CENX and STLD: They are choppy, but climbing higher. One caution is that if the markets fall into an ICL, they could go along for the ride, but they’ll be a great buy at the ICL too, so It’s good to look at the bull runs now too. Use stops.
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USD – I have stated many times what I am watching for here and that is a higher high and then a higher low. Last week I said that I do think that the USD looks bullish, the RSI & MACD are strengthening, and I think that we will see a higher high here soon. What that does for Gold and Silver remains to be seen. USUALLY they run in opposite directions, but lately Gold and the USD did run higher together a few times.
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GOLD – Keeping it simple, we had an a-b-c drop to the 34 sma on day 28. It looks like a dcl and so far we have just seen chop sideways on what should be day 4 now.
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GOLD – A drop is usually a-b-c and a rally is usually formed with a 1-2-3-4-5 wave, but the 50sma is below and I cannot rule out a quick drop there since the ‘timing’ would still be around day 33 or so. At this time, however, I still think that we have the dcl at the 34 sma as seen ABOVE. 5 waves down is less common but not impossible.
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SILVER dropped in a-b-c fashion and just about reached that 50sma. This has acted as support since the ICL.
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A very strong parabolic push higher might look something like this for SILVER, but we are currently 7 months out form the April ICL, so this would either be a final push higher (parabolic) or …
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SILVER could make a lower high and then drop into that next ICL.
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GDX dropped through the 50sma, so it did not hold up as well as Gold (34 sma) or Silver (50sma). It is oversold and needs to move higher soon. Price is under the 50sm and the RSI is under 50% too (44.72). I have drawn in a bullish descending wedge, but it can fall apart if Gold and Silver sell off instead of rally.
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Without strong conviction over the last few days, it does seem like the markets are still digesting the rate cut by the Fed last week. A rate cut can boost the economy, but it also may signal that the economy is slowing. The precious metals rallied sharply after the September rate cut, but they are meandering right now following Wednesdays cut. That said, it has only been 3 trading days since the rate cut, so no doubt we’ll get more clarification over time.
I will say this: If we start to roll over and drop into an ICL, it could take a month or so to bottom, but we are on month 7. A drop like that sets up a rally in December or January and think about what happened after the April ICL. We had our watchlist of the stronger companies can pull back into a sweet spot for buying. During an ICL drop, many stocks may drop quite a bit, maybe 50% of their prior rally, but then they bottom and they can double or triple from there, and we have good lists to buy from. AI, Quants, Tech, various Energy sectors, and precious metals, and more, so things do still look good in the long run, there is just a little indecision coming out of the current lows. Enjoy your Tuesday trading!
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~ALEX
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FROM THE WEEKEND REPORT:
BITCOIN – Saturday should be day 61, and I have expected a drop to a lower low below day 46, since we often get the lowest low around day 60. Day 46 low just seems way too early, but so far Bitcoin should be weak, and it has shown some strength. The MACD and crypto stocks look good too…
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BITCOIN – Guess what?
Bitcoin FINALLY gave us that drop overnight, and this is a chart as of 6:30 a.m. ET.! This is day 64, so the timing is great, we just need a reversal higher. So far it came up $25 short of breaking that day 46 low, but if this reversed and rallied from right here on day 64? I would have to say that it is probably close enough. Aside from that, Many Crypto stocks have been holding up closer to their highs as Bitcoin sells off near the lows, so adding some Crypto stocks shouldn’t hurt unless for some reason this just started to cascade lower. We buy with stops. I should add…
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I should add that it would be easy for bitcoin to sell off further today and then reverse again later, possibly giving us something that looks like this. Like I said though, many crypto stocks are already closer to the highs with Bitcoin at the lows, so they look bullish as bitcoin (hopefully) finishes up this sell down.
