Tuesday December 30th
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SPX – On Monday we saw the markets sell off a little lower, but that isn’t considered bad or bearish by itself. You can see the similarities between the current dip and the one after the half cycle low in October 2024. Please read the chart.
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NASDAQ – I’m hoping for a breakout soon, to keep that ‘Santa rally’ running through this week too.
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WTIC – It has been a bit difficult to see the DCL’s due to the constant choppiness. We constantly had new lows and a bounce, as you can see on the chart for Oil. Timing-wise and based on the bounces that followed, this would likely be accurate. So…
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WTIC – Oil has been weak and unable to get and stay above the 50sma, and it is at the 50sma again, so we’ll see if anything changes going forward. I looked up NOG, PUMP, VET, WTI, VLO, and other Oil stocks and so far I’m not seeing anything that looks overly enticing, unless they continue to make progress.
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THE USD has been chopping lower and that also makes it a bit difficult to see the difference between what a DCL may be or a HCL, but it has been unable to get above the 200sma and hold price there and lately the blue 20ema is also acting as resistance.
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GOLD slammed down to the 20ema when Silver took a dive on Sunday night into Monday. We did see a drop like this in October, but the difference is that we were coming due for an ICL at that time. This is only the 2nd daily cycle. So at this point we have to look at this as day 13 peak on the 2nd daily cycle and it becomes cautionary. It may bounce and act as a half cycle low, but when you get a drop like this out of the blue, it becomes cautionary. I will show you something that I found very interesting this weekend though...
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I will show you something that I found very interesting this weekend though. In my Weekend report I covered that Silver Peak in May 2011, using this chart for example:
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SILVER WEEKLY 2011 – Notice that Silver peaked in May 2011.
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GOLD did NOT ‘peak’ in May 2011.
Notice that Gold sold off with Silver for a few days in early May 2011, but then it formed a consolidation with a double bottom and rallied again into a double top in August and September. That seems odd, because Silver was finished after that May peak, so this is something to keep in the back of our mind if Gold starts to look as though it is starting to hold up and strengthen again.
So now we see an ‘outside day’ formed with SILVER. Those are usually a strong reversal days and they reverse the trend, so if the trend was up, it should now change to a downtrend. That would mean that it looks like Silver has peaked. Can it bounce?
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SILVER can bounce and we see that it started to bounce at the 10 sma, so I had drawn in a bounce, but usually there is a continuation sell off that follows.
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SILVER in May 2011 did NOT bounce. It dropped for 5 straight days before bouncing and anyone holding on waiting to sell the bounce gave their gains back.
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GDX is also similar to Golds set up. We should be on day 15 today, so this could be a half cycle dip if it follows Gold.
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The danger is that The Miners have not been acting strongly lately. Do you recall that last week Silver was rocketing higher and Silver stocks continued to ‘pop & drop’? That weakness when Gold and Silver was strong may turn into added weakness if the Metals sell off.
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We have another holiday shortened week with the markets open during normal hours Monday through Wednesday and Friday, but closed on Thursday. When you get the ‘Santa Rally’ that we had been experiencing, it often has a bullish bias into the end of the year and at least a couple of days into the new year. That may continue despite Mondays dip, but what happened to Silver is a warning signal for that sector.
‘Outside day candles’, like we see in Silver, are often an exhaustion and a strong reversal. It came out of nowhere, right? It came without warning, so this sector may bounce, but I think that Silver has peaked. I have seen other analysts saying that Silver is in a melt up phase and yesterday was just a scare tactic by big money before the big melt up. They claim that it was a buying opportunity. One thing to keep in mind is this: What were Silver stocks doing as Silver ramped up day after day after day last week? Friday Silver shot up 10% and Silver miners that I owned, like EXK, AG, and CDE popped and dropped. They were up 1% and some were even red. THAT was why I wrote my weekend report as a cautionary note before Silver even started to drop. I compared that ramp up to May 2011 for a reason. If Silver stocks weren’t running higher with Silver up all week and 10% Friday alone, then I don’t see how they’ll do any better going forward. You have to play this the way that you see best, but we made excellent money in this run and I’m ready to cash in and put my money elsewhere. I also stopped trading Crypto Stocks and Bitcoin. The chop was a sign of weakness so far.
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I DO CURRENTLY SEE A PRETTY GOOD SIZE BOUNCE PRE-MARKET FOR GOLD AND SILVER
For now, I do see Silver and Gold bouncing in pre-market, so we’ll see how this all plays out over time. I’ll be watching volume in the Silver stocks for one thing, to see if they push higher and hold those highs, but I’ll probably be trading the general markets going forward, if they remain bullish. ENJOY YOUR TUESDAY TRADING! 🙂
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~ALEX
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BITCOIN has now spent 40 days out of that sell off low and it is unable to push higher. There was a pop and drop on day 39, but the 50sma capped the price as resistance. Time is running out for Bitcoin and the 4th year of a 4 year daily cycle is upon us.
