Tuesday January 27th

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SPX – On Monday the SPX & NASDAQ of the general markets continued higher out of what should be day 4 out of the day 38 dcl.

 

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THE IWM (& The SOX) actually have dipped lower over the last 2 days, since they didn’t drop when the SPX & NASDAQ dropped last week. They were acting more bullish and stronger at the highs last week, so they seem to be putting in their low this week.

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Taking note:

I did notice that some of my favorites are pulling back, like RKLB, ONDS, UMAC and some others, but they are breaking below the 20 ema support that was holding up as support for price. I’m wondering if that is because the IWM is dropping? I’m not sure, but I know that some that break the 20 ema may actually back test the next support. That could be the recent breakout to new highs, or it may even go down to the 50sma. RKLB ran from $38 to $100 out of the ICL, no complaints there!

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ONDS reversed higher at the 20ema as support, but now it also lost it yesterday.  ONDS was very strong. It ran from $6 to $15 out of the ICL, but it may drop back to $10 for the 50sma.

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UMAC just broke the 20ema too, and my blue uptrend line. It ran from $7 to $20 since the November ICL, so these were very strong stocks, but I am just a bit concerned about yesterday’s price action. They may tag the 50sma and for some that is giving back significant gains.

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WTIC – Oil has strengthened enough to get above that 50sma and ride above it. This is only day 26 out of a possible 50 plus day cycle, so this is likely half cycle low material. It may break above the green 200sma and that would be the first time since June and August, when it had 2 false breakouts. Oil is acting bullishly.

 

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THE USD dropped after showing signs of strength, so that may change this picture. You will recall that it had a L.T. daily cycle, another L.T., and then a R.T. daily that was now showing strength. That September low should not be taken out, but if it is, it may indicate that this is now a longer cycle, becoming L.T. too. It is a bit of an anomaly. The USD had a higher low that broke above the 50sma again, so it looked to be strengthening before this plunge. So…

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THE USD – I thought that we were seeing strength and an ICL could have formed at the recent low, but We could drop to a slight new low and get an ICL with a larger a-b-c down. I drew in a bounce, but it may just continue to drop, and Gold and Silver may continue to pop. The cycle count for Gold and Silver does allow a little more upside.

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GOLD is on day 16 and it sold down a little at the close, but if that USD dips a bit lower, I think that Gold and Silver could move higher into day 20. I mentioned that in the weekend report.

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SILVER LIVE:

Silver actually did a large pop and drop yesterday, and that is often a topping candle, but the surprise is to the upside as Silver continued higher overnight. Silver is going straight up over the last 4 days and has surpassed many measured ‘targets’ of a normal run.  On this chart today is day 19.

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GDX broke that up trending channel. I’m not sure why this chart shows Monday as a red candle, it did run higher and is moving with Gold.

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The general markets continued higher, but the IWM and SOX dipped lower and so did many of the small cap stocks. Some even look ugly. Rare Earth stocks were up 8-10% when I left in the morning and they gapped open and sold off relentlessly. They have moved up over 100% over the past few weeks, and they were bullish with all of the news of the need for Rare Earth and Specialty Metals, but now they sold off hard in one day. That could be the start of a consolidation period, where a stock that is up 100% or 130% begins to consolidate those gains.  We’ll have to wait and see where they find support, but AREC & UAMY were bearish engulfing candles, also possibly indicating a consolidation period is starting. Another thing that I noticed on Monday night ( I was away for most of yesterday), was that Quant stocks broke down, and Nuke stocks look weak. IONQ, QBTS, QUBT, RGTI, etc broke down and went from looking bullish to looking more bearish now.

Please take a good look at this chart of IONQ. It was bullishly crawling along the 50sma, and when I left yesterday it was up a good amount. It sold off and lost the 50sma with the other Quant and Nuke stocks. So the small caps are starting to look weaker and that needs constant monitoring. I have been stopped out of positions.

 Gold and Silver are obviously in a major bull run that can continue this week, but if they obey cycles we’d expect a top soon, possibly near the day 20 area. Bitcoin remains weak and I’ll discuss that below. Tuesday may give us a better idea of what is happening. The IWM and SOX were running to new highs last week, so I was thinking that this dip is just their turn to put in a dcl, but some of the stocks seem weaker than others. We’ll see what Tuesday brings our way. Enjoy your Tuesday trading!

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~ALEX

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BITCOIN is in the timing for a dcl and it looked like it had one a week ago, but it couldn’t get back above that 50sma and then it made a new low. It is oversold and we’re just waiting to see a move back above that 50sma , but it still may lack strength going forward.