Wednesday February 4th – Bumpy Roads

.

THE SPX opened even and then sold off, but in the final2 hours the markets started to bounce back, bouncing off of the 50sma.

.

THE NASDAQ sold off and buyers stepped in around 2 p.m. also. I want to mention that I was watching several stocks bullishly hold up (Drone stocks and Rare Earth stocks held up especially well). There were others like AI stocks SES and LAES, RKLB, APLD, AAOI, and more, so some areas look good. I will give examples further down below.

 

.

Then you get to the Russel 2000 IWM – It also sold off, but at 2 p.m. buyers stepped in and it rallied back toward the highs. I was really thinking that the IWM and SOXX would sell off to more visible dcl’s, but we may get sideways chop…

.

A few days of sideways chop may bring the IWM to that 50sma, something like this. Even if this just took off, I think that it could qualify as a dcl this week. We’d see an ICL, 1/2 cycle low, dcl.

.

THE SOX really has held up well, actually rising the 10sma all the way up. I mentioned in my reports that without a visible dcl like SPX & NASDAQ, we could see selling here and now we do see it. AMD released earnings and dropped 8% so we’ll see if that dips SOX a bit further or not. Notice that we do see strong 1 day drops in this sector at times (Red arrows).

.

.

This is a snapshot of the markets intraday yesterday.

 The dotted red line is the closing price from Monday. We saw a gap open and then selling almost all day long. With this selling, I found many stocks holding up and staying green (Rare Earth, Metals, RKLB, RCAT, ONDS, SES, LAES, etc etc.   Then you can see that after selling down all day, Buyers stepped in at 2 p.m. and the markets rallied into the close. IWM even went green.

.

MANY STOCKS HELD UP WELL:

.

RKLB was up almost 10% yesterday when it really should have easily sold off to the 50sma with that sell off for most of the day.

.

AREC INTRADAY (Rare Earth) – The Rare Earth stocks gapped up, sold off a little, and then took off higher. I was watching this pattern (I owned it) and when it broke down I sold half my position thinking that we might get a gap fill down at $2.90. When it held at support and started to stabilize, I rebought my position, because ALL Rare Earth stocks started to do the same. I posted this in the comments. So I rebought my half position back around $3.20.

.

AREC closed at $3.43 and was up 17%. These do look like they may be bottoming here.

.

Uranium stocks dropped over the past few days, but reversed at support so I posted this chart of DNN after an hour of trading.

.

RCAT an hour into trading.  Again, remember that the markets were selling off all day, so I was looking for stocks showing strength. Drone stocks like RCAT, ONDS, UMAC were holding up. RCAT closed up about 5%.

..

As mentioned : RARE EARTH & SPECIALTY METALS did well:

.

An hour into trading I pointed out that TMQ was reversing right at the support of the 50sma. This could be bought with a stop, especially since all of the metals were acting correctly, and…

.

And TMQ was up 13% in the final hour and closed up 16%. These move swiftly.  (TMC was up 7.55%).

..

UAMY is also always a strong gainer when Rare Earths run.

.

Copper stocks like TGB, WRN, FCX, etc made strong moves on Wednesday too. The only problem is that these all made a strong drop, so I know that some may sell them and then its hard to get back in when they gap up and run like this.

.

WTIC – Oil lost the 200sma, but it landed and reversed at the 20ema. On Tuesday it reversed strongly and regained the 200sma. This is bullish and I mentioned yesterday that even when Oil crashed down, some of the stocks like BORR, WTI, VET, PUMP, NOG, USEG, BTE, etc held up well, so there was no damage there.

.

THE USD is running into a little resistance.

.

GOLD & Silver put in a strong bounce and now they have (unconfirmed) Swing lows in place. These can bounce strongly, as mentioned in the weekend report. It is possible that we have an exhaustion dcl, even though it would be early on day 20.

.

AS A REMINDER, THE NEXT 2 CHARTS ARE FROM MY WEEKEND REPORT:

.

GOLD – This may become an exhaustion drop where we put in an early dcl, OR we could bounce and drop and that becomes the dcl on day 25 or so.

.

GOLD – A 4th daily cycle could put in a convincing bounce; but it should remain L.T. and roll over into an ICL if we do see a 4th daily cycle develop.

.

SILVER will have the same set up as Gold, so we have a swing low and it could bounce and drop quickly, or it could play out as a L.T. daily cycle.

.

GDX gapped open around 5-6%, sold down and tried to fill that gap, and then rallied back at 2 p.m. onward with the rest of the markets. Miners will follow Gold and Silver, and they may even lead at times if buyers buy the dip.

.

The markets have been choppy and difficult, but nothing has turned bearish for the general markets despite the chop. I’ve been wondering if we would get a visible dcl in SOX and IWM, and if so, would the NASDAQ & SPX start to chop, drop, and sync up with them. We may be seeing that, but I still see bullish sectors and stocks. Oil is bullish and Oil stocks look good, Gold, Silver, and Miners may have an exhaustion low (selling dries up temporarily). Now we’ll see how this bounce unfolds. My weekend report covered my analysis of the recent top and drop. There are a few possibilities. Bitcoin remains weak and I’ll cover that below.  Enjoy your Wednesday trading!

.

~ALEX

.

YESTERDAY WE WERE LOOKING FOR THAT ELUSIVE BOUNCE WITH BITCOIN, BUT IT HAS BEEN CHOPPY AND WEAK: I SAID…

.

BITCOIN : In December and early January I thought that we could see Bitcoin bounce up through the 50sma and tag the red 200sma, but it never made it up to that 200sma area. I am now thinking that it can bounce around to the 50sma again, but at this point it may not be able to even get above that area. We are in the 4th year of that 4 year cycle.

.

BITCOIN actually made another new low!!