MAY 2nd – FOMC WEDNESDAY

SPX DAY 21– The lows of the 1/2 cycle dip were not taken out, and a reversal saved the day Tuesday on day 21.  A break above the 50sma and especially a move above the April high, would be bullish.  A  R.T. Daily cycle is more likely that way.  Let’s see what happens after the FOMC Decision is released.  The MACD & RSI are still fine.

Breaking below the April 1st lows is a failed daily cycle, and means that we have weeks of selling ahead. A break below Feb lows is what I would call an epic fail.

WTIC  – We have the Oil Inventory report released on Wednesday Morning. If Oil peaked here at day 9, it would most likely be a L.T. Daily cycle. A break above day 9 ( 69.55) is quite bullish.  We’ll see if the inventory report affects the outcome.

USD APRIL 27 – Read what I wrote on this chart. These bases often launch a strong rally. Those ‘former recent highs’ are the top of this pattern on the left.  94 or 95.

USD –  The USD has had a very strong rally, but it is at resistance, we are at a the FOMC Decision, and the ‘timing’ in the daily cycle is getting late. I would think that the USD should  begin to stall or pull back very soon.  That could help Gold to rally.  When this base broke out, I said that I expected 92 to be reached and MAYBE 94 ( former recent highs). It has been strong.

GOLD –  Gold day 29 tagged the 200sma, and I have been waiting for that.  Will we get a ‘shake out’?  It is possible.  Day 30 is in the timing for a dcl, so even if Gold starts selling off after the FOMC Meeting, we shouldn’t see the selling last for too long. A drop from here would be a normal run a lot of stops, but is not necessary.

GOLD  –  I actually drew this for yesterdays report and forgot to post it, but basically it is the same idea- we CAN get a few large down days of selling, just be ready to buy the reversal. The timing is getting late.

GOLD  – Big Picture, Gold actually broke out & back tested at the last ICL. This is a bullish set up, but it COULD drop down again if we sell down into an ICL, and still be perfectly healthy.

SILVER  – Silver could run some stops here too, if it drops a little further.

GDX #1  – Today will be day 30, unless the lows of  Tuesday hold up and we get a swing low, then today will be day 1.  A ‘riskier’ trade is to buy that reversal and use the 50sma as a stop, but on a volatile Fed Day, you could get stopped out. A close over the trend line & 10sma gives us a swing low, and it could be bought. 

GDX #2– This is an example of  ‘What if the markets sell down after the Fed Decision?” I wouldn’t expect it to last too long, since we are at day 30. This is just an example, we could sell to day 31 low, 33 low, or even a day 35 low.

THIS IS WHY I DISCUSS A SELL OFF OR A RALLY FROM DAY 30. THE CURRENT SET UP OFFERS BOTH.

GDX – Yesterday we discussed that we are currently right in the middle of the consolidation for GDX.  We can rally, we can drop – that is how this is set up.  This late in the daily cycle, you would watch it drop and buy a reversal, especially a confirmed swing low.  If it rallies…

GDX – If  GDX rallies, you should already own some individual miners, so you will have some gains that way.  Then you just add or buy more as it confirms that a swing low is in place.  A swing is any move higher than yesterdays highs without breaking the lows. A confirmed swing would be a move above the 10sma & down trend break. A move that goes to the 50sma is pretty much a trend line break.

Conclusion:  It is the FOMC Decision.  ANYTHING can happen.

1. Markets can rally, Gold can sell down.

2. Gold can rally, Markets can sell down.

3. Markets and Gold can both rally. We saw that recently.

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It doesn’t matter what happens if you are holding a few positions in Miners like I recommended over the past couple of weeks.  If it sells off, and we are on day 30, the downside selling should be limited.  Often the deeper it sells down, the sharper the snap back rally, and that is usually what I see at ICLs.   If we just turn higher here, and you own some Miner positions,  that is good, and you can add on a confirmed DCL.   Riskier traders can buy the reversal from yesterday & take a chance that they dont get stopped out.  So if Miners sell off- you’ll do well buying lower.  If Miners break higher and run, putting in a swing low, You’ll buy that and we should have at least a week or 2 of upside, much more if this was an ICL.

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There is a chance that this could become an ICL in Gold, though at this point, it is not the type of sell off that we are used to seeing at an ICL.  If it is just another DCL, it would likely top in a week or 2 ( Day 5-10ish) and start getting choppy again.  Many individual Miners are doing well on their own , despite the recent selling in Gold.  I have pointed this out with charts in recent reports.     Right now, we are just waiting to see what this FOMC day has to offer for the General Markets and Precious Metals sectors as a whole.  I would expect a little volatility after the 2 p.m. decision.    I think that we have all seen $10 gains in Gold evaporate in the final hours of a Fed Day, and we have seen a sharp sell off at 2 p.m. turn around and rally into the close.  Enjoy your Fed Wednesday !

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~ALEX

AKG – By request. Yes, it has been moving higher, but if Gold sold off sharply, it also could drop to support. That would be a great place to add or buy.

AXU– Nice reversal, I do still own it, and I may add whether it POPS or DROPS. It reversed right at the 50 & 200 sma, but it can till drop further too.