May 1st – F.O.M.C.
I apologize for the later than normal report. The website crashed a few times last night and was down until 7:30 A.M. Eastern. I drew up my charts last night, but couldn’t upload them to the website, so for the sake of time- This report will have to be mostly charts, brief on words, but I’ll still try to be clear. Thanks for your patience.
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QQQ – No change in expectation, and after the FOMC Mtg, we might get a false rally (a POP higher) that rolls over. I say this because of the SPX…
SPX -The SPX held that 10sma again, but it is entering an extreme over bought situation. It is all time new highs, so many will likely buy a ‘no rate hike’ call by the fed at 2 pm, and then as he speaks at 2:30- it may sell off. We’ll see.
WTIC – Oil dropped for 1 day sharply, and has since been rising again. Wednesday is the inventory report, and if Oil is going to fall further, this would be a good day for that to happen ( Picture an a-b-c down to the 200sma ).
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GOLD – A break above the green line would say to me that we have an ICL in place. On a Fed Day, you and I both know that this can do a number of things. It can burst higher & Rally. It can crash down . It can break higher & then sell off. It can crash down & reverse higher, so w’ell have to wait and see. Let’s discuss possibilities…
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GOLD LIVE CHART – This is my current cycle count, and I had a day 32 dcl when price closed above the 10sma. It is currently sitting on that 10sma and should be day 6.
1. If this crashes & sells off because the Fed says ” Inflation is very low, no rate hike” , that may be this new daily cycle selling down to the ICL.
2. If this rallies above the green line, an ICL should be in place & a very bullish rally should unfold.
3. A Less Likely possibility is that we are now on day 38 and one quick FED CRASH to new lows will be a day 39 or day 40 DCL/ICL. I have drawn that on one of the GDX charts.
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GDX #1 – So these are the 2 scenarios, and if you are long (especially leverage) , a stop is necessary .
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GDX #2- I discussed this possibility with Gold. It would be normal to have a flash shake out, just to stop out Bulls like me, so I thought that a flash shake out would look like this.
GDX #3 – I changed the cycle count here, but this seems less likely when I match it up with GOLD & Silver. It would have us only on day 18, because here I would call day 23 a DCL and not just a 1/2 cycle low like above. IF THIS WAS THE CASE, we are day 18 & could drop into an ICL for 2 more weeks, so it is a possibility that shows why we need to use a stop. If we get a slam down & reversal by the close or tomorrow- in a frustrating way, that would be considered a buy back opportunity ( or wait for the break of that Gold Green Trend line).
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LOOKING AT A FEW MORE MINERS THAT LOOK BULLISH ( Yes, this can change after a fed meeting sells off Gold, but if this sector rallies after today instead, these are a few bullish Miners to consider buying, right? Right. ).
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AXU – I own this Silver company. It looks like a bull flag and suddenly a massive amount of volume came in as it pushes against the 200sma. A break above the 200sma is bullish.
GPL –
1. GPL sits above the 200sma,
2. a little extra volume came in yesterday,
3. It broke a downtrend recently, closing above the 10sma.
All of these are bullish signs ( if the Fed doesn’t reverse this).
KL – KL started to pop yesterday, and has already been pointed out as NOT selling off with GDX / GDXJ over the last 2 weeks.
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So there you have it, that is a summary of what the markets look like heading into an FOMC Meeting on Wednesday. The Rate Hike Decision is released at 2 p.m. Eastern, and then the Fed Chairman speaks at 2:30. At times I have seen an initial reaction at 2 , based on the decision alone. Then I have seen the Fed speak, and reverse that initial move, by discussing words that trigger reactions. Terms like Inflation, no inflation, softening economy, robust economy, ‘concerns’, etc can affect the markets , so be aware of the idea that the 2 p.m. reaction might not be what you see by the close. Exciting , huh? It always seems to be a bit trickier around Fed Wednesday, so keep the BIG PICTURE in mind. The weekend report gives you that BIG PICTURE if you want to review it.
Enjoy your Wednesday trading!
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~ALEX
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I own positions in Miners and have cash to add to positions if things continue to unfold Bullishly, but I also trade on the side ( I know many others do too). Below are some trade ideas.
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TGODF – I bought this near the open yesterday after putting it in the report. I also added to my OGRMF at the open.
ACB – ACB was on the watch list and it ‘Popped’ yesterday, so I bought it and then it settled back down, closing up only 2 cents. I’ve been using the 34 sma on this one, but will probably use the 50 sma as my stop. I still like the set up.
HEXO – I sold a portion of my HEXO ( I was quite heavy) anticipating a complete move A-B=C-D measurement, followed by consolidation & another move higher. IT IS NOT A ‘SELL’ – This CAN BE A BUY & HOLD & may just continue higher. I would not be surprised if this just found a way to keep moving higher (like EDXC did), since it has very strong volume.
LGCY – I noticed a POP in an energy stock that was on my watch list. I didn’t buy it, but we’ve traded this before, so I thought I would post this as a buy or ‘watch list’ candidate. Popped over the 13 sma.
VIPS – Do you remember out VIPS buy? This was a nice base and…
VIPS – Really it just continues higher with higher lows and highs. It is choppy, so many may have sold it, but this shows it as a BUY & HOLD candidate , and…
VIPS WEEKLY – The weekly chart has turned Bullish too, with that recent Pop, as this base recovers. Yes, this can eventually run back to $19, if you can take the choppiness. Use stops along the way, in case market conditions change.
ENPH – It reminds me of ENPH. I LOVED this base, and we have traded this all the way higher, but at the time I mentioned it as a BUY & HOLD, because the company itself was fundamentally looking good. YESTERDAY This hit $11! Was it all just 1 big easy ride?
ENPH – No, it got choppy a few times, but from $1 to $11 (After hrs it was up over $1 with re-earnings announcement), is fantastic. I did buy & hold a good chunk, and traded the rest. Eventually, I sold my biggest position on the BIG CUP drop that you see in July. I recommended it again this year and it has moved from $4 to $11 so far. VIPS reminds me of this one.
