FED WEDNESDAY – SEPTEMBER 18th
It’s a Fed Wednesday, I think by now we all know the drill…
SPX – The SPX has now been bouncing off of the 10 sma area as it moves higher. It does have some upside room left in this run, but it is day 30 of this daily cycle. The Fed decision could start the drop into the dcl, or Pop this to a new highs. I have drawn 1 possibility going forward.
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WTIC – Wed is also Oil Inventory day. An Oil daily cycle can run for 40-50 days and even though we recently had a Pop & a drop, we do still have time for more upside. I think that Oil has broken out and could keep running, but it is volatile & choppy too. Let’s see what the report brings our way, even though we already know that the Drone bombing has cut future production from Saudi Arabia.
XLE – Oil dropped sharply as seen in the above chart, but The Energy Stocks dropped rather mildly compared to Oil. The XLE broke & then regained that 50sma.
XOP – XOP dropped and it MIGHT fill that gap. I was thinking that we might have a ‘continuation gap’, but those don’t fill, so we will know soon enough what we have. Even a gap fill does not make this bearish, a tag of the 50 sma is normal and then oil/Energy can trend higher.
GOLD #1 – Golds sell off was milder than the one we see with the Miners. Gold did not even tag the 50 sma yet. It has moved up to the 10sma, and we have the Fed Decision Wednesday, so will Gold drop a bit more? Possibly…
GOLD #2 – Gold can sell off below that 50sma, but this is either day 33 or day 5, so a sell off would likely be a ‘shake out’ at the 50 sma & recovery…a false sell down that is short lived.
GOLD #3 – A bullish report would have Gold push over the 10 sma and this would be day 5 of a new daily cycle. This should be a buy if it holds.
SILVER – Silver has been capped at the 10 sma too. Is that a bear flag? The Fed will decide.
GDX #1 – GDX is on day 32 but a trend line break as seen here is usually a buy for me. If it can break above that 10sma, this could be day 3 of a new daily cycle. A recovery over the 50 sma can be bought with a stop, but it is still a tricky set up longer term. Unless my cycle count is wrong, then we didn’t have a L.T. Daily cycle , so this doesn’t appear to be an ICL. IF AUG 19 was a dcl instead of My purple arrow ( much less likley), then this could be an ICL. Honestly, I think we just saw a day 30 low.
GDX #2 – We just have to take it 1 step at a time. We can buy a dcl, take it step by step as long as one is aware that could top out sooner than many would think. It could double top for example. I’ll give you an idea of what that could look like…
GDXJ – We could get a good bounce in the form of an a-b-c up for days, but it may become L.T. and drop into the ICL later. THAT would fit my past bigger picture ideas of an A-B-C Down into an ICL on a weekly chart.
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Looking at the above chart, it is probably best to say that this Intermediate Cycle may have already topped out or ‘peaked’ because our uptrend line has been broken. If that is not an ICL drop below the 50 sma, then more selling lies ahead for an ICL. If that is the case, we would get a choppy, toppy situation with this daily cycle as shown and then a drop into that real ICL.
GDX #2 – Final thought & Just an interesting sidenote: I mentioned recently that I have heard 1 or 2 of our readers say that Miners seem to bottom around a full moon. I said, That a full moon does affect the tides and supposedly peoples moods , and other Ebb & Flow areas, maybe it affects the Markets when it affects peoples emotions?” Well day 30 was the full Moon last Friday.
So the Miners dcl would be buy-able for a trade, but it may or may not be worth it in the long run. The move higher may be short lived. Since anything can happen in the markets, there is a chance that we can run even higher & put in another Right Translated daily cycle, but this leans more toward the idea that this intermediate Cycle did top and we’ll have a left translated daily cycle next.
If the ICL is still ahead, That is the REAL buying opportunity, since the run higher from an ICL can last for months.
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Oil & Energy will probably be on the move today too with the release of the inventory report. Higher or Lower? Oh it probably depends on..
1. The Inventory report
2. Any discussions about future Oil being released into the system, and
3. Possibly even a Tweet or two that changes public perception 🙁
Just know that this is a fast moving sector and it is not for the timid with this set up. The swings are big on a day to day basis. That said, I do believe that some big gains can be made here if the Oil ‘break out’ from that drone strike holds up after this back test. The situation longer term would become Bullish for the Oil stocks in this sector.
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I will post a few ideas below, even BITCOIN is finally looking good to me again, but on a Fed day volatility is often found at the end of the day. It is often best to hold some cash and see how things go. Enjoy your Wed Trading day!
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~ALEX
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GBTC- (Bitcoin) – I’ve been watching Bitcoin and this is finally starting to look like it will continue higher. I think that GBTC can be bought with a stop, but waiting for a break above the down trend line is a bit safer. NOTE: THIS MOVES VERY FAST, AND IT IS NOT FOR EVERYONE.
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DRD – I mentioned that I bought DRD as a possible leader when it reversed at the 50 sma. This is what I am looking for at this time- Miners acting ‘technically correct’during a correction. You can see that it has already moved from roughly $3.60 at the 50 sma to a high of $4.37 Tuesday. That is already a nice move, so…
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HMY – With HMY holding up at the 50 sma, a run to recent highs at $3.85 from this $3.00 area would be great gains for a trade. That is a 25% gain if it plays out, so I am looking to buy HMY if the Fed reaction holds price here.
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HL – I posted this Monday as a Miner that has not sold off under the 50 sma, it is still in the base. It may make a better run on this next run if it breaks out.
CDE– Will the Fed Reaction be good or bad? We really can’t tell yet, but it seems late in the daily cycle, so I added back some CDE & posted that in the live trading area as it tried to recover that 50sma. I sold half at the top & went back to full position on this one.
NEM – Look at NEM above the 50 sma. I posted this as a buy in the live area yesterday. This has made a nice move since May, a 40% run, and has held up well. You can use a stop at the 50 sma to keep losses small if we get a fed sell off.
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GOLD (Barrick) – This was also mentioned because it regained that 50 sma. It can be bought and these may be leading the way higher as a shake out & recovery.
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KEG – With many Oil / Energy stocks, we saw massive gains Monday and Tuesday a pretty big drop. It is possible that this is just profit taking short term & a gap fill as seen here. We may know more after the Inventory report.
