Wednesday September 9th – Sideways Chop And Rapid Drops
SPX – The General Markets fell to a new low on Tuesday, but this is a good thing. On day 50, we are due for a dcl, and this lowers the parameters for a swing low to form. A move above yesterdays highs is an unconfirmed swing low.
DJIA – The DOW actually looks a bit shy of falling to the 50sma, since that is where prior pull backs landed.
NASDAQ – The NASDAQ is on the 50sma and that is actually a reversal type candle, so the lows may be in place for now.
If the General Markets rally or bounce, the VIX can chop or drop…
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VIX – Take a look at that last large POP in June. That was followed by some chop, so we may see the Vix pop along the 50 or 200 sma.
WTIC crashed down below the 200sma Friday and followed through on Tuesday. We cut our Oil investments around 2 weeks ago when the XOP did not follow Oils rise above that 200sma. Things didn’t ‘feel’ right, and now we see why.
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WTIC – I posted this chart in the weekend report.
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The USD showed strong divergence over the last couple of weeks and I pointed that out as a bottom likely forming. Now we see that the USD moved higher and is now it’s downtrend line.
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The Precious Metals sector has been chopping and churning sideways, and they are still coming due for a dcl. One day the sector looks like it is going to break lower & Sell off, and then suddenly we see a reversal and the chop sideways continues. Let’s take a look at a few things in this sector.
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GOLD #1 – As the USD moved higher, Gold actually put in a reversal right at the 50sma. That could also be viewed as a break out and back test of a smaller triangle. Volume also picked up, so do we just rip higher now?…
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I think it is too early for a dcl and Gold should weaken as the end of this daily cycle progresses, so I don’t think we’ll just rocket higher.
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GOLD #2 – Last week I also pointed out that in April we broke from a triangle and just continued to chop sideways. We may do that again, as seen here. This DOES have a bullish look to it, and some Miners are acting bullishly on their own.
SILVER – Look at Silver at the 34 sma since March. Silver is only on day 18 and there is nothing that says that this cannot break out to new highs in a Bullish surprise, but so far it has been choppy and sideways. That could continue too. I will show you a couple of Bullish looking silver stocks after we look at the GDX…
GDX is chopping around the 50sma. It has chopped sideways for almost 4 weeks. Each set of 5 days is a week of trading.
GDX looks quite similar to the drop & chop in June, which was followed by a gradual rally higher. The only difference is that the MACD looks weak now and looked better then.
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I want to show you a few Bullish looking Miners at the bottom of this report. This is a really tough call, because as we have seen in the past, this sector can just continue to chop sideways into a mild dcl. I have also pointed out that as it does that sideways chop, individual Miners can put in a Milder dip and begin to make their own progress. I am seeing that already, and you’ll see that below too. The General markets are due for a dcl, it can be considered buyable, but I want to watch that move out of the lows for strength or weakness. We could be setting up an a-b-c type drop into an ICL, or just a dip & Rally in this parabolic move higher.
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Enjoy your Wednesday trading!
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~ALEX
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HL – If I ignored ‘cycle count’ and the expectation that we are coming due for a dcl (and even an ICL), I’d say that this and a few other Miners are bullish set ups. It has pulled back from ‘roughly’ $7 to almost $5 and also looks similar to May-June before a strong rally took place. You COULD buy this with a stop under $5 to be safe.
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AXU – A week ago I pointed out some bullishness in certain Miners, and you can see that we rallied and dropped. That is still just choppiness, but AXU is bouncing off of the 50sma, which can act as support.
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WLBMF is interesting – It peaked in June near $1, and then dipped & consolidated or chopped sideways through June , July, and August. It lost the 50sma , chopped along under it, and then recovered it . Now it broke that consolidation yesterday. I feel that this is a buy if you wanted to own it and that it dropped first ( June) and may run first (Soon). It looks to be under accumulation.
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ELYGF – Remember when ELYGF was over $1.50. This box consolidation has put it on sale. Now it was trading near $1.00 again yesterday with a low of $1.02. It COULD drop to the 200sma, but so far it seems to reverse near $1, so you can keep an eye on it if you have been wanting to own it. It probably wouldn’t hurt to start a small position even if it did drop to the 200sma ( $0.77), but it would have hurt to ride it from $1.55 to that price point. Your funds would have been cut quite a bit.
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Many Miners have been selling off or chopping lower, others have held up nicely so far. NGD is back at the highs and several Junior Miners ( or explorers) are not far off of the highs too. Others have actually been cut in half from recent highs, and that wouldn’t be fun to hold on the way down, but they should recover quickly once the Bull starts running again.
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CWH – This company was mentioned by Deshy and I find the chart to be a BUY right here. It is a bullish falling wedge, breaking out above the 50sma & The MACD is about to cross higher. This was Midday and it closed at $33.50. I like the set up and this pushed higher with the markets selling off.
WKHS, SPAQ, LCA, HCAC, FVAC, GRAF, SHLL, etc. etc. are rising as the markets drop. I was told by a reader that he locked in solid gains of $14.75 to $22, selling because price reversed yesterday. Well that is an excellent trade, congratulations! …but I want to point out to any still in the trade that we see those sell off candles in the middle of a run often & it is not an automatic sell. Continued…
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At the end of a long run, I might see it as a sell, but here it can simply be profit taking and then Buyers can overwhelm that shortly after and push it higher. Notice the price stick that I am pointing out in June. WKHS has a possible price target of $34, but that might depend on how long the General Markets run.
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BITCOIN seems to be on support and all of those lower wicks are dips that are being bought. This COULD turn into a bear flag , but I find that least likely with those wicks, and any dip should be very short lived, we are due for a dcl. I actually think that support may hold up and when this runs higher, RIOT, MARA, HVBTF, NETE, etc. should run too.
