May 21 Weekend Report
I just want to start by mentioning again that the USD has started to put in a decent bounce, and with the February-March USD bounce, both the General markets and Precious Metals sold off rather sharply. The current USD bounce has not adversely affected the General Markets, but that is not the case with the Precious Metals sector. The USD bounce has again dropped Gold & Silver, and they have broken important support levels (Dcls), so they have become failed daily cycles. Going into this weekend review, that is what has been on my mind. Let’s take a look at the charts…
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The Big Picture for The SPX :
The SPX actually broke above the last intermediate high from January and that is a bullish development. We now have new 2023 highs in place and the set up remains bullish.
THE NASDAQ WEEKLY – The Nasdaq also broke over the 2023 highs and also has now made new 8 month highs. This remains a bullish set up and it is finally finding some follow through after a long choppy bottom was put into place.
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WTIC WEEKLY – Oil has landed at a support area and is trying to break higher out of what should be an ICL. This is obviously a buy area since a stop can be placed under the recent lows, but as a reminder…
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This is obviously a buy area since a stop can be placed under the recent lows, but as a reminder…
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I put this chart in a report over a week ago to show just how choppy Oil has been lately. Daily cycle after daily cycle has bounced and dropped and bounced and dropped. Price for Oil when I posted this chart was $70 and today it is $71, so it does remain choppy.
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USD WEEKLY -The USD broke a long term downtrend and that is often rather bullish. This usually indicates to me that an ICL has developed. The 30 week ma is overhead and that can offer resistance, but I want to really keep an eye on the USD. Even though it is Not affecting the General markets negatively, Gold is being hindered. I’ve been thinking about that this week…
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By now you all know that I have been calling for a 3 yr cycle low as being due around January 2024. Follow along on this chart and you see that it is quite reliable with the timing. we saw 2002, 2005, 2008, 2011, 2014, (the next one stretched to 2018), 2021, and 2024. Many of these USD lows were Gold tops (2008 and 2011 stand out ar memorable Gold tops if you follow Gold).
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So when I look at the USD now, I see this USD WEEKLY doing a double bounce on a support area, and the blue arrow is where I expected the USD to fall to by Jan 2024, but I have added the question: “Could we bottom early?”
1. And then I drew an inclined trend line with one break down through it. The trend line lands at the USD now.
2. Then I looked at the weekly RSI. It has a similar ‘W’ pattern as the last two 3 yr weekly cycle lows and the MACD depth is similar.
So when I see things like this, it is nothing conclusive, but I have always trained myself to pay attention to detail and look for ‘changes’. This gradual change throws up a caution flag, but it does not change anything at this point yet. The 3 yr cycle low is still due in late 2023 or early 2024, but here is my problem…
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GOLD peaks at each USD 3 yr cycle low. IF that 3 yr cycle low came early due to Inflation, Rate Hikes, War, The Debt Ceiling, or for whatever reason… Gold could triple top? So let me be clear, This is just me sharing with you what I see and it is me thinking out loud about a different possibility, but it remains less likely for now. For now…
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For now I would still see this as a very large bullish pattern for Gold, preparing to break out after the USD bounce and a dip into an ICL. I would expect the USD 3 yr cycle low to come after the current bounce and final drop for several weeks and months.
SILVER WEEKLY – Silver is still a bullish set up too. It is pulling back with the USD bounce, but we still need that bounce to roll over and then drop into the next 3 yr cycle low. When that happens, Silver could really accelerate upward.
SILVER WEEKLY – The recent drop for Silver still has it up near the highs of the last 9 month rally, September to May.
SILVER has a weekly reversal candle at the 38.2% Fib level. It remains above the 30 week ma too. It could slowly chop down into its next low though, since it is overbought, and it did break the dcl (failed) on a daily basis.
GDX WEEKLY – At the last ICL, notice how the GDX weekly price landed on the 30 week ma for 3 weeks and then rallied strongly higher, so I am watching that area near $30 to see if GDX falls there and reverses at support.
GDX WEEKLY – Last weeks small bounce came in at the 50% retrace line. This is perfectly normal so far.
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A week or two ago I did mention that we all have to decide for ourselves how much of a position we want to hold (if any) with Miners when a deeper drop is likely to come. The drop in March was slow and torturous, day after day, but it also recovered very quickly when it was rallying back. I had sold a few weeks ago with the Silver drop and was actually looking for a place to re-enter, until GDX & GOLD broke the dcl. At this point I want to wait and see how this plays out before I start buying.
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I know that todays report threw in a little bit of a curve ball, didn’t it? It was where I was seeing things on the charts develop and I wondered out loud: “What if….The USD bottomed with the 3 yr cycle low 6 months early?”, but please don’t allow it to completely change your big picture view. My view is still actually very bullish for Gold. I was just running through the charts and watching Gold break down earlier than it should have with the USD bouncing stronger than it should be. The USD broke that downtrend line, and that is bullish, but that may just indicate that it has an ICL in place and Gold will go seek out its next ICL. There is not any supporting evidence that anything has changed for the Big Picture. In technical analysis, we would expect Gold to reach the highs, pullback for a bit to build up some energy (& kill bullish sentiment), and then break out to new highs. This is still what I am seeing for Gold going forward. And along with that, The General Markets learned to ignore the USD completely, and Gold can certainly do that too, when its ready to make this major break to new all-time highs!
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Enjoy your Sunday
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~ALEX
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BITCOIN has moved nicely out of the lows. You can see the dcls at the green arrows. It is starting another daily cycle, so we are hoping for more upside, but I just wanted to point out 2 very different ‘Intermediate” Cycles on this chart. The first one climbed higher at a gradual slow choppy rate and eventually dipped into an ICL, before the 2nd one climbed higher and higher at an extreme pace before crashing into its’ ICL. It is best to raise stops along the way under the dcls.
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RIOT WEEKLY:
And the weekly charts of the cryptostocks do still look like nice solid bases with an upside bias.
