Wednesday September 13th – C.P.I.
Today we have the release of the CPI Numbers (Inflation) at 8:30 a.m., and these numbers do tend to move markets. Let’s take a look at where we stand before those numbers are released…
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THE SPX was looking good on Monday, but on Tuesday it took a dive and lost the 10 & 50 sma again. If it doesn’t move higher and we keep dropping from here, this would be quite Left Translated with a day 10 high. That would signal that the drop into the ICL would continue down to a new low from here. If the markets rally on the CPI numbers, then we likely have an August ICL.
The story is the same for The NASDAQ. We have not broken above that downtrend yet and it also lost the 10 & 50 sma.
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SPX WEEKLY: So in the weekend report I mentioned this possibility for the ICL. It is either already in place and we move higher or we drop one more time to the blue 30 week ma as our ICL.
WTIC – Oil broke higher out of that consolidation and it and the Oil Stocks remain bullish. That was mentioned as a ‘buy the dip’ dcl in August.
THE USD stalled and has dipped to the 10sma. The CPI and PPI Numbers do usually affect the direction of the USD, so we’ll see what happens today after 8:30 a.m. ET. We would love to see this roll over in a similar manner to what we saw in March and July.
GOLD dropped pretty sharply on Tuesday, and it lost the 200 sma. Surprisingly, with this drop GDX and many of the Miners went green. That is often a good sign, when we see Miners lead a move higher, so now we’ll see what happens after the CPI release. This may be a false break down that turns into a shakeout.
SILVER dropped and recovered on Tuesday.
Here we see gap down and recover in The GDX, and this was with Golds fairly sharp sell off.
KGC was a Miner that didn’t act like Gold sold off, as it tried to regain the 50sma. This is encouraging and you can see that KGC has been chopping sideways in an orderly manner above the 200 sma for weeks now.
AU has a double bottom higher low in place. The MACD and RSI have strong divergence and this look like it wants to move higher, especially since Gold was down with this push higher.
HL has been weak, but it does have divergence at the double bottom low.
SSRM is one of the stronger Silver miners. It is above the 50sma and is now trying to move above the 200sma again. It did not sell off the way that Silver did recently, so it is showing individual strength at this point. With this long consolidation, a break above the 200sma could lead to a solid bull run.
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So we have important numbers being released pre-market, and I say that because I would expect that this report should move the markets. The CPI Numbers can also help us to get a better idea of how the Fed may act at the next meeting. Will they need to raise rates again? Will they see it best to pause on rate hikes again? This could affect both the General Markets and the Precious Metals, so we’ll see what happens at 8:30 am ET, but do keep in mind that the initial reaction may or may not be the real move. It will take time to see if we gap in one direction by the open and then that move continues or reverses as a false move. It is never easy, so patience may be the best move of the morning, but we do have some fairly nice looking ‘set ups’ with the Miners and Tech stocks. It may be hard to sit on your hands if they start moving. 🙂
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Enjoy your Wednesday trading!
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~ALEX
