Thursday September 21st : Post-Fed Slippage
We got exactly what was expected with the Fed Meeting yesterday and that is no rate hike and volatility. The results were a sell off into the close in many areas, and the General Markets broke down. It could be a false breakdown, depending on how the markets react to Thursdays Jobless Claims report, but so far it was a break down, so let’s take a look…
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THE SPX closed at the lows and broke that lower part of the triangle. This gives us a left translated daily cycle so far and it looks like that sell down into the ICL is still ahead. This CAN turn upward and rally, but at this point it just looks like that a-b-c down is going to take place.
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The NASDAQ looks the same.
The SOXX actually broke below the dcl, so this is a ‘failed’ daily cycle, and that indicates that a sell off is ahead.
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So I’ve been showing this possibility with the ICL ahead. It is an a-b-c down to possibly the 30 week ma.
WTIC – Oil did drop, but it also kind of bounced off of the 13 sma, similar to what it did on the last run higher. I felt that on this run it may do a deeper drop to the rising 50sma as a half cycle low because it is a bit extended or overbought, so we’ll see. If you shorted with SCO, use a stop just in case Oil bounces & remains strong.
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This is where the Fed non-rate hike affects The USD, and possible GOLD, Silver, and the Miners.
It was absolutely no surprise that the Fed didn’t raise rates. They gave it a 99% chance on Wednesday morning that the Fed was not going to raise rates, and yet The USD dropped all day and Gold and Silver rallied. As soon as the decision came out, everything started to get volatile and reverse. Why does that always happen? I do not know, but it always amazes me when such ‘head fake’ condition takes place, but that is how the day ended, so let’s take a look.
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The USD was dropping during the day and Gold & Silver were flying high. After the Fed Decision was announced, things reversed. This can also reverse on Thursday again, so we need more time to see if the USD is going to pull back or will it continue higher and break that $1.06 area?
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GOLD Pre-Fed – I grabbed this Gold chart pre-Fed on day 22, because as Gold surged all morning, it was getting closer to breaking the day 9 highs and changing this to Right Translated.
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GOLD post Fed– We have a reversal day and Gold did NOT break above the day 9 highs, so at this point it remains L.T. We have to see how this plays out, but these are often reversal candles that can have follow through lower. I will grab live charts in the Morning to see where we are before I release the report.
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GOLD 7 a.m. et– Gold is between that 50 and 200sma, but even if it loses it, it may just be dropping to the lower end of the triangle. Today is day 23 and as much as we would hate this, it is possible that Gold drops to the lower trend line and then breaks higher. I have mentioned in reports in the past: DCLs inside of a triangle can be L.T. It is also good to note that the Miners didnt really sell off with the General Markets or Gold yesterday. THAT is worth watching.
SILVER 7 a.m. et Thusrday– Silver doesn’t look bad at all right now. After rallying & selling off post Fed yesterday too, it has dropped to the 10sma and is bouncing slightly. SO FAR, that is what we want to see, but we have to see what Thursday brings our way, so fasten your seat belts.
GDX 11:30 a.m. Wednesday: GDX was breaking out Wednesday morning, but we know that both Gold & Silver rallied and sold off to red. What did Miners do?
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GDX – As mentioned. it is also good to note that the Miners didn’t really sell off to new lows like the General Markets (SPX, NASDAQ) or Gold yesterday. THAT is worth watching. If I just showed you this chart of GDX, you would likely say, “It looks ready to break out above that 50sma”, so let’s see what Thursday brings, especially by the close.
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I also want to show you how several individual miners acted yesterday. As we look at these charts remember this:
1. The SPX & QQQ sold off and closed at the lows.
2. The USD rallied and…
3. GOLD & SILVER put in reversal candles as they sold off in the final hour.
4. So the question would be, with those conditions, did the Miners get slaughtered like they usually do under those conditions?
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HMY somehow was able to remain up by over 8%. Yes, it was up 10% in the morning, but this did not get trashed as the markets sold off and Gold reversed lower.
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NEM is one of the biggest components of the GDX, and it looks to be trying to break out from a downtrend. It didn’t hold the highs of the day, but it certainly doesnt look bad with a market sell off and Gold sell off.
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NG was also able to close up almost 9%. That is great compared to what used to happen to Miners if the General Markets sell off and Gold drops into the close. Can this drop from here? yes, it may tag the 50sma, but again, I am interested in how these Miners reacted after the Fed sell off.
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AU – Take a look at Anglogold Ashanti. It closed up 4% and near the highs of the day, so we are seeing MIners act bullishly under what is usually pretty bad conditions.
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Will the Jobless Claims Report save the General Markets? We’ll have to wait and see. I’m just going to conclude this report by repeating a statement that I had in this report: I am seeing Miners act bullishly under what is usually pretty bad conditions. Even if they drop on Thursday morning a little with the General Markets, possibly selling down after jobless claims, I am going to be watching to see if they hold up better than normal. So far, what we saw yesterday was far more encouraging than discouraging for Miners. The morning might be a bit rough, but I look forward to seeing how the Miners end the day ( I think) 🙂 Enjoy your Thursday trading!
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