Thursday December 7th
Todays THURSDAY DATA could move the markets, and I am expecting it to cause a sell off, since we had a bearish ending to yesterdays trading. Let’s see the charts…
THE SPX gapped up higher yesterday , but then sold off. This is called a bearish engulfing and indicates that buying is possibly drying up, and a move higher is no longer sustainable. This is Very normal at day 29 and we could get a dip into a dcl into next week. This was a very strong right translated daily cycle, so we will likely BUY THAT DIP next week! (Wait for a reversal/dcl).
The NASDAQ also gapped up and sold off. I showed this rounding top yesterday too. A dcl could fill the gap and land at the 50sma area. Trying to go short (SQQQ, SOXS, SPXS, etc) is optional, but may be tricky in this choppy topping pattern.
I mentioned that Biotechs / Pharma looked good and that I liked LABU a couple of weeks ago. This may resist the selling, but I’d raise up a stop. They did a reverse split and this can move quickly now.
WTIC – Oil continues to sell off and was pointed out as very weak, possibly dropping to June or May lows. I tried a cycle count…
The cycle count for Oil is 40-50 days, or even a little more, most of the time.
– We had a normal 50 day daily cycle.
– Then the peak at day 25 and the drop into day 31 looked like a dcl, because it rallied above the 10sma up to day 10 high.
– IF SO, We then dropped into day 29 and THAT looked like a dcl, because it closed over the 10sma, but when it rolled over, I had to decide if I should keep that count going. So now you see the day 38 spike instead of calling it day 9. If it was day 9, we would have 3 more weeks of selling! Instead, I’m trying to view the day 29 low as just a drop to the trend line (not an early dcl) and continuation to currently day 42. I hope that makes sense as explained on this chart.
The USD is on day 6. Gold most likely ‘peaked’ last Sunday for the 2nd daily cycle. Was that The Peak of the whole Intermediate Cycle? Maybe, it could even run back up there and double top, but we’ll have to see. I do like what I see happening with the Precious Metals, so let’s discuss that. I’m going to mention that this should not break above that 50sma, and if it does, then we likely have an ICL here and that would be a higher ICL.
GOLD was green yesterday and Silver continued to sell off. It makes sense to me that Gold spiked, exhausted, and can chop around into the next dcl rather than try to break out again (exhaustion candle). I am watching to see if the 3rd daily cycle low is a Buy for me, and so far I would say that it will be a buy, to see if Gold can run back up tot he highs. I will show you why…
Is this remotely possible for GOLD? I cannot rule it out completely, and this would be awesome, because it would mean that Gold is extremely right translated and extremely strong and would be dipping into a dcl that would only be starting the 2nd daily cycle. I HAVE TO SAY that this is NOT the most likely scenario, because a 45 day daily cycle in Gold is rare. It may have never happened, I can’t recall, but it is something that we can watch for. The chart ABOVE is the more likely scenario currently. I drew this one because of the way Miners are acting. I’ll discuss that.
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SILVER is selling off harder than gold, but oddly, the Miners are NOT (Yet). So again, we could question of this is 2 daily cycles (most likely – yes), or one large daily cycle with a 1/2 cycle dip? ANd again, I say this because Miners are not crashing down.
Take a look at CDE with Silver crashing down. CDE ran up to last weeks highs yesterday and then sold back down a bit, but this is still basically at the highs. Lets see the GDX…
The GDX is finding support at the 200sma. I do expect that this will fail and price will drop toward the 50sma when the dcl arrives, but so far this is not looking bad and volume is almost being cut in half with each day of selling.
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So again, Silver is crashing lower and Silver miners are holding up. HL lost the 10sma, but it isnt bearish looking. I did own it and I do think that it will drop to the 50sma, so I sold mine. That drop from the 200sma to the 50sma is $1. If you held 5000 shares, you’d give back $5000 dollars for example. I sold Miners Monday to be able to watch with a clear head. So far I do like what I see.
Again, CDE is holding up very well with Silver dropping, so the strength is surprising.
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KGC was actually AT THE HIGHS after the first hour of trading, so I posted this in the live area. This is impressive when you remember what Miners often do when Gold and Silver sell off.
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OR is still not far from the highs, but during a drop into a dcl it will likely fall to the 50sma, and that is a decent size drop too.
AAGFF reversed at the 13 sma and moved up 6% by midday yesterday too. I do like what I am seeing with the miners as Gold and Silver move off of the highs.
EGO is also still right up at the highs. If Gold bounces, stocks like KGC, EGO, etc could revisit their highs and then dip into a dcl. You can decide to continue to ride it out(?), sell partial(?), or sell all as we approach a dip into a dcl?
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Actually, I am eventually anticipating a drop into a dcl for the General Markets and the Precious Metals, so You can decide to continue to ride it out(?), sell partial(?), or sell all as we approach a dip into a dcl? You may even decide to hold some miners and add JDST to cushion the drop? We still have time, so I am just eager to see what the Miners do, and what Gold and Silver do too, during that dip. If it is mild and choppy, it could mean that the next daily cycle could be strong too. for now, enjoy your Thursday trading ( 8:30 Jobs Report may affect futures and the markets today).
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~ALEX
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THIS IS JUST A REPEAT FROM YESTERDAY:
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Monday I discussed the continuation of Bitcoins rally. After a 30 day dip and a day 65 dcl, we were on day 20 of 60. Will this dip into day 30 sharply(?), or mildly? Will it just chop sideways? I had an initial target of 34,000-36,000 and resistance…
I had an initial target of 34,000-36,000 and resistance, but as it broke out on this weekly chart, the next target area is roughly 44-48,000, seen on my next chart. This has been a very strong run and crypto stocks are doing exceptional.
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The next target area is roughly $44,000-$48,000, seen on this chart. This has been a very strong run and crypto stocks are doing exceptional. We had a Pop, a running correction, and now the 2nd Pop. The next drop into a dcl or ICL will be a huge buying opportunity.
