Tuesday December 12th – Does It Even Matter?
This is a Fed Week and the rate hike decision comes in tomorrow, but does it really matter? It seems that all of the recent data shows that the Fed will not hike rates, and they will not cut rates until we get into 2024, so you would think that everyone already knows what is going to happen and it really doesn’t matter. Well, it usually does. Unfortunately, we have always had knee jerk reactions, volatility, and whip sawed action on that day, especially during his speech on Wednesday. We’ll watch for that tomorrow, but for now let’s take a look at the charts and see where we are at heading into that Fed Mtg…
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The SPX is still stretching higher…
And it is day 32 for the General Markets. These daily cycles often put in a daily cycle low or a dip around day 35-40, but as mentioned before, we did see two 50 day cycles in 2023. This one is stretching higher for now. MAYBE The Fed Decision will cause a dip? If so it will be a ‘BUY THE DIP’ opportunity for sure.
WTIC – Oil has been quite weak and it has been chopping lower. It is on day 43 and these daily cycles do last 40-50 days on average, so we have a swing low that could be a dcl, but it is not a confirmed swing low yet. You can buy it with a stop ( UCO, USO, etc), but there is a little risk that this could roll over one more time.
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IN THE WEEKEND REPORT WE SAW A SMALL REVERSAL CANDLE AND I SAID:
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WTIC WEEKLY– Oil is dropping into an ICL and it broke through my round bottom drawing, but the daily chart is on day 43, so we could get a ICL/ DCL any day now. This may just drop down to the May lows again.
THE USD is on day 9 of a new daily cycle, and I voiced some concerns in recent reports that this is starting to look like a higher low (Higher ICL). Why is that concerning? I have discussed a 3 yr cycle low as very reliable in this sector and one is due in early 2024, but with all of the Fed Manipulation, it could have developed early in July. That ICL was followed by a strong rally, as you can see. A low in the USD can hinder Gold.
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IN THE WEEKEND REPORT, I POINTED OUT THE ‘HIGHER LOW” or “HIGHER ICL” WITH THIS CHART.
We would now have a ‘higher high / higher low’ following the July ICL. That to me sounds like the 3 yr cycle low would have come in in July, like I mentioned as a possibility in prior reports when the rally from the shake out was so strong. A move above the daily 50sma, or that weekly 10 week ma has me viewing this as an ICL.
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This is an example of that 3 yr cycle low in the USD that I have been pointing out for over a year.
They are very reliable and the next low was due in 2024. That JULY Low rallied very sharply to a new high, and now this higher low and higher high has me thinking that all of the Fed rate manipulation may have caused an early low.
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GOLD dropped over $20 on day 20 yesterday and Silver dropped too, but I have to say that some Miners still look very bullish and are NOT following this drop. I have discussed that in recent reports and I will briefly discuss that today again. The last daily cycle low landed on the 50 & 200 sma and this low may form there too. Again, there is a slight chance that the miners are holding up so well because this is all one very long first daily cycle with a 1/2 cycle dip, but that remains to be seen.
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In the weekend report I mentioned that it was also possible for a 3rd daily cycle to show strength:
It might look something like this. Gold would drop next week into that dcl around the time of the Fed Mtg. The 3rd daily cycle would have to start out strong after the Fed and run back up toward all time highs.
SILVER looks like it is crashing into a low, and you all know how sharply the Miners usually drop when Silver drops, right? Well, that is not happening and we’ll discuss that, so take a look at this drop in Silver and keep that in mind. Silver just lost the 50 & 200sma.
GDX – Gold dropped $20, Silver is crashing down, GDX was down 13 cents. It may bounce and then dip to the 50sma and form a dcl there.
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So again, Take a look at Silvers plunge, and then…
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Taking a look at CDE and we see that it dropped and recovered yesterday. Not only that, but it is right at the highs again. THIS is NOT what we normally see with the Silver stocks if Silver even drops a little.
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EXK is at the lows and has been weak, so why did it chose a day that silver is breaking lower to reverse and go green? I captured this at 11 am and it closed up 5 cents on high volume. EXK looks like a bullish double bottom with good divergence (MACD not shown, sorry).
HL had the same rection. After a big drop it reversed higher and closed green too? This is very strange, but it shows us that the Miners are bullish despite the recent selling.
HMY closed up 3% with Gold down $20 plus.
KGC reversed and remains near the recent highs.
NGD was trying to turn green at midday too, so I grabbed this chart.
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As seen above, The Miners are showing strength as the Metals dip lower into their next low. That is pretty impressive and it makes me wonder if we’ll get another early dcl in the metals with that Fed Mtg Wednesday (or Thursday). The General Markets are also very bullish as they just keep stretching higher heading into the Fed. The timing is getting late, so it could start to dip at any time, but for now a stop under the 13 sma has been enough to keep ‘longs’ in the game. There has not been a deep dip yet out of that ICL. Today is the day before the Fed Decision and speech, enjoy your Tuesday trading!
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~ALEX
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THE CURRENT CYCLE COUNT FROM THE WEEKEND REPORT:
We were counting out the cycle counts recently and BITCOIN only had a slight 4 day dip at day 30, and then the deeper dcl dip was also minimal at day 64. This may indicate that it was starting to go parabolic.
RIGHT NOW, we are only on day 25 of the next daily cycle, and that last run peaked on day 59. I’m NOT saying that that this won’t ‘peak’ until day 59, but what that does mean is that possibly we will see another mild dip around day 30, and then it can just continue higher. So…
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Ok, so that wasn’t such a ‘Mild dip’ after all, 🙂 but BITCOIN did drop on day 27 and I was thinking that we’d get a dip around day 30. Day 30 is actually the day after the Fed Mtg, so I was thinking that this might slowly drop into the Fed and then take off. Now with this drop, it is hard to say what exactly may happen next. This might be the entire dip for a 1/2 cycle low, or it may chop around and form a multiday 1/2 cycle low. All I know is that some of the crypto stocks went on sale FAST. That makes it very hard to buy a dip when they drop 10-20% (That was seen in many of them). Will that happen again? We just don’t know with this sector.
Let’s just take a look at a couple of the Crypto stocks: These drops do seem extreme, but it can happen.
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BTBT dropped 20% and erased 5 days of gains to fill a gap, while landing on the 13sma. Is this it? Or could this drop another 10-20% and back test the base? These can be unpredictable, so we’ll have to wait and see and if you buy a starter position, I’d say to start smaller and add as it becomes clear what is happening.
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MARA doubled out of the lows, but that doesn’t make a 12% drop any easier to take! 🙂 In the run from $9 to $20 in June-July, it never broke the 8 ema, but it did yesterday. This might even want to drop to the 13sma to fill that gap, it’s hard to say. It may depend on whether or not Bitcoin has a 1/2 cycle low in place or whether it drops further.
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RIOT dropped down and filled that gap and started to bounce back. RIOT did rebound off of the 13sma, but again we cannot say exactly where the lows of this dip will be, if Bitcoin has further to drop. If you wanted to ‘buy’ or ‘add’ you’ll have to decide how big to go and when. So with these charts I’ll just say this…
So with the above charts of a couple of Crypto Miners, I’ll just say this:
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BITCOIN could have a 1/2 cycle low in place now before the Fed Mtg, and therefore it may do what we see here, just starting to run higher from this low, or…
BITCOIN has been very choppy, hasn’t it? So it could still bounce and drop into day 30 around Fed Wednesday, because it has been choppy on this entire run. So knowing that, be positioned in a way that you are comfortable. Start small? Add small to current positions? Etc.
