Thursday January 4th
We have Data that will be released at 8:30 a.m., and in the past it has caused the markets to bounce (or even rally), so it is possible that with our sell off into a dcl, we could see a bounce develop that becomes the ‘b’ of an a-b-c down. It is also possible that the selling just continues until we find that dcl…
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I wanted to start with the NASDAQ, because it broke below the 20 ema, which held as support on the 1/2 cycle low. It is not oversold, so this could continue to drop to the 50sma near that open gap.
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The SPX landed on that 20ema, and that is why I started with the NASDAQ. I wanted to show that the Nasdaq broke the 20 ema, so we know that the SPX can also break that area as it likely drops toward the 50sma. This is not oversold at all, it is closer to overbought.
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Look at the arrows to the left of this chart.
Using a wider view of The Weekly SPX we can see that in the bull run many of the dips landed on either the red 10 week or the green 20 week ema line. We are still well above both, so I am just helping all to see that there is room to drop to the 4500 or 4600 mark, even in a bull market run.
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WTIC – Oil dropped lower again, but then it reversed and put in a ‘higher low reversal’. The MACD looks very good now and this is a bullish set up. Oil can be choppy and difficult, but buying this 2nd higher low with a stop under it is one method of investing in UCO or USO (or Oil). As mentioned yesterday, Oil stocks look a bit better than Oil too.
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I think that Oil Stocks or The XOP (& GUSH, which is leveraged) could be bought as a higher low here too. The XOP is crawling along the 50sma, but with Oils reversal, it may start to rise instead of chop & crawl. It also held above the 20 ema, so now I may be more interested in a trade in this area. NOG, ERF, WTI, VET, VLO, MRO, etc are Oil stocks to consider too.
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NOG – On Dec 15 I pointed out that NOG is choppy, but it was a BUY at the 200sma. So let’s just say that that was a buy at $37 area.
NOG – Then on Dec 26 it was a buy breaking out above the 50sma at $38.80 (But I did complain that these get choppy too). So how is NOG Now?
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NOG is a buy again, but did you notice that it is now $37.50 area again? You can see my complaint that these can be choppy playing out here. That choppiness during ‘buy and hold’ caused a back test, but I will say that this & other Oil stocks are a buy again.
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The USD has had a strong push out of the lows over the last 2 trading days this week. It has reached an area that could stall it, we’ll see, but this push on Wednesday did finally drop Gold. The USD is NOT overbought.
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GOLD day 13: Gold was holding up, but yesterday it did drop 1.5%. It remains technically bullish since it is still above the 50 & 200sma, but using ‘cycles’ I am expecting the peak to be in place and for more choppiness and a drop into a dcl and a ‘peak’ on day 10, if that remains the peak, makes this L.T. and weak.
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SILVER I have been mentioning that Silver has been weaker than Gold.
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GDX is weaker too and now it gapped down and lost the 200sma. It may bounce and chop around, but this daily cycle has faded very quickly and I mentioned that I sold my Miners when Gold had that exhaustion run, mainly because I was also focused on Crypto Miners / Companies. So currently I am not holding any Crypto or Metals Miners. I want to be patient and let things unfold so that I can buy heavily at the next ICL.
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We are in the first week of trading for 2024 and this is playing out as I expected. The ‘Santa Rally’ extended the general markets and I expected a pullback there. We also expected the possibility of bullish Oil, and unfortunately Gold & Silver look to have peaked for now. They may chop, pop, and drop until they reach their next ICL. The General Markets may not drop for a long time, so we’ll stay alert to a swing low forming as a buy in the coming days /weeks. Pharma, Biotech, Oil stocks, and the MJ Set ups that I mentioned a couple of weeks ago still look bullish too. These sectors have been trading bullishly so far this week. Enjoy your Thursday trading.
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~ALEX
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BITCOIN IN YESTERDAYs report was at day 50, and that puts us closer to the time that we dip into a day 60ish dcl. After I posted this chart at 6 am, Bitcoin slammed down, so…
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BITCOIN Slammed down yesterday, but as you can see, that is nothing abnormal for Bitcoin. We are now at day 51 and Bitcoin may be seeing weakness as it draws close to a day 60ish dcl. That means that a dip could start at any time and this may have peaked, we’ll see. Crypto stocks slammed down last week and show continued weakness this week.
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BY REQUEST:
I bought TIGR as a ‘lagger’ last week, but I sold everything Friday morning heading into the long weekend. TIGR has had strong runs in the past, but for the last Crypto push higher, it continued to consolidate that last June through Sept run, that is why I grabbed it as a lagger.
What if you bought and didn’t sell? Well, the good news is that since it wasn’t still overly extended to the upside, it didn’t exactly crash on Friday. It actually remained green Friday as it tagged that blue 50sma. That said, TIGR did drop on Tuesday and then bounced on Wednesday. IS IT OK TO HOLD, OR SHOULD IT BE SOLD?
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I personally would sell just to avoid any surprises when Bitcoin dips into a dcl.
TIGR can and will most likely drop to the 200sma (lower red line), and it could even overshoot and break below it as a shakeout. What I would do now is I would say to myself, “Do I want to risk it if this sells off, since now it is more likely to break lower than higher?” When I chose to buy this, I expected Bitcoin to possibly break out higher and get to $48,000 before a dcl, but the chances of that lessen with each day now that we are in the 50+ day range.
