Wednesday January 10th
The DATA that will be released on Wednesday does not usually affect the markets.
In Tuesdays report I mentioned the likelihood of a dcl in the General Markets. I said:
THE SPX put in a strong reversal after day 48, and this should really be the dcl, with that break of the 10sma. We only had 1 week of selling, so the weekly charts looked as though they needed more selling, but this reversal at the 20 ema flipped the RSI at 50% and we did reach oversold.
So this should be day 2 for The SPX. The markets gapped lower and climbed back toward the Tuesday highs.
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THIS WAS OIL IN TUESDAYS REPORT:
WTIC – Oil chopped and dropped again. It actually still looks like it is struggling. At times we have seen the first move out of an ICL run up, chop around, and drop back to the ICL low as wave 1-2 of a 5 wave move higher, so this still could be the ICL, but it definitely is struggling. Oil stocks look a little better, but are choppy too…
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NO BIG CHANGE FOR WTIC – Oil is now on day 17 already, but it is still chopping around along the downtrend line & the 20 ema.
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The USD is chopping sideways at resistance, but the MACD & RSI do look like this wants to push higher.
Both GOLD & SILVER moved higher and then dropped again, giving us a day with no real change.
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In Tuesdays Report I mentioned that:
GDX is at the bottom of the upward channel & the 50sma. I thought that maybe it would bounce with the General Markets and Gold, if the USD dips lower.
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The GDX was pinched between the 200 & 50 sma, but it dropped lower on Tuesday and is now losing the 50sma.
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We didn’t have a lot of change with Tuesdays trading. The General Markets dropped and tried to recover, they are very early in a new daily cycle so that sector should present a buying opportunity. The Precious Metals also traded in a small range, but as time goes on and the daily cycles get later for the precious metals (Day 18 today), time is running out for that sector to make an impressive run higher. This is the 3rd daily cycle and it looks like we can expect a L.T. 3rd daily cycle, so more chop & an eventual drop should be the main expectation there. Bitcoin looked as though it did want to break out, but it has also been giving us a little pop and drop. That will be discussed below, enjoy your Wednesday trading!
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~ALEX
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I don’t really want to get into the whole story, but last night Bitcoin did a little POP & DROP on what was apparently a false declaration of the ETF approval by the SEC. I wrote my comments on it in yesterdays ‘Comments ‘ section, and for now You can google “Bitcoin ETF approval” to see what happened last night, but for us just looking at the charts, let’s discuss Bitcoin:
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Bitcoin looked at though it did want to break out on day 55, but it has also been giving us a little pop and drop. Since that looks like a pop on day 55, that would make today day 57, with a dip into the day 60 area (give or take few days) as the normal timing for a dcl. That said, I have mentioned another way to possibly view what is happening…
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What if we get that approval for a Bitcoin ETF and it isn’t ‘Buy the rumor, Sell the news”, with a sell off that follows? What if it just rallies with anticipation of more buying and accumulation resulting from that decision? I did mention that with Gold we have seen ‘stealth’ dcls form inside of a triangle and the breakout marks the lows for that daily cycle, so this is what I said about that:
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BITCOIN had that red candle drop on the day 50 low, so that would make this a day 55 breakout. The odd thing is that Crypto related stocks were selling off during this sideways chop until Monday when they did Pop with the breakout. I want to point out that when Gold has been in a STRONG Bull Run, it forms a triangle and then continues higher, and we view that as a stealth dcl. DID WE JUST SEE THAT HERE? It is possible and if so, that would explain something else…
BITCOIN now has a weekly breakout and this could be a ‘continuation’ of the prior run before that consolidation took place. I was thinking that we might get the ‘SELL THE NEWS” pullback with the ETF announcement, and that could lead to a day 60+ DCL. Now? If this isn’t a false break out, I don’t want to sound silly but it could have a stealth dcl and could run to $60,000+.
BITCOIN LIVE: In conclusion, that leaves us waiting for the answer of the next path really. There should be an announcement about the Sec Approval soon, and then we have 2 paths that could follow. A back test of the breakout and run higher next (Stealth dcl in the wedge), or a drop down into the real dcl, and that could come in at day 60, 62, 64, etc. One thing is for sure, I do NOT want to be holding crypto stocks if this breaks down, and I DO want to be buying them if this runs higher from here. They would be running with the General Markets and Bitcoin running higher as a catalyst. Time will tell.
