Friday February 23 – Hello Friday
YESTERDAY I POINTED OUT THAT THIS 2nd DAILY CYCLE COULD CONTINUE HIGHER: I said…
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Notice this:
Take a look at the first daily cycle and where it was at day 27. It still rallied to day 43 from there and then dropped to a dcl later. We are currently on day 31, so this may be what unfolds here if the markets rally on Fed Minutes, NVDA, and the Jobs Report. This can go higher and still be in the 2nd daily cycle.
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SPX -I still think that this is the 2nd daily cycle and this is day 32 (the first one was 47 days long). The dcl may be an eventual back test or Gap fill in this area. This will be another very right translated daily cycle, so it will be a ‘buy the dip’ opportunity when it pulls back.
WTIC -Oil is bullish and looks ready to break & run higher. I would think that you could even raise a stop to the 20ema.
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DO YOU REMEMBER WHAT I SAID ABOUT THE USD YESTERDAY? This is part of what I said…
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Well, The USD stayed on the lower support line of this channel and hardly moved on Wednesday. The MACD has crossed lower and unfortunately it is very difficult (almost impossible) to see if or where it has its last dcl. That means that it may be ready to drop down into a dcl, but this is a very unclear set up. The MACD is a clue of weakness though.
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USD – Wow, I think it dropped to a much more visible low. So one way to look at this would be a day 39 dcl. That is quite a long daily cycle for the USD though, so maybe…
USD -Maybe day 26 was a stealth dcl, and this is the dip down into the 2nd daily cycle, like a half daily cycle dip? Real accurate cycle counts are still unclear, but at least we now have a good drop to take note of moving forward. IF THE USD BOUNCES FROM HERE, GOLD CAN DROP INTO THE ICL.
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GOLD may finally be ready to drop into that ICL, and it is possible that we are in the 5th daily cycle. Time will tell, but Golds strength has been making it very difficult to visually see weakness. Hopefully that changes briefly 🙂
SILVER was rejected at the 200sma and it is chopping sideways for now.
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Newmont Mining released earnings on Thursday, and that wasn’t a very helpful. The GDX would be affected by that steep drop. There is divergence in the MACD and RSI, so this may be an over-reaction that bounces back fairly soon, we’ll see. What happened to the GDX?
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THE GDX dropped 2.5% and filled that open gap, but don’t be surprised if the lows are broken too, over time. That could give us an ICL with MACD divergence.
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RGTI– My doctor knows that I invest and he asks me questions often, so Thursday he said to me, “Hey, what do you think about the quantum computing sector and RGTI?”, so I looked up the chart and I do really like it. I drew this up for him and emailed it to him yesterday, so this is a day old now (and it was up 5% Thursday).
1. It had a strong rally, and then formed a high base after running from under $1 to $3.50.
2. That base was under the 200sma and it allowed the moving averages to align better and
3. Now price is rallying on stronger volume as it broke above both the 50 & 200sma. It is also pulling back toward the 50 & 200sma, so it may do a back test at the next dcl(?). For any that like a longer term buy & hold, this may be a good candidate. Earnings come out March 18. It is on my watchlist.
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RGTI – This is updated as of yesterday. I usually don’t like to buy an extended stock (Crypto stocks are the exception in a bull run), But this is extended a bit so I HOPE for a back test at the 2000sma & a reversal there. The lower trend line is at the 50sma, and this could go there too, if the markets give us a dcl soon.
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Today is the last trading day of the week, have a great weekend and enjoy your Friday trading!
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~ALEX
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Bitcoin – So far our ‘peak’ is day 28, and our ‘half cycle dip’ came the next day on day 29. Today is day 31. As mentioned in yesterdays report, we have often seen Bitcoin just suddenly sell off to the 20 ema, also seen on this chart.
1. That means that we could drop quickly down to the $49,000 area on day 31 (today) or maybe over the weekend. Or…
2. This could just continue to bore us to tears and chop sideways until that 20 ema catches up to price a little more in a week.
3. There is nothing that says that this daily cycle can’t just be stronger and no longer dip down to the 20 ema. Sometimes a bull run will get steeper and find another moving average to ride, like the 13 sma. (However the 20 ema is pretty popular for a strong bull run).
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Bitcoin – Yes, Bitcoin has had a strong run already in 2023 and it can just continue to chop sideways here like it did from late November to January, but what I have drawn here would be the ideal outcome. 🙂 If that was an ICL, we could go higher from here and I would love to see this run back to former highs after a half cycle low.
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JUST A NOTE: Finally, let me just mention this: When a cycles timing is on the early side in any sector (a few days out of a dcl or ICL), I will hold positions over the weekend. Buy & Hold is fine. So if Gold & Silver put in an ICL for example, I will Definitely hold my miners over the next couple of weekends. Lately I have simply been selling at least half of my positions in the General Markets or maybe all, and re-entering during the next week on Monday. For crypto this time, I am thinking that I will hold at least a starter core basket, because we are possibly due to move higher next week and Bitcoin trades over the weekend. So let me show you what I am thinking MIGHT happen…
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Bitcoin
– What if we drop Friday (& that scares people out), and then it tags that 20ema Saturday night or Sunday and flips higher? By the open on Monday the crypto stocks can be up 10% and then rally from there. It is VERY HARD to buy that, because often we are waiting for those gaps to fill, but sometimes they don’t. These stocks can gap open up 10% and be up 15% in minutes, so for THAT reason and due to the cycle timing, and the closeness of the 20ema, I will likely hold a core position or at least 1 or 2 ‘starter positions. I am NOT going ‘all in’, because ANYTHING can happen in this sector and it can slam down quickly too.
