Post-Fed Thursday – Waiting For The Trade
DATA – We had some interesting price action with the Fed Decision and the speech that followed. Today we also have data that moves the markets , so let’s take a look at the charts and the set ups and see what we might expect.
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NOTE: In the past, as the Fed speaks after the decision, we would find ourselves screaming at the T.V., “Please stop talking!“, because the Markets & Precious Metals used to sell off as he was speaking & doing his Q&A part. After he finished talking, the markets would rally into the close. Well, yesterdays reaction was the exact opposite, so let me show you what I was seeing…
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QQQ Intraday – You can see the Pop on the Rate hike decision at 2 p.m. We then had a rally as Chairman Powell spoke about inflation. When he was done taking the Q&A part of his meeting, the markets started to sell off right into the close. That whole rally was wiped clean. This happened in many areas including The SPX, SOXX, Gold, Silver, and GDX.
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So now that gave us a POP & DROP and the SPX closed back below the 10sma. This was heavy volume selling and the RSI was rejected. This looks like it wants to go lower in that 5 wave down, but I must say that I NEVER could have shorted this with leverage and rode the Fed day ramp up. These markets are choppy & difficult right now.
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OIL HAS WEAKENED. The day 52 low should be a dcl with the price closing above that 10sma, but then it dropped. Yesterday I said:
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Sidenote: If that was NOT day 6 and we were still in the 2nd daily cycle, then it would be day 58 -OR- it also may mean that Oil just peaked on day 4 and is in for a long daily cycle lower (less likely). Less likely, but Oil stocks had a rough day too.
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WTIC – Oil plunged lower on Wednesday and lost the 50sma. This does not look healthy anymore, but
1. Is this one long 59 day 2nd daily cycle? Just a back test of the breakout?
2. Or is this a 3rd daily cycle breaking down quickly as Left Translated?? We need more time, but that could mean much lower oil prices again, if this is a 3rd daily cycle breaking down already.
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Yesterday I thought that we were about to get a breakout. I mentioned that the USD was pushing higher out of this bull flag.
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THE USD popped and dropped instead of breaking out. So it is still just chopping sideways at this resistance area.
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GOOD NEWS! Timing-Wise, WE ARE CLOSE TO A DCL:
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Yesterdays report mentioned that GOLD did not confirm a dcl on Monday or Tuesday by closing above the 10sma, and it actually dropped to a slightly new low yesterday. That made this day 29. Will it bottom on day 30, which is The Fed Day? Will Gold bottom on day 31, which is the day after the FOMC Mtg? We just have to wait and see how it plays out, but it could fall down to the 50sma and that may be a dip for the rest of this week.
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GOLD dropped to a slightly new low for day 30 (31 on this chart because it shows that Gold traded on the holiday), but then rallied off of the 34 sma. It is now pinched between the 10sma and 34 sma. This should form a dcl sooner than later and if it loses the 34sma, the 50sma is the next logical support.
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SILVER is on day 24. Is that enough? Maybe, but it seems likely that it will fall to the next support area and 50sma, but we’ll see. Right now we are waiting for these set ups to finish forming the dcl. These are finally nicely oversold.
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GDX did that Pop & Drop with the Fed Mtg too. Here you can see that at 2 p.m. it Popped. It pulled back before the Fed speech, and then it started higher as he spoke of inflation being held back and future hopes of a rate cut and not a hike. When he was finished speaking, the selling took over and it dropped right back to the lows. Pop & Drop.
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So this was the Pop & Drop for GDX. It would seem that we should see another new low, but if the Metals move higher, this will just keep that day 23 low. Another low from here would be into the day 30 area, so I think that we may see selling post Fed and then a dcl.
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GDX is also churning sideways to get through that resistance area that I pointed out long ago.
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AEM – I was pointing out that most stocks are holding up well when you consider how close we are to a dcl. These have chopped sideways.
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KGC during the Fed Speech. I was showing how it was reversing off of the 20ema and it also just looks like a bullish consolidation.
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NGD actually released earnings and it looks like another good report (Like NEM ), where it pushed higher, and NGD actually closed like this yesterday.
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I just wanted to point out that I bought TGB in the $2.50 are and posted this as a break out.
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TGB is probably fine in the longer term, but I am now out. What a shame, this was a beautiful set up in the chart above. TGB and other Copper stocks looked very promising, but this sold off during the fed day and probably needs to ‘re-group’ or stabilize.
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I think at this point we just need to try to be patient and see what happens ‘Post-Fed’. Good trade set ups are currently developing with the Miners, but post Fed Volatility is something that may give us a bit of a lower low dcl from here. We’ll see. The General Markets rallied and then dropped too, so we need to wait for that dcl. It MIGHT be in play with the General Markets, but we lost that 10sma yesterday. We need to patiently allow things to develop now that the FOMC Meeting has passed. I do see a dcl as being close if not forming here in the Precious Metals sector. Everything looked to be rallying yesterday as Chairman Powell spoke, so I do think that we are close. I also see Bitcoin as another coming opportunity, but it will take a little more time and patience before we get a normal dcl in the 60 day area (roughly), so that is another thing to look forward to.
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Remember that the 8:30 Data is market moving. Enjoy your Post Fed Thursday and beware of a little volatility as a possibility too.
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~ALEX
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YESTERDAY AS A REMINDER:
BITCOIN; Day 42 actually has now broken below that half cycle low at day 30 too, so this is playing out as expected. When we reach a low at day 60 or so, THAT may offer an exceptional buying opportunity. That would now be roughly 20 days away (2-3 weeks away, because this trades 7 days a week).
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BITCOIN – We are really going to need patience for this set up, since the last dcl was on day 57 and we are only on day 43, but patience can be greatly rewarded with Crypto plays and Crypto Stocks. MARA, RIOT, HUT, CLSK, CIFR, BTBT, WULF, etc should really be ‘On Sale’ and cheap for us in about 2 weeks time.
