Friday July 26th
INFLATION DATA! – Does anyone dare to buy anything? Well, I have some possibly safer ideas in Biotech and Oil again, but also today we have inflation data and the markets could rally or bounce into the fed mtg, we’ll see what the futures will do AFTER 8:30 a.m..
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I just want to say something here and will do so using 4 charts for the NASDAQ.
1. For starters, this looks like every other ICL sell off, right?
2. ICL sell offs come along every 6 months or so, so this would only be the half-way point, right?
3. That COULD get ugly, but let me show you an idea for the General Markets…
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NASDAQ – That is a sharp drop for what should only be the 2nd daily cycle. It is possible that we get some strong bounces and mini rallies that walk us lower into the next ICL (in time for the Rate Cut?). Please take a look at the sell off (coincidentally) from Aug to November last year. We saw 3 daily cycles lower into an ICL.
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NASDAQ – If I copy/paste that drop into the area now, we would drop into the September Fed Mtg and then rally AFTER that meeting.
This was a nasty sharp drop in the 2nd daily cycle though. Do I have a crash scenario, just in case we see that?
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This is my crash scenario and it could be ugly (Unless you short those drops). We’d see a bounce after each ICL, but the selling would return. AS I WRITE THIS REPORT…
AS I WRITE THIS REPORT, it is 6:30 a.m. and the NASDAQ FUTURES ARE UP 200 POINTS and we have inflation data due out at 8:30, so we may start to bounce today and we’ll see how things go from there with both of the above scenarios in mind.
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Yesterday pre-market I noticed that Biotech avoided the deep sell off. XBI & IBB were now climbing as the markets fell, so in the comments I put this chart 10 minutes into the morning drop (Following Thursdays drop) Noting that it avoided the crash. I then bought LABU and NVAX and placed those in the comments section too. XBI & IBB represent LABU for me.
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NVAX was up 2% but I pointed out that it has 15% gainer days, so this could run higher. I grabbed it when it was up 1%, so I wanted to alert readers to its potential.
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NVAX – After 2 hrs of trading it was up 5-6%, but slowly climbing, so I posted this. S0 far, so good on a sell off day.
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NVAX was actually up 14% at one point, and dropped to up 8.25% THIS CAN CONTINUE HIGHER TO THE PRIOR HIGHS OF $24.
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PFE popped so I showed tis at 10 am and listed a few other biotech stocks that I follow simply to say that this sector was avoiding the sell off. I mentioned TWST, GH, EDIT, PRTA, INO, and so on. ALL OF THOSE REMAIN BULLISH IF YOU ARE INTERESTED IN A TRADE THAT AVOIDED MARKET SELLING.
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TWST was ‘only’ up 4% at one point yesterday, and only closed up 2.6%, but the chart is bullish and sell off didn’t hurt it. I have been pointing this and others out for a couple of months. They are slow and steady.
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WTIC- Oil put in a nice reversal yesterday and this might be worth a trade or buy & hold. Read the chart. Oil is oversold and the timing is right for a dcl or a half cycle low and on the 2 market sell off days of Wednesday and Thursday, Oil held up. What about the Oil stocks?
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XLE is climbing higher. It has been choppy, but progressive and yesterday it was nicely green despite a market sell off, so Oil stocks are resisting the selling too.
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Stocks that I have mentioned in the past like APA, OKE, WTI, NOG, VLO, etc etc looked good yesterday after a dip into a dcl. APA reversed at the 20 ema and was up 3.30 % on a sell off day. $27 to $33 isn’t bad either.
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VLO had earnings and Popped $8 as it double tapped that 200sma. VLO may be ready to run to former highs over time.
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GOLD – Using the futures, Golds lowest point was that day 24 slam down, and if we count from there as the ICL, we are at day 32 on the 50sma. If that was an ICL that ran to a higher high (in this case an all-time high), then we should make a higher low. Gold could be close to a dcl. It may do a ‘shake out’, since the FOMC is next Wednesday. That would be day 36 for Gold.
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SILVER has been different. It is doing the original idea of a drop into an ICL in a 5th and final daily cycle. Let’s do a cycle count next…
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SILVER – This should be day 28 of a possible 32 (or anywhere around there lately). So the Precious Metals may be nearing the area for a low.
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GDX DAY 26 The GDX ETF also appeared to lead the way and put in an ICL in June. You can see that as it sells off (or when you look at individual miners), they are selling off sharply, but this also looks like it wants to put in a higher low, indicating that we saw an ICL in Gold & Miners. The problem here is that it could drop to the blue 200sma, since we have time and space left (the stochastics is not oversold).
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GDX DAY 26: That ‘time & Space’ actually makes it perfect for the GDX to bounce and sell down one more time into the Fed Mtg next week. What a buy that would be on day 30 (FOMC) or the day after the Fed Day as day 31.
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We’ll see what the futures do after that inflation data is released. To be honest, this Wednesday -Thursday market crash seemed to come out of nowhere, so we may only bounce and then drop 1 more time into next weeks fed mtg. A DCL could form then, and we’d see how the bounces play out. With all of this said, we also took note that — Biotech and Oil stocks remained bullishly set up and avoided the deeper drop this week. You can consider those trade ideas as likely safer over the short term. I will discuss Bitcoin below, Enjoy your Friday trading!
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~ALEX
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YESTERDAYS REPORT:
BITCOIN: And overnight Bitcoin dropped to the 20ema with a low of $63.800, but I don’t know if I trust the crypto stocks at this point with such a sell off yesterday. Again, the charts are not absolutely ugly, but they started to get caught up in that market selling yesterday after rallying in the morning, and now the price action has me a bit concerned with a market sell off. Bitcoin remains bullish…
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BITCOIN dropped to the 20 ema an then recovered the 8 ema here, with a spike lower. Overnight Bitcoin took off higher so this is still a very bullish set up and buying the BITCOIN ETFs has been better than buying the crypto stocks on this leg up. Today we’ll see what the crypto sticks want to do.
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Today we’ll see what the crypto stocks want to do.
Take a look at these 2 charts of MARA & RIOT:
They DID get caught up in the market sell off, and I didn’t expect that with Bitcoin up nicely. I also do see many up in pre-market 5-8%, so they could gap open, fill the gaps, and then take off higher. They also could just gap up & run. Lately they have been weak though, so they could pop & drop again. It’s hard to know because they have been such a disappointment with Bitcoin looking so good. Today may shed some light on the crypto stock possibilities.
