Tuesday October 8th – Choppy and Higher
The question is, “Do the General Markets have a dcl in place, or is there one more drop ahead?” On Friday, the SPX and NASDAQ closed above the 10sma, but on Monday they lost that 10sma, so let’s take a look and see if anything stands out as a clue…
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THE SPX had gained the 10sma on Friday and so I thought that we might have the dcl at day 41, but when I looked to the left to the point just before we dropped into the half cycle low, we had the exact same situation. Look at the Green and Red arrows that I drew as we dropped into the half cycle low. This set up looks similar, so we may be dropping into a deeper dcl at the 50sma area this week, UNLESS we remain above the 20 ema and just shoot higher from here.
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THE NASDAQ also slightly resembles the sideways chop between the 20em and 10sma before it fell into a final half cycle low.
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THE SOXX actually didn’t drop very much on Monday, it is still trying to ride the 10sma. If we do get a drop lower into a dcl in the SPX & NASDAQ, the SOXX may just land on that 50sma. This could make the markets seem choppy like last week, if it plays out this way.
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WTIC – Oil surged again and tagged the 200sma. Volume has been big, making this look like a real move higher, so we’ll see if it can get through the 200sma next.
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THE USD is also running straight up and out of its’ lows, but Gold and Silver have not been dropping straight down, they have chopped sideways.
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GOLD looks to be forming a pennant and only chopping sideways as the USD goes straight up. If the USD dropped lower, Gold might pop higher.
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SILVER has also been chopping sideways with the USD straight up, but it has wider swings and isn’t forming a pennant. Again, if the USD starts to dip, Silver could pop and make new highs. The cycle timing is a bit unclear for Silver, so…
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The cycle timing is a bit unclear for Silver, so I drew the following for the weekend report. Just add one day now…
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SILVER DAILY – The cycle count for Silver has been obscured with the choppiness.
Was day 20 too early? It seems so, but was day 28 the dcl? Maybe, it is hard to say with a certainty. Another dip came on day 8 or was that day 36 and THAT was the dcl? You can see that it is not clear, but what is clear is the ICL in August and we are exactly 2 months forward from there, so Silver can & should continue higher despite the USD.
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GDX – The Miners did not hold up as well as Gold & Silver and that is disappointing. This looks very similar to the last 2 drops lower. With those dips, price lost the 50sma for a few days and then recovered. That price action formed a lower trendline. If Gold and Silver chop sideways for a few more days (complete the pennant, for example), Miners may lose and regain the 50sma. So GDX is in a wide and sloppy trend higher.
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Not much has changed as of Monday, but I am mainly watching to see if we do have a dcl in the General Markets yet, or is it right ahead? It is a buy with a stop when a dcl confirms, so that may be important to those using leverage, however we are around day 40+ so the lows are very much due and further selling should be minimal. Bitcoin is below. Enjoy your Tuesday trading!
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Note: I have quite a few readers located in Florida, US. and there is a massive Hurricane in the Gulf waters heading right toward Florida (Again). It looks like all of the state will be affected, some being hit with wind and storm surge much worse than others. I just want to wish you the best possible outcome, and we all know that safety comes first, so please do what you need to do to be safe and a survivor when all is said and done. It is often best to evacuate as deemed necessarily by local authorities.
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~ALEX
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FROM SATURDAY:
This is Bitcoin Saturday morning: If this day 59 swing low remains in place, then this was a beautiful reversal / landing on the 50sma and we should have 30-60 days higher over time if the sideways chop comes to an end.
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BITCOIN – With a day 59 low and then 4 days higher as of yesterday, we seem to have that dcl near day 60. Yesterday was the ‘Pop & Drop’ candle for Bitcoin, so what started out as a morning rally ended up as a pop and drop for some of the cryto stocks. I’ll show a couple below, since I rode that wave (& was disappointed too).
I mentioned going into the weekend that some Crypto stocks looked to have bottomed, so I expected the day 60 low in Bitcoin over the weekend and I already owned HUT and IREN from last week (small starter positions). I held those 2 Miners and grabbed some RIOT due to the large volume after the open, so…
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HUT was up 2% an hr after the open, so I pointed out how it was above the 20sma & 50sma. It looked good and started to run higher. It did a pop and drop by the close though, dropping right back to the 50sma 🙁 …
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HUT did a pop and drop by the close though, dropping right back to the 50sma 🙁 . If Bitcoins lows are in – this should hold, but these are crypto stocks and they do chop a lot at times. I will have to stop out and start over if this drops, since it could form an inverse H&S that matches the left shoulder.
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RIOT gapped open over the 50sma and kept running and I had taken a position because I traded it last week up to that 50sma and it already had strong volume in premarket on Monday. RIOT was up over 8% and then sold off with the Bitcoin Pop & Drop too. Riot…
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Riot actually tried to close that gap and then reversed higher, so it still closed up about 4%, but basically it did that pop & drop too. There is the possibility that it will try to completely fill that gap at the 50sma and then continue higher, but what happened yesterday may be good enough. A drop & REVERSAL at the 50sma could offer another entry though, if that were to happen.
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IREN I have already been pointing out IREN as a good set up and this is the one that ran from $4 to $15 earlier this year. Well, it also did a Pop & Drop, so my position went from Green to down almost 4% (frustrating, but this is how they move quite often).
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RECAP:
As mentioned in prior reports, Bitcoin should have a low in place here around day 60 and now I want to watch how it acts when it gets to the highs. A break out and run to new all-time highs would be great for this sector, but it also COULD run up, stall, and continue the consolidation. I mentioned that in the weekend report and will show both charts below from the weekend report.
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I PUT THIS IN FRIDAYS REPORT:
If the day 60 low comes in this high in the consolidation, it is very easy to picture Bitcoin finally breaking out and running much higher, like this. THIS would be a GREAT TRADE for ETFs or the Crypto stocks.
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FROMM THE WEEKEND REPORT:
ONE FINAL THOUGHT ON BITCOINS SET UP: Is it even possible that we get another 60 day portion to this large consolidation? Of course it is. 🙁 Anything is possible with Crypto. That said, this day 60ish low would be a buy and then I think that we will know more as we approach day 30 near the highs.
