Tuesday November 26th – Just a Little Turbulence
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THE SPX continued higher, but I still see this bearish rising wedge formation. Notice this:
1. We dropped and broke down from that wedge, and that often leads to a sell off, but
2. It then recovered with the Election results ‘gap open higher’.
3. The upper trendline still seems to be a resistance area, so we’ll just have to see if this can break out above it over time, or not.
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THE SOXX still looks broken and really just seems to be setting up to do a back test and then it should continue selling off.
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On Monday we saw the USD, OIL, GOLD, SILVER, and The MINERS drop, and for Oil, Gold, and Silver price dropped fairly sharply. Let’s look at the charts…
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WTIC – Oil is not a fun trade with all of this choppiness. It still should be at a point that it is bottoming, but it certainly isn’t reliable.
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THE USD popped and dropped and landed on the support of the 10sma. It may just remain choppy and drop into a dcl from here, because it is in a resistance area. That could look similar to what we saw at the end of October, which was a drop to the blue 20 ema line. So…
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THE USD broke above resistance and dropped back into it so far. It is noteworthy that The USD has not really had a major effect on Gold and Silver lately.
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GOLD was rallying and it was odd to see that strength, since it was due to form a 5th daily cycle lower into an ICL. That rally looked strong, but on Monday Gold crashed down over $100+. That crash looks bad on day 7, but…
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That large drop may make it look like Gold is now going to drop several hundred points for the next 20 days or so, but it may just get choppy. We saw that in May and June after Gold experienced a couple of large drops too. See the box to the left of the chart.
SILVER dropped over 3.5% too. We are expecting a weak choppy daily cycle here, so the choice is whether or not you want to ride it out or step off and get back in later. Silver may not be able to get back above the 50sma until after an ICL is in place.
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THE GDX also dropped 3% and may just chop around going forward, unable to get above that trendline and 50sma too. Honestly, the GDX looks like it already gave us an ICL, but if Gold and Silver haven’t, then The Miners can sell off further too.
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This is a holiday shortened week in the US and at times that can affect the markets. For example, with the markets closed on Thursday and a half day on Friday, all of the data was moved to Wednesday. That is Jobless Claims, PMI, etc. That could cause some turbulence or it may actually cause a Wednesday and Friday rally. Why a Rally? Usually, lighter volume comes in on each day, so the markets can rise higher with less selling. If that is the case, we may see more of a bounce as we head into the end of the week. Thursday the markets are closed and on Friday we have a half day. Enjoy your Tuesday trading!
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~ALEX
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REMINDER FOR THE BITCOIN COUNT: I said in the weekend report…
On Sunday Bitcoin was at day 20 of possible 30 or so. My target was $100,000 and then $120,000, so tagging $99,800 may be all that we see for a few days, we’ll see. Let’s examine the chart.
With the last cycle, Bitcoin peaked on day 19 and then slowly sold down and bottomed on day 25. On this daily cycle, Bitcoin peaked on day 18 so far near $100,000. I mentioned that Bitcoin may dip lower, form another pennant & bottom near day 25 again, and then take off, as drawn here by me. Well, it is selling off, so let’s take a look…
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BITCOIN: So the daily cycles that I use are 60 days long with 30 day mid point dips (roughly). The last dip was day 25 low, as mentioned above, so this could dip into day 25-35. If day 20 was Sunday, day 21 was Monday, and Tuesday is day 22. This can drop further and the blue line is a 20 ema target area. If that breaks, the 34 sma could be next. This low will probably be a good buying opportunity, since Bitcoin could really fly again as it runs to $110,000 and $120,000 and more.
