Friday January 10th – Is The Coast Clear?

Today is Friday and we have a little data, but a lot to talk about, so lets get right into the charts…

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THE SPX: IMPORTANT

  The General Markets did seem to put in a dcl at day 31, but things have been quite choppy with sharp drops. We had a dcl at day 41 and day 32, so now do we have one at day 31? That is possible, but if the lows break, it still might only be seeking out the next dcl at day 40 or so.  ALSO, and I had discussed in December that we should be due for an ICL (the last one was in August), so the markets have been trying to rally in the new year, but have been bogged down into ‘choppy’ and that may continue.

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THE SOXX was very bullish with a strong gap open higher on Monday to put it back above the 200sma, but then it sold off on Tuesday & Wednesday. It might just be a dip to a gap fill and recovery, but we’ll have to see what the markets give us today after that data release. The Soxx bounced away from the green 50sma.

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WTIC – Oil has been SO CHOPPY, that it was really hard to tell where or when that dcl would form. With this box, the dcl would be day 49 and that is likely the dcl. The severe chop continued but the MACD started to turn bullish and  I pointed out a bullish triangle. Oil broke out and ran to the 200sma where it is currently being held back. So…

 

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Same chart: So

1. Oil now has a Right Translated 2nd daily cycle,

2. The RSI reached almost 70 (that isn’t bearish or weak).

3. It is day 34, so Oil may be due for a dcl. Now that means that Oil could drop again, even to the 50sma(?), but NOW that would look to be a possible buy if it holds support. It also may just crawl sideways under the 200sma.

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When Oil was choppy and looking ready to break down, The Oil stocks (seen here with The XOP) Sold off in a very sharp manner. That was an a-b-c crash down in November through December and I did not like this sector, but now it is rallying with Oil. I am not trading here yet, but if Oil now drops to a dcl and back tests the 50sma, and Oil stocks hold up or sell off mildly, we may see bullish set ups then. VET, NOG, VLO, APA, OKE, etc are on my watch list.

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This was Gold in my last report. I said…

GOLD is choppy too, and it with an ICL in place, it is expected to break & run higher soon, similar to what we just saw with Oil. The MACD is bullish. The sharp drop in the markets and bitcoin did not flow over into Gold.

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GOLD has very slowly been rising higher and is now almost touching that upper trendline. It is on day 17, so it  is possible that it might breakout if it doesn’t stall and chop along the top. Miners are moving higher, but they also have been slow, choppy, and that gets frustrating when we are hoping to get well off of the lows.

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SILVER –

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As mentioned above when discussing Gold:

Miners are moving higher, but they also have been slow, choppy, and that gets frustrating when we are hoping to get well off of the lows.

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GDX -After that sharp sell off to the 200sma, GDX bounced and broke down further. That has formed a possible Bullish descending wedge, and I’ve discussed that Miners could be a buy again to start a basket if you don’t have one. The MACD is shaping up, but we may be a resistance point too (temporary resistance).

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 You may recall that during the Rally last year, we made good gains in IAG, EGO, OR, HMY, EGO, KGC, AU, AEM, etc, so I wanted to be ready to buy or add those after the pullback.  Let me show you something…

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Some Miners are acting a bit better than others and KGC actually looks pretty good coming out of the lows. I know that it has been choppy and all of these prior rallies to the highs failed, but this should breakout again and run, if we have a continuation bull run in Gold.

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EGO is now pushing on the 50sma & 200sma. I hate that the 50sma looks ready to cross under the 200sma, sometimes called the death cross, but that can change. The MACD & RSI are becoming bullish.

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IAG was a good runner on the last run, and it has regained the 50sma. yes, these Miners have been choppy and lackluster, but they may slowly climb higher.

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And then we get to HMY: You may recall that this one was my favorites in 2024.  I had a buy & hold position when I had a basket and I traded it, and it was a winner, so why is it trashed? I think that it is a buying opportunity with a stop at these lows. It has the death cross, but I bought it this week anyway. Notice how HMY ran straight up in October before the Miners sold off, so I think that all of those buyers may have bailed out or took profit, causing that drop.

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CDE I like what the Silver miners are doing, since Silver has only been choppy. I did buy EXK, AG, CDE recently and EXK dropped on news of a delay in production, so that may become a buy opportunity for some, I sold mine for now as it dropped.

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So we’ll see if the General Markets are just choppy or looking for more downside. Oil is perking up and Oil stocks may become a buy on the dip. Miners look good, so that is set up properly at this point, especially if Gold can break free from that triangle and back test it on the next dcl. Bitcoin?  Questions arise, I’ll cover that below.

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I have to be away for the morning, but hope to be back in the afternoon. Maybe by then the dust will settle and things will become more clear in the general markets & Bitcoin.   Have a great Friday and a great weekend!

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~ALEX

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Bitcoin put in a low at day 56 and broke out from a bullish descending wedge. With that downtrend break and reversal at the 50 ema, this looked to be a dcl and a rally should follow…but it rallied and dropped, so what is happening?

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PROs & CONs – The good and the bad.

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Bitcoin is raising a question here.

 We DID get a lower low overnight, so we naturally think that we have a ‘failed daily cycle’, and we might!  HOWEVER, Bitcoin cycles can last 60-70 days, so is that low & reversal today the dcl now on day 66?  Some might say, ” But the dcl was confirmed above the 10sma, right?”  Yes, I agree, but it also formed in the wedge or triangle, and from what I have seen – Bullish wedges or Triangles hold up stronger than anything else. They are the technical analysis pattern that seems to ignore cycle rules. So we MIGHT have a day 66 dcl, but…

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Bitcoin: We still need to be cautious here until this makes some upside gains, because the overall pattern is starting to look like a topping pattern, namely a H&S possibility. The MACD has divergence, so we may just have a dcl. Only time will tell, I am still hopeful and bullish until this really breaks down.