Friday January 17th
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SPX – yesterday the markets started off fine, but as you can see, the SPX reversed right at the 50sma.
1. We had a strong bounce at day 24, but that was too early for a dcl.
2. We had another good bounce at day 31, and that was ‘o.k.’ for a dcl, but still a little too early.
3. It rolled over. Now we have a strong bounce at day 37, so is that the dcl? This is within normal timing, but we have seen day 40+ dcls too. So this was called a ‘Buy with a stop’ recommendation just in case we drop even lower for an ICL on day 45 or so. This is a L.T. Daily cycle.
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YESTERDAY I MENTIONED THAT POSSIBILITY OF A DEEPER DROP USING THIS NASDAQ CHART: We could see one more entire daily cycle – or – this bounce could roll overand drop toward the green line for an ICL.
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NASDAQ – A slam down would be a clear ICL, like #3.
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WTIC – Oil dropped on Thursday, but it has been quite strong after breaking out from that choppy consolidation. At this point it is possible that Oil could dip to the 200sma, crawl along it until a dcl is in place, and then continue higher. If it does that and Oil stocks pull back, they would be a ‘buy the dip’ setup.
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The Oil stocks crashed sharply with the chop in Oil. Once they started higher, there was no dip for me to enter 🙁
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NOG – I hate to even look at NOG, because I was watching for a dip. I didn’t get in early on the Oil trade due to all of that chop in Oil at the lows. My favorites NOG, WTI, APA, VET, VLO, etc have now launched off of the lows, not even pausing at strong resistance areas. I drew in a future DIP possibility here, and that would be a buy.
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WTI did pause & dipped lower, so you could buy this one here. The volume is good, but it hasn’t run as non-stop as NOG, APA, VLO, etc.
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The USD has been faithfully rising up and along that 20 ema. There is divergence showing up at the recent new highs and eventually a L.T. Daily will appear and a dip into the next ICL will take place. Gold may be starting to breakout in anticipation of the USD drop.
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GOLD has a very clear bullish breakout, so it is VERY disappointing when we look at the Miners. Some are running, many are stagnant. THIS BREAK HIGHER YESTERDAY should have added gas to the tank on Miners, but take a look at this…
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Sure, KGC is at the highs, but it sold off 4% on a day when Gold broke the downtrend, up $33? That is very confusing. MAYBE…
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It IS Bullish, because the MACD and RSI are bullish, but MAYBE the Miners lagging signals that GOLD is doing a false breakout for now? Let me show you what could happen when a dcl comes due…
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Maybe Gold will drop back inside of the triangle for a dcl, and drop down near the apex? I would have to redraw the upper trend line and the real breakout would be after the next dip/dcl. I can only give it an educated guess at this point, but too many Miners ignored this beautiful day in Gold. Look at that first LONG purple triangle last April to July. We had a false breakout then, and it got really choppy before the real run took place.
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SILVER was not ready yet either. Silver has wide chop and did not follow Golds surge higher either, so it makes me feel that we need a little more time. It is still Bullish, just choppy and frustrating day by day. Let’s discuss that further…
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Let’s discuss that further…
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Silver has a rather large wedge formation, but it did NOT break out and it may not be ready too. Silver stocks have lagged. This could remain in the wedge until the next dcl forms, and THAT would be the Silver ICL. Take a look at that last drop after the tag of the magenta trendline. It can happen fast.
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So now we see Miners lagging Golds breakout. The GDX ETF was red. It is possible for Miners to bottom first and for this to be the ICL for Miners, but it will be choppy if Gold and Silver chop lower.
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Finally, Do you remember when Bitcoin broke out from this wedge downtrend, but Crypto stocks didn’t follow? It just wasn’t proper timing …yet. We got a new low on day 70 and then the crypto stocks seemed to start following Bitcoin more closely, so this may be happening to Gold & its’ miners too.
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I cannot say with 100% certainty that Gold has put in a false breakout, but I have seen it before. Silver and many Miners did not respond as bullishly to Golds breakout, and when I have seen this before, it always makes sense later-in hindsight. What I often see if that it is not ‘time’ yet, so if Gold broke out and drops, we’ll have another false breakout that frustrates those trading miners, and then a rally unfolds after the next low, when everyone pretty much gives up. The overall set up remains very bullish, it may just be a matter of’ timing’. Bitcoin is looking good too, so I’ll discuss that below. Enjoy your Friday trading!
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~ALEX
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REVIEW: YESTERDAY I SAID:
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BITCOIN is on day 3 and has reached a resistance point and paused. It can pull back further and be fine, but Bitcoin is known to be very strong, so it also could just power through much sooner than later.
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Also yesterday:
BITCOIN: The bigger picture is a very bullish looking set up, if it breaks out higher. So far, the crypto stocks are very volatile, but they are acting correctly (possibly because the General Markets were running higher too).
BITCOIN crashed and recovered and that gave us a pattern pointed out to me by Joe Granville that he called ‘railroad tracks‘. This usually marks the low, as sellers bail out and buyers scoop it up just as quickly. I saw this on a 60 minute intraday chart and then expected Bitcoin to hold these lows and push higher. On a daily chart…
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BITCOIN dropped to the 50sma with that intraday crash and recovery, and then it closed right back at that trendline. This was after the close.
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BITCOIN then broke out after hrs and this is a chart of Bitcoin this morning at 5 a.m. ( I don’t know why the time stamp on the chart says Jan 17 at 10:30 a.m.? Obviously THAT can’t be true). Bitcoin remains bullish looking and this should be day 4 of 30 or 60, depending on how you look at it, but there is a lot of ‘time’ left in this daily cycle. Hopefully higher and R.T. over time.
