Wednesday January 29th – It’s A Fed Day, Hold On!
Today is a Fed Wednesday and we all know what happens on a Fed Wednesday, right? It can be a choppy day, or price can even climb steadily until about 2 p.m. ET. Then we can get false rallies after 2 p.m., and then when the Fed Speeks and answers questions, the charts start to look like a Cardiogram Chart. Welcome to Fed Wednesday, and since we know that things can get choppy and difficult, we’ll just keep this report rather simple.
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The SPX crashed with the Monday news, but price rallied on Tuesday at the 20ema. This would be day 10 and so far it actually would look normal if you didn’t know about the Chinese AI news event. Today is Fed Wednesday, so this can continue to rally or continue to chop. We’ll have to wait and see.
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THE NASDAQ dropped sharply on Monday, day 9, and started to rally back on day 10. The CYCLE is NOT broken, since the lows were not taken out. Cycles contain a ‘range’ of trading, and the price remained within the daily cycles range.
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Monday and Yesterday I mentioned that META, EXFY, HD, PAGS, and others were not affected by the sell off. I posted this chart in the comments on Monday.
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META – So now you can track those and buy on dips or areas of support. In fact, if it wasn’t a fed day…
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In fact, if it wasn’t a Fed Day, I likely would have bought TSLA right here, but I held off for now.
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I bought EXFY in November and I also mentioned EXFY on Monday, and I really like what EXFY is doing too.
WTIC – Oil has been dropping into a dcl. We did see a reversal on Tuesday, but that doesn’t mean we have the dcl yet. This could bounce up and back test the green 200sma, and then drop again to the blue 50sma.
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THE USD probably does have a dcl in place. I am not expecting a strong rally like the first 3 daily cycles. I am thinking that this will get choppy and toppy and roll over into a dcl/ ICL. THE RSI lost the 50% for the first time since September and the MACD is showing weakness.
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GOLD had a good day on Tuesday, which is a little unexpected this late in the daily cycle. I would expect it to start to turn lower and seek out a dcl soon. The FED Decision and conversation today may slow it down, we’ll have to wait and see.
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SILVER dropped in the morning and then reversed higher on Tuesday too. It still has not broken above the downtrend line and the Fed Day is the kind of a day that may be ‘do -or-die’ for the breakout. It looks like Silver is on day 24, so this could still go either way.
1. A tag of the trendline on Fed Day 25, and then a drop into a dcl (maybe ICL). Or…
2. A breakout proving that an ICL is in place, and then a dcl back test of the downtrend line next week.
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GDX has been moving higher in a choppy manner for the entire run out of the lows. It only looks like day 18 for the GDX.
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So Monday was a slam down day for traders, Tuesday saw the various sectors rising back up, as if it was just a knee jerk reaction, and now we have a Fed Wednesday. This will definitely be a week of volatility and today, after 2 p.m., things often do get quite bumpy. With that in mind, we just want to be mentally prepared, have stops in place, just in case selling picks up, etc. I am NOT saying that we will see another sell off, but we could. We also could rally. Why? The Fed is not expected to cut today, but if the Fed discusses a rate cut in June or July due to recent data, we could also see a bullish reaction higher, so let’s just be prepared for whatever may come our way. Expect the worst and hope for the best! 🙂 Enjoy your Fed Wednesday trading!
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~ALEX
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From yesterday:
BITCOIN dropped quite a bit, but it bounced right off of the 50 ema, and that looks like a perfect set up. Crypto stocks were beaten down severely due to this drop plus the general market selling, some down 20-30% before putting in a slight bounce. That again may help some to decide to just trade the Crypto ETFs. Some crypto stocks held up ok, but the leaders like WULF, HUT, IREN, etc. sold off sharply.
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On day 15, BITCOIN could just move higher and begin to breakout, or…
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BITCOIN may continue to chop as mentioned a week ago, giving us a cup and handle over time. Either way, I don’t think that the Crypto stocks will move higher until Bitcoin breaks out and runs, and even then, they may not join in. The ETfs may be the way to invest in Bitcoin.
