Tuesday February 4th – Another Dump?
One old saying is that ‘The Stock Market does not like uncertainty’, and we have been seeing that kind of volatility chop its way into the markets recently. Stocks had another large dump Sunday night into Monday morning when Trump discussed Tariffs being put into place on Sunday and added uncertainty as to how that may affect U.S. inflation, production, sales, business relationships, etc. How did the day end? Let’s take a look…
.
THE SPX – By the end of the day Tariffs were ‘put on hold for at least 1 month with both Canada and Mexico’ as they negotiate border control. ALL OF THIS back-tested that trend line again, once on day 9 and then yesterday on day 14. These markets are now very choppy with wider swings. Hopefully they stabilize for a while so that the gains can become a bit steadier.
.
THE NASDAQ has been very choppy too, with all of the above-mentioned uncertainty, along with other issues like DeepSeek AI, etc. The Nasdaq has chopped sideways, lost and regained the 50 ema, and reversed at the bottom of an up trending channel on Monday (Magenta). Again, hopefully now with some of that uncertainty put aside, maybe now we can move higher off of support rather than chop along the bottom.
.
In the weekend report I mentioned the long term downtrend with this chart: I said
WTIC WEEKLY – Oil did have a nice run higher once it escaped from all of the choppiness at the lows. Now it has run into longer term resistance and is pulling back into a dcl. It may then seek out an ICL with the next daily cycle, if it cannot escape from Oils Apex. I also noticed resistance at the Red Arrowed 200 week ma. Oil can still breakout upside – or – down.
.
WTIC – Oil could be forming a dcl in this area.
.
THE USD is working on a 4th daily cycle and looks to be on day 6. I am not expecting this daily cycle to be as strong as the first 3, but it could start out with some strength.
.
GOLD has been running since moving out of the lows of this triangle and then breaking out above the apex of the triangle. Triangles are consolidations that build strength, and that is what we are seeing with Gold now. This looks like day 29, but there was a small dip at day 24. That does NOT look like a dcl, but was that dip a dcl for Silver? And if so, could it be an exceptionally mild one with Gold? I don’t think so, I think Gold has a dcl ahead, but let’s look at Silver…
.
SILVER – You can see the dip here at day 23 for Silver, and this dip was a bit deeper for Silver than for Gold and it lasted for a few days. That COULD be an early dcl for Silver, so that is why I asked if the dip could also be a dcl for Gold at that time, even though it was milder in Gold? Well, it was only a 1 day drop for Gold, so I don’t think so. Gold should be on day 29.
.
GDX bottomed later than Silver and Gold, so it only appears to be on day 22 out of those lows. I mentioned weeks ago that once The GDX breaks the downtrend and recovers the 50sma, it should AT LEAST run back up to the $43 former highs over time. This is only the first daily cycle, so I would say that it will do much better than that.
.
GDX is only on day 22, but Gold is on day 29, so I would really like to see both pull back and give us a nice buyable dcl. One idea is a drop to the 50 & 200sma as a back test. THAT WOULD BE A ‘BUY THE DIP’ MOMENT.
.
It has been choppy and some of the dips have been quite large and frustrating before recovering, but the bull market does remain intact. With a little less uncertainty out there, maybe they can start to trend upward rather than chop sideway. The Precious Metals sector is a bit different. It has not really reacted to the down days of the General Markets. We are hoping for a couple of days of chop and a dip there, to give a good entry for those that want to ‘add’ to positions. Have a great Tuesday!
.
~ALEX
.
Bitcoin sold off sharply overnight on Sunday, so on Monday morning I posted this chart Pre-market ( one at 7 a.m., one at 8 a.m.) to show that we looked to be getting a reversal. The crypto stocks started to put in reversals too. Did it last?
.
Bitcoin gave us a strong reversal and even regained the 50 ema. Crypto stocks also reversed. This is a live shot from this morning and we see a dip back lower on day 21.
.
I posted this chart of RIOT toward the end of the trading day ( 2:36 p.m.) to show that reversal at support and it even closed green.
.
IREN also reversed at the 200sma support area and went green, up almost 5%. This kind of a ride is NOT fun, even though it closed green. This chop is frustrating, so smaller positions may be recommended until things stabilize? Maybe they WILL now be a bit more stable for a couple of weeks with the tariff situation on hold, but uncertainty can affect these markets as changes take place.
