Friday February 7th – The Long and Winding Road

 

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THE SPX was on day 17 yesterday and it continued higher out of the recent low.  As mentioned yesterday, that double dip on the trendline could be considered a half cycle low if this daily cycle is 30-40 days long. You can see that the road to new highs has become very choppy. This is that ‘long and winding road’, but it should lead to new all-time highs.

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IWM almost broke out above that 50sma, but instead it gapped way over it and sold off. It is still bullish and I believe that it will break out soon.

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WTIC – Oil continued to sell down after losing the 50sma. It is due for a dcl, and actually 40 – 50 days is where a dcl usually forms, so…

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WTIC – The count appears to be day 53, so a dcl would be due any day now. I then expect a L.T. Bounce, and then Oil would sell down into the next ICL.

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THE USD was on day 8 on Thursday and so far the ‘peak’ was only on day 5. Interestingly, The USD rode up and along that green 20 ema for the 1st – 3rd daily cycle, but now it is struggling in that area. I expect the USD to roll over eventually and start trending lower. That may add some fire to Golds run.

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GOLD – I would love to see Gold stall, chop sideways or slightly lower, and land on the green 20 ema. If it does that, we could count that as a mild dcl and we’d be able to start the count over again for the 2nd daily cycle. So far, Gold has been in a strong bull run to new all-time highs.

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SILVER broke the downtrend line, but Silver is a little choppy. The question here is

1. Was that a dcl right before price broke above the downtrend?

Or

2. Is it about to dip down now and give us a dcl? Another view of Silver is…

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SILVER – Another view is to look at the cycle count, and we see that…

1. The dip before the downtrend break would have given us a day 23 dcl, but

2. If we don’t have a dcl there, this would be day 31 yesterday and the timing is normal for a dip then too, so…

3. The dip will likely be mild if we get one and could just be ignored or ‘add on the dip’ if we get one here. It also may just be sideways chop.

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Yesterday I wrote: And I drew a return to the highs soon…

GDX was a real lagger that just started to play catch up recently, and we are only on day 24. That was a deep sell off and it was a bit choppy near the lows, but it has started to add some gains out of the ICL.

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GDX – Now on day 25 GDX stalled, but remains very bullish. I really don’t see a dcl here, so I am still expecting that we will see Gold, Silver, and these Miners stall or dip, but in a bull market-things can get stretched.

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 We are in the first daily cycle out of an ICL for the General Markets and The Precious Metals. The Bulls are still in control, especially with the Precious Metals Sector. That means that we can just ride the choppy Miners out, and if we get a dip, we can add on the dip.

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 Sidenote: I have a pretty packed weekend. It starts with a funeral on Saturday morning for my wifes’ co-worker and we have plans after that for the afternoon. Then we are getting a snow storm on Sunday morning with snow to clean up in my area and at my mothers house too. All of this is happening before the popular Superbowl in the U.S., and I do have plans for that too, so I will really try to get the weekend report out on Saturday night.

Enjoy your Friday trading and enjoy your weekend!

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~ALEX

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BITCOIN has been very choppy. It also looks a little less like a cup and handle and more like a long choppy rectangular box consolidation on day 24. We often see a dip around day 30ish, so it is hard to say if the day 20 dip and this current ‘weakness’ counts as that dip(?), or will we see more weakness into day 30 and then rally higher from there. At this point, the Crypto stocks do seem to be holding up better and may follow Bitcoin higher if we get that run to the $120,000 area.

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BITCOIN : O.K., I guess I’d still call this a cup formation with a handle, but that sharp drop on day 20 somewhat ruined it, because the handle should not drop back as deep as the lows. A rally next week would be good timing since this is day 24.