Tuesday February 11th
The choppiness in the markets recently can act as a temporary head wind to our trades. In todays report, I want to specifically address the current choppiness that we see in the General Markets. I do believe that it is temporary, but we should take a look at it and discuss what we may be dealing with.
.
Take a look at how THE SPX would run up to the prior highs, put in a reversal, and then crash down on ‘News events’ like tariffs, concerns raised about relations with other countries, the economy, etc. So we have had some real choppy trading here.
.
The cycle count for The SPX has us rising up and out of an ICL, but after a day 8 high, we have chopped quite a bit with lower lows. Well, I do think that we will get above that day 8 high, to make this a R.T. first daily cycle, but I cannot guarantee that the chop will stop after that, so let’s discuss that…
.
Going back to November, December, January and February, The NASDAQ rallied and dropped and then it became more prevalent. Some are wondering: Is this the end of the bull run? I’m going to say, “No, not necessarily. The markets do NOT like uncertainty, and there have been a lot of questions raised as to how new changes will affect the economy and markets longer term.” However…
.
I just wanted to point out that even in Bull Markets we get those long choppy box-like consolidations.
.
This is Gold and the current choppiness that we see in the General Markets is similar to what we have seen with Gold in the past. If it eventually breaks out higher, it becomes the pent-up fuel for another strong leg up.
Keep in mind that the choppy Triangle that we recently saw in Gold caused a ‘good’ Miner like HMY to chop lower and it even dropped to new recent lows.
I am seeing that kind of chop and then a drop with GOOG now (earnings), while NFLX and a few others are still able to make new highs. So we may get a mixed bag of results during the chop. Stocks often react or overreact under these conditions. The recent recovery rally has renewed HMYs zeal in the above chart, so we may see that in the general markets over time too, if and when the chop stops.
.
THE USD is on day 10 of a 4th daily cycle that I expect to eventually drop it down into an ICL. This day 5 peak may be the highs of this daily cycle. Gold has been strong whether the USD was rising or falling, but when the USD rolls over, it will be interesting to see if Gold even gets another strong push higher.
.
GOLD has been on a strong rally out of the triangle. I took a look at it with the 8 ema and I see that Gold is not violating that moving average. This is a strong run. I mentioned this a week ago and I’ll mention it again:
We are due for a dcl, but at this point, it could be a very mild dcl and therefore easy enough to ride out. You wouldn’t need to ‘trade around’ a dip into a dcl, because a move like this is not easy to sell a dip and get back in. A dip from here …
.
A dip from here MIGHT simply back-test the breakout to new highs.
.
SILVER has not been anywhere near as bullish as Gold. It looks ready for a dip into a dcl with the spot Silver cycle count, but stock charts has the low in a different place 8 days earlier, and that is why we wondered if that day 18 low is really a day 26 dcl, as shown on Stockcharts. So again, this may be best to ride a basket and add on the dips.
.
CDE AND FSM BELOW:
Silver stocks have really lagged Gold Stocks, but you can see that slowly but surely, most are rising up to prior highs over time. Yes, they are very Slow and choppy, so it hasn’t been very exciting, but once they break from the large consolidation, they may run well (2nd daily cycle).
.
So GOLD was up around $50 yesterday, but…
.
GDX was only up $1. It has turned into a decent run, but it doesn’t seem to match the gains that Gold has. That said, we do not know how this will play out over time. It is possible that GDX will break to new highs and continue to chug higher, even after Gold stalls or consolidates. Right now $34 to $41 is not bad for an ETF, and some of the leaders in Miners that I recommended as better runners (HMY, IAG, KGC, AU, AEM, etc ) have done very well.
.
GDX is also holding the 8 ema, so it has been choppy day to day, but it has not dropped very much on each dip.
.
HMY – We had an entry for HMY near $8 and it has had a nice run.
.
I called out SAND, NGD, NG, BTG, and SA as laggers that may play catch up.
SAND did break out and ran higher. What about SA?
.
SA has a long base, and it has only moved from $12 ro $13 since I mentioned it. THAT is disappointing, with Gold running the way that it has, it could be a sign of internal problems (an offering coming? And earning miss coming?), but it also still may be an opportunity to buy low (small) and ride it higher.
.
So we still have Bullish set ups and the Bulls are still in control, but every now and then the bulls do take a rest and we endure consolidations. The choppiness has made even the right decisions (like buying an ETF at the ICL) difficult, but consolidation periods do eventually come to an end, and rallies can follow that period of time. As for Gold, it seems like it’ll never pull back, but it is due for a dip and All rallies will pull back eventually, so Gold should be in that category soon enough. It kind of looks like it wants to run right to $3000 and then pullback, but a break of the 8 ema would likely signal that the pull back is taking place. This is only the first daily cycle, so the Miners may do well in the second daily cycle, even if Gold consolidates a bit. Enjoy your Tuesday trading!
,
~ALEX
.
BITCOIN is on day 28 and it is pressing up and against the 50sma. This is Bitcoin at 6:30 am et, and when I looked at RIOT, MARA, WULF, CIFR, etc pre-market, they are down and not following Bitcoin (yet?). So we’ll have to wait and see how this plays out. So far this has been yet another long choppy consolidation.
