Wednesday April 9th – Fed Minutes Today

FED MINUTES are to be released at 2 p.m. today. Does it even matter at this point?

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SPX 2023 – I had pointed out this set up with 5 daily cycles during a somewhat normal selloff. It ended with a shortened daily cycle, and my theory is that we suddenly had an event or situation where ‘shorts’ that had piled in heavily were forced to cover.  As they cover, buyers see the v-bottom low and buyers move in pushing it higher. It goes straight up. I mentioned that this could happen now with good news, or it may not, so…

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SPX – On Monday we saw a strong bounce, but there was no follow through, even on Monday afternoon. We rallied out of the lows very sharply, but in the afternoon, we sold off. Now on Tuesday we saw more selling. With that, I want to remind everyone that Tuesday was only day 18, and the markets normal daily cycle is often over 30-40 days long, so if that plays out, I said…

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I want to remind everyone that Tuesday was day 18. The markets normal daily cycle is often over 30-40 days long, so if that plays out, I said on March 31 that we could bounce as a half cycle bounce and then drop to the final low (maybe only slightly breaking the current low as a double bottom, or maybe deeper). 

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By request TLT: I actually follow the $TNX, because it shows the movement of interest rates. The TLT moves inversely to the TNX.

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Recently The TNX dropped with the markets as rumors went around that the Fed could intervene with a sudden rate cut due to the markets  crashing. Last week I also heard that we could be back to 4 rate cuts in 2025, and the TNX dropped sharply. That news was shot down over time and now we see a rally out of those lows. This would mean that the TLT should have popped and dropped…

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The TLT rallied last week and crashed this week with heavy selling. Does this mean that the TLT will crash and burn now?  Not really, but it may drop to that gap from January at 84…

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THE TLT does look to be bottoming with a large base forming in the bigger picture, but it could drop back toward the lows of January at the 84 area. It remains overbought on a weekly basis.

 

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WTIC – Oil continues the break down, but we are at day 43 today and a low can form anywhere after day 40 in Oil. I have discussed a bounce with a dcl, a back test with that bounce, and then a drop to maybe $42ish if we have another bearish daily cycle. You can short this with DRIP on the bounce, if the bounce looks weak.

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GOLD is near support, so it can bounce or even put in a dcl around this time.

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SILVER has a number of short daily cycles in the last intermediate cycle, as seen here. It lasted roughly 5 months. It may also have short daily cycles in this intermediate cycle, which is now oversold and could put in a low soon, as a dcl. The ICL may come later, and I showed that idea yesterday. The selling here was extreme and may be ‘exhausted’.

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The ICL may come later, and I showed that idea yesterday on this chart.

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SILVER just couldn’t hold up.  I have drawn a repeating pattern with daily cycles here too. It is an A-B-C drop into the ICL. August ICL, December ICL, May ICL? I feel that this is reasonable to expect, but Aug to Dec is 5 months, and Dec to April is 5 months. I still have to think that we’ll see another bounce and drop to give us the a-b-c drop.

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GDX dropped pretty sharply. I think that it will bounce with Gold and Silver, but may also a-b-c drop down into an ICL later.

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I drew this idea for GDX in case Gold and Silver have 1 more daily cycle. An  A-B-C drop would give us a possible dip to the purple trend line, the green 200 sma, or the Red 300 sma that it tagged in December.

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These markets are really struggling with the indecision and changes that are quickly taking place, not only weekly, but almost daily. Day after day new news can cause a quick bounce or a quick drop. I have traded a few smaller positions here and there, but I am also using this time to take off for a few hours and get a few things done outside, like yardwork at my mothers, etc., The way I look at it, we could have some great trades line up in the Precious Metals in May, and these markets could exhaust and rally in future weeks too, so  I would rather do the yard work that I can do now, while things are volatile and difficult, and then be ready and able to trade all day when things bottom and set up better. For now I have been spending half a day trading and a half day getting a few things down.  Some are long trades, some may be short trades.  Drip was a great trade, but I missed it. It went from $10ish to $17 in just a few days. I may short the bounce later. Enjoy your Wednesday trading!

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~ALEX

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BITCOIN – As mentioned, Bitcoin broke below the last low and this has to be viewed as a failure. How high will it bounce after the 30 day low is in place? It may be a pretty good bounce, but I do not expect new highs. This might only get up to that 200sma and then crawl along it and roll over.  We’ll have to wait and see. I do think that crypto stocks will bounce nicely if Bitcoin does too, so that may make for a good short term trade. We’ll see.