Friday May 23rd – Thinking Outside of the Box
I have a new idea in this report, you’ll find it in the Precious Metals sector. It may or may not play out, but it would be very exciting if it did! I just needed to look at the charts and then think outside of the box a little to come to this conclusion. 🙂
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SPX #1 – One idea is that we are slowly selling down, so maybe we get a mild dcl as soon a Friday, that only lands on the 200sma and the 20 ema. I have seen dcls land on the 20ema, I will show you that later. Or…
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SPX #2 – The original idea was that we could sell down to the 50sma, and that could take a bit longer. we might see that low come into place next week.
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THE SOXX finally lost the 10sma and that can indicate that a dcl is coming at this time of the cycle.
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I like to look back at past ICLs to see how they played out and if they may be similar. By now you know that I have been comparing this ICL to the COVID sell off, even before we rallied back up. so let’s take a look at that one first.
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SPX COVID ICL – This is interesting, because it dipped mildly twice, and by day 37 it broke and recovered the 20 ema. That was it, we had a mild dcl on day 37. It ALMOST tagged the 50sma, but it didn’t. Now let’s look at another bull run out of an ICL.
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SPX LONG FIRST DAILY CYCLE – After an ICL formed in Oct 2023, we got a V-Bottom and a strong rally that actually ran up to a day 42 ‘peak’! The dcl came in at day 47, but notice that it was very mild. It only tagged the 20 ema. This mild 4 day drop to the 20ema is similar to what we have now, except that it was much longer time-wise.
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So my point in looking at these rallies out of an ICL above is to show that
1. We can get a dcl at any time now…or not. We had both a 37 and a 47 day daily cycle.
2. It also shows me that we can dip to the 20ema and that could be enough for a mild dcl. That said, we also could dip to the 50sma. So we continually look for clues, signs of strength, signs of weakness, etc.
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GOLD popped and reversed lower without even touching that downtrend line, so it can still run up there and test it. if so, we’ll see what happens at that point. This is day 5 on ‘stockcharts’, it was day 6 on spot golds chart.
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GOLD could dip, bounce again, and roll over with a L.T. peak as seen here.
What If this were to breakout and rally? That last L.T. daily cycle would have to be a drop into an ICL, but that really is least likely at this point.
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Gold Live 6 a.m. – Gold is rising up this morning and looks very close to the downtrend line.
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SILVER broke out Wednesday, but then it fell back down Thursday, so Silver has been choppy and remains choppy for now.
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GDX is on day 6 and it broke the downtrend line. I mentioned that the reversal at the 50sma could be bought with a stop, but why? If I wasn’t using cycles, I would have called the reversal at the 50sma a ‘buy’ with a stop using technical analysis alone, and I’d have just watched to see what we get, raising stops along the way, so you can do that here too. I did not buy it, because I’m trading other areas.
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I just want to mention this next chart of Platinum AS IMPORTANT, because it stands out in my mind as quite possible and quite important.
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Take a look at Platinum, a Precious Metal that has been very choppy and has also lagged Gold lately. It did exactly what Silver did with the General Market crash on April 7. THAT DID become the ICL for Platinum, and it chopped sideways for weeks (Similar to Silver now) and then over the last 3 days Platinum has exploded higher. Could Silver?? Let’s just keep THIS in focus as a possibility.
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Scroll up to Platinum and then here to Silver. What do you see? The chart of Silver during that April 7 crash down and the sideways chop that followed is quite similar, right? So I just wanted to keep that in front of us and if you see Silver start to make a move, be ready to jump in (or own a little silver/ miners now). .
I have an appointment this morning until about 11 a,m, so I hope to be back & trading with you by noon. Quant stocks were on fire yesterday, and those were recommended weeks ago when I said that they based out and did NOT drop on that April 7th crash. They showed strength then and lately they have been very rewarding. Pullbacks can be tough, but they are marching higher. I’ll revisit those in a future report, and many other set ups are looking good as we approach the timing for a dcl See RR, BBAI, LAES, NNE, SMR, OKLO, along with our TSLA, GOOG, NVDA, MU, AMD, etc. Many good trades took place in the first daily cycle. I expect the 2nd to do very well too.
Markets are closed on Monday in the U.S.
Enjoy your Friday trading and your long weekend if you are in the U.S.
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~ALEX
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BITCOIN is doing great, but as mentioned in prior reports, I am disappointed in many of the Crypto stocks. Bitcoin is at new all-time highs, hitting $112,000, and the ETFs are climbing too. Next I’ll show you a couple of charts of Crypto-lameness.
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I like the slow steady climb in IREN, WULF, BTDR, etc, but they are not near prior highs. And when Bitcoin hit new all-time highs, take a look at what a couple of our former runners did yesterday.
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MARA: $10 to $15 off of the lows is great, but Bitcoin is at all-time highs and Mara can’t even push over the 200sma for 2 days in a row? That is dissapointing.
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RIOT: Again, $6 to almost $10 is great, but MARA and RIOT used to be heros in this sector and to struggle at the 200sma while Bitcoin breaks $110,000 is lame. This is also happening when the general markets are running back to former highs, so I just don’t love this price action, though I have made money with IREN, BTDR, WULF, (Hut and Cifr earlier).
