Wednesday July 3rd
.Today is a Fed Wednesday, and we all know that this means that no matter what happens in the morning, we will get some shake, rattle, and roll today. This may start at 2 p.m. with the current rate decision, but usually more of that follows with his 2:30 speech and Q&A session. It’s just good to keep that in mind. Let’s just look at the current set ups and discuss how this might affect the markets ‘Short-term‘!
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So the general markets are strong, and they are in a 3rd daily cycle.
The SPX cycles can last for 35-50 days, so being on day 9 is not concerning at all, however I drew past ‘day 8 or day 9’ areas just to show that we can dip and then recover a day or 2 later. So with that visual, if this dips lower, it should be a buy opportunity, especially if it tags the 20 ema again (Green arrows).
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I should mention that so many of my stock picks and favorite stocks are doing excellent (RKLB, AAOI, etc etc,) However my recent Energy stock picks like OPPT, BLDP, PLUG, and FCEL rallied sharply and then sold off. OPTT & FCELL broke support and do not look good. BLDP and PLUG are also weak after a rally, so this sector has weakened and the Bulls are no longer in control here and I am out. Almost everywhere else, the Bulls remain in control.
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Yesterday I saw Oil ‘spike’ around 1:30 pm, so I grabbed this chart of UCO (UCO & USO represent Oil) to show that ‘Pop’. This was good timing, because I have already been discussing Oil stock bullishness and Oil stocks were red by 2-3% on average, so this POP could be a BUY for Oil stocks…
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Here you can see that WTIC was up almost 4% by the close. I explained in a recent report that Oil may have 2 30 plus daily cycles in place and this could go higher, especially with XOPs bullish set up. So we may just be starting a 3rd daily cycle that runs back to June highs.
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So the XOP went from selling off in the Red to Green later yesterday, and it may be ready to break from the triangle I’ve pointed out. With that…
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I pointed out some Red to Green Oil stocks as time went on in the day. NOG was going red to green too.
NOG went green, but it did end up closing a little red. I still really like the set up, if Oil is going to run.
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I want you to take the chart of Oil here and compare it side by side with an Oil company WTI (the chart right below this one). Scroll up & down and see the similarities. They look very similar, so IF Oil is going to run back to the highs, WTI should do the same.
WTI – This chart is Oils twin, so if we think that Oil is going to run higher, then I would expect WTI to also move higher.
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I saw that WTI chart and bought it, and I also wanted to buy PUMP, but I checked and saw that they have earnings today. Yes, it could Pop 10% & break out of the triangle, but it could also drop 10% with lower Oil prices, so I’m just keeping my eye on it. I may try to own it after this mornings earnings release.
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So now we have the USD breaking higher and the Fed Decision could affect the USD one way or the other. So far though, I have mentioned the bullish MACD and break of the 50sma as bullish, so this doesn’t seem like a false breakout. THAT SAID…
THAT SAID however, this does look like a ‘late in the daily cycle’ move, day 21, so a drop to the next dcl can happen at any time. It may just crawl down the 50sma, because it is now quite R.T..
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GOLD – In early July, Gold & the USD moved higher together. Over the last 2 weeks, they have been inverse, with Gold dropping as the USD rises and broke the 50sma. Gold is not due for a dcl quite yet, so I think we should expect more choppiness and then a dcl. So we may rally with the fed Wed-Friday, and drop next week (that is just a guess based on the set up).
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Also notice where the stochastics was at past dcls. We are not quite there yet.
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SILVER is also well along in the cycle count. We see a first daily cycle at 27 days. The second daily cycle was 26 days long. We were now at day 24 yesterday with a day 23 low. Is that day 23 low enough? MAYBE, but recent daily cycles were a few days longer. It could be that the Fed decision drops it this week quickly to the red line of support or 50sma and it bottoms with a dcl next week. Stay tuned.
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It could be that the Fed decision drops it this week quickly to the red line of support or 50sma and it bottoms with a dcl next week. Stay tuned. An a-b-c down like this is easy to picture. It would still be a mild dcl.
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GDX is still looking healthy and many miners reflect that…
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EGO still looks great, but it has earnings Thursday too, so it makes it a little bit of a tough hold. We saw NEM & NG SURGE on earnings, others have dropped.
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KGC still looks great, but they have earnings today. We’ll have to see how these weather the storms. In a bull market, they may surprise to the upside due to the strong price of Gold.
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A choppy Fed Day is what we should expect after 2 p.m., but overall, everything remains bullish (except for some of the clean energy/battery area that I mentioned.) So if you can withstand the choppiness, the bulls do still remain in control and dips seem mild for now.
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~ALEX
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BITCOIN – nothing has changed with Bitcoin as it continues to chop sideways in this long consolidation. This was expected, but we do want to see a rally higher sooner than later, with ‘time’ pushing forward. Bitcoin is still above the 20ema.
