August 20th – Just a Minute!
At 2 P.M. Today, The FOMC MINUTES...are released as the DATA today. That may not be something to view as bad news, and I’ll show you why.
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THE NASDAQ dropped to the 20ema on Tuesday. When we look back to the last FOMC MTG, that was actually on July 30, and you can see that the markets crashed for 1 day and then rallied out of that low. The Minutes MIGHT do something similar and then put a low in place.
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THE SPX hasn’t quite tagged the 20 ema yet, but it might with the minutes.
One thing that I do want to point out here is that…
1. Coming out of an ICL, the moves can be strong.
2. Coming out of the 2nd daily cycle, the rally can continue to be strong.
3. The 3rd daily cycle can be strong too, but it also can begin to show weakness & choppiness. Even ‘toppiness’. So far there is nothing out of the ordinary here, but we want to be mindful that the ICL was back in April, and that was 4 months ago. We may start to see signs of weakening, we’ll see.
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I also wanted to point out that with The SPX in the past, we have seen MUCH deeper dips than we have with this one, so the selling isn’t considered bearish at this point, but we are in a 3rd daily cycle and the dips MIGHT start to become more prevalent or choppiness may become more frequent. It is hard to know and may depend on data and Jobs reports, and interest rate cut decisions, etc.
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THE USD is bouncing off of that uptrend line and it has also broken the Magenta downtrend line. This seems to be causing weakness in the Metals and Miners ( & they are due for a dcl/ICL).
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So GOLD dropped to the bottom of the triangle on day 14. With a USD bounce, we MIGHT expect a breakdown, but another thing to consider is…
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THE FOMC MTG did cause Gold to bottom and bounce on July 31 and Aug 1st too. Today we have the FOMC MINUTES being released, so is it possible that GOLD could bounce with the minutes? We’ll have to wait and see, but gold is also coming due for an ICL.
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SILVER is on daily cycle #4 and we have to expect weakness to show up. So far we even have a lower high, rolling over lower than the daily cycle #3 high or peak. Now, I do see that the FOMC did Pop Silver too at the Magenta arrow, and Silver is at the 50sma.
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FROM TUESDAYS REPORT:
GDX is now forming a bullish pennant. Let’s see what happens on Tuesday, since this pennant is in the apex and it is now time to break one way or the other. This actually SHOULD break higher, (but it can break down).
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GDX – I know that this looks bad, but there are things here that could indicate that this drop is a false breakdown. How?
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GDX – The FOMC caused GDX to bottom at the end of July too, so will the ‘minutes’ cause a reversal today or tomorrow? This could be ready to bottom with daily cycle counts too. The daily cycle…
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Daily Cycle Count: It was a bit too choppy at the lows in June & July to know exactly which of those lows in the box consolidation is the dcl, but it has been 24 days since the last low in mid-July and 31 days since the one before it.
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So we had a dip that started on Tuesday and we do have the fed minutes set to be released later today. What will happen in between now and then and even after that? It’s hard to know, but after the last Fed Speech we did get a 1 day slam down and then a dcl was put into place with the general markets and the Precious Metals started to rally out of a low too. We’ll just have to see if we get that kind of a reaction today-or any reaction at all? Bitcoin continued to sell off too, I’ll discuss that below. Enjoy your Wednesday trading.
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~ALEX
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BITCOIN dropped very close to the prior lows, and that seems concerning. It lost the 50sma and it also lost that uptrend. It is concerning, but at the same time, it looks very similar to the last double dip into a lower low. Let’s briefly discuss that…
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BITCOIN –
1. In early June Bitcoin bounced perfectly off of the 50sma and looked to have that low in place at day 59. It bounced and then dropped below the 50sma for a final low, and that was odd behavior.
2. Well, it looks very similar right now. We saw Bitcoin bounce off of the 50sma, it actually ran up and made a new high, and then dropped below the 50sma. The stochastics also looks similar, but I want to be cautious if the selling persists. This also reversed with the Fed Day, so we’ll see if it reverses with the fed Minutes.
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BITCOIN has a small bounce at 7 a.m. and the prior low was not taken out at this point.
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CRYPTO STOCKS SOLD OFF, but the selling was somewhat tame so far in some of them.
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HIVE was fine, closing green
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IREN hurt, down 9.5%. It is almost back to my recent entry at the 20ema.
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RIOT was down 3%
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If you entered crypto stocks recently, some of the gains have been taken back, so put stops in place just in case the selling continues. You can always get back in if you get stopped out, but you can’t always get your money back if they plunge below support areas.
