Wednesday October 22 – Seeing Some Pop & Drops
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THE SPX didn’t move very much through the day, but it did close higher and would appear to be on day 7 of a 4th daily cycle. The Fed Mtg is 1 week away, and that could cause the markets to ‘peak’ and begin to pullback, or it could send it into a parabolic run higher.
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SECTOR ROTATION: Will we get a strong 4th daily cycle? I just wanted to show you something that I noticed, and it may just be short term, or it may be continue a bit longer, but it is worth noting.
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AMZN has been choppy from May until now, so it has been a bit ‘stale’ coming out of that April ICL. That said, it has now started to move higher off of the 200sma. Also…
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MSFT dropped from August until now, but it has been chopping along the 50ma, formed a triangle, and may be ready to push higher now too. So this might indicate that the markets will run again after the fed. This set up, MACD, RSI, etc looks to be turning bullish after a sideways move from July to now.
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AAPL In August I showed APPLE as a ‘lagger’ too. It chopped and formed a base and I called the breakout and then a back test as a buy area, so…
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AAPL has just made a choppy run to new highs. My point is that these Big Stocks took a rest, but now if we get sector rotation, they may be running after the fed too. With that said…
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BBAI Some of our recent high performers have stalled. BBAI, AI, Quants, etc took a little rest to consolidate gains, they have been dropping lately, but they may also perk up again with the Fed Mtg Approaching. So this does make me wonder…
So this does make me wonder if we will get a blow off move with the General Markets after the fed in the 4th daily cycle? We are due for an ICL, right? 6 months from the April ICL, but MSFT really looks bullish, AAPL is bullish, AMZN may become bullish. We’ll just have to wait and see.
USD continued to slowly move higher after bouncing off of the 50sma last week. So far we still have a lower high in place.
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We are finally seeing some selling in the Precious Metals sector, and it has started off with a BANG!
AT ONE POINT YESTERDAY Gold was down over $250 and Silver was down over $4.36.
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We’ve been expecting a pullback in GOLD now that it moved into the 20+ daily cycle count, but we weren’t sure whether the pullback would start before or after the Fed Mtg. As mentioned in prior reports like the weekend report, this could now pullback into a dcl and then put in a final slingshot rally to a parabolic peak. I also discussed the NASDAQ 2000 blow off top…
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FROM THE WEEKEND REPORT:
GOLD WEEKLY – It is very possible that the LONG consolidation that we saw on the daily charts, that turned into a triangle or pennant was a halfway point or mid-point consolidation of a rally that ends with a blow off top. That is what it is starting to look like now, to be honest. This move is straight up, right?
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AS A REMINDER: You may want to re-read the important lesson in the weekend report. Take a look at this chart from the weekend report: I still wonder…
– ARE WE AT THAT MIDPOINT AREA, with one more strong run higher” after the Fed?
– OR ARE WE ALREADY AT THAT PEAK, with a pullback here, a double top at the Fed, and then a deeper drop into an ICL? THIS IS when I added JNPR, EMC, CSCO, etc.
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SILVER dropped 7% in one day! We could see it chop its way down to the 50sma as a dcl, and then rally with the Fed, but it also could hold up a little higher ( 34 sma?). We just have to wait and see.
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SILVER – I can’t know 100% for sure how this will play out, but this is what I have been saying for quite a while with the approaching Fed mtg. I have mentioned 2 possible ideas.
1. We just run up parabolically into the Fed (maybe $75 or so) and then crash down, or
2. What has been drawn here: We pull back into the Fed with a dcl, and Rally with his speech.
3. This could be a perfect set up, if it happens. We’ll see.
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YESTERDAY GOLD MADE A NEW HIGH, BUT I POINTED OUT THAT GDX DID NOT FOLLOW GOLD, USING THIS CHART: I said this could be smart money selling into the rips higher…
This was also in yesterdays report as Gold made new highs: That MACD bothered me.
We had a breakout that failed last week and Now THE GDX has divergence on the MACD and RSI. It means that we may have smart money selling Miners a little at a time to secretly unload to the buyers. If Gold runs to new highs again and again and the Miners do not? large money may be selling to the new buyers. We’ll see how this plays out.
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I said we’ll see how this plays out, and this is how that played out. Gold dropped this time and The GDX gapped down about 8% on Tuesday, so I grabbed this chart at 10 a.m.
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GDX closed down almost 10%, as seen here. It is near the 50sma already and volume is spiking as sellers find the exits. The MACD is weak. This too could bounce or chop lower as we head into the Fed meeting.
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So yesterday was higher for the general markets after putting in what looks to be a dcl, but with Gold and Silver due for a dcl at day 22, yesterday a rough one for the Miners. We have a Fed Mtg next Wednesday and as this all unfolds and plays out, I’ll obviously be covering it day by day. We could see nice buying opportunities develop over the next week or so. Bitcoin is setting up in an interesting manner now too, I’ll cover that below. Enjoy your Wednesday trading.
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~ALEX
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BITCOIN actually rallied yesterday, but then it hit the 20ema and the 50sma (not shown here, but seen on the next chart) and dropped again. I grabbed this chart Midday, but then take a look at the next chart…
So Bitcoin tagged that 50sma and dropped after that big recovery!
Bitcoin is struggling, but now I’m starting to see a possible bullish wedge forming. It would mean that Bitcoin continues to chop lower into that day 60ish area, possibly bottoming near the FED mtg, and then it could rally higher. Crypto stocks could follow Bitcoin and chop around, or possibly they may follow the general markets. Right now they have been choppy. I actually have been saying that all along…
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I had this in yesterdays report. A bounce and drop into day 60ish.
BITCOIN is on day 50 and it dipped overnight, but I still think that we can get a bounce and then a dip around the time of the Fed Mtg. Crypto stocks did reverse higher with the bounce on Sunday & Monday.
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