Friday January 30th
NOTE: The Big Reveal is that Donald Trump picked Kevin Warsh for the next Fed Chairman. He was a critic of current policy and of Powell, so he may be more inclined to try to lean toward rate cuts, etc. The futures were very red overnight, but I want to point out that that was Before trumps announcement. So let’s go to the charts…
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The futures are a Sea of Red this morning, but they are actually bouncing out of these lows since I grabbed this chart. We’ll just review the charts and see where we were as of yesterday. We did see some selling yesterday that recovered as the day went forward, so we’ll keep that in mind too. Yesterday was the first full Post Fed trading day, and it was a bit volatile.
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SPX – As you can see, the markets sold off on the day after the Fed decision and speech, but they started to recover as we headed into the close. As you saw above, the markets are very red at 6 a.m., so we’ll see if the futures can recover or are we going to have a red Friday?
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THE NASDAQ was actually down 625 points at one point, and that put it slightly below the 50sma! It then started to recover and has a reversal candle in place. Let’s see if today’s morning selloff wants to recover or not.
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THE IWM closed the day up after selling off too. I don’t know why the candle showed up as red, it should be green. You can see that the Russell 2000 is stronger than the Nasdaq and SPX. It is still above the 20 ema.
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WTIC – Oil surged once it got above the 200sma, and you’ll recall that I mentioned that we were only on day 29 or possibly 50plus, so this can even run higher (Even though it is down pre-market). Oil stocks could dip and become a buying opportunity.
A dip in Oil over the next couple of days could back-test the 200sma and give buy opportunities in Oil stocks.
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BORR– Yesterday I pointed out Borr Drilling as it broke out and pulled back. It has a nice consolidation, a possible flat-topped wedge. BORR has already done well, so if Oil is going to push higher, BORR should do well too. A week or 2 ago I pointed out others like WTI, PUMP, VET, NOG, APA, etc and they are moving higher. Buy the dips?
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THE USD dropped sharply and is now chopping sideways. It looks like a bear flag, but at the same time, we are due for a dcl or bounce, so…
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THE USD could have a dcl in place (maybe even an ICL) and it may bounce back to the resistance area above. If this is an ICL, then we just saw a shakeout, and it could break the overhead resistance like Oil just did. If it is not an ICL, the Dollar could bounce and roll over again, as drawn here.
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PREMARKET 5:30 a.m. ET – I saw Silver down $16 and back under $100 and decided to just go to the live charts…
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I think that it’s amazing that GOLD dropped right to the 13sma and bounced, but this is a huge drop off of the highs. On this chart I am simply showing the last 2 ‘peaks’ in Gold. They also have sharp drops in price, but then the selling slowed up and they formed a swing low / dcl. Gold and Silver are coming due for a dcl.
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SILVER did not respect the 10sma, it plunged right through it overnight.
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SILVER : I had pointed out that silver used to have small candles (50 cent moves that seemed big), and then the candles got larger, and now the candles became very big with $3 moves and $5 moves. This contributes to volatility and we see that now with a $20 drop overnight.
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GDX -Yesterday, most miners that I looked at were Red, and the volume was pretty high off of the top. That often indicates further selling and even distribution. Look at the October 20th area. We had a high volume drop, a bounce, and then a gap down as it sold off into the ICL.
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Well, we will need to see how Friday plays out. It was announced at 7 a.m. that Donald trump has picked Kevin Warsh as the next Fed Chairman, and he was a sharp critic of Powell.
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Yesterday the markets sold off, but then they tried to recover into the end of the day. This is an intraday chart of the QQQ. We gapped open higher and sold off right away. You can see that it reversed near 11 a.m. and moved higher all afternoon. We see a sell off overnight and it bottomed at 5 am and is trying to move higher (the pink line is breakeven), so we’ll see if this recovery can continue or not. The markets do look ready to bounce back again with this set up.
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We are due for a dcl in the Precious Metals, and the overnight surprise was to the downside, but this is a volatile bull, and it can bounce and chop around too. I do currently see the metals bouncing this morning on intraday charts. Even if we do see a bounce, I still would expect the next direction for the precious metals to be overall lower until we get a dcl though. We may not bottom until day 23 or 25 or so. Enjoy your Friday trading!
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~ALEX
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BITCOIN dropped and then started to bounce before it could break the November lows. This may be all one cycle and this may become the dcl. We had a low on day 60, but a low on day 65 or so could happen too. The crypto stocks do not look broken at this time.
