Thursday February 5th – Mixed Signals
With the General Markets, I have been saying that we have mixed signals. We have had very different looking daily cycles for the various areas of trading. I have mentioned that ‘In order for things to ‘Sync up’ or become clearer, it would take time’. I can keep covering it in the reports, but it will honestly take ‘Time’ to see how this will actually play out. Let’s review…
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The SPX looked to have a dcl at day 38 on JAN 20 (remember that date) , because it ran to new all time highs, but that COULD BE a R.T. daily cycle that is just now dropping into the real dcl. Daily cycles CAN BE over 50 days long. Why might day 38 not be the dcl?
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IWM – Look at Jan 20 the IWM (and $SOX) did not dip at all. Jan 20 was actually a strong up day for the IWN, so I posted this chart on Jan 27 to mention that we do not have a visible day 38 dip on IWM and SOX. IS THIS ALL ONE DAILY CYCLE?…
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IS THIS ALL ONE DAILY CYCLE?…
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IWM is dipping lower now, but it still isn’t a very deep drop and we are on day 50 by the looks of things. In fact, IWM dropped and popped back up. I mentioned recently that we could see a sideways drift to the 50sma and so far we are seeing that.
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IWM – I mentioned recently that we could see a sideways drift to the 50sma and so far we are seeing that. THAT WOULD BE THE VISIBLE DCL.
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I’ve been saying the same thing with the SOX.
It would take time to see how this plays out, but we didn’t have a visible dip into a dcl yet, and I posted this on Jan 30. So I drew a drop down to the 50sma.
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That drop is happening now, so basically this IS what I expected. The SOX dropped to the 50sma and bounced. I also stated that the SPX & NASDAQ could drop into the real dcl and all 4 of these would sync up.
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So the NASDAQ dropped and looks more like day 49. Why? Breaking day 38 indicates to me at this point that we are likely still in the first daily cycle. And when you take into consideration all that I have been saying and putting in the past reports about the SOX and the IWM not even dipping at day 38…it fits. This first daily cycle has been Choppy and difficult, and that CAN happen. It also CAN happen right before a bullish burst higher, because it changes sentiment and then it climbs a wall of worry. Prove it Alex!!
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This first daily cycle can be Choppy and difficult, and that CAN happen right before a bullish burst higher, because it changes sentiment and then it climbs a wall of worry. Prove it Alex!!
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Take a look at This NASDAQ ICL in July for example:
1. The ICL was in place and the Nasdaq rallied for 1 month and then guess what happened? Look at the 1 month rally out of the ICL, and then…
2. …it dropped so hard that it lost the 50sma by a lot–and almost broke the ICL/ Lows! It definitely broke the half cycle lows, right?
3. And then what did the 2nd & 3rd daily cycle look like? Bye-Bye! So we have to just be patient and see how this plays out.
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So we really just have to just be patient and see how this plays out. Day by day it is choppy and frustrating, and maybe stepping to the side or stopping out is best until we get a low in place. I know that the ‘stocks’ were choppy in the above move out of the ICL, but they did run higher later (after everyone hated them). If our markets put in a dcl all at the same time and rally like the 2nd and 3rd daily cycle above, you’ll love it and have plenty of time to get in. Right now, however, my favorite stocks are dropping with that dcl drop and they have become concerning. Let’s take a look at a few of the stocks on my watchlist that may become questionable…
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LAES was riding along the 50sma, but it just started to lose it. That concerns me when I look at BBAI…
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BBAI lost the 50sma last week and ever since then the selling has continued. This can recover but the point is that it now has new 6-7 month lows. 🙁
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ONDS lost the 50sma yesterday. This was a nice cup and handle, but the selling is now holding it under the 10 sma.
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RGTI (& IONQ, QBTS, QUBT) – These are literally ‘breaking down’. They can recover later as a shake out, but for now I am not in any of these. I will buy them back for a slingshot higher–IF–things recover.
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So we’ll need to wait and see what happens with this selling over time. Everything may bottom and dcl at once, and that would be great, but I do want to see buyers step back in before I get too heavily invested again.
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WTIC – Oil lost and regained that 200sma, so we see bullish price action and the Oil stocks like BORR, WTI, APA, OKE, VLO, VET, etc are doing well, but I will say this…
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I will say this…
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WTIC – Oil is only half way through the normal daily cycle and it is climbing higher, so we can expect higher price in the future, despite any choppiness.
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BORR – The Oil stocks mentioned in past reports do look bullish. That makes them ‘Add on dips’ or ‘ buy the dips’. Volume is surging.
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USD – We have no change in the USD since yesterday.
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FROM THE WEEKEND REPORT:
GOLD – This may become an exhaustion drop where we put in an early dcl, OR we could bounce and drop and that becomes the dcl on day 25 or so.
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GOLD is giving us that bounce and is moving higher. It popped above the 10sma, but then sold off again on Wednesday. So far this looks like the above chart.
SILVER is also bouncing out of that slam down low. The sell off was so strong that this bounce has not even reached the 10sma yet.
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At 11 P.M. I captured this chart of SILVER. Silver dropped sharply overnight and as of 6 a.m. it has bounced back a little to $78. Gold di not drop nearly as much.
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This is Gold right now at 6:30 a.m. It dropped, but surprisingly, it has not sold down as much as Silver, so we’ll see how this day goes in The Precious Metals sector. Gold could start to fall next, taking Miners down too, or it may continue to resist the selling, we’ll see.
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GDX dropped back into that channel and actually has been able to hold up above that 50sma and the lower channel line. Is that an exhaustion low (dcl)? It could be, and I have explained a few ways that this could play out in recent reports.
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I was definitely getting spoiled 🙂 There were times when all of our markets were in a strong bull run, and week after week it seemed that they’d just continue climbing higher with minimal pull backs. All of my reports continued to say that ‘The Bulls remain firmly in control’. We could buy Tech, Robotics, Aerospace/ Aviation, Crypto, Quants, Nukes, Gold, Platinum, Palladium Silver, Copper miners, etc, etc . Precious Metals rocketed higher and I feel that they put in a blow off top. Now we are in choppy General Markets, and the stocks are chopping sideways and lower too. The Nasdaq in particular is chopping sideways to lower right now.
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I’ll start here by saying that the charts are not bearish though. This chart of IWM and the SOX were rallying strongly in both December and in January, but a dcl came due. That seems to have caused the Nasdaq to chop sideways. In choppy markets, ‘Buy and hold’ can be frustrating and new positions from the Nov ICL get tossed around, but hopefully we get a dcl soon in the general markets and the stocks find buying again. The SOX and IWM were actually running swiftly to new highs, as you can see here with the IWM, but we are spoiled and hate pullbacks and choppiness. The charts of The SPX and Nasdaq are also dropping and chopping more Sidways to lower, so it makes day to day price action less thrilling. Hopefully we get that low soon, but until then, we just need to be patient, watch and see how this plays out, and if this is just the first daily cycle, we can hope that the second one will be a strong one too.
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Enjoy your Thursday trading.
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~ALEX
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NEW LOWS AGAIN!
Bitcoin is really showing that 4th year weakness that I have been discussing. It is due for a dcl or a good bounce, but it is struggling to find any legs to stand on. At the end of the 4 year cycle (often in October/November) THIS is going to give us an excellent entry in Crypto and in Crypto stocks.
