Friday February 27th
The 8:30 am Data being released today does usually affect the General Markets and the Precious Metals markets. The Chicago PMI can also, if it is a big surprise from expectations.
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THE SPX actually sold off yesterday and then by the end of the day it found enough buying to regain that 50sma and the 20 ema. It still closed down 37 points, but at least it is still working its way off of the bottom.
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THE NASDAQ also sold off and bounced back, but it closed down 273 points and is under the 50sma.
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THE IWM also dropped, but it closed green by the end of the day and held above the 50sma and even the 20 ema for most of the time. The IWM looks bullish and is near the apex of a triangle.
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So the general markets, which have been very choppy, were still choppy intraday. They sell off and recover now, so hopefully after todays PPI numbers, we will just see some buying come in.
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WTIC – Oil actually sold off deeper than I expected for one day, but it then bounced back giving us a doji. I did say in yesterdays report that it might dip down into the triangle because that triangle was incomplete and a dcl could be due timing wise. Let me show you something about cycle timing…
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I was thinking that day 41 could be the dcl forming inside of a triangle, but it broke out of the triangle well before creating an Apex. So will this ride down the trendline and give us a low after day 50? It could. It also could just continue higher with q day 41 dcl, so I guess we just need to wait and see, but the important thing so far is that the Oil stocks remained bullish. Oil still looks bullish whether it dips further or not. I think that the green 200sma will be supportive again if it sells down.
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THE USD continues to crawl along the 50sma resistance area. As it stalls and crawls, Gold & Silver is also stalling out.
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GOLD has often chopped sideways on the way higher, as seen in November and December, so I mentioned that I wouldn’t be surprised to see it do that again. I even mentioned a possible cup formation and a handle as the dcl…
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GOLD – Something like this wouldn’t surprise me, because Gold was on day 17 yesterday. Today shows up as day 19 on Spot Gold however, so a dcl will come due soon.
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SILVER bottomed later than Gold, so it is only on day 15 and has a day 13 peak so far. This is a live shot at 7 am, and Silver is pushing higher so far, but PPI (Wholesale inflation) can move this in either direction so after 8:30 am will be the time to look at Silver and Gold.
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Like Gold, The GDX ETF (Miners) tends to chop higher, so I pointed that out in November and December and compared it with our current run out of the lows. The GDX was up 2,5% yesterday and is right back at the highs. If it gets choppy soon, it could be viewed as a handle and nice daily cycle out of the lows.
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The choppiness in the general markets has been very difficult to navigate in the Nasdaq and the SPX, while the SOX is at new highs and the IWM forms a triangle. Thankfully, we should have a late dcl in place and that chop may be coming to a finish if the buyers can continue to push the markets higher.
Oil sold off yesterday and tried to bounce back, but it really wasn’t damaging to the chart and the timing for a dcl is now.
Gold and the Miners basically chopped higher while Silver chopped sideways. I have pointed out what happened in 2011 with Gold and Silver, so we may see something similar in this run. I do think that we have seen Silvers ‘peak’, but Gold may continue to push higher and some of the Miners are moving back up. Some are even making new all-time highs.
Todays markets can be affected one way or the other by inflation numbers and prospects of future rate cuts, so we’ll see where the futures are by the time the markets open. Happy Friday and enjoy your Friday trading and your weekend!
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~ALEX
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BITCOIN: Today is day 21 out of the capitulation lows for Bitcoin, and it isn’t surprising to see that it is stalling around the 20ema. This run is quite similar to the last one, where it is struggling to move higher all along that 20ema and eventually the dropping 50sma contacted price too. These 2 consolidations do look quite similar at this time.
