FED MTG TODAY
In the past I have found that either on Fed Wednesday or Follow Through Thursday much of the analysis, whether it’s using cycles, Tech Analysis, Fundamentals, etc – is both correct for a short time, then wrong for a short time, then correct again, then wrong again, and then the true direction that is going to hold finally seems to take hold. So for today ….
It may just be worth mentioning a couple of things. Trading today is difficult and tricky, sometimes its just best to sit on the sidelines and watch how it plays out (Or at least keep it light). Yesterday I mentioned that we are late in cycle timing for the general markets – SO one would assume that a reversal is due . The markets look really weak at this point on a weekly basis, but that can change if the FED MTG turns markets higher and the weekly ends with a reversal.
I pointed out last week that a normal drop in bullish markets is usually to the 10 weekly MA
A FED reversal gets us back above the 10 wma by end of the week, BUT SIGNS OF WEAKNESS ARE SHOWING UP ON DAILY & WEEKLY.
The daily cycle is due for a low, so we should get a reversal higher , but a light volume run up to former highs (Holiday trading next week) MIGHT be an area to think about a top. WHY? look at weekly charts of IBM, TSLA, NFLX, GOOG, etc for example. They are not pretty.
They look like this:
And dont forget that the $NYSE looks like a trend line break / TEST / and Fail already. I showed this Monday. It has dropped further to 10390. The general markets are starting to show weakness In my opinion.
GOLD / MINERS
Gold has acted correctly so far for an ICL (Meaningful, trade-able low). It has surged with volume and recovered a shake out.
Miners looked good out of the gate, but now there is a very mixed picture. GDX is still ok, but is threatening to break Nov lows & the FED mtg can push it. GDXJ is below Nov lows. It has become a mixed picture. Some stocks are holding up on days when SILVER is selling off sharply, so its a very mixed picture now.
I pointed out charts like CDE , HL, NG holding up with metals selling off, but others are not.
This is SILVER YESTERDAY, and then look at CDE below it . VERY MIXED SIGNALS THERE
SILVER looks to have its ICL DEC 1st. Rolling over here leaves a LOT of downside.
CDE ignores Silvers drop? SSRI & PAAS are now dropping towards Nov lows with volume. Its a mixed picture at best now.
It’s very early in that SILVER daily cycle, and if it fails? If the FED MTG doesnt reverse the Metals…I’d be concerned.
Also , We are getting the DIP that I thought we would with the USD when I posted this, BUT I EXPECTED GOLD TO BENEFIT.
USD NOW DIPPING
SO ON FED DAY, sometimes its best to just stay light, or stay out. The markets tend to get volatile and even the past 2 days, the DOW has opened with futures 100 points up, only to close 100+ points down.
There is a time when you might have an edge in the markets, and times like the FED MTG when the charts get murky and the ride gets too rough to enjoy. UP / DOWN / BACK UP/ BACK DOWN. Green to Red to Green to RED and …
SO I think it may be best to let things settle down after this meeting and see if the picture gets clearer. I know that Some people like to trade all the time, they always want money on the table. I can be that way when there are set ups all over the place, but right now many set ups are currently being aborted & stopped out , with markets going 100+ up to 100+ down & back. This is one of those times when the picture isnt all that clear in many markets. It may be best to take a short rest.
~ALEX
When in doubt, stay out! – Great advise, Alex. Thx!
Yes, I just dont feel that I have an edge when it comes to “What direction do expect XXXX to go , say Thursday after the Fed Wed?” The charts say that anything can happen from here. Its kind of ointeresting how they line up to an indecision point right at critical ‘events’
Quick note: you showed a chart comparing gold and the USD in 2010 where gold and the USD initially moved down together and then gold reversed course and moved higher.
True _ It isnt the Norm, but it does happen from time to time and usually one of those characters is running in a fake out type move.
Right now the dollar is breaking up higher, Gold is dropping , and Miners are up. That can change, but the Miners are bouncing with the dollar while Gold/Silver drop.
when you say silver has a lot of downside, do you mean lower than ICL?
Actually, what I was trying to say is that it looks like SILVER put in its ICL on DEC 1st (Thats a whole month after Gold). So if that huge day in Silver represents day 1 , then it peaked on day 8 and now today we are only on day 13. IF IF IF The FED reaction sends SILVER below the ICL lows (A FAILED CYCLE) it so early in the ICL that it would be extremely weak and likely have further downside for weeks.
On the other hand, that strong reversal day was very high volume and was a very large candle. IT would seem that it was a decisive day where Bulls won over and shook off bears (Shorts) , which would likely put in a reliable low that should hold.
FED decisions can affect everything in a volatile way, so I just wanted to mention that since its early in the SILVER ICL…It needs watching.
K, thx for that explain.
i just eased off on half my physical silver, coz its causing too many sweats esp now that 10ema has dropped below 20ema
Alex….what are your thoughts on one of your setups DGLY…Is it safe to hold through the FED.
I liked how it took off this morning, but the FED thing is tricky when you say “Safe”. If it was bought near the 50sma, you can see that it dipped under the 50sma 2x and recovered, it COULD do that agin. WHY? Bcuz it has shot from $13 to $17 twice in 4 days, THAT is crazy! I still like the set up, and if it’s going to move higher, it’ll go fast then too. Its tough to know what the fed reaction in the markets will be. “Safe”, I’m not sure anything is absolute safe, but you could
1. put a stop under the 50sma and risk losing any gains that you may have.
2. Take some profit before FED, re-enter after fed (maybe miss some gains, maybe avoid some loss).
The chart was there in my answer, but freaked out…I’ll see if I can post it here
thx Alex!
Alex….. are you willing to give a small thought about PM after the FED firework?
Thanks – You. !!
As I mentioned in the report , it has to settle down. (With plenty of pictures to show the feeling) GOLD/ The Dollar , Miners are going to jump around UP/ DOWN / UP / DOWN.
This could be the Daily Cycle Low that I have been discussing in Miners, but you need to let it shake out.
It looked like it might be – miners really big day but gold itself not so much. I appreciate your advice and caution. I’ll wait to see if there is more clarity or lower risk in upcoming reports then. Wouldn’t that be something if it tried the lockout now that everyone that got burned last few weeks is gun shy?
Alex- today we have a swing in Gdx no?
Well Alex Gotta love your gal with the wherewithall to hold her hair back in such uncertain times !
Interesting these markets. Monday should pronounce the way…
Hey Alex, appreciate the comments and caution. I’m really thinking long market/short VIX looks good for a bounce – at least through low volume on 26th – low vol direction favors higher prices usually. But be prepared to hold onto your hat come January.
What do you think of a stab at crude oil or XLE with a stop below today’s low (oil) or yesterday (oil stocks) based on today’s action?
I’d only play short-term right now – likely two weeks max.