The USD has made an undercut low today likely on optimism of the Stimulus passing (which is not confirmed yet) so this could just be an extension of TCL1 for the USD as the 10ma never really turned up on the brief move above that level. If this is an early failure of TC2, however, that would be very Bearish for the USD signaling its Intermediate Cycle has already topped. The moves in markets today are tied to the optimism of the Stimulus passing but that is still not a done deal. Gold, GDX, and SPX charts are posted with additional details. I plan to watch most of the day to see how we close. My last chart is on GBTC which shows you my positions are doing very nicely.
My Cycle work has Gold headed higher after the next Intermediate Cycle Low (ICL) has been confirmed. Short term, we may see more of a pullback but longer-term it is headed much higher into next Spring for starters.
In the short-term, the USD could well test the 96 level (200wma on the Weekly chart) in its current uptrend but my Cycle Work shows it is headed much lower. Why? Sometimes a picture is worth a thousand words.
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It sure looks like the USD found its short term Trading Cycle #1 (TCL1) yesterday at the 62% Fib support level. Also remember from my weekend report that Gold, late in its longer Intermediate Cycle, when Gold is still Bearish, it usually finds a top between Days 10-12. Today both Gold & GDX have formed swing highs and may have found tops on or before Day 12. The tricky part here is that this is also where Gold often forms a Half Cycle Low (HCL) so my plans are to watch the action for a bit before any next steps.
Here is a supplemental update to my Weekend Gold & USD Cycle Update. Attached are 5 Year Gold & GDX Weekly charts using the 30wema and 66wema which are longer-term Bull Market support moving averages for all Markets. Note where Gold likely found its 5-6 month Intermediate Cycle Low (ICL) in late September 2020. Right near the 3wema at the confluence of my middle price channel or Fork and my dotted blue trend line. Evidence is building that an ICL has formed and my minimum target by next Spring is 2,300.
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Note that this section’s analysis uses a combination of 30wema or 50wma on the Weekly and the 150ema or 200ma on the Daily depending on which appears to be more relevent.
Crude Summary: With a Failed TC, Crude may have found an ICL but this week’s price action on the Daily chart signals that may not yet be the case. On the Weekly chart, the Bollinger Bands are extremely tight signaling a big move is likely coming. That said, often times the initial move can be a head fake. If correct, we could see a spike lower into an ICL followed by a strong reversal (see weekly chart).
Crude Oil (WTIC): Crude W.24 and price closed 11 cents above the 10wma but nothing on the weekly chart looks like an ICL to me as Crude almost always retraces at least a Fib 38% into an ICL. Cycles, however, do have sideways consolidation ICLs but they are rare. Given the time we have chopped sideways any move lower into an ICL can see a sharp reversal.
Crude D.23 of a new Trading Cycle that is bouncing out of a Failed TC. So far we have a top on D.8 where price found resistance at the 50ma and a retest that made a lower high that was also rejected by the 50ma. Until I see a close back above the 50ma that makes a higher TC High I am looking lower as a high on just D.8 is Bearish in within a shorter term Trading Cycle.
XOP & XLE Update: W.29 for XOP and XLE as all we have is a weekly swing low in place. More evidence is needed to confirm an ICL and the next is a close back above the 10wma.
XOP and XLE short term counts are not crystal clear and so I may exit this trade as soon as tomorrow depending on the action in the broader stock market. We are either on D.5 of a new TC or perhaps D.20 within a Failed TC4. Friday price moved lower with crude rather than stocks and I stepped aside as Crude may be headed lower based on Friday’s rejection at the 50ma.
NatGas: Note that I am using UNG for now as the NatGas chart on Stockcharts does not look correct perhaps due to a contract month rollover.
UNG W.15 seeking out its next ICL as we only have a very slight Weekly swing low and price was rejected at the 10wma. My short term count is also not crystal clear yet.
My Primary short term count has UNG headed lower (see details in my Daily chart).
Uranium (CCJ): CCJ W.29 with a slight undercut low so it is still seeking out its next ICL. Note that price is trying to establish support at the Fib 38% retrace near the 50wma.
CCJ D.23 of a Failed Trading Cycle #4 (TC4) still seeking out its next TCL which could also be an ICL. Note that there are no divergences yet on either the RSI or the MACD.
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