“Falling, yes I am fallin’
And she keeps callin’
Me back again” I’ve Just Seen A Face, The Beatles
QQQ has been going essentially sideways since October 29th when it struck an all time high along with the SPX.
The SPX eked out a new record high in early January but then plunged below its 50 day line for the third time since the October high.
Like the prior two instances the SPX recaptured its 50 day ma almost immediately.
As well it reclaimed the large gap from January 20.
It may look coiled for new highs but at the same time a weekly SPX shows 3 Drives to a possible Secondary High to the October 29 high.
A weekly QQQ shows an Ascending Triangle with three tests of the 20 week moving average and three tops at the 625-630 region.
Both indices are sporting indecision patterns which should resolve this week or next at the latest for three reasons.
1) The cycles we have been showcasing in this space, most notably the 36 year natural cycle from 1990.
2) We are 90 days/degrees from the October 29 peak.
3) Many generals and glamours will be reporting earnings over the next two weeks.
The parade of leading names reporting starts Wednesday, after the close, with MSFT, META and TSLA. AAPL follows on Thursday.
We also get LRCX on Wednesday which left a Key Reversal Day last Thursday but has not seen downside follow through.
Under the surface of the three month sideways stint, many glamours have registered stunning gains—most notably memory and drive stock and chips in tech and of course precious metal miners—which we’ll cover below.
Memory and drive names include SNDK, MU, LRCX, STX and WDC to mention a few.
WDC exemplifies how many glamours have acted of late…running up early in the session and tailing off. Traction is MIA for the most part.
A daily WDC shows it left a Lizard sell signal on Monday—a new 10 day high that tails off closing near the open.
However drilling down to the hourlies, shows a Bull Flag on Monday.
Is the hourly pattern a double top or a Cup and Handle?
The real action Monday was in gold and silver.
Here’s part of what we said about silver in Monday morning’s Hit and Run Report.
Silver Over Threw a Tops Line (blue) on its way to hit a parallel channel around 116.
We should an historic chart of silver from the 1970’s with a trend channel connecting the 2009 low and the 2019-2020 lows (red).
The upper rail of the channel was kissed and rejected on Monday.
From the April 28 low a 900 degree move on the Square of 9 Wheel is 106/107.
During the day, on the Hit and Run private twitter feed, we added that 114 squares out with April 7, the low.
The last low before silver went vertical was at 70.
70 squares 117.
Silver struck 117 and reversed with authority on Monday.
Between the chart patterns and the time/price square-outs we had to ask:
“Do you want to buy silver here?”
My platform does not provide intraday data for silver, so let’s take a look at SLV to see how Monday’s reversal unfolded.
A 10 min SLV shows Monday’s massive up gap.
Following Friday’s sharp gains the ‘normal’ expectation would be a sharp pullback after the open as profit takers locked in some gains.
It never happened.
Instead the hook was put in when SLV reversed intraday starting with an innocent looking outside down bar on the 10 min chart.
When the first rally attempt faltered SLV caved in triggering an Opening Range Breakdown.
An hourly SLV shows the nail was put in with a large range outside down hour.
Checking two major miners, AEM and WPM shows that both left Key Reversal Days on January 21.
They never followed through to the downside.
Monday they both left signal reversal bars….Gilligan sell signals (gaps up to new 60 day highs with closes at/near session lows).
This may be a classic ‘the first mouse gets the squeeze, the second mouse gets the cheese’.
In other words the first sell signal got the squeeze, but the second mouse gets the cheese.
Yesterday we noted that GLD squared out with 466 as January 26 is opposite 466.
GLD hit a high of 469 and closed at 464.70.
Gold eclipsed 5100 on Monday.
510 is direct January 26.
Caution is warranted.
The tale of the tape will be told when after a correction silver and gold rally to a Secondary High.
I am not saying that they are done. But there is a strong likelihood they may be done for the moment.
I would not be surprised to see gold pull back to the 4000 region.
As offered Monday, the silver and gold Freight Train was bound to come off the tracks up around the bend.
The conductor had a heart attack last week and keeled over on the speed lever.
For the moment, the metals are coming down off their acid trip.