pebblewriter

Tag: bitcoin

  • Charts I’m Watching: May 23, 2022

    Futures are up sharply following Friday’s 140-point reversal which finally saw SPX/ES reach the -20% mark. As we discussed last week, the market should surprise many this week.

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  • Sure OPEX, But Then What?

    Futures are up about 1% this morning – par for the course for an options expiration Friday. The Chinese prime rate cut is no doubt helping.

    But, what happens next week as new and pending home sales, durable goods, FOMC minutes, GDP, PCE and Michigan Sentiment come rolling in? This will be a serious test of the market’s ability to hold its lows, let alone continue to bounce.

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  • Charts I’m Watching: May 18, 2022

    We’re seeing more backtesting this morning, consolidation after yesterday’s strong surge.

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  • Analog in Play

    Futures are all over the map this morning, with the overnight losses largely erased at one point.

    The key, though, is that SPX bounced back above a key Fib level after tagging its 20% target last week. Although it’s still early stages, our analog is in play.

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  • Bitcoin’s Meltdown

    BTC reached our next downside target at 28,600 last night, then dropped as low as 25,401 before bouncing back to current levels.

    It’s not unusual for BTC to overshoot important support. And, this .618 Fib level is theoretically important support. But, it’s also important to remember that a bounce is sometimes just a backtest of newly formed resistance before another leg down.

    We’ve been bearish on BTC since 66,432 in October 2021. We were a little early, but maintained our posture ever since with with the exception of the Dec 2021 and Jan 2022 bounces – a stance which has produced exceptional gains.

    We’ll take a fresh look at BTC and whether it’s worth trying to catch this falling knife.

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  • A Swing and a Miss

    ES spent 11 hours hanging around our next downside target yesterday.  While the session had many characteristics of capitulation, the fact that SPX didn’t quite reach significant support (3956) suggests that the overnight ramp is a head fake.continued for members… (more…)

  • Update on Bitcoin: May 9, 2022

    Bitcoin, the inflation hedge which has fallen 56% in the midst of the sharpest rise in inflation in over 40 years, is plunging again. Recall that we turned momentarily bullish after it broke out of a falling channel back on Feb 6.

    We expected a backtest of the 200-day moving average – which BTC dutifully delivered on March 28.

    Turning bearish again, we settled in and began waiting for a breakdown. Bitcoin didn’t disappoint. Today, it reached the bottom of the rising yellow channel.

    Strange behavior, indeed, for a so-called store of value.

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  • The Reflation Trade

    Remember how excited the bulls were about the reflation trade? Higher interest rates meant the economy was reopening at a good clip. What could be better than that?

    Things look a little different from the perspective of 3%+, don’t they?

    Nothing alarming here… Remember, it’s not the inversions that bite, but the spikes higher which come after. Futures are off again this morning following a strong jobs report, but we’ve yet to punch through Monday’s lows.continued for members… (more…)

  • FOMC Day: May 4, 2022

    Today’s FOMC meeting is one of the most anticipated and consequential in years. It’s difficult to overstate its importance in terms of economic impact and, perhaps more importantly, Fed credibility.

    Yes, we care about whether the Fed hikes 50 or 75 basis points – though either is unlikely to put a dent in inflation. The bigger question is what the Fed does with its $9 trillion balance sheet.

    Futures are up modestly.

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  • A Fork in the Road

    Yankee great Yogi Berra famously advised that “when you come to a fork in the road, take it.” The S&P 500 is weighing such a decision this morning, having closed Friday at a critical level of technical support.  A rebound from here would buy the Fed a little more time for inflation and hawkishness to ebb. A failure to bounce implies at least another 8-10% downside.

    Which will it be? Fortunately for us, our chart patterns are sending a very unambiguous signal.

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