Let’s Discuss a Few Technicals

I have been somewhat agnostic here, recognizing that we would enter some period of sideways chop, which we did, though it’s been a little more up and sideways rather than simply sideways. That said, between the two counts expressed here, I am beginning to favor the bearish one more than the bullish one, though they both remain possible.

I have a feeling that this rally is simply a short covering rally (in part because of the moves we’re seeing in the meme stocks and much of the heavily shorted tech stocks—which were under-performers during the move off the all-time highs). If that’s so, we still need to see some supply enter the market.

That said, I would like to review a few things.

Previously, I discussed the channel on the US indices that I expected to serve as some resistance. While it did temporarily slow the Nasdaq 100 and the S&P 500 down a little bit, they have managed to get back into their channels, but the Dow and the Russell’s respective technicals remain unchanged:

The Dow futures have come back to retest the channel yet again but have not recaptured it:

YM

And the Russell futures have made no progress toward recapturing its range either (still under the long-term orange range):

RTY

And finally, Bitcoin is in an interesting place. It has recaptured its head and shoulders neckline (orange line), but is also in a very large bear flag (green parallel rails).

BTC

Until some of these improve, there remains an excellent chance for these to all break down still. I do not believe we are out of the woods yet.


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