Market Update for Wednesday, May 17th, 2023

Good afternoon traders.

In yesterday’s article, I discussed an inverse that could be seen on SPX, but I didn’t have a lot of conviction in it. Let’s take a look at what that looked like again before today:


And from there, sure as can be, we got this:


It hasn’t met its measured move—and it might—but I do still have a few things that make me very shy about attempting longs while we’re up here, so I’m not enthusiastic about insisting this will meet the target. If it does, so be it. But I’m especially cautious here, for the time being.

In addition to the inverse, a similar outcome was suggested as a possibility last Thursday, and that had to do with a count possibility given the contraction in price we were developing. What that looked like back then was this:

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A couple of things I can say about Bitcoin, as it’s a good asset to help track risk. I’ve already discussed how Bitcoin is not making a good attempt to recapture a long-term trend line of great importance. That looks like this now:


And what’s even more interesting are the “jaws” forming between Bitcoin and the Nasdaq-100:


These often move closer to each other. To my mind, this may be suggesting that risk appetite isn’t as great here as the NDX might make it seem—Bitcoin often responds well in good liquidity environments. Looking a bit closer on Bitcoin,

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So, that’s what I think for now. Very little has changed, and everything continues to seem at least compatible with the views I’ve expressed lately. The door is open for the bears, and we’ll see if they come through it. I continue to think there’s a good chance they will.

I hope everyone has a fine evening.

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