A Few Remarks I Can Make for the Weekend

I can’t really make a firm decision one way or another here.

On the one hand, I have been expecting this to be a bear market rally that would soon fade. Soon is now a poor thought to have had. First this whole recent structure became far larger in time than I expected, and now it’s quickly becoming very severe also in terms of price. Even if it does eventually fade, it will be a smaller victory given the extent to which I have been wrong to expect this to fade in terms of both time and price.

But let’s walk through a few things.


First, crypto looks not so great but also not so terrible as it did.

Bitcoin, which I have maintained has been in a bearish structure, has done nothing bearish with that structure (yet):

BTC

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Just a Couple of Additional Thoughts

Given the FOMC policy statement and presser, I see no reason to interpret today’s move as anything other than an unfortunate short squeeze, with “it’s only the expected 75bps, phew!” used as the excuse. The Fed is crystal clear: they will likely continue to raise rates, which should continue to restrict liquidity. I therefore see no reason to interpret the structure on the S&P 500 as anything other than what it looks like, a big bear flag:

ES

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Note: When articles are first published, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced (or to join my Discord chatroom), please consider becoming a patron. Note that there is a 7-day free trial period. More information may be found on my About page and on my Patreon page.


Just a Few Thoughts

Little has changed in my assessment of the markets here. It is my interpretation that the low made on 6/17 produced a rally of poor quality that is inconsistent with a major low (though clearly an intermediate low was made). I believe that we are not close enough to a Fed pivot, given their consistent language, and I believe serious geopolitical risks are present and a rapidly deteriorating economy has not been priced in.

From a technical perspective, I see several good signs that this countertrend bounce may have (finally, Jesus) completed today.

The trend line pointed out here held as resistance:

SPX

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Note: When articles are first published, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced (or to join my Discord chatroom), please consider becoming a patron. Note that there is a 7-day free trial period. More information may be found on my About page and on my Patreon page.


A Glance at Crypto: $BTC & $ETH

Let’s look at the structures on crypto.

On Bitcoin, we remain within the big flag. We have a good fib relationship at today’s high. I see very little here to persuade me that this is a bullish structure.

BTC

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Note: When articles are first published, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced (or to join my Discord chatroom), please consider becoming a patron. Note that there is a 7-day free trial period. More information may be found on my About page and on my Patreon page.


Ethereum Risks a Move to Under $500

A recent post pointed out the very negative configuration on Bitcoin (first chart here). That count needs to be revised as the high from Friday has been breached. So long as the 7/7 high remains intact, we may simply count it like this:

BTC

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Note: When articles are first published, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced (or to join my Discord chatroom), please consider becoming a patron. Note that there is a 7-day free trial period. More information may be found on my About page and on my Patreon page.


I See A Couple of Options

I continue to believe that there is a low probability of a long, drawn-out bear market. That does not mean that we cannot have a technical bear market, of course. But I do not think we have some multi-year demon ahead of us. I remain more inclined to believe that we are closer to a bottom in time, if not yet in price.

I know a lot of people are expecting a GFC-style crash, but I don’t see a systemic risk large enough for something of that magnitude. I do believe we are in a correction in a longer-term bull market that is incomplete. But, it is possible for us to still see lower prices in the short-term.


The options I will list below are based off of a conviction I have that sentiment here is more compatible with us being near a significant low, rather than in the middle of a move, or certainly near any kind of top. People are certainly allowed to get very bearish. But they need to become so after most of it’s already done. People are very bearish here, and so I think that most of it’s already done (or it already is done).


If Friday Was a Panic Low

It is statistically rare to sell into a close and then gap down the next day. Gap downs are more commonly found after there are short covering rallies (if even only small ones) into a close. Friday was quite a statistically rare day. That said, the bullish count is not invalid, though it looks like hell because a nice intraday reversal would have looked a lot better after a drop like that—especially given the well-defined wedge that had developed. But, “abandoned babies” and “island reversalsare chart patterns that do happen. And so, if it’s a deep “2,” we may rally strongly from here and never look back. That is a possibility here.

SPY

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Note: When articles are first published, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced (or to join my Discord chatroom), please consider becoming a patron. Note that there is a 7-day free trial period. More information may be found on my About page and on my Patreon page.


Member Request: A Look at $ETH

A member has requested an update on $ETH. Better than I able to do with Bitcoin (here), Ethereum is much easier to count as a whole, single triangle for minor degree—the green B up there. If that’s the case, then perhaps this will be done with its correction sooner, rather than later.

And this raises an interesting question: just how far off can these be from each other? Usually not that much. I can make this count also work for Bitcoin, but it looks more forced there than it does here.

So here’s what we should do: I would suggest that these are now competing crypto counts. I will watch them both closely from here to see which one works best for both of them. If green B is already in, then it would suggest that the big pink B I am looking for in equities may also already be in, so it’s important to get this right. Stay tuned, I will try to keep a close eye on these.

ES


Note: When articles are first published, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced (or to join my Discord chatroom), please consider becoming a patron. Note that there is a 7-day free trial period. More information may be found on my About page and on my Patreon page.


The Great Bear Case

The gamma squeeze, “cubic function” look to the last rally has given me great pause. I have spent a good deal of time thinking about it. I have shared my basic conclusions about it with you already, namely, that it may very well turn out to have been a finishing move, rather than a beginning move (I’ve discussed that here, for instance). But I am now increasingly concerned (excited?) that it may have been the finishing move.

And in fact, in answer to the question “Why on Earth did we go up like that?” I think the answer is essentially this: I think that was the total, utter, final capitulation of the bears.

I am going to run through a whole bunch of things in this article, just laying out pieces of evidence and observations. It is not my intention to sell you on the bear case; rather it’s a truth-telling expedition, in my opinion. I believe strongly in the bear case here, and I will share what I believe is the truth of the market. But it’s not my intention to persuade you, rather, to express what I feel is true.

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Note: When articles are first published, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced (or to join my Discord chatroom), please consider becoming a patron. Note that there is a 7-day free trial period. More information may be found on my About page and on my Patreon page.


Here’s a Short-Term $ETH Call for the Plebs

Inverse targets the orange box.

ETH

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Note: When articles are first published, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced (or to join my Discord chatroom), please consider becoming a patron. Note that there is a 7-day free trial period. More information may be found on my About page and on my Patreon page.


$BTC and $ETH Dump Was the Sweet Spot, New Targets

After bungling the suspected bull flags here and here, I think my instinct was right, but the structures involved larger than I was expecting. That said, the liquidation dumps we just got on both fell right into wave 2 ranges and formed better-looking bull wedges.

$BTC target:

BTC

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Note: When articles are first published, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced (or to join my Discord chatroom), please consider becoming a patron. Note that there is a 7-day free trial period. More information may be found on my About page and on my Patreon page.