Good morning, everyone, and happy new week to you. I had a thoughtful weekend, with so many ideas from those whom I solicited for advice. I have embarked on an exciting new project for Slope which will keep my time and attention occupied.
As for this morning, it’s naturally nice to see so much red, but as always, we must keep it in context. Below on the ES, we see that, regrettably, on Friday, the market pushed above its prior high, thus killing the cycle of lower highs. Mercifully, when the market zipped higher on Sunday, it did not violate yet another high, and in fact all the green turned to red in short order.
What I mean by that other high is illustrated below is the longer-term chart. The arrow in the center of the chart was an important reversal, because it affirmed the validity of that broken ascending trendline. Yesterday’s brief surge higher failed to best that level. At this point, we are range bound. We are between the proverbial rock (the lower horizontal below, which constitutes the neckline of an inverted head and shoulders pattern) and hard place (the point marked with those two arrows).
On a wholly different subject, I just read that Tuesday, at long last, will herald the introduction of the ProShares Bitcoin ETF. That has been years in the making, and of course they are besides themselves with excitement. I’d say: not so fast. These “bringing crypto to the masses” events are, on the surface, naively assumed to be major propellants for more market gains, but you know how cruel the market can be. The highest point in Bitcoin’s entirely history was to the MILLISECOND when the Coinbase IPO happened. So don’t be surprised if this week marks another important top.
