Last week, as we approach trading on Thursday (green oval), I figured it was all over for the bears. Everything was positive for the bulls, we seemed poised for lifetime highs across the board, IBM and META were blowing doors off, etc. You know what happened next. Conversely, on Sunday night (red oval), I was in here high fiving everyone about how the wheels were coming off, Bitcoin was crashing, the /NQ was plunging, and then…………Monday…………green across the board! Let’s just say overnight sessions often don’t mean a damned thing.
As the /NQ (both above and below) show, we are hovering around the top of a range which has been in place for months. Following the peak in October, the market hasn’t really known what to do with itself.
For the /ES, prices rallied to a lifetime high last week (right around my “bears have no hope” moment) and were rejected by the broken trendline. The bounce from yesterday (based on – – what? – – not bombing Iran?) has accomplished nothing more than put the prices right back in that vicinity so they can fall again.
The price correlation among assets seems awfully close to 1.0, as Sunday night illustrated. Bitcoin, /ES, /NQ, gold, silver – – everything was falling – – just like everything rose Monday and, to a smaller degree, into this morning. I will say, however, looking at these precious metals charts, this is NOT a “marvelous base ready to rally” kind of moment. This is nothing more than a dead cat bounce which is at or very close to a point of exhaustion before Sunday’s lows will soon be tested once more.
As I mentioned in yesterday morning’s Follow Bitcoin post, you would be well advised to, errr, follow Bitcoin. We have bounced a few thousand bucks off the lows (prompting the crypto freaks on Twitter to assail me with Told Ya So name calling, since their precious $BTC is now down 39% instead of 40%) and has as much as $6,000 of upside (but not necessarily) left. If it can break $75,000 in earnest, you’re going to see armageddon.
I’m going into the day medium-aggressive at just over a 100% commitment level (no margin).
