Bitcoin in a nutshell...CHAOS...over and over again.
Not for the faint of heart! 🤢
UPDATE:
Bitcoin's extreme volatility renders it unsuitable for normal technical analysis, as has been done in the following report.
IMHO it's simply an overhyped kleptocurrency...as are the rest of these cryptocurrencies.
While it's not a guarantee, it's not uncommon for the the S&P 500 Index (SPX) to bounce after a significant drop and retest its 200 MA, following the formation of a bearish moving average Death Cross.
We may be at that point, as the 50 MA is poised to drop below the 200 MA in the next couple of days, as shown on the following daily chart.
As you can see, the SPX has plunged a great deal since it reached its high of 6147.43 on February 19 in connection with President Trump's global tariff war, before reversing and spiking following its low of 5069.90 on April 4. It closed today at 5268.05 in a very large and volatile trading range.
A spike to around 5750ish to retest its 200 MA is possible (and close the gap down between April 2 and 3), given that the RSI, STOCH, and MACD indicators are hinting of such a scenario -- and that volatility is extreme, as shown on the following SPX:VIX daily Ratio chart -- before resuming its downtrend.
With the drama of Trump's day-to-day tariff/trade flip-flops, anything's possible, so we'll see what happens.
It's plain to see that the SPX is firmly stuck in between 3750 and 4200 (a very volatile, whippy 'Chaos Zone') as noted on the following daily chart.
It's had difficulty gaining sustained momentum to hold onto gains made above 3750 and steadily increase its value, convincingly, since January of 2021.
A breakout and hold above 4200 could see a retest of its prior high of 4818.62 (hit on January 4, 2022).
Otherwise, a break and hold below 3750 could see a retest of 3500, or lower, to around 3000.
N.B. Unless absolute proof is produced to investors and traders that the entire U.S. banking system is safe and secure, including Regional banks, any breakout above 4200 could be considered shaky and short-lived...especially with inflation still near 40-year highs, the U.S. Fed still raising interest rates, and a recession looming this year (or, more likely, stagflation).
As shown on the following monthly chart, the price has, essentially, traded sideways in a large trading zone, between 3500 and 4300.
It's bounced back and forth between Buyers and Sellers, like a yo-yo.
As it's turned out, any gains, either on the long or the short side, have been short-lived...much like the first half of 2022 was.
Day-to-day or week-to-week trading for 2022 has been erratic and non-directional...and about as interesting as 'watching paint dry.'
Unless you took profits during the December 2021 candle -- which followed November's bearish 'shooting star' (which wasn't confirmed until January's 'bearish engulfing' candle) -- and, either, shorted the markets and held, or, simply stayed out, you were caught up in this slow slip downwards, dominated by choppy large-scale sideways consolidations.
As I mentioned in my post of December 21, we may see a fourth 'candy cane' form in January 2023, with a price target of 3200...if Sellers remain in control.
We'll see what happens.
I hope to post my Annual Forecast for the New Year in the next few days, so stay tuned. As a reminder, my 2021 Market Wrap-Up & 2022 Forecast can be read here.
* See UPDATES below...
In my post of March 2 regarding WTI Crude Oil, I mentioned that my previous price Targets 1 and 2 (100.00 and 111.00-112.00), which I'd identified in my prior post of February 24, had been hit...and that Target 3 (147.27) still remained intact.
However, just days later, price hit a high of 130.50 on March 7...not quite tagging Target 3, but coming fairly close...before chopping around that level, then beginning a drop to current levels, as shown on the following monthly chart.
Note that an extreme spike formed by the end of March on the ATR indicator...hinting that a price turnaround may be imminent. As I did in my March post, I've shown the ATR with an input value of one period to clearly illustrate that such a spike occurred that month.
Price is stuck, again, within, what I've dubbed a 'Chaos Zone,' in between 80.00 and 100.00.
Previous attempted breakouts above this zone have been short-lived, since January 2008. In fact, those breakouts have all been followed by a large drop to retest long-term major support at 40.00.
Whether price drops to 40.00 any time soon, is anyone's guess. If it does, watch to see if the ATR forms another extreme spike to signal a potential price reversal.
However, if such a spike occurs at any price above that level on the monthly timeframe, a bounce may soon follow...possibly to tag or surpass Target 3 (147.27).
So, keep an eye on the ATR for clues in this regard.
* UPDATE Aug. 17...
Although world markets may be headed toward a recession, that may not negatively impact demand and the price of oil, as described in the following article.
* UPDATE Aug. 21...
However, the following court win for oil and gas exploration and production on U.S. federal lands may eventually bring down the price of Crude Oil and Gas whenever the producers in those states begin their operations...provided that Biden's EPA regulations aren't too cost-prohibitive and onerous at that time.
* See UPDATE below...
The Emerging Markets ETF (EEM) has had difficulty holding onto gains above 30.00 since January 2006, major support, as shown on the following monthly chart.
It's been in freefall since June 2021.
A sustained breach and plunge below that level could bring down global equities and financial stocks/ETFs...one to watch as a potential "canary in a coal mine."
* UPDATE Sept. 20...
Emerging markets continue to weaken as the U.S. Dollar gains strength...as of 2:20 pm ET, EEM's current price is 37.63.
We'll see what happens after the Fed raises interest rates at their meeting tomorrow.
Depicted on the following monthly chart of the High Yield Corporate Bond ETF (HYG) are a long-term downtrending channel, several horizontal support and resistance levels, and a large sideways "CHAOS ZONE."
HYG's current push downward is accelerating and is fast approaching a confluence of price and channel median support around 80.00.
It has been trapped, for the most part, in a volatile and whippy "CHAOS ZONE" in between 80.00 and 90.00 since mid-2009.
A drop and hold below 80.00 on accelerating selling (depicted on the Balance of Power indicator and is now at an extreme level) could see it retest 75.00 or 70.00, or plunge even lower, in short order.
For further clues on possible direction, check out the following information.
The article below contains relevant and important details on HYG and the credit markets, and their potential impacts on equity markets...definitely worth a read.
Further to my post of February 24, WTI Crude Oil took out price Target 2 (111.00-112.00) today, after blowing through Target 1 (100.00) yesterday.
It's currently trading above that level at 113.44, and rising, as I write this at 8:30 pm ET, as shown on the monthly chart below.
As I described in the above post, the "path of least resistance" is up (in fact, resistance is extremely thin above Target 2, as depicted on the TPO Profile of that chart), and Target 3 (147.27) is now in the crosshairs (to retest its prior all-time high).
Exactly how soon that may be hit remains to be seen, but the Buyers remain fully in control on this timeframe, as shown on the Balance of Power indicator.
Furthermore, until we see an extreme spike made on both the Momentum and ATR indicators, as well as the Balance of Power, Oil may not have topped out yet. (By the way, I've shown the input value of the ATR as one period to illustrate this more clearly...the other two indicators are shown in their default mode).
So, we may see Target 3 hit sometime this month...possibly sooner, rather than later.
* See UPDATES below...
IF there is an "old" Dow rule-breaker lurking about somewhere in the ether, then Monday's trading should not end in a "Crash."
OTHERWISE...brace yourselves if history repeats itself, as described in the following ZeroHedge article.
BUT...although the Dow 30 Index closed at its all-time high on January 4, it reached an intraday all-time high on January 5...so, 55 calendar days later could put the "Crash" date forward by one day to March 1.
SO...either way, we may (or may not) see a "Crash" on Monday or Tuesday...depending on whether the "old" rule-breaker shows up. 😏
* UPDATE February 28...
No "Crash" today...
* UPDATE March 1...
No "Crash" today, either...the "Old Guy" (Fed Chairman Powell???) is still around, for now...we'll see how long that lasts.
P.S. By the way, Chair Powell looked nervous and stressed as he testified before the House Financial Services Committee on March 2.
His responses to various questions posed by Committee members pertining to rampant and rising inflation, as well as the oil and gas industry relative to Biden's climate change policies/agenda, sounded weak, wishy-wasy and ill-prepared.
It didn't sound like the Fed is prepared to act in any meaningful or serious way to quickly tamp down inflation and its destructive consequences. It appears that they are more concerned with keeping markets over-inflated at record levels than they are at deploying their monetary policies in a sound manner, as their mandate so requires (lacking or ignoring serious predictive warnings)...if they were, I doubt that inflation would have reached current levels.
So, I may not be wrong in assuming that the "Old Guy" who showed up in markets yesterday (and today) may, in fact, be Powell...or, rather his "silent influence."
MEANWHILE...U.S. equity markets are clinging to and threatening to break below major support...so, stay tuned as things heat up in global Oil markets...and other areas of concern in which the Fed may be ill-prepared to act in a timely, effective and prudent manner.
And, unlikely to resolve before the November 3rd Presidential election. Until then, 3350 is a key support/resistance level to monitor. Chaos and higher volatility lie below that price within the jaws of the "alligator."
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| SPX weekly |
