Bitcoin and the big macro picture
BTCUSD currently in a very bearish trend. Keeps closing lower and lower both on daily and weekly charts, while the price keeps getting rejected at previously important levels. Bitcoin is oversold and cheap compared to several models and previous cycles, but because it went up too fast it could potentially bottom anywhere between 12k to 28k. Essentially its momentum and trend are very bearish, although Bitcoin is cheap. It could just get a lot cheaper. It's tested the 28-31k zone so many times, that the whole thing will probably break down. Currently 31-31.5k is resistance and until that is properly reclaimed I remain pretty bearish. BTC could go all the way up to 35.3k and still be bearish, but once it closes above that level I think the bull is fully back.
BTC.D is another thing indicating that the crypto market isn't in a good state at the moment. Bitcoin dominance growing without Bitcoin showing strength potentially means money is leaving the market. Yes there is money coming in, in the form of stablecoins, but the market still doesn't look very healthy. We have a big bubble and its only been about 2 months since it popped and we haven't seen capitulation yet. Bitcoin dominance could reach 60% before alts start going up hard again (both vs USD and BTC).
https://www,tradingview.com/x/TL3Wr5PH/
Bonds had a massive breakout. There are many reasons why bonds could be going up, but I think this also hits the inflation/reflation story/narrative in the head. The Fed isn't printing money and there is no real growth, so at least for now inflation is transitory. The market is telling us banks aren't lending and that there is a lot of trouble ahead, something clearly shown by the Reverse Repo situation where banks want to give cash and get pristine collateral (US Treasuries). Clearly the Delta variant, the Fed being hawkish, so very high inflation numbers etc are also catalysts/signals that things are good and that the Fed has neither inflation or deflation under control.
The USD (DXY) hasn't broken out completely yet, but it is creeping higher. Another not so great sign. The USD has a lot of resistance in the 96-97 area so even if it breaks out, it might just create a shock in the markets which might not last for very long. At the moment getting down to 91 wouldn't be abnormal and then go up to 96-97. Personally I think that breaks 89 it will head all the way down to 82, but until then it's still in this massive range and I have no idea which way is it going to break. The USD and Bonds creeping higher are not good signs for the reflation trade for sure,
Oil is at key support right now and with OPEC announcing more production + the Delta variant + the reflation trade slowing down for months now + oil hitting a 6.5 year high, were enough to slam Oil back down... but personally I think the low supply + underinvestment + the insane collapse & bear market bottom in April 2020 are the major catalysts that will take oil higher. Oil is a good buy here and all the way down to 44. In the next few years it will probably hit 100$
Gold is trapped in a range. Doesn't look great, doesn't look awful... But because its below most key MAs, below most key pivots and has tested the diagonal support & the horizontal at 1680 so many times, I think it will break lower. If dollar goes up, then I expect Gold to go down.
Silver seems very weak and breaking down. Another bad sign for the reflation trade and could be a bad sign for gold too. After the failed scam pump silver failed to go higher and I wouldn't touch it until it hits 19$ or breaks above 30$.
Copper made a new ATH and then quickly crumbled back down. We saw something similar with gold, but at different time period and that's not bullish. At least until I see them reclaim their 2011 ATHs I am cautious. Copper unlike silver looks a lot more bullish as its long term trend is still up and the demand for copper could skyrocket due to the green revolution, but in the short term if it breaks below 4$ I think it would potentially bounce at 3.7$ and then bottom at 3.3$.
Nasdaq 100 has been the best performer of the last few months as US tech giants are benefiting from a strong dollar and deflation. The Nasdaq going up alone was a sign that something was a bit off. In my opinion stocks, and especially US tech stocks will go even higher and properly parabolic over the next few years... but in the short term I am a cautious. NDX showing some strength at the moment but could dip down to 14.2k and if that doesn't hold to go all the way down to 12.4k. In my opinion there is no doubt that stock market bull isn't over, at least not for the Nasdaq.
SPX hit some very important support and this could be the dip. Beautiful fill of the inefficiency and bounced a bit. The SPX Equal weight topped in May 10th along with crypto, another sign that the final rally was only because of large caps.
Russell 2000 also showing a similar picture although it actually topped in Mid March. The current way the Russell looks is a proper reversal and doesn't look bullish. However it's still in this range and because it has held the lows after sweeping only one there is a chance it goes higher. If it start dropping the best area to look for buying are the old ATHs which coincides with the Vaccine/Election breakout pump.
DAX Not looking great, but still very bullish long term.
Nikkei has been having these pumps and then full retrace for many many years. The situation is similar to the Russell, so I'd definitely like to go long near 24.2k
BTC.D is another thing indicating that the crypto market isn't in a good state at the moment. Bitcoin dominance growing without Bitcoin showing strength potentially means money is leaving the market. Yes there is money coming in, in the form of stablecoins, but the market still doesn't look very healthy. We have a big bubble and its only been about 2 months since it popped and we haven't seen capitulation yet. Bitcoin dominance could reach 60% before alts start going up hard again (both vs USD and BTC).
https://www,tradingview.com/x/TL3Wr5PH/
Bonds had a massive breakout. There are many reasons why bonds could be going up, but I think this also hits the inflation/reflation story/narrative in the head. The Fed isn't printing money and there is no real growth, so at least for now inflation is transitory. The market is telling us banks aren't lending and that there is a lot of trouble ahead, something clearly shown by the Reverse Repo situation where banks want to give cash and get pristine collateral (US Treasuries). Clearly the Delta variant, the Fed being hawkish, so very high inflation numbers etc are also catalysts/signals that things are good and that the Fed has neither inflation or deflation under control.
The USD (DXY) hasn't broken out completely yet, but it is creeping higher. Another not so great sign. The USD has a lot of resistance in the 96-97 area so even if it breaks out, it might just create a shock in the markets which might not last for very long. At the moment getting down to 91 wouldn't be abnormal and then go up to 96-97. Personally I think that breaks 89 it will head all the way down to 82, but until then it's still in this massive range and I have no idea which way is it going to break. The USD and Bonds creeping higher are not good signs for the reflation trade for sure,
Oil is at key support right now and with OPEC announcing more production + the Delta variant + the reflation trade slowing down for months now + oil hitting a 6.5 year high, were enough to slam Oil back down... but personally I think the low supply + underinvestment + the insane collapse & bear market bottom in April 2020 are the major catalysts that will take oil higher. Oil is a good buy here and all the way down to 44. In the next few years it will probably hit 100$
Gold is trapped in a range. Doesn't look great, doesn't look awful... But because its below most key MAs, below most key pivots and has tested the diagonal support & the horizontal at 1680 so many times, I think it will break lower. If dollar goes up, then I expect Gold to go down.
Silver seems very weak and breaking down. Another bad sign for the reflation trade and could be a bad sign for gold too. After the failed scam pump silver failed to go higher and I wouldn't touch it until it hits 19$ or breaks above 30$.
Copper made a new ATH and then quickly crumbled back down. We saw something similar with gold, but at different time period and that's not bullish. At least until I see them reclaim their 2011 ATHs I am cautious. Copper unlike silver looks a lot more bullish as its long term trend is still up and the demand for copper could skyrocket due to the green revolution, but in the short term if it breaks below 4$ I think it would potentially bounce at 3.7$ and then bottom at 3.3$.
Nasdaq 100 has been the best performer of the last few months as US tech giants are benefiting from a strong dollar and deflation. The Nasdaq going up alone was a sign that something was a bit off. In my opinion stocks, and especially US tech stocks will go even higher and properly parabolic over the next few years... but in the short term I am a cautious. NDX showing some strength at the moment but could dip down to 14.2k and if that doesn't hold to go all the way down to 12.4k. In my opinion there is no doubt that stock market bull isn't over, at least not for the Nasdaq.
SPX hit some very important support and this could be the dip. Beautiful fill of the inefficiency and bounced a bit. The SPX Equal weight topped in May 10th along with crypto, another sign that the final rally was only because of large caps.
Russell 2000 also showing a similar picture although it actually topped in Mid March. The current way the Russell looks is a proper reversal and doesn't look bullish. However it's still in this range and because it has held the lows after sweeping only one there is a chance it goes higher. If it start dropping the best area to look for buying are the old ATHs which coincides with the Vaccine/Election breakout pump.
DAX Not looking great, but still very bullish long term.
Nikkei has been having these pumps and then full retrace for many many years. The situation is similar to the Russell, so I'd definitely like to go long near 24.2k
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