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I cannot cannot short this...Today's CPI data (down to 5.0% from 6.0% YoY) created interesting and actionable price action this morning... more on my thoughts about it later. Technically the data release created a Spike Alert by punching through the pre-market high and then closing back inside it before the cash open. This is happening within two important contexts: A double top for the price action of April's highs The 4155.25 level which is the most important level of 2023 4155.25 is the 50% Retracement for the entire 2022 bear market. This is THE level which the S&P 500 has been holding all year and stubbornly refusing to break higher. The first time it was hit was the December 2022 CPI data. That signaled the December bear trend to yet another key 50% Support. The next time was the top of the January 2023 rally that got everyone excited. Following the recent February/March malaise price is once again testing this level. The CPI data release has very much driven the highs and low (October CPI being the major bottom) for the last many months. Inflation, and how the Fed handles it, has driven this current era of the stock market (and all risk assets). While the news is that inflation is coming down it is still well above the Fed's target 2.0% rate. There is no guarantee or sign that the Fed will change its mind. Yesterday I sat in on a presentation that juxtaposed the current GDP numbers (which have been recently positive) with the LEI (Leading Indicators) which are sending up a recession signal. I am ALWAYS hesitant to take FUD into account in my analysis. However, the signal is the signal. The trade of this post is based upon a confluence of four factors (news event, spike, double top, 50% Retracement). My rules state that I must trade this... win or lose. The LEI is also a signal that has a high probability of efficacy. It should also be heeded.
CME_MINI:ES1!Short
by norok
39
LEI clear Recession warning: What it means for Bitcoin?The LEI (Leading Economic Indicators) has a great track record of predicting recessions. While a recession has been much anticipated for many months... now the data is coming in to actually support the possibility. What does this mean for Bitcoin? The two most important data points we have (because we don't actually have a major recession to draw upon in Bitcoin's lifetime) is the COVID crash and March 9th this year... the "banking crisis" FUD. When COVID fears hit the markets Bitcoin responded like a risk asset. It lost over -60% of its USD value from the high of 2020 to that point. As the "Banking Crisis" hit markets last month so too did Bitcoin fall over -20%. What this suggests is that when recession fears grow and become realized... Bitcoin will drop as a risk asset. The future of it though (in both cases) is V-shaped. So fear not. But also ignore not. Be thinking about buying opportunities.
BITFINEX:BTCUSDShort
by norok
2