Update: QQQ/SPY Continues to Resemble BTC $60K topThis is acting as an update to the linked idea below where I make the case that it appears a broad sell off in equities is very possible based on the behavior of the QQQ/SPY ratio. It is a very rigorous look at the pair and the implications of any breakdown. If you want the full idea please check that out.
The candles can appear red SPY goes up quicker than QQQ or if NDX goes down quicker than SPY and I believe that will be the scenario we will see. I believe we are seeing this topping pattern as people distribute their QQQ index holdings at a higher rate than their SPY holdings. I don't know of anywhere you can trade the QQQ/SPY spread but you could use this information to make long term calls if you wanted to trade any dips or rotate your savings and wealth into different assets.
BTC appears to be developing a head and shoulders pattern that I believe a lot in the crypto space are in denial about (see the linked idea on that as well). Due to the volatility in BTC we saw a very vicious ABC sell off with AB being 2x that of BC on the log scale. I have QQQ/SPQY targeting for a ABC correction on the standard scale and the AB=CD looks very likely place for price to consolidate. I don't see a pattern as clear as the head and shoulders just yet.
QQQ/SPY could still thrash around some more but until it gets back in the wedge I assume it is going to ABC down. The implications are severe. With a broad equities sell off we could see a cascade into crypto or commodities. I think in part the market is still dealing with the Archegos collapse and as these home offices and other institutions get more disciplined with leverage, lending and borrowing levels and who they trust we will see decrease of money in the market. That means that we go down as people unwind their risk and how far with the inflation anxiety remains to be seen.
Those of you familiar with my work will recognize the implications of the charts below. If you would like to see the system detailed be review my linked Ethereum post below. Eevery single one of these charts could be fleshed out into its own post but I can't be bothered.
Here is the weekly chart. If we AB=CD as shown above then we will be fully confirmed on a bear market on the weekly time frame. That is bad enough.
If we see a AB=CD we also and closes a monthly candle below the monthly VSTOP/20 month SMA it is basically another dot.com bubble burst.
And for funsies here is QQQSPY with the simplified cloud. It has twisted bearish.
