And there you have it! Bears can finally rejoice and celebrate the "sell off" in U.S. equities. It was a much deserved breather the bulls earned after posting historic numbers in the month of April. The weekly close though, wasn't so hot. Especially in terms of candle disposition. Today we review BTC and QQQ.
BTC Nailed It!
Whoever said crypto was not correlated to the stock market must now be questioning everything! Oh yea, and that narrative of digital gold, please. Instead, Bitcoin is turning out to be a great tool for marking tops and bottoms in this market environment. It continued to do so this week, after exploding to nearly $9500 on Coinbase. Where is it goes next, is anyones guess. Though I am willing to bet it is heading lower. Below is a 5 min chart of Bitcoin.
Currently, Bitcoin is undergoing a correction. To be specific it is looking like a Flat, ABC. In my view Bitcoin will eventually retest the 1.618 or 2.618 retracement level from the high of approximately $9478.66 (Coinbase). See the chart below for more details.
I wouldn't be counting on an extremely bullish moves from Bitcoin for some time. Even though the move off the low was impulsive, it is now more likely that Bitcoin undergo a lengthy consolidation period before heading any higher. Prepare for a mini crypto winter! Bias: Bearish.
Leading Again...
The Nasdaq Composite was leading the way once again today. Finishing the day down 3.2%. Here, we look at the PowerShares QQQ.
On the chart above is the QQQ and no, I won't say Head and Shoulder yet. I will say that the QQQ is likely to head lower. My reasoning simply stems from the magnitude of the rally off the low. Next week, the market should provide more clues as to how deep this correction will be. The real question I have is with the big tech names having reported quarter one earnings what forces will begin to move the markets? Will it be the news once again or will fundamentals finally take the lead and price in a depression?
The strength of the April rally hints to me that out of all the indexes, it is the Nasdaq, or in this case the QQQ that will make a new all-time high. I will be keeping a close eye on the volume and the pattern that takes place in the coming correction. The QQQ and the stocks of the Nasdaq Composite may be worth buying into heading into quarter 3 and 4 of the calendar year. Nevertheless, in the short term the QQQ has me leaning... Bias: Bearish.
Don't Fear the... Low
I can't predict the future but I can guess with near certainty what the Fed will continue to do if the March low is at risk of being taken out! It is never a good thing to predict market turns. You tend to build a bias and eventually it may lead to missed opportunities. If you are going to attempt to project the future, do so understanding that there is a high probability you will be wrong. Have strictly defined levels that confirm or invalidate your ideas. Thank you for reading and I hope you have a great weekend!
BTC Nailed It!
Whoever said crypto was not correlated to the stock market must now be questioning everything! Oh yea, and that narrative of digital gold, please. Instead, Bitcoin is turning out to be a great tool for marking tops and bottoms in this market environment. It continued to do so this week, after exploding to nearly $9500 on Coinbase. Where is it goes next, is anyones guess. Though I am willing to bet it is heading lower. Below is a 5 min chart of Bitcoin.
Currently, Bitcoin is undergoing a correction. To be specific it is looking like a Flat, ABC. In my view Bitcoin will eventually retest the 1.618 or 2.618 retracement level from the high of approximately $9478.66 (Coinbase). See the chart below for more details.
I wouldn't be counting on an extremely bullish moves from Bitcoin for some time. Even though the move off the low was impulsive, it is now more likely that Bitcoin undergo a lengthy consolidation period before heading any higher. Prepare for a mini crypto winter! Bias: Bearish.
Leading Again...
The Nasdaq Composite was leading the way once again today. Finishing the day down 3.2%. Here, we look at the PowerShares QQQ.
On the chart above is the QQQ and no, I won't say Head and Shoulder yet. I will say that the QQQ is likely to head lower. My reasoning simply stems from the magnitude of the rally off the low. Next week, the market should provide more clues as to how deep this correction will be. The real question I have is with the big tech names having reported quarter one earnings what forces will begin to move the markets? Will it be the news once again or will fundamentals finally take the lead and price in a depression?
The strength of the April rally hints to me that out of all the indexes, it is the Nasdaq, or in this case the QQQ that will make a new all-time high. I will be keeping a close eye on the volume and the pattern that takes place in the coming correction. The QQQ and the stocks of the Nasdaq Composite may be worth buying into heading into quarter 3 and 4 of the calendar year. Nevertheless, in the short term the QQQ has me leaning... Bias: Bearish.
Don't Fear the... Low
I can't predict the future but I can guess with near certainty what the Fed will continue to do if the March low is at risk of being taken out! It is never a good thing to predict market turns. You tend to build a bias and eventually it may lead to missed opportunities. If you are going to attempt to project the future, do so understanding that there is a high probability you will be wrong. Have strictly defined levels that confirm or invalidate your ideas. Thank you for reading and I hope you have a great weekend!