Traders,
Still have a nasty cough here so, in lieu of a video this week, I am just going to wrap up the week with another static post highlighting some of the key elements and charts currently at the top of my observation list.
Let’s start with the U.S. dollar.
As you all know, if you are following me on any of my SM sites, the dollar hit a key resistance trendline this week which has only been touched twice (this being the third time) since 2009. Then, as expected, it turned right around and started to dump. Will this dump continue? Unknown at this point. However, you all know that my sentiment favors the fed coming to their senses soon, digesting all of this disinflationary data that is coming in hot and heavy (and way ahead of the CPI report), and reconsidering their current strategy. We’ll soon know (like within weeks) whether or not my theory here is correct.
Next up? That VIX.
Earlier this week, I suggested that red candle, highlighted by the red circle, might become a blow-off top. It was. Now the VIX has come down to significant support which it currently rests on as I type. If this breaks, it could become an early indicator of a potential future fed pivot. Or, it may just have more to do with this insane war in Ukraine that none of us rationale human beings appreciate in the least.
Onto the S&P500.
Again, resting on critical support! If it fails to hold, look out below!
And all of this, of course, effects our crypto king, the one, the only, King Bitcoin, which, as of now, determines where all other cryptos go.
And what is King Bitcoin telling us? Unfortunately, absolutely nothing right now. It wants to break to the top side of our long-standing year old bullish descending wedge. But the bulls just do not have enough conviction and strength to do so at the moment. Bitcoin is waiting for the broader markets to determine future price direction. And that is why the first three charts I posted are extremely important.
Basically this. Dollar continues to dump? Then VIX breaks support and also continues to dump. VIX continues to dump? Then markets (illustrated by S&P500) pump. Markets pump? Bitcoin pumps. Bitcoin pumps? Altcoins start to follow.
That’s it. That’s the formula. Now, we wait and watch …yet again. I know. This sucks. Bear markets are like that. They suck. But patience and due diligence will be rewarded to those who are prepared for the next moves up or down. And that is the goal here.
Best to you all!
Stew
P.S.- Don’t forget to follow me on Twitter where I post a bit more lately. And thank you to those of you who have taken a minute to give me a thumbs up on my posts. This only helps me to spread more education and content just like this.
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