Welcome to Week Two of the new year, and we’re off to a non-boring start. There was a lot of red on the screen this morning, but I wanted to point out there have been no fundamental breakdowns in equities. Here is the NQ over the past few months. The red horizontal near the top of the chart represents the first important support level, which is being approached but isn’t broken.
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Here is a closer look. A failure of this level would be the first signal that maybe something larger is underway. As it is now, they’re just burning off some of the fat.
Gold is managing not to get too badly battered, but it’s still in a really uncertain place. The arrow marks the failure of its small bullish base, and we’re getting in the same ZIP code as a much more important level, which I’ve circled (it’s around 1762). If it can manage to stay above this level, it has a chance of staying on track for a long-term bull run.
Of course, the real fireworks were in crypto. It is ironic that some of these are referred to as “stablecoin”, as they are anything but that. Far and away the leader, BTC, lost about 20% of its value, plunging from nearly $43,000 (on the futures market) to almost $31,000. All the chatter about “the institutions are just getting involved” sure disappeared swiftly.
Finally, one stock being tossed around by the political mayhem is Twitter (TWTR) which got hit with about a 10% tumble at the opening bell. It’s a big drop, but in the grander scheme of things, it’s just a blip. It lost the gains over the past month, and it had a similar drop early in October.
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