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The pattern on the hourly chart of the ES 24 hour S&P 500 fuguetures has turned unmistakably bullish. But there are challenges. They’ll arise at clearly delineated resistance levels. 3800, 3810, 3820, and 3835. Each in succession will be a test to whether this bullish potential comes to full fruition. If successful at clearing the last test, the conventional measured move target of the pattern would then be 3900.
Now, if there are enough willing short sellers sufficient to absorb demand at any of these levels, then the index will start to roll over. Then the test of bear strength would arise around the sport level of 3725.
I’d say that anything between 3825 and 3725 is a nothing burger. Noise in the bigger picture.
Meanwhile, there’s been a humongous rally in the bond market over the past week. It has negated the breakout in the 10 year yield. But the uptrend is still intact, and will be as long as the yield stays above that 3% area. This is but a temporary respite.
The correlation between crapto and stocks continues. BTC has firmed up, but it’s weaker than the stock market. Is this subtle difference just randomness, or a sign of things to come for stocks. I’ll come down on the side of randomness, simply because I’ve never found intermarket correlations usefully predictive. Interesting, yes. Fun to watch, yes. Predictive? Meh. Flip a coin works as well.
But BTC melting down as a sign of liquidity problems, and the death of animal spirits. Yeah, that’s good stuff.
Regardless of what happens in the very short run, the daily chart suggests that crypto is in its death throes, with much farther to go. That includes a 1 year cycle projection of 9000-12,000. And a long term conventional measured move target of the top breakdown of 5,000 below zero.
Follow how pre-determined and known liquidity flows drive stock and bond prices here . I will show you and tell you exactly how the major forces of macro liquidity move not just the bond market, but stocks as well. Liquidity analysis sets the context for technical analysis. It helps us to narrow the focus of our chart reading to the outcomes that are most likely, given the circumstances.
To better understand the big picture right now so that you can take the correct action when the time is right, check out the following:
- We Knew QT Would Be Devastating, But You Ain’t Seen Nothing Yet June 21, 2022
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- Swing Trade Screens – Tank Gawt We’re Not a Long-Only Entity, Poor Bastids June 20, 2022
- Watch Out For a V Bottom June 19, 2022
- Gold Stares Into the Abyss and Doesn’t Like What It Sees June 14, 2022
- Dealers Assume the Position, as 75 BPs Coming Wednesday June 13, 2022
- The US Economy, Including Jobs, Collapsed in May June 2, 2022
- Quantitative Tightening is Here, and the Effect Will Be Devastating June 1, 2022
If you’re serious about the underlying forces of supply and demand that drive the markets, join me!
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