Back from a 3 day weekend yesterday, which I, living in France, had no clue was a 3 day weekend. Mea culpa, I shoulda! But stocks were rejuvenated and celebrated.
Apparently, traders ate too much, because this morning the market has taken a big old dump. The breakout from that nice 3-day base has been reversed, but so far, only to a classic return to the scene of the crime.
If bulls can hold their ground here, we may yet see more upside. But if this drops back under 3685 on the ES S&P continuous 24 hour fuguetures, bears’ ball. The zone of contention will be between there and 3750. No decision either way until that range is busted.
Meanwhile the BTC/SPX tight correlation continues in June. Here’s the hourly chart.
You can see on the daily chart that this thing still has plenty of downside. There’s still an unmet short term cycle projection of 16,500, and the one year cycle now points to 7500. I have to wonder if the stonks/crapto correlation will hold if that happens.
Of course in the long run, we know that this POC is worthless, with a conventional measured move target of 5000 below zero.
The bond market doesn’t look like it will do too much better. The 20 year Treasury bond ETF has a 3-4 year cycle projection of 85-90, and a conventional measured move target of 50-55.
Obviously, this has major implications for the stock market. You too can follow how all that works, 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 understand the big picture, check out the following:
- We Knew QT Would Be Devastating, But You Ain’t Seen Nothing Yet June 21, 2022
- Is There Life on Mars, or in the Precious Metals? June 22, 2022
- 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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