While this looks like a top, and the price has come down from 500 to 171, two longer moving averages are still trending upward.
The problem for HODLers is that the first MA is at 117, and the second is at 57.
As I explained here, we’re in a liquidity shortage, but one that will be lessened over the rest of this month.
As liquidity ebbs and flows, we’ll see wild volatility changes over the next 3-6 months.
This morning, it’s to the upside, but …
There were lots of sell signals last week, but this isn’t the big one. Yet. We just need to be prepared for it.
In the mid month QE update, I concluded the intro summary with this warning:
1/16/21 At this point, it seems like we are on the edge of the precipice. The risks are enormous. At the very least, I don’t see the likelihood of significant upside for either stocks or bonds.
Likewise, this could very easily go south in a big way. The Fed would need to act. Would it be too late? Would the market even respond?
Today is Fed Circus. The elephant parade.
What can we learn from this lesson in financial zoology?
I’ve added one new mining pick to swing while we all wait for gold to start moving again.
However, my guess on the 5 day cycle projection is 3865.
As of 4:45 AM ET, the ES fucutures are pulling back from a high of about 3852, heading for multiple support lines around 3839+40. I imagine we’ll get a bounce from there. If it doesn’t, or if it’s weak, the next target would be around 3824-25.
Near term cycle projections have risen as the relentless mania just trends right along. We may as well take advantage, right? I’ve added a couple of swing trade chart picks that look well positioned to do just that.
What about all those sell signals? Failed again. Short sellers are setting themselves up as targets in a carnival shooting gallery. That’s typical of an entrenched mania.
When and where will it end? I’ve posted near term and longer term projections based on current trends and cycles.
Stock market analysis requires many disciplines. Unlike, physics, for example, it’s not rocket science. Hell, it’s not even science. But while physicists and astrophysicists understand more and more about how the universe works, there is much more that they don’t understand. For every theory that they confirm, more questions arise.
They say that approximately 80% of the mass of the universe is “dark matter.” They don’t know what it is. And there’s “dark energy,” that they don’t understand either. They see their effect, but they can’t see the cause, and don’t know what either of them is. So they observe and measure the effects, and make predictions and develop theories based on that.
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