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Well folks we are on the lows to start the week, down a quick 400+ points to start the morning trade off and climbing lower. I saw the outlook for this week was very bearish in a recent post and you can see that this morning. I find it very hard to believe that this action stops here considering markets do not usually bottom (intermediate) on Fridays or Mondays, however I suppose anything is possible.
My bet is that this 23500 and early 2018 lows will be tested in the coming days where the market and buyers will attempt to make a stand.
This will be a good spot for a “bounce opportunity possibly” depending on the buyers reaction and if there is any panic. Regardless, the outlook stays the same and we are bearish below the 200 day moving average usually signifying the market is in a downtrend. I am 100% cash and may look to play this bounce, however timing a bounce (or falling knife) sometimes is not even worth it considering you know the lows aren’t in.
I have a feeling this is only just getting started in the big scheme of things.
Since my last update, Bitcoin dropped to the prior level of support ($3,400-$3,250) I warned about. It’s shown some life over the past 24 hours, rising from $3,280 up to $3,600. The prior support is now acting as resistance as it currently trades just below $3,600. Volume remains weak. At the moment, I’m seeing no signs this latest rise has any sustainability.
EOS had dropped just below the known support between $1.85-$1.72. It’s also rallied over the last 24 hours, rising as high as $2.16. The prior $2.11 support is acting as resistance with no decisive break above.
In today’s video analysis I discuss, where prices may be heading next, my personal buy zones, traps to avoid and so much more. I hope you find it helpful.
We are here folks. We have truly entered the buy zone for a number of reasons and a number of indicators I follow which I will lay out some here. Bitcoin has dropped from 19000+ to almost 3000. If you were unfortunately one of those that piled in on the bubble swing up due to @CNBC and MSM pushing crypto in the tens of thousands then I feel sorry for you, but don’t throw in the towel now, at the bottom.
Here is why we have entered the buy zone, a few reasons.
1. If you have followed me from 16000+ I have constantly been saying that Bitcoin will fall, crash, pullback, whatever you want to 80% of the current price. Bitcoin has done this more than 5 times in its existence and there was no reason NOT to believe it would not and could not happen again.
2. Take a look at the monthly chart and look at the stochastic indicator. You can see that you BUY the oversold stochastic indicator for the next run to the overbought. These are market cycles and they occur in all markets. Yes this may take a while but this is how you play the game. Buying here is like buying in Feb of 2015.
3. When you start see crap like this, also known as FUD.
This clown has no idea what he is talking about and likely had to fire a bunch of people for buying bitcoin well above where it is. When you see this capitulation non sense it is a good time to start buying.
I am currently watching the 3000 level which is the 200 week MA zone that has held support in the past and looking to keep accumulating. Bitcoin looks like it wants to make a move and we have a LONG way to go here to fix this damage…but it will be fixed in due time.
This is what we want to start seeing at the bottoms.
The monster rally that we had last week that was bullish engulfing and had everyone bullish again calling the bottom, is gone.
The past three days we have seen massive distribution across many of the sectors and the overall market. The market gapped up at the beginning of the week because of Trade news and then this was all but massively sold into for 5 straight days. This is some of the most bearish price action that I have seen in the past few years. Look at the chart below.
You can clearly see that the market is really pressing to see if buyers can hold it up. Back in February I was not surprised to see the volatility spike due to the increase in the rate of change of price into highs, I bought this a couple times on the lows. Once we made it back to highs in September I was a seller there.
Now I have been of my long term accounts and 401k since then and have only bought a couple times holding for no more than 3-5 days. As time has progressed it is very important to note the past price action and data points that we now have and be very open to possibilities that most do not think could happen.
If we have follow through next week to this Bearish Engulfing week, you are looking at targets in the SPX of at least 2500 at the February lows (which is not going to hold), and then 2350. The latter seems more likely considering we have not tested this weekly moving average in quite sometime. Other price support below that is where the Trump euphoria began and that is around 2100 (blue line).
Be very very cautious in the coming weeks, I will try and keep you out of trouble. For now, stay out. We are not going to be long US stocks (except maybe XLU) for the foreseeable future until the 200 day MA has been taken out and then add over 2808.
I have been a believer in Cryptocurrency since the early days and have called the past two bubbles before the rally and the top. The most recent one being the most significant. Sitting here watching the prices go down really sucks, not from an investing standpoint, or even a losing money standpoint (which is the number one rule), but from a fundamental standpoint. I really thought the crypto space was going to somewhat hold some gains during this bull run instead of making a FULL round trip back to the bottom and I was really hoping that the crypto space would emerge as a leader this year.
Clearly, we are not there yet. HOWEVER. The more I think about it, the more I am 100% glad that crypto is getting killed again.
For one, everyone who missed the last 5 bubbles, for the love of christ will you buy some crypto now so you aren’t complaining about missing the 6th?
Two, this type of bubble move blowup was IMPERATIVE in order for the crypto space to fundamentally move forward and evolve into something much bigger and change the world.
There were so many tokens that were mimicking the likes of PETS.com IPO’s in the late 90’s that these HAVE TO GO AWAY. The only way these go away and investors stop flooding money into these shitcoins is that they GO TO ZERO. I am hoping this is what we are seeing now. The impact of this on the rest of the market is that everything is going to get killed.
Below is a chart of EOS and you can see it is getting taken to the woodshed. You have to honor these price points and if you are trading you were out at the support line and just watching. Many of the charts look like this now, but I would be accumulating this to be honest. My bets are on many of the cryptos that have an ACTUAL product. Something will emerge in the social media space and will be a HUGE winner.
Those that emerge from the carnage I believe will mimic the likes of AAPL, AMZN, GOOGL, FB, etc. in the future. This is a No-Brainer Accumulation phase that everyone should be continuing to flood money into the crypto space…
Folks, I am going to be completely honest here. As much as I love being right, I truly enjoy and love getting people out of the way at the right time and getting them back in at a better time even more. After being a part of the 3.10+% yield camp for much of late 2017 and early 2018, I switched gears and said that we were coming back down in the 2.7ish% range. You can find all that here . Since rates peaked above 3.20% there was zero doubt in my mind that were we were coming back down.
The FED has gone too far and too fast in a growth slowing environment where Powell is adamant about raising rates (when there is no inflation) and cutting the balance sheet significantly. This policy has finally raised its head and the market has shown its hand while the Policy Makers sit back behind the curve once again.
This break is NO surprise, and the reason it was so prolonged was everyone thought rates were going to be raised next week and 4 times in 2019., with growth slowing. LMAO. I think it is safe to say that the policy makers and the big boys were wrong (once again) and this once is a win for the ole home team.
Bitcoin continues to find support at $3,800. Zooming out on the 4 hour chart, we can see price continues getting squeezed within a larger wedge. This suggests a larger move may be coming within the next few days.
In today’s video analysis I discuss where price may be heading next, traps to avoid and so much more. I hope you find it helpful.
When the time is right you will see the Small Caps Make a stand and lead the way. Just like Silver will usually lead the move in gold, small caps will usually lead the move in stocks, especially up.
Check out the move yesterday in the IWM Russell 2000…
While many people were watching the Dow, I was watching this. The Russell 2000 is basically st the lows of the year, in 1 day. It gave up an entire week of gains, in 1 day. This is very bearish price action.
You can see a massive top forming and on the verge of breaking down. This too will target the 120s and give most of the 2017 gains away. I am not saying this will happen, it is simply a possibility that is looking more probably when people don’t believe it can happen.
The entire 2015-2016 Bear the IWM kept the overall market from going higher. This is happening again and will continue. The overall market will not move higher without the Russell 2000 participation. I am looking for new lows to come in the Russell and the SPX in the coming weeks.
IF you are invested in US assets (or other global assets which have been killed), then this post is for you. Full disclosure, I am 100% cash regarding my US stocks and indices positions. I know many people on here do not understand charts or technicals, and quite frankly a lot of the fundamental issues you are listening to on the TV is all a crock of bologna anyways so I realize this can be quite confusing. I attempt to convey to readers in a way that is easy for EVERYONE to understand.
First thing you need to do is TURN OFF THE TV. The majority of TV is pushing an economic agenda and quite frankly is finding a reason for every price move.
Second thing you need to do is be on the right side of the trend. Are are going up, or down, or sideways. If we are going down or sideways then being in the market long term is a complete waste of time and you are losing money. So lets pull up the LONG TERM Chart of SPX
You can easily see that the trend has been up since the February lows of 2016, boosted by Brexit, Trump victory and then the riding “high” that the trump euphoria caused the market to undertake. That “high” is running low on fumes. You can see the Long term trend has been broken and the trend (200 day moving average red line) is starting to DECREASE. This is facts based on data and shows that the market is running out of steam and needs to correct with TIME or with PRICE. Best case is time and we go sideways like 2016, however if we were to correct through price then you are looking at a move down into the 2300 area in the S&P500.
Presently, we are at 2715. If you zoom in, 2808 is MY LINE IN THE SAND. Above that we are going to be long the market, below that we are going to be OUT.
Sure if you sell today you are losing 3.0% today, however isn’t this 3 percent worth it considering we have gone straight up since 2016 (a gain of 50+%) and you are risking giving back almost half of that gain if you ride this out? I think it is.
I am 100% cash and if you are over the age of 55+ you may not have time to recover from the coming months if we were to break lower. I will be staying 100% cash until 2808 is taking out on a closing basis. The selling is accelerating and I made a post yesterday regarding this level. Over 2808 we are targeting 3000+ and I will be long again, but it is not worth the risk here right now.