Market Watch For June 7-11, 2021 – An Upward Drift in Stocks + A Potential Sell-Off in CryptosJune 5, 2021
This past week the North American equities markets continued their grind higher as volatility continued to seep out of the markets bringing us right back to the volatility regime we had prior to the start of the COVID-19 pandemic.
We’re still a full week out before the official start of summer but with the low volume and volatility it certainly reminds me of the famous adage, “” Never short a dull tape”.
The crypto market broke to the downside after two weeks of consolidation however the trade quickly got crowded and if this week’s lows hold we may have seen the monthly lows in both Bitcoin and Ethereum. A break above this week’s highs would be very bullish however keep in mind that it would take a lot for BTC and ETH not to trade inside month.
This week watch out for the FOMC announcement on Wednesday and Quad Witching on Friday.
Here are some of the ideas in this week’s video:
- VIX futures are now back at pre-pandemic levels
- The tape is calling for higher prices in the US indices although a Gamma pin may have us stuck in a range until options expiry
- TSX continues going into highs – continue to be long but wary
- EEM having a hard time getting any traction – is this signaling weak growth in the Chinese economy?
- Bonds – the long bond (TLT) has been showing continued strength with the US 10Y yields falling back into the range – the most likely scenario is the stay inside a range for the rest of the month and quarter
- DXY – is the one head asset that is offering divergent price action. Watch to see how it breaks this past week’s range.
- Gold continues to be held back to the monthly and yearly open – a break above both levels would signal a breakout to the upside
- Bitcoin and Ethereum – the break to the downside was overcrowded. If this week’s lows hold then this may have been the low for the month and an upside move is likely. However, if this week’s lows break – watch out!