Last week I discussed how the US indices were stretched to the downside and sure enough this week the buyers stepped up pushing the SPY and QQQ’s back to their all-time highs.
Congrats once again SPY and QQQ hodlers!
Eventually, the bull party will end but until then you have to dance.
All the taper talk from the Fed appears to be in the rearview mirror now and this past week
we saw several Fed heads talkback their previous week’s hawkish comments.
With fresh all-time highs, you would now think that all is now rosy and blue skies however we are now seeing a deep negative divergence between the price of the SPY and its underlying.
This condition doesn’t mean that the markets will immediately correct but that when we see a reversal it will be sharp.
I’m continuing to watch in DXY as the canary in the coal mine. If we see strength in DXY watch for potential weakness in equities and commodities.
This week will likely be muted as traders wind down for the upcoming US Independence day holidays however there is the potential for some volatility as traders square away their trades to wind down the month and quarter.
The crypto markets broke below last week’s low and gave up any chance we were going to see an easy reversal back to the upside. The crypto charts look very damaged at this point and if we weren’t so stretched to the downside I’d be very bearish. The bullish case is not any better as it will take some time to repair the charts and set up for a larger timeframe reversal.
I’ll be sitting on my hands at least until the start of the new month and quarter.
Here are some of the ideas in this week’s video:
0:00 – Intro
2:00 – Negative Divergence between SPY and the S&P100 stocks
3:55 – VXX/VIX futures analysis
10:50 – Analysis of SPY/DIA/IWM – stretched but likely more all-time highs ahead
23:27 – TSX – continues to be bullish however yellow light warning with price going into monthly BB highs
25:12 – EEM stuck in between timeframes
26:40 – Bonds – stuck their quarterly range – watch for how the new month and quarter plays out
32:04 – DXY/Gold – Gold is at the mercy of what the DXY chart will do
36:30 – Bitcoin – last months’ lows were broken. Stay bearish if the timeframes remain to the downside.
43:27 – ETH/ Crypto Total market cap / SHITPERP