GOLD Daily TA Cautiously BearishGOLD Daily cautiously bearish. Recommended ratio: 10% Gold, 90% Cash. **H&S WATCH. DEATH CROSS WATCH.** *USD is down a bit while energy, commodities, equities, cryptos are up and gold is relatively flat. The relief rally is primarily benefiting risk on markets as money begins to enter it from risk off markets (like gold and bonds); this is still just a technical relief rally that was precipitated by very oversold daily and weekly conditions, the Core PCE report due next Thursday (06/30) should give a clearer picture of what the Fed will do on 07/27/22 and therefore guide the markets in the near term.* Price is currently completing a H&S pattern and trending down at $1827 as it prepares to formally retest the uptrend line from April 2020 (~$1815) as support for the second time since 06/15/22. The 50 MA is currently trending down at $1860 as it quickly approaches the 200 MA at $1845 where it would technically form a Death Cross. Volume remains Moderate (high) and fairly balanced between buyers and sellers (which is indicative of consolidation before a next move). Parabolic SAR flips bullish at the 50 MA ($1860), this margin is neutral at the moment. RSI is currently trending up at 45 after bouncing off of 42 support for the third time in a month, the next resistance is at 67.24. Stochastic remains bearish and is currently beginning to form a trough at 43 as it is still technically testing 53.13 support. MACD is currently crossing over bearish at -8 as it hovers above -10.84 support. ADX is currently trending down at 10 (with little sign of trough formation) as Price is trending down as well, this is neutral at the moment; if ADX was to bottom and begin trending up as Price continued down this would be bearish. If Price is able to bounce here and resist a H&S AND Death Cross then it will likely retest the 200 MA at ~$1840 before potentially retesting $1867 minor resistance. However, if Price continues down here, it will likely formally retest the uptrend line from April 2020 at $1815 as support before potentially falling to retest the largest supply/demand zone on the chart at $1783 support. Mental Stop Loss: (two consecutive closes above) $1844.
Recession
$RUT Canary in the Coal MineThe Russell 2k tends to be a solid indicator of broader market movement.
While we have realized a correction of ~33%, given the broader macro headwinds... this is not nearly the level expected relative to past major corrections (dot.com & housing market).
Given the past major corrections of 47% and 60%, not including the global pandemic shutdown it's apparent theres further markdown market behavior ahead.
At the least, expecting a pullback to the 100 EMA is minimum expected while pullback to the 200 EMA with a further wick down from there is not outside of reason.
The Fed has only recently begun QT with Central Bank balance sheets letting securities roll off as they mature.
With the Fed hyper-focused on inflation with demand side tools at their disposal, the bearish case remains firmly in place right now.
In addition to rates, unemployment is part of the Fed's dual mandate. Given the sheer # of available jobs (2 jobs for each unemployed person in the US), the Fed has plenty of room to focus on reigning in inflation to achieve price stability.
Will there be bear market rallies? Yes.
Will the Fed pivot? Possibly... especially given mid-term elections this fall.
Q2 closes next week, earnings will start pouring in... until the Fed changes narrative and there's substantive change, principal preservation should be the priority with a risk-off focus unless one is highly skilled at trading during extreme volatility.
XAGUSD 4H Possible scenarioI just wished that this would be the bottom, this would be the end, and just buy buy buy but, FED and Treasury are way more popular than Gold n Silver these days, specially Silver, despite higher cost for mining and, despite industrial demand for Silver to build solar panels and energy efficient cars, that's not what the price of Silver reflects
It's just down down down as everyday passes and, i'm just wondering what could've possibly gone wrong so i could just sit n watch the central planners just get away with this ? what this world has became and why do we people just keep listening to what central banks say
After all those poor people in 2008 who lost almost everything, their homes, their 401k their trust in life, why on earth history has to repeat itself and i'm just wondering when people including me gonna say, wait a minute, why do we have to keep doing this like a sheep ?
GOLD Daily TA Cautiously BearishGOLD Daily cautiously bearish. Recommended ratio: 30% GOLD, 70% Cash. *H&S Formation Watch. In anticipation of a critical FOMC statement to be released tomorrow at 2pm (deciding on whether or not to raise FFR by 75-100bp to more aggressively combat inflation), the US dollar and treasuries are once again stealing the bullish spotlight as cryptos and equities remain relatively flat and Gold is taking a tumble.* Price is currently retesting the lower trendline of the ascending channel from April 2020 at ~$1810 after testing it back on 05/13/22 and failing to climb even halfway back up the channel; this is bearish. Additionally, Price has completed a second shoulder formation in the H&S and could see a short term bounce here before completing a potential H&S sell off. Volume remains Moderate (high) and is currently on track to favor sellers in a second consecutive session if it can close today's session in the red. Parabolic SAR flips bullish at ~$1880 (which coincides with the 50 MA); this margin is neutral at the moment. RSI is beginning to form a trough at 38 as it fast approaches a test of the uptrend line from April 2013 at ~37; if it breaks below this level, the next support is at 27.07 which hints that Price will have a bit of room to fall in a short amount of time. Stochastic remains bearish and is currently trending down at 33 as it approaches a test of 25.40 support. MACD is currently crossing over bearish at -9.60 which is just above -10.84 resistance (though it crossed above this level it still has not confirmed it as support). ADX is currently trending down slightly at 13 as Price is beginning to develop downward momentum; if ADX can begin trough formation here as Price continues to fall, this would be bearish. If Price is able to defend support at the lower trendline of the ascending channel from April 2020 at ~$1810, it will likely aim to retest the 50 MA at ~$1840 before either a) potentially moving higher or b) completing a H&S formation bull trap before plummeting lower. However, if Price breaks down here then it will likely formally retest $1783 support for the first time since 01/28/22. Mental Stop Loss: (two consecutive closes above) $1840.
SPX Daily TA Cautiously BullishSPX Daily cautiously bullish. Recommended ratio: 70% SPX, 30% Cash. *The US Dollar (and treasuries and bonds), energy and commodities take a tumble as equities and crypto get a boost from a lower PMI and a successful Federal Reserve bank Stress Test with hopes that inflation can start to slow down before the Core PCE report due on 06/30/22. All things considered, this is still just a technical relief rally (with just a bit of room to run) until it crosses certain levels in a sustained fashion.* Price is currently trending up at $3795 as it aims to retest the lower trendline of the descending channel from August 2021 at ~$3900 as resistance. Volume remains moderate and has favored buyers for four consecutive sessions now, indicating that there is significant support at $3706. Parabolic SAR flips bullish at $3938 minor resistance, this is mildly bullish at the moment. RSI is currently trending up at 41 after testing 38.06 support and bouncing, this reconfirms that the uptrend line from 01/27/22 is still intact; the next resistance is at 52.68. Stochastic remains bullish and is currently trending up at 37 as it is currently breaking above 18.32 resistance; the next resistance is at 48.08. MACD is currently trending up slightly at -100 as it looks to complete a trough and break above -86.76 to form a bullish crossover; the next resistance (minor) is at -76.22. ADX is currently trending sideways at 27 and forming a soft peak as Price continues to push upward, this is neutral at the moment; if ADX can begin trending down as Price continues up then it would be bullish. If Price is able to continue higher then it will likely retest the lower trendline of the descending channel from August 2021 at ~$3938 minor resistance. However, if Price breaks down here, it will likely retest $3706 minor support before potentially heading lower to test $3508 minor support. Mental Stop Loss: (one close below) $3706.
TLT bottoms in weekly hammer & divergence;but 108 still possibleTLT may have already bottomed out & the US10Y topped out with weekly hammer candles. TLT may find equilibrium at 132, my inflation pivot zone while US10Y may stabilize at 3.6% inflection point retesting its upchannel.
TLT is now completing its M-pattern & has just entered my bullish BUY ZONE at 114 to 120. DCA Dollar cost averaging up from this point presents a very good risk-to-reward ratio.
MORE DOWNSIDE? TLT may still go down to retest 108 where it bottomed multiple times in the past.
Inflation expectations are slowing & the economy is starting to contract with oil & commodities turning down last week with investors pricing in a coming recession.
Not trading advice.
AVAXUSD Daily TA BullishAVAXUSD Daily bullish. Recommended ratio: 95% AVAX, 5% Cash. *A technical relief rally is underway for cryptos and equities as markets seem to have priced in more rate hikes, I know I focus solely on the Federal Reserve in most of my TA but that's because not only do they fund liquidity for many other central banks but they have been instrumental in setting the tone for the rest of the world for the past decade or more. The Fed was the first central bank to aggressively raise rates in response to global inflationary pressures and in doing so may have earned back a bit of the credibility they lost in being largely responsible for this inflation quagmire. Crypto and equity markets seem to think that the Fed has a plan to navigate us to a soft landing, but it is becoming more and more apparent that a hard landing is likely; when that will be priced in to risk-on markets is the question. Whatever the answer to that question is, we are 'technically' getting close to a short term bottom.* Price is currently following that of other altcoins like Kava and Polygon and trending up out of an eleven day consolidation out of the second largest supply/demand zone on the chart. Volume remains Moderate, fairly balanced between buyers and sellers (indicative of consolidation) and has been shrinking for what is on track to be a fourth consecutive session (indicative of an impending breakout/breakdown). Parabolic SAR flips bearish at $13.80, this margin is neutral at the moment. RSI is currently trending up at 39 after bouncing off of the descending trendline from August 2021 (breaking out of a 10 month descending trend), this is very bullish in the short term. Stochastic remains bullish and is currently trending up at 88 as it aims to resist a bearish crossover on its way to retest max top. MACD remains bullish and is currently trending up at -3.66 as it aims to break out above -4.23 resistance after being rejected the first time on 06/10/22. ADX is currently trending down at 40 as Price is pushing higher, this is mildly bullish at the moment. If Price continues up then it will likely retest the largest supply/demand zone on the chart at $25 before potentially retesting the upper trendline of the descending channel from November 2021 at ~$35. However, if Price breaks down here, it will likely retest the lower trendline of the descending channel from November 2021 at ~$10. Mental Stop Loss: (one close below) $15.
Don't fear the capitulationINVESTMENT CONTEXT
Fed Chair Jerome Powell confirmed the key priority of the Fed is bringing down inflation, even while acknowledging that monetary policy can't address critical components like food and energy. Powell also a stated a recession is “certainly possible,” but not in the near term as the U.S. economy remains “in good shape.”
Turkey's central bank is expected to hold its benchmark rate steady at 14% on June 23, after it kept interest rates deeply below zero when adjusted for inflation. Norway's Norges Bank is instead set to hike its key rate 25bps to 0.75%
Russia is facing three interest payment transfers totaling almost USD 400mln on June 23-24, but more pressing is a Sunday-night deadline on previous missed payments from late May. If the country fails to make those payment - ca. USD 100mln of bond coupons - it will effectively be declared in default
Global bank Citi said the probability of a recession is now approaching 50%. The Bank expects 3% growth for the world economy this year and 2.8% in 2023
U.S. President Joe Biden called for a gasoline tax holiday, in an effort to relief households from pump gasoline prices, which briefly surpassed USD 5/gallon
BTC trades have entered a dangerous (4) channel with trading range set between 19-21k as volumes fail to return to the blockchain space
PROFZERO'S TAKE
Value investing has been the key theme across Q1 and most part of Q2 this year, as investors unloaded Growth assets whose bulk of profits are located deep into the future, hence more exposed to higher interest/discount rates. That trend is set to reverse should a recession materialize. In particular, the undisputed champions of the past 150 days, namely Oil & Gas stocks, may steeply retrace as energy demand is threatened by slowing pace of industrial expansion, particularly in China. ProfZero warned back in April that the fat dividends paid this year may dwindle in 2023 as a protracted bear market triggers a recession; consistent with that, ProfZero maintains faith in Value-like Growth stocks, which enjoy state-of the-art balance sheets; top cash generation; and most importantly excel at intangible assets and services - natural price deflators for the economy
ProfZero concurs with ProfThree thinking one step ahead - demand for industrial commodities is by definition pre-cyclical, and any slowdown in the near-term should be taken as an early sign of a cooling global economy. Seeing Brent crude tumbling more than 2% just on recession concerns confirms in ProfZero a sense of unease while looking forward on Energy equities; thinking even further though, the feeling of concern permeates the post-recession recovery, whose seeds do not look planted as of yet
PROFTHREE'S TAKE
One of the commodities to watch this week is iron ore, which has seen a slump to USD 110/ton on June 20 after topping USD 150/ton just two weeks ago. Profs’ eyes are obviously on China (ca. 60% of global steel output), where demand seems to be under threat following the news that steel mills are cutting production in response to weakening real estate sector. ProfThree contends iron ore quotes are finally close to their fundamentally justified levels after a long period of speculation-driven pricing. Yet, a further dramatic correction could still happen since the second half of this year is expected to bring an increase in steel output from China, compensating for the 10% y-o-y output reduction in Q1 due to the Olympics-related emission restrictions. ProfThree also sees infrastructure spending and targeted fiscal as well as monetary stimulus also to prove supportive to supply, thus boosting prices
SPY either outlier or on perfect course You can see there is a strong difference between the real cyclical bear market and the current correction. Also the primary bull market last 25 years last time from 75' till the 00'. We are now at around half cycle (13 years in). Last cycle SPX did 20x since cycle low the cycle before was around 13x (if data reliable), now we have just done 6x really underperforming. The 52 weeks MA has been the support of the bull market cycle as you can see in the chart. Hence I doubt the current correction will last for much more.
SPX Weekly TA Neutral BearishSPX Weekly neutral with a bearish bias. Recommended ratio: 30% SPX, 70% Cash. *Equity and crypto markets are experiencing a technical relief rally after getting decimated by recession fears and tighter more hawkish monetary policy. Fed Chair JPow testified before the Senate Banking Committee earlier today and the main takeaways were that the Fed will remain committed to raising the fed funds rate expeditiously (above 2.5%) and reducing the balance sheet accordingly to bring Core PCE inflation down from 5%-6% to their longer term target of 2%. He made it a point to acknowledge that financial markets are reacting appropriately to the adjustments in monetary policy and that a soft landing isn't entirely out of reach, which begs the question of how much of a hard landing is priced in if a soft landing is improbable but still possible. Dates to watch: PMI report comes out at 945am (EST) tomorrow morning (06/23/22), Core PCE report at 1230pm (EST) on 06/30/22, CPI report at 830am (EST) on 07/13/22 and FOMC Meeting on 07/26/22-07/27/22.* Price is currently testing $3722 support as the bear market sell off intensifies along with recession fears; if it breaks this support it will likely test the 200 MA at $3540 support for the first time since March 2020. Volume is on track to remain Moderate and could break a three session streak of seller dominance with a green close in this week's session. Parabolic SAR flips bullish at $4546, this margin is bullish. RSI is currently trending up at 34.67 after exhibiting bullish divergence by bouncing from 30; the next resistance is at 37.75. Stochastic remains bearish and is currently testing 36.55 with no sign of trough formation. MACD remains bearish and is currently forming a new ATL at -167.02 with no sign of trough formation. ADX is currently trending up slightly at 37 as Price attempts to defend $3722 support, this is neutral at the moment; if ADX begins to form a peak as Price continues to push upward, this would be mildly bullish. If Price is able to defend support at $3722 then it will likely test $3950 minor resistance. However, if Price breaks down below $3722, it will likely test the 200 MA as support at $3540 support for the first time since March 2020. Mental Stop Loss: (two consecutive closes above) $3722.
XLB materials broke 78, the 2021 support; 70 or 57 may be nextThe worst may not be over. A 8% inflation is very hard to fight even with monetary & fiscal policy because the FED could only control the demand side & not the supply side of inflation. With the FED making it very clear that it wont stop until inflation comes down, we may be seeing aggressive rate hikes leading to layoffs & demand destruction in the near future & in turn causing a decline in manufacturing & materials.
XLB just lost the 78 (Fib 0.236) impt support since 2021. The next stop to watch very carefully is the Fib 0.383 pivot zone @70. This may come sometime in late August or early September 2022.
Make-or-break zone: if 70 fails, then 64 (Fib 0.50) will offer not much support till 57 which is the pre-pandemic zone. This scenario will end the ABC correction sometime in November or in the last Quarter of 2022.
Not trading advice.
SPX Daily TA Neutral BullishSPX Daily neutral with a bullish bias. Recommended ratio: 51% SPX, 49% Cash. *Fed Chair Jerome Powell testified before the Senate Banking Committee today and to no one's surprise reiterated the Fed's 'reaction function' (comprised of quantitative tightening and a higher federal funds rate (FFR)) working like it's supposed to. He mentioned that the market reacted appropriately by pricing in future rate hikes and repeated that the Fed will continue to move expeditiously (go beyond neutral) to bring Core PCE inflation down from ~5% to their target of 2%; according to Powell beyond neutral is beyond 2.5% FFR, the current FFR target rate is 1.5%-1.75%. With direct endorsement from Powell, the crypto and equity markets are correct in thinking FFR will be at or above 3.5% EOY (75bp July to 2.5%, 50-75bp September to 3%-3.25%, 25-50bp October to 3.25%-3.75%, 25-50bp to 3.5%-4.00%); obviously certain events can expedite or delay this but it seems like markets are beginning to price in the reality of a recession. It is important to remember that by the time the economy recognizes that it is in a recession, financial markets will already be pricing in the road to recovery. In other words, the economy is usually last to feel a recession. That said, it's still to premature to call a bottom (Jim Cramer hasn't told us to sell everything yet) but we could perhaps be in store for a short term rally. PMI report will be released tomorrow at 945am (EST) and Core PCE Inflation report will be released 06/30 at 830am (EST).* Price is currently trending sideways at $3759 after closing above $3706.52 minor support for a second consecutive session. Volume remained Moderate and has favored buyers for three consecutive sessions now. Parabolic SAR flips bullish at $3983, this margin is mildly bullish. RSI is currently trending sideways at 38.06 resistance as it attempts to flip it to support. Stochastic remained bullish for a second consecutive session and is currently testing 18.32 resistance. MACD remains bearish and is currently trending sideways at -105 as it continues to form a trough; it would need to break above -81 in order to cross over bullish. ADX is currently trending sideways at 27 as Price continues to decide whether to bounce here at $3706.52 minor support or go down lower, this is neutral at the moment. If Price is able to continue up from here then it will likely retest the lower trendline of the descending channel from August 2021 at ~$3900 as resistance. However, if Price breaks down below $3706.52 minor support, it will likely retest $3508.14 minor support for the first time since November 2020. Mental Stop Loss: (one close below) $3706.52.
ETHUSD Weekly TA Neutral BearishETHUSD Weekly neutral with a bearish bias. Recommended ratio: 35% ETH, 65% Cash. *(Short-Term) Bottom Watch. Cryptos are seeing a relief rally after a majority of them have now seen 80%+ drawdowns (ETH is down -82% from November 2021 ATH). A more dovish stance from JPow tomorrow may be bullish but with new home purchases going down and inflation continuing to rage on it's going to be hard to call this the bottom.* Price is currently at a critical juncture in that it's testing both the 200 MA and the uptrend line from June 2020 at ~$1200 (in addition to still technically testing the lower trendline of the descending channel from October 2021). Volume is starting off the week a bit slow and is currently Low after being High in last week's session; it is currently on track to favor sellers for twelve consecutive sessions if it manages to close this week in the red. Parabolic SAR flips bullish at $3600, this margin is bullish. RSI is currently flatlining for a second consecutive session at the ATL of 25.88; it's still technically testing the lower trendline of the descending channel from August 2020 as support at 29.80. Stochastic is currently flatlining at max bottom for a fifth consecutive session. MACD is currently trending down slightly as it prints a new ATL at -493.99 with no signs of trough formation. ADX is currently trending up slightly at 30 as Price continues to break down, this is bearish at the moment. If Price is able to bounce here at the 200 MA + uptrend line from June 2020 ($1200) then it will have to reclaim support of the lower trendline of the descending channel from October 2021 ($1230) in order to test $1407 support-turned-resistance. However, if Price continues to fall here, it will likely formally retest the lower trendline of the descending channel from May 2021 at ~$850 before potentially retesting the uptrend line from January 2017 at ~$300 for the first time since March 2020. Mental Stop Loss: (two consecutive closes above) $1230.
BTCUSD Daily TA Neutral BullishBTC Daily neutral with a bullish bias. Recommended ratio: 51% BTC, 49% Cash. *Cryptos led stocks this week with a bullish weekend/Juneteenth leading into a bullish day for equities today, they could also just as easily lead them back down with a bearish catalyst this week (Powell testimony, PMI report, higher global inflation numbers, etc.). It's unclear how much further Bitcoin (and cryptos in general) can fall without forcing mass liquidations at already struggling institutions like 3AC, Celsius, Microstrategy and Babel; but to counter this argument, exchanges like FTX have been stepping in to fund liquidations at crypto lenders like Voyager and BlockFi . All that said, Bitcoin has yet to formally retest the uptrend line from April 2017 at ~$15k (last time was September 2020) so it is a scenario to be mindful of in these times of sporadic volatility.* Price is currently trending up at $20900 as it attempts to close above $21335; if this were to happen it would likely continue the rally to retest $24180 minor resistance. Volume remains Moderate and fairly balanced between buyer and seller dominance (indicative of consolidation); it is on track to shrink for a fourth consecutive session which hints at an impending breakout or breakdown. Parabolic SAR flips bullish at $23250, this margin is mildly bullish. RSI is currently trending up slightly at 31 as it attempts to reclaim support at the uptrend line from 01/22/22 at 25.60 support. Stochastic remains bullish and is currently trending up at 32 as it tests 29.70 resistance. MACD remains bearish and is currently forming a trough at -2915, a break above -2497 support would likely form a bullish crossover. ADX is currently trending up at 43 and is beginning to form a soft peak as Price is seeing some buying pressure here in this relief rally, this is neutral at the moment but can turn bullish if it begins to trend downward as Price continues up. If Price is able to continue up here and close above $21335 (two consecutive times, so today + tomorrow) then it will likely retest $24180 minor resistance for the first time since December 2020. However, if Price breaks down here and falls back below $19417 support, it will likely retest the uptrend line from April 2017 at ~$15k for the first time since September 2020. Mental Stop Loss: (two consecutive closes below) $19417.
TAN Invesco Solar ETF They have at their disposal the trend since 2008 as well as a key support zone and resistance.
Thank you for your support, greetings.
L.E.D in Spain as of 06/21/2022
BIG SHORT on USDJPYin the coming months, when the recession in the USA starts every bank and investment bank is going to buy Bonds, and then yields are going to decrease, that's the time for USDJPY to fall where it started to rise!
SPX Daily TA Neutral BullishSPX Daily neutral with a bullish bias. Recommended ratio: 52% SPX, 48% Cash. *Though we still need one more close above $3706 to confirm a short term bullish reversal, key support lines for other indicators are currently holding up and therefore lending a bullish bias to PA in the short term. JPow is scheduled to testify before Congress tomorrow at 9:30am (EST) and everyone will be listening for any hints of slowing down rate hikes or QT to further boost markets. PMI is scheduled to be released at 9:45am (EST) on 06/23 , if it comes in lower than last month's prepare for another drawdown.* Price is currently bouncing off of $3706.52 minor support as a technical relief rally is underway. Volume is Moderate and currently on track to favor buyers for a second consecutive session if it can close today in the green. Parabolic SAR flips bullish at $4017, this margin is mildly bullish. RSI is currently trending up at 39 and is currently testing 38.06 resistance after bouncing off of both uptrend lines from 01/27/22 and August 2015 (at 31) indicating that both uptrends are intact in the short term. Stochastic is currently crossing over bullish and is trending up at 10.82 as it prepares to test 18.32 resistance. MACD remains bearish and is currently forming a trough at -105 as it is still technically testing -76.22 minor support; it would need to break above -76.22 minor support to cross over bullish. ADX is currently trending sideways at 27 as Price is either in a correction or reversal, this is neutral at the moment; if ADX begins to trend down as Price continues up then it would be a bit bullish, but if ADX continues up as Price retreats it would be bearish. If Price is able to continue up here then the next likely target is a test of the lower trendline of the descending channel from August 2021 at ~$3900. However, if Price falls back down below $3706.52 minor support, it will likely retest $3508 minor support for the first time since November 2020. Mental Stop Loss: (two consecutive closes below) $3706.52.
Look Out for Bull Trap!Looking at weekly QQQ: In the last recession, after confirming it via Sep 2 EMA crossing, we saw within 2 months of that crossing a very nice bull rally week. But it's a trap! We can see it was a trap by waiting for the week to play out & notice that BBPower was very weak, as shown via yellow circles.
The bulls now are fatigued from the bears & want to get over this recession already, but make sure you confirm bull momentum is there before going back in, whether you are getting out of shorting via SQQQ or going long with TQQQ. We recently confirmed this recession from the Jun 6 EMA crossing, so be patient.
Hello Dolphins.Guys here is a possible scenario for BTC in the upcoming week, BTC going to retest the 200MA weekly and continue it's way down to the 12/14 k region.
SPY 2008 vs 2022 Comparsion2008 vs 2022 weekly chart for SPY
With us touching the critical 200EMA levels, if this plays out similar to 2008, then we should expect a relief rally going back to 50EMA (~430) and then we hit true bottom a year from now in Summer 2023.
Stay safe!!!
Running up that hill - but then?INVESTMENT CONTEXT
Analysts sharply raised the probability of a recession, while the Fed announced its support to yet another 75bps rate hike in July
A worldwide measure of people’s inflation expectations over the next year was more than 4% in May, up from 2.3% a year ago
Russia cut 60% of natural gas supply to Europe via Nord Stream 1 pipeline; cuts are now estimated to have reached 50% to Austria and Germany and 45% to Italy
Germany announced it would take emergency measures, including restarting coal-fired power plants, to cushion the impact of lower gas supplies from Russia
Turkey offered its support to extending safe grain export corridors from Ukrainian ports
A delegation from the IMF arrived in Colombo, Sri Lanka's capital, to discuss a rescue package after the country declared default on its international debt
Three Arrows Capital failed to meet demands to provide extra collateral to meet margin calls on digital currency positions
PROFZERO'S TAKE
Carefully monitoring equities after last week's collapse - not even energy stocks, the clear overperformers of the first 150 days of the year, were spared by the rush to sell. Balancing now Value with Growth may become the major challenge for investors as we head into recession - where the winners of the next decade are dictated
Ireland's Finance Minster Paschal Donohoe expressed positive views on the Eurozone, asserting that the balance sheets of the continent's States are in much better shapes then 10 years back, when the contagion of Greece's debt crisis was feared to spill over to Italy and Spain, triggering a spiraling domino effect of defaults. ProfZero unfortunately does not share Mr. Donohoe's optimism. Countries like Italy deeply enjoyed the not-so-implicit backing of the ECB when it came to rolling over government debt in the open market after the investor confidence meltdown in November 2011 - yet no tangible reforms revived the nation's growth and productivity statistics, while public spending rather than targeting infrastructural changes was aimed at winning political approval in the form of heftier unemployment cheques. Taken together, Italy's debt-to-GDP ratio in fact ballooned from 126.5% in 2012 to 150.8% in 2021; inflation may definitely play a role smoothing the nominal debt load, but interest rates are already guiding fixed income traders to bet against the country's solvency, to the point that the ECB had to backtrack on its announcement regarding the end of the EUR 20bn monthly bond-buying program. ProfZero recently reiterated that from an inflation crisis this could easily spiral into a credit downfall; China already had its Evergrande moment. Let's hope the world will suffer a little more piccolo
ProfZero often gets asked "Is it the right time to buy?" - The right question would rather be: "Why and what am I buying?" Until we flip our mindset to that, we'll be just chasing trends, ending up being eaten by the sharks
PROFONE'S TAKE
Following the considerations about the energy of future, ProfOne’s eyes are set on green hydrogen, a promising alternative fuel facing ever-growing demand. Hydrogen has been demonstrated to enjoy potential to replace natural gas in power-hungry industries like cement, steel, ceramics and fertilizers. In the context of de-carbonisation and energy security, exacerbated by the war in Ukraine, governments and energy companies upped their investments in green hydrogen: BP (BP) has taken a 40.5% stake in a USD 30bn green hydrogen production project in Australia, while Spain is bidding to become the first green hydrogen hub in Europe. Amidst growing enthusiasm, ProfOne is curious how producers will deal with the challenges of storage and transportation, other than the extremely high production costs. Today's green hydrogen is based on clean electricity from renewable energy; as such, it is ca. 5x more expensive than grey hydrogen (actually the most common, coming from natural gas without emissions recapture). The energy equation has 3 variables: security, reliability and affordability. To date, all known sources can satisfy but 2 at a time - green hydrogen included
Five theories of the market's future. All bad short-termI have come up with a few theories in trying to determine where we are and what could happen next. I believe we are in Sub-Millennial wave 1 (began June 1877), Grand Supercycle wave 5 (began March 2009), Supercycle wave 2 (began January 4, 2022), Cycle wave A (January 4), Primary wave 1 (January 4), Intermediate wave 5 (began June 2, 2022), Minor wave 2 (began June 17 at 1030 eastern time). This is the primary assumption as to where we are (and is referenced as 152A152 based on the wave), but I will explore what should occur next if this is true along with timelines. Theory #2 would have us in a wave ending in 152A52. Theory #3 would put us in a wave ending in 152A4A where Primary 3 just ended at 1030 on June 17 and therefore we will move up for a month or so. Theory #4 is that I am very off base in my wave markings while theory #5 would be that Elliott Wave Theory is only good for Monday morning quarterbacking and the Jacksonville Jaguars will win more times than Elliott Wave will. The U.S. economy is on the brink of major trouble and no one appears to be willing to do anything to stop it so theory #1 is the most plausible at this time. Recession is here and will linger for many quarters.
The beginning of Theory #1 must consider what could happen with Supercycle wave 2 (referenced as 152). Supercycle wave 1 lasted 3252 trading days and ran from March 2009 until January 2022. The index began at 666.79 and topped at 4818.62 for a total move of 4151.83 and rise over run of 1.277 points per day (move/trading days). Based on similar waves ending in 52, the models agree the most that this downward cycle could last 813 trading days which would put the end of this overall downward trend in March 2025. Even if this is true we would move upward again and possibly near all-time highs before falling down. The three closest end points would have this Supercycle ending after 397 trading days (August 4, 2023), 469 (November 15, 2023) and 542 (February 28, 2024). The median movement of waves ending in 52 will move 44.44% of the predecessor wave. This would put the median length at 1445 trading days (August 2027). While this does not bode well, the length could be much shorter as market and wave intensity continue to get more drastic possibly a byproduct of computer trading, technology, market participation, or other factors. Recent waves ending in 52 have seen wave 1 be 2-4 times greater than wave 2 in length. 813 days would be if wave 1 were 4x greater. More specifically, waves ending in 152 tend to last 30-100% of the length of wave 1 with a median length at 50%. The shortest possible lengths are the aforementioned 469 and 813 trading days.
Determining the length of Supercycle wave 2 is only half the battle. Waves ending in 52 tend to retrace or move 32-75% of their wave 1’s movement with a median at 50.17%. This means wave 2 could find its bottom in a range 1344.36-3116.36 below the index’s all-time highs. This would place the bottom between 1702.26-3474.26 with the median bottom at 2401.12. Waves ending in 152 slightly widen the retracement to 25.37-75.67% of the prior wave with a median at 45.71%. This could place the highest bottom at 3765.30 which we have already dropped below.
We can provide early estimates of Cycle wave A and Primary wave 1 inside of Theory #1, however, our next focus is on determining the end of Minor wave 2 inside of Intermediate wave 5. The ratios and percentages from the prior two paragraphs are still valid as this wave 152A152 ends in 152 and 52. Minor wave 1 lasted 11 days, dropped 540.64 points with a rise over run of 45.053. The length could be between 3-11 days. The models have the strongest agreement on 3 and 6 days long. Day 1 begins Tuesday June 21. June 23rd is 3 days with 6 occurring on June 28. A move between 25-75% of wave 1 could see a quick gain for the index of 137.16-409.10. This could place the top between 3774.03-4045.97 with a median at 3883.99.
If theory #1 proves true, we will likely move quickly over the next week with a top less than 4045.97. This would still provide quick and large gains. Theory #1 is most likely wrong or off by a wave if we drop below 3636.87 before moving above 3770. This theory is the most logical at the moment but I will publish my other theories over the coming days. Once a theory works, we will move forward with it and continue to provide updates going forward.
Is NIFTY50 in correction or crash mode?Update on last 4 NIFTY Predictions : 4/4 Correct with precise targets.
EMA150 is very curious.
In the 4 drawdowns of bear markets, it has touched when it was a crash
It bounced off from around 25% when it was just a correction
Sep 2022 - Looks like make or break. Coincidentally US Recession is more or less confirmed that month since June quarter GDP data is out. (2 Q -ve GDP is Recession)
EMA200 and EMA100 were conclusively broken or untouched at monthly for me to make any assumptions.
