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Today’s newsletter is a follow-up from Part 2. However, this time around, I’m focusing my analysis on just 3 aspects: S&P500 Futures, the Magnificent 7 ETF and Bitcoin. Let’s dive deeper:
S&P 500 E-mini Futures (CME: ES1!)
ES has been trading in a series of lower highs and lower lows since it topped at 6,166.50 back in February. I’ve marked out the 2 main resistance trendlines to watch going into next week.
The SKDJ oscillator has been pushing to the upside following a bullish crossover on the 4h chart. However, the SKDJ has to be contextualised - ES has not been able to breach 5,352 despite several failed retests. Should this level continue to fail, a strong move down back into the 5,070.50-5,136 is on the cards. Otherwise, ES should be able to push further towards 5,425.25, and towards the bearish imbalance at 5,564.50-5,646.50. A breakout above the resistance trendlines indicated lend greater weight to an actionable trade.
That being said, keep track of the bigger picture - I keep mentioning the SKDJ bearish crossover on the monthly chart. That has historically led to drawdowns/pullbacks over several months. To me, the downside move is likely not complete, and will require a full reset over the next few years before there is a true reversal.
The way that stocks such as DECK have been acting (bearish crossover → bearish continuation & trend breakdown) could serve as an advance warning for what lies ahead for the indices.
Roundhill Magnificent Seven ETF (CBOE: MAGS)
The first thing that should scream to everyone about this chart is the longer-term trend breakdowns, which resulted in a substantial move down. The SKDJ oscillator is in neutral territory, and Monday’s overnight open should give us insights into whether there is trend continuation, or a breakout.
MAGS is currently trading in a descending broadening wedge pattern with lower highs and lower lows. For the market to turn, MAGS has to break out of this pattern and reclaim 47.55. Otherwise, it could find itself drifting towards 35.54-36.24, where it should find very strong support, given the confluence of imbalances in that area.
Bitcoin / U.S. Dollar (BTCUSD)
I took a more esoteric approach to studying BTCUSD’s chart. Considering the original channel that BTCUSD was trading in (in green), it appears that it broke down from this channel without reclaiming trend. Since then, BTCUSD has been trading in a smaller channel (in light blue) within a larger channel (in red) following a trend markup. An SKDJ bearish crossover is also present on the monthly chart.
BTCUSD is likely to see a longer term pullback if it cannot breach 91,315, which has turned into strong resistance. A possible short-term downside target for BTCUSD could lie at 73,600 (quarterly support), followed by 70,016 for the quarterly bullish imbalance.
We have to take it level by level in this market.
$ProShares Bitcoin ETF(BITO)$ $Roundhill Magnificent Seven ETF(MAGS)$ $E-mini S&P 500 - main 2506(ESmain)$ $Apple(AAPL)$ $Tesla Motors(TSLA)$
@TigerWire @TigerStars @CaptainTiger @MillionaireTiger @TigerEvents
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