Today is the final day of free technical analysis for all the asset classes we cover. It’s our gift to the community for helping us smash through 1,000 members on our discord!
Yesterday we saw a prolific collapse in equities. It appears that the risk-on exuberance has faded and the reality of persistent global issues has sunk in. Stocks woke up from their stupor with a gigantic hangover. We outlined all the levels of resistance well, but we admit that the extent of this selloff caught us off guard. This is why tight stop losses are important. After all, if you don’t get a good price, it’s better to let go and wait for an even better one.
In the over night session, stocks have bounced back a bit after plunging through a vacuum zone, retracing June’s move. Currently, they are facing resistance at 3071, a level we have identified a while back. After such a crash stocks are likely to try to find footing in this area. Currently the Ghostsquawk risk sentiment is tilted to the risk-on side, but this could change on a dime. In the larger picture, the Elliott Wave suggests that this is a reasonable retracement for an overall bull phase.
Today could be very dangerous to trade. Rather, it may be a time to pick up some stocks on discount, or add to your existing holdings. After all, 2008 proved that some companies really are too big to fail, so now is the time to buy on dips rather than sell in a panic.
Bonds have rallied, but not to the extent that stocks have collapsed. ZN has validated our position that it would rally and fall, missing our level by 10 ticks or so. They are likely to range today, on account of the rally, and the fact that it’s Friday. Watch 138’14 and 138’27, two Fibonacci levels.
The Kovach OBV is still pretty bullish, but the Chande has declined, indicating that this may be a good point of entry if you are long of bonds. The Elliott Wave suggests that we could have a correction down to the 61.8% or 50% Fibonacci level, however.
Oil has extended its decline, likely a spillover of risk-off sentiment from stocks. Based on the Elliott Wave, we are still in a reasonably bullish run. The price action of the past few days is a reasonable corrective retracement. As with the other asset classes, we expect it to range, before breaking higher.
The Kovach OBV is still fairly strong, though it is tapering downwards. However, the Chande is tapering up, indicating there could be some momentum building for a breakout.
As we anticipated, Bitcoin broke out. We noted yesterday that BTC would probably break to the downside, despite the bull wedge formation. Bitcoin loves to tease new traders keen on implementing their technicals. The best trading idea is to just accumulate a position and HODL. Current levels constitute a good entry point, though we foresee another wave of selling to get even better prices. Eventually, Bitcoin is destined to break $10K again, so it’s better to load up sooner than later.