S&P 500, Bitcoin, Treasury Update

Subscribers to iSPYETF’s free e-mail newsletter receive a market outlook, usually once a week. The market outlook below was sent out on October 27, 2022. If you’d like to sign up for the free e-newsletter, you may do so here (we will never share your e-mail with anyone, just as we don’t accept advertising).

S&P 500

Are you going to talk about the expanding diagonal again?

If a simple pattern works so beautifully in an incredibly challenging environment, you ride it and milk it as long as it works (if you haven’t read about the expanding diagonal yet, you can do so here:

S&P 500 Path is Deceptively Simple

The October 12 Profit Radar Report that: “This week’s new S&P 500 low meets the minimum requirement for a wave 5 low, and RSI-2 is nearing over-sold again.”

Starting on October 13, the S&P soared almost 300 points.

Obviously there are still a ton of economical and political cross currents, but the KISS approach is to look higher as long as double support (shown on the monthly chart) holds.

Treasuries

“Distrust in government is a global mega trend. The US Treasury market may just have carved out a key reversal and perhaps major market top.” March 15, 2020 Profit Radar Report

30-year Treasury bonds just suffered the worst one-year decline on record and are down 35% from their all-time high. The last 2 1/2 years have erased about 43% of the gains racked up during a 40-year bull market.

But, as mentioned in the October 23 Profit Radar Report, there is long-term support near current price, short-term RSI-2 is over-sold, RSI-35 is around support, and a furious rally is becoming likely.

The daily chart shows TLT up some 6% since October 24, now nearing over-bought and resistance, but price is compressed from almost 9 month of steady losses, so further up side (perhaps after a pullback) is very possible.

Bitcoin

October 23, Profit Radar Report: “Bitcoin futures are trading above trend line resistance. RSI-35 has been rising over the past 4 months where price was range bound. This is not a screaming buy signal, but the development is overall positive.

Aggressive investors may consider either 1) buying bitcoin with a stop-loss below either of the support trend lines or 2) buy after a break above resistance around 20,400. One ETF alternative for bitcoin is the Grayscale Bitcoin Trust (GBTC).”

Bitcoin has since broken out, and previous resistance is now support (and potential stop-loss) for longs.

Continuous updates for the S&P 500, Treasuries, Bitcoin are available via the Profit Radar Report.

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Barron’s rates iSPYETF a “trader with a good track record,” and Investor’s Business Daily writes “Simon says and the market is playing along.”

New Bitcoin ETF, Eating Crow, S&P 500 Update

Subscribers to iSPYETF’s free e-mail newsletter receive a market outlook, usually once a week. The market outlook below was sent out on October 21, 2021. If you’d like to sign up for the free e-newsletter, you may do so here (we will never share your e-mail with anyone, just as we don’t accept advertising).

Stock market bears seem to enjoy sitting in their echo chamber shielding themselves from objective analysis. Below are just a couple of works produced by the bears’ echo chamber:

8/21/21 – Elliott Wave International: “The top is in.”

9/20/21 – Glenn Neely, NEoWave: “The bull market is over!”

9/20/21 – Fox Business: “Stocks could drop 20% or more.”

9/28/21 – Kitco: “Bear market is imminent.”

9/30/21 – Barron’s: “3 Reasons the stock market will keep falling.”

Bears are back to eating crow (for international readers, eating crow is an idiom for admitting to being wrong after taking a strong stand).

Although my Risk/Reward Heat Map projected weakness for September/October, the weight of evidence suggested only a limited pullback.

In fact, I quoted some of the above bear claims and stated in the September 23 Free Market Outlook that:

“While the risk was ‘on schedule,’ I didn’t – I couldn’t – call the bull market over or even presume further losses. Here are my 3 reasons for giving bulls the benefit of the doubt.”

You may review the 3 reasons and the Risk/Reward Heat Map here.

Another reason not to count out bulls was shared in the October 7, Free Market Outlook, which pointed out that market breadth did not confirm a breakdown (chart below).

It may sound like I’m plugging my own research (and I kinda am), but more importantly I’m plugging the truth. There’s never been a time with as much information and as little truth.

iSPYETF is a place where you will always find honest analysis.

The S&P 500 is butting against its prior ATH while over-bought (based on RSI-2). This is a place where I’d allow for some weakness (chance for bears) but the path of least resistance is up as long as the S&P doesn’t drop below 4,429.

ProShares launched the first Bitcoin ETF (BITO) on Monday, and it hit the $1 billion asset mark faster than any other ETF ever.

Below is the bullish Elliott Wave count published in the September 23 Profit Radar Report.

New trading vehicles for hot markets often put a damper on price (BITO is down 5.5% today). Does anyone remember what happened to bitcoin when Coinbase (a crypto currency exchange) launched? Hint, look at the top left of the chart below. I wrote about this in more detail here.

Continued updates, out-of-the box analysis and forward performance based on historic precedents are available via the Profit Radar Report.

The Profit Radar Report comes with a 30-day money back guarantee, but fair warning: 90% of users stay on beyond 30 days.

Barron’s rates iSPYETF a “trader with a good track record,” and Investor’s Business Daily writes “Simon says and the market is playing along.”

S&P 500 And Bitcoin Update

Subscribers to iSPYETF’s free e-mail newsletter receive a market outlook, usually once a week. The market outlook below was sent out on October 7, 2021. If you’d like to sign up for the free e-newsletter, you may do so here (we will never share your e-mail with anyone, just as we don’t accept advertising).

I shared the following chart in Sunday’s Profit Radar Report to show that most breadth measures (NY Composite advance/decline lines, new 52-week highs – lows) did not confirm a breakdown (see triangles).

Sunday’s conclusion – based on the above and other facts – was this:

“Near-term resistance is around 4,380 – 4,400 followed by 4,440 +/- 10. We are allowing for the open chart gap at 4,436.19 to be filled, but a close above 4,450 – 4,470 would reduce the probabilities of a deeper down turn.”

As the chart below shows, the S&P is within striking distance of the open chart gap (dashed purple line) and now back above the bold trend line (which goes back to 2018) and the 18-day SMA. A close back above the 18-day SMA has ended the last 3 pullbacks.

If bears don’t step up soon, they’ll have fumbled another chance to take control at least for a little while.

On a slightly different note, over the past several weeks, the S&P 500 and VIX have delivered readings that also appeared prior to every major market top over the past 20 years.

Purely mathematically, the ‘meltdown risk’ came out to be 33.75%. A detailed explanation was published here, but, the risk comes with an important ‘but’ and unfortunately not all charts made it.

Bitcoin Futures soared from 41,000 to 56,000 over the past week. The Elliott Wave count first shown in the September 22 Profit Radar Report explains the surge.

Continued updates, out-of-the box analysis and forward performance based on historic precedents are available via the Profit Radar Report. 

The Profit Radar Report comes with a 30-day money back guarantee, but fair warning: 90% of users stay on beyond 30 days.

Barron’s rates iSPYETF a “trader with a good track record,” and Investor’s Business Daily writes “Simon says and the market is playing along.”

Bitcoin Update

While watching tennis on April 17, I caught a ‘too good to be true moment.’ What was it? A Coinbase commercial. The commercial included the price history and an actual projection (of course much higher) of Bitcoin. Frankly, I couldn’t even believe this was legal, because the commercial showed Bitcoin soaring from 58,000 to infinity.

I took a picture of my TV screen and commented on it in the Profit Radar Report (you can watch the full commercial here, the projection to infinity is shown at second 16).

Here is what I wrote about that in the April 25 Profit Radar Report:

Barron’s rates iSPYETF as “trader with a good track record” and Investor’s Business Daily says: “When Simon says, the market listens.”  Find out why Barron’s and IBD endorse Simon Maierhofer’s Profit Radar Report

“What captured my attention is that the commercial actually projected the price of bitcoin going through the roof, which of course activated my contrarian antennae. The chart insert shows the price of Coinbase since going public (down 23.6%). 

Short-term, Bitcoin Futures are at support (around 47,500) with RSI-2 over-sold. This support may spark a bounce and a drop below support is needed for lower price targets.”

The chart below shows that Bitcoin first bounced from support but eventually that support failed and led to much lower prices. One down side target was the 161.8% Fibonacci extension at 30,574, which was reached on May 19.

As Bitcoin dove towards 30,000, it also fell more than 50% below its 50-day SMA, which doesn’t happen often. 

The orange lines below highlight other times Bitcoin traded more than 50% below its 50-day SMA. This kind of ‘oversoldness’ always led to a rally, although In 2018 that rally was brief.

In Summary, there was extreme Bitcoin euphoria around 60,000 and a possible ‘washout’ event around 30,000. It’s quite possible that price will trade in that range for a while as emotions recalibrate.

Continuous updates are available via the Profit Radar Report.

Simon Maierhofer is the founder of iSPYETF and the publisher of the Profit Radar Report. Barron’s rated iSPYETF as a “trader with a good track record” (click here for Barron’s evaluation of the Profit Radar Report). The Profit Radar Report presents complex market analysis (S&P 500, Dow Jones, gold, silver, euro and bonds) in an easy format. Technical analysis, sentiment indicators, seasonal patterns and common sense are all wrapped up into two or more easy-to-read weekly updates. 

Follow Simon on Twitter @iSPYETF or sign up for the FREE iSPYETF e-Newsletter to get actionable ETF trade ideas delivered for free.

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2021 S&P 500 Forecast, Bitcoin, Gold

Subscribers to iSPYETF’s free e-mail newsletter receive a market outlook, usually once a week. The market outlook below was sent out on January 21. If you’d like to sign up for the free e-newsletter, you may do so here (we will never share your e-mail with anyone, just as we don’t accept advertising).

Here’s your ‘broken record’ moment of the day: The tug-of-war between extreme sentiment and breadth continues as stocks grind higher (2 steps forward, 1 step back).

If you’re not yet familiar with this epic, never before seen tug-of-war, it was explained here on December 1 with the following conclusion:

“Normally the combination of historic investor optimism while stocks are pressing against long-term resistance is a recipe for disaster. But, as the above studies show, strong stock market internals are likely to over-power other risk factors.“

Our approach has been, and continues to be: Higher prices are likely as long as support holds.

But, extreme euphoria brings risk of a nasty pullback, so I’m also trying to discern where that risk potential might turn into reality.

The dashed trend channel center line could be a ‘pressure point’ for the iShares Russell 2000 ETF (IWM).

The detailed 2021 S&P 500 Forecast includes an actual S&P 500 price projection for 2021 based on the following factors:

• Breadth & liquidity
• Technical analysis (support/resistance & Elliott Wave Theory)
• Investor sentiment
• Seasonality & cycles
• Valuations
• Risk/Reward Heat Map

The latest gold analysis is available here.

The January 6 Profit Radar Report included the Bitcoin chart below along with this warning:

“Bitcoin has gone parabolic, and Bitcoin futures jumped another 16.7% on Sunday afternoon. If Sunday’s pop holds, price will open above the blue trend channel on Monday, which will then act as support (around 33,000). The rally has taken the shape of a bowl (green line) and I don’t recall a ‘bowl-shaped’ rally that didn’t end badly. Based on Elliott Wave Theory, any upcoming pullback could be ‘only’ a wave 4 and not as strong as in 2018, but nevertheless, any remaining gains come with the risk of a quick 20-40% pullback.”

Bitcoin Futures are down some 30% and price is threatening to fall below the blue channel. While there is more down side risk, there’s a good chance Bitcoin will recover to new highs once this correction is over.

Continued updates and the new 2021 S&P 500 Forecast are available via the Profit Radar Report. 

The Profit Radar Report comes with a 30-day money back guarantee, but fair warning: 90% of users stay on beyond 30 days.

Barron’s rates iSPYETF a “trader with a good track record,” and Investor’s Business Daily writes “Simon says and the market is playing along.”S&P