The Market Breakdown is back!
Guess it's time to get to work
Welcome (back) to The Market Breakdown where each week I will take a look at recent news headlines, economic data, and charts, bringing you into my world and helping you understand the markets and price action unlike anyone else. If you’ve been with me since before the hiatus, welcome back! Time to get back to work. If you are new, I look forward to helping you on your trading journey.
I am going to slowly get back into the groove, so this first newsletter will be light but you can expect each weekly newsletter to dig in a bit deeper and give you more juicy tidbits and charts.
Jobs Disappointed, Fed remains neutral, Bitcoin and Equities Rally
Last Friday’s Non-Farm Payrolls report came in short of the expected 243,000 increase, only managing to notch an increase of 175,000 which is well below the average 242,000 jobs increase over the previous 12 months. Additionally, we saw unemployment rise from 3.8% to 3.9%. But it is important to note that unemployment has remained below 4.0% for 26 months in a row now and hasn’t seen a longer streak since the 1960s.
If you’re looking for the Fed to finally give us a rate cut, then Friday’s jobs number would help support such a move. However, this will need to be the beginning of a slowdown if you want to see multiple cuts. The general belief is that a jobs market that is cooling off will lead to a re-injection of liquidity by the Fed. And more liquidity could add fuel to an already-hot rally in stocks and crypto. For now, the Fed has chosen to leave rates unchanged.
Bitcoin ETF holders are paper handed?
As I’ve been arguing, that doesn’t seem to be the case. Eric Balchumas noted that the Bitcoin ETFs saw less than 5% net outflow during this most recent 22% pullback over almost two months. He also noted that we had the first-ever 1D flows of all green (no outflows).
For its part, Grayscale’s GBTC ETF just had its first AND second day of green since the ETFs were launched in January with +63.0 and +3.9 respectively.
And now we have two straight all-green days in a row for the Bitcoin ETFs.
Want do do your part in protecting crypto in the U.S? Support our elected Congressmen and women like John Rose who are speaking out against SEC Chairman Gary Gensler and working to pass legislation that will positively impact the U.S. crypto market.
The game of speculation is the most uniformly fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the person of inferior emotional balance, or the get-rich-quick adventurer. They will die poor.
— Jesse Livermore
The US Dollar (DXY)
The weekly chart shows everything you need to know about the DXY at this time. It is range bound between the 100.617 support and 107.348 resistance. A break out above that resistance is likely to see it targeting 110.078. But a breakdown below 100.617 will signal that its downtrend is likely to continue below the 99.589 swing low into an initial target of 95.616 or secondary target of 93.052.
Bitcoin All Time History Index (BTC/USD)
Bitcoin continues to look good at this time. The weekly Stoch RSI has reset into oversold and RSI remains bullish around overbought. We can note a decrease in volume throughout the most recent range which culminated in a spring below the range support, printing a long demand wick on the doji candle. Price has broken out above the descending red resistance but is currently finding trouble with the range EQ. Breaking out above this week’s swing high at 65541.11 should see it rallying toward the ATH just beyond the range resistance. And that will give us an initial target of 86562.
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Ethereum (ETH/USD)
It seems like everyone has been sour about Ethereum this bull cycle. After almost 600 days of accumulation, price finally broke out higher, rallying to a swing high of 4093.88. Since then it has pulled back in a descending channel while the weekly Stoch RSI bottomed out in oversold and RSI held bullish above neutral. The 50% pullback of the recent rally suggests that price may be ready to resume its rally higher. An impulsive break out above the descending channel resistance will signal that the pullback is likely complete. Further break out above 3729.16 will add confidence to that scenario and give us an initial target of a new ATH of 5185. If it does happen to break down a bit first, then we should watch for a possible reversal at that S1 pivot in the chart.
DogeCoin (DOGE/USDT)
After more than 620 days of accumulation, DOGE finally broke out higher. It has since pulled back in what we call the back up to the edge of the creek (BUEC) which is nothing more than a retest of previous resistance as support. Price has recently broken out impulsively above the descending red resistance. This should see price continuing its rally toward a minimum expected wave ((iii)) target of 0.3550.
S&P E-Mini Futures (ES1!)
The S&P continues to look strong as well. The Stoch RSI reset into oversold and is now threatening to break out while the RSI bounced off of neutral and is nearing a bullish cross. The recent 3-Day candle just completed a strong move up through the daily pivot. Breaking out above 5285 will give us an initial target of 5577.50.
Talk About Knocking It Out of The Park!
I mentioned that Carvana was likely nearing a bottom on December 7th, 2022, just about 30 cents off the bear market low. Since then, it has rallied over 3200! While I am trying to post more on my other social media accounts, x.com is where you will find my most up-to-date charts and analysis. Make sure you’re following me to get more charts like this.
Join me as I co-host spaces with Gary Cardone every Tuesday at 5 p.m. CST/6 p.m. EST. And, also, as I join Scott Melker every Wednesday at 8:30 a.m. CST/9:30 a.m. EST with some of the more interesting charts of the day.
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Interviewing guests and discussing charts: