Good morning and happy spring!
Among so many negative headlines mother nature continues its cycle, and nature is coming to life. There is something special about the beauty of renewal and flowering. It gives everyone a sense of hope and peace, two keywords in today’s reality. You can see the market in the same way you see spring, as each tape is a clean slate, ephemeral and with opportunities for enrichment. The futures are slightly down today, but nothing major, we had an impressive reversal off the lows amid all sanctions and catastrophes taking place in Eastern Europe. Putin’s Russia is hit from all directions but the US stock markets seem to be resilient in the face of this conflict. We are at the mercy of headlines, but from a technical analysis point of view today looks like another side-ways tape, unless we have a big headline coming from the war. On another note $BTCUSD seems to have sparked interest for the buyers, since this “digital gold” could help Russians evade sanctions and has been also heavily used for donations to Ukrainians.
If the $SPY shows strength it should hold $434-435 (8 day EMA) for bulls to stay in the game. If the $SPY fails at this level we are in uncharted territory and remember we are under all moving averages, for a movement to the downside is possible. Should the $SPY hold this 8 day EMA it can go side-ways for a few days, or even a leg higher to the 21 day EMA of $440, which will be resistance. If the $SPY climbs all the way there trim into strength as it can be difficult to break this downtrend, and we might see some choppiness.
The tech sector sees a similar pattern to the $SPY, and a key level is $344 (8 day EMA). If there is strength in this sector it should hold this level, with a possibility of sideways action, if not, down we go. Again, towards the 21 day EMA $350 we’ll find some resistance, so if it gets there trim heavily and wait to see if the bulls come out winners, or if this will be a major resistance and the bears regain control. Watch $AMD and $AAPL for sentiment in this sector.
Like I mentioned in the intro Bitcoin is coming out a winner out of the sanctions imposed on the Russian banking system, and this might bring about a new active sequence for the whole crypto sector. For the first sign of strength today $BTCUSD should go towards the 100 day EMA $44177 and hold around there. Yesterday’s candle is not something to ignore, but after it pushed through the 8 and 21 day EMAs could have added and trimmed already at this level. Now this is a more risky zone since it can be rejected at the 100 day EMA and move lower towards the simple 50 day moving average of $41500 or even to the 8 day EMA of $40500. This area here is higher risk than reward, so if you missed this gigantic candle don’t jump to buy until you see a clear trend forming.
When you have such volatile situations like these you have to be tactical and surgical in your approach. Take your gains and don’t overstay your welcome. At these high levels the risk is higher than the possibility for reward so be more careful. We had an impressive run from Thursday, and if you followed us keep your gains and only buy small to try against some levels, but don’t take the ride down, because it can be even sharper than the one before. We are still in uncharted territory and the FED is around the corner with more inflation and rates talk, so it is best to keep doing scalps rather than swings.
We Grow Together!