This is the next installment of a weekly, exclusive, series of technical analyses that DeFinity is proud to share with its community.

The analysis is completed by renowned, experienced financial analyst and successful global podcaster, Paul Rodriguez.

Paul Rodriguez lectured at the City University in London on the subject of Technical Analysis whilst working as an award winning analyst at NatWest Global Financial Markets (Now RBS) in the 1990’s, pioneering and promoting the education and use of technical analysis to City professionals and private investors. Paul set up Think Trading to continue that education and consultancy having appeared frequently on financial news channels seeking his views. He set up the State of The Markets Podcast with fund Manager Tim Price three years ago, which consistently tops the top 50 UK business podcasts and has a global audience. He provides bespoke research and consultancy to market-leading firms.

SUMMARY:

As we approach the November CPI data release (13th December) the market may fret for two reasons; 1) If Inflation is stronger than expected, a sell-off will occur due to the prospects of higher rates and 2) if inflation is weaker than expected, are we entering a recession? Our core strategy remains that inflation will continue to fall and the US Fed will become more doveish with smaller rate hikes a certainty. This will be supported by the CPI print. What may also be in prospect is talk of a rate cut in 2023. This potential may appear in the first half of 2023, but will likely dissipate after that. To be clear at this stage we are not saying a rate cut will occur, just that the swing back from rate hikes to neutral could make this a potential talking point . Given the decline in commodity prices, especially oil, it is clear demand destruction wreaked by a higher US dollar, slowdown in China and higher energy prices have all taken their toll. The pivot could well take the market by surprise.

Equities are in a grey area here as it is possible they could react badly to a too rapid a slow down in inflation — mainly because there will be a period where the Fed hesitates in order to gain more concrete data of the slowdown. However, the market is primed to rally in 2023 and any short term concerns should evaporate as 2023 unfolds. We project new all time highs for 2023/24 in the S&P500 and risk-on should run hot in line with a weakening US dollar throughout the year. The big question with Crypto is; have we seen the low? Sentiment wise this is entirely possible. Price action is muted, which is understandable give the time of year and recent events. Despite this, ETH continues to outperform BTC and holding above 2022 lows is particularly notable. BTC continues to lag, but whilst above the 13,880/14,715 support zone we hold a bullish long term view, acknowledging it has significant technical challenges ahead.

DXY

A major bear market in the US dollar is our central case for 2023 and beyond. The sharp decline from 114.78 implies this trend has begun. There are some final support levels to break to complete the bearish picture, the most important being the main upward trendline, but we maintain the macro trend should be lower from here on in. There is scope for a retracement as discussed in the main summary, but rallies to 108.00 are seen as an opportunity to sell US dollars strategically.

US 10 Year Yield

Yields continue to ease lower in line with our broader strategy that the US Fed. will not raise rates as fast the broader market has expected. However we mentioned last week that rumblings may appear for potential for a cut in rates in 2023 and this is borne out by yields holding below 3.50%. Overall support for a spring-board risk-on move is gaining.

Crude Oil

Whilst our long term view of Oil is bullish, the intermediate bull trend was invalidated on a break of $96. The continued decline is in part due to demand destruction (supporting our doveish rate view), and should be seen as bullish for risk-on in 2023 and beyond. Given eventual recovering demand, the downside is limited. We see the zone between 60–69 as a key support area where oil should consolidate before embarking on the next major trend.

S&P500

The SP500 hit a brick wall close to the 200 day m.a. and 4114 resistance. As the market frets about next week’s CPI number, the market may ease lower with 3810/35 the next support zone. However, we maintain our bullish view and look for a recovery into all time highs in 2023/24. We will maintain a bullish view whilst the main upward trendline is in tact.

Ethereum

So far the rally is encouraging as it allows for a shallow upward trendline from 879 to 1071 to be drawn. Whilst above this line we will hold our bullish view with 1445 (200 day m.a.) the next target. Sentiment remains skewed to the bearish side and despite this, 2022 lows remain unbreached. Whilst it is too early to call the end of the bear trend, the current move is encouraging.

Bitcoin Daily Chart

BTC has held above 2022 lows and considering the bearish sentiment, is performing well in the short term. This is normally associated with a strategic low, but there are a confluence of bearish hurdles to overcome — 17,592 is the most immediate. In addition the 60 day and 200 day m.a. plus resistance from a declining highs will also need to be breached to start a secular bull market, hence a longer period of consolidation may be in prospect before the secular bull market begins.

Bitcoin Weekly Chart

If we are wrong about the prospects for an imminent rally, the next major zone of strategic support is at 13,880/14,715. This long term chart puts the recent price action into perspective — the main trend is still bullish and the current retracement is still part of a correction in a bull market. However, any decline below 13,880 would be a very bearish development.

This report is superficial in nature and may contain errors. No warranty is given to the accuracy of the data or text and any reader must understand that it should not in anyway form part of an investment process — that is reserved for that individual/business and an investment professional. No positions should be taken, exited or otherwise considered on the basis of this research. This is a condition of reading this document. The main function is of education into how different chart patterns might indicate a future trend (or lack thereof) and not for the purposes of speculation or investment.

Transcribed to Medium

Original Technical Analysis provided by

Paul Rodriguez — ThinkTrading.com

Technical Analysis: Weekly Market Strategy was originally published in Definity Network on Medium, where people are continuing the conversation by highlighting and responding to this story.

This is the next installment of a weekly, exclusive, series of technical analyses that DeFinity is proud to share with its community.

The analysis is completed by renowned, experienced financial analyst and successful global podcaster, Paul Rodriguez.

Paul Rodriguez lectured at the City University in London on the subject of Technical Analysis whilst working as an award winning analyst at NatWest Global Financial Markets (Now RBS) in the 1990’s, pioneering and promoting the education and use of technical analysis to City professionals and private investors. Paul set up Think Trading to continue that education and consultancy having appeared frequently on financial news channels seeking his views. He set up the State of The Markets Podcast with fund Manager Tim Price three years ago, which consistently tops the top 50 UK business podcasts and has a global audience. He provides bespoke research and consultancy to market-leading firms.

SUMMARY:

Risk-on trades continue with base & precious metals performing well and equity markets pushing higher. Expectations of next year’s US rate rises have been paired back considerably as the market aligns to our core strategy. The US Fed even acknowledged that hikes take time to filter into the system, and if inflation data continues to weaken (which it will in our opinion) the prospects of a pause will become compelling. This underpins the bullish macro conditions.

As we mentioned last week, sentiment in crypto is of the type that is normally associated with a major low. Coupled with the bullish macro conditions, the disparity will spark a major rally soon, but when? The charts currently look pressured by short term pattern set-ups, but the nature of these is such that, if the market is not lower by early next week, a rally becomes more compelling. We understand the temptation to ‘bottom-fish’ here (which is also time frame dependent), but we still need a bullish technical signal to cement the end of the crypto winter. Any sharp short term short cover rally would most likely be induced by ETH. Despite the news, it has not traded into a new 2022 low and hence a bullish sign (admittedly tempered by broadly range-bound price action). Any rally in the whole sector will most likely be led through ETH.

DXY

Short term targets at 102.35/103.42 are approaching which is close to the 200 day m.a. Hence a further decline into this support should follow by a short-cover rally back — perhaps to 108 — before the trend resumes lower. The main upward trendline at 101 is now the last significant support for the US dollar and a break of this would be the final confirmation that a multi-year decline is at hand.

US 10 Year Yield

We remain bearish for yields with a test of 3.50% support the next target. A break of this key level would imply a significant reversal in sentiment and whilst we anticipate a continued revision in market expectations, it would take a major commodity decline to produce this extended move. We consider anything below 4.0% as promoting ‘risk-on trades.’

Gold

An impulsive trend in gold has been supported by the weakening US dollar. Whilst, we are long term bulls of gold, resistance between 1787 and 1802 is strong and may encourage some profit taking, causing a pull-back towards 1730 ahead of the next impulsive trend. Whilst above 1670, we will remain bullish.

S&P500

We maintain a strategic bullish view here whilst above 3720 (up from 3636). The two major obstacles remain at the 200 day m.a.(4073) and the main downward trend (4180 and declining) — both of which we expect to be breached by Jan 2023.

Ethereum

Sentiment is bearish and yet the market is trading with a wide margin above the 2022 lows. The short term price action is taking the form of a bearish pennant which implies an extended move lower — however if the market does not extend by Friday, the clock will be ticking for a short-cover rally. Any break of 1280 could spark this move as it would negate the continuation pattern. From a long term perspective the 200 day ma. is a useful marker to indicate a thawing of sentiment. Major resistance remains at 1720 and the 2035, a break of which would herald the end of the crypto winter.

Bitcoin Daily Chart

BTC has taken the brunt of the market’s negative sentiment. On the plus side, the downward move has not extended much further from last week. However, price action has formed a potential short term bearish pennant risking a test of 14,715. We anticipate a rebound from this level if hit (top end of a major support zone see the long term chart below). Short term traders will be watching 17,262 as a break through this would indicate a short squeeze (implying the continuation pattern has failed).

Bitcoin Weekly Chart

Strategic support at 13,880/14,715 is coming into focus. A test of this zone is not compulsory to reverse the trend but as risk/reward zone it represents an area of interest. Failure to hold this zone would indicate structural issues, but whilst above, and with ETH holding a more positive technical picture, we retain our long term bullish outlook, awaiting confirmatory signals that the down trend has completed.

This report is superficial in nature and may contain errors. No warranty is given to the accuracy of the data or text and any reader must understand that it should not in anyway form part of an investment process — that is reserved for that individual/business and an investment professional. No positions should be taken, exited or otherwise considered on the basis of this research. This is a condition of reading this document. The main function is of education into how different chart patterns might indicate a future trend (or lack thereof) and not for the purposes of speculation or investment.

Transcribed to Medium

Original Technical Analysis provided by

Paul Rodriguez — ThinkTrading.com

Technical Analysis: Weekly Market Strategy was originally published in Definity Network on Medium, where people are continuing the conversation by highlighting and responding to this story.

This is the next installment of a weekly, exclusive, series of technical analyses that DeFinity is proud to share with its community.

The analysis is completed by renowned, experienced financial analyst and successful global podcaster, Paul Rodriguez.

Paul Rodriguez lectured at the City University in London on the subject of Technical Analysis whilst working as an award winning analyst at NatWest Global Financial Markets (Now RBS) in the 1990’s, pioneering and promoting the education and use of technical analysis to City professionals and private investors. Paul set up Think Trading to continue that education and consultancy having appeared frequently on financial news channels seeking his views. He set up the State of The Markets Podcast with fund Manager Tim Price three years ago, which consistently tops the top 50 UK business podcasts and has a global audience. He provides bespoke research and consultancy to market-leading firms.

SUMMARY:

Our core view has been the US Fed will move to a doveish stance after the release of today’s CPI number due to the lag in the response to weaker commodity price data. Paradoxically, we remain bullish on base and precious metals for the long term, which will mean inflation will run hot, but as far as ‘risk-on’ — the equity markets (more precisely value rather than growth stocks) were already ahead of the game and had started their rally some weeks ago. A short term correction is near, but we remain bullish into 2023 and beyond.

A weaker US dollar continues to play out with the DXY completing a short term topping pattern, confirmed by commodity currencies (we highlighted the Canadian Dollar last week) and even the ‘collapsing’ Japanese Yen has managed to strengthen significantly. We expect a major US dollar bear trend to unfold — but it would be unlikely to see this move in a straight line down, more likely a larger range will develop and the trend will get underway in earnest in 2023.

The torrid situation in the crypto world is the sort of news that comes near a major low — usually. We highlighted the possibility of one last down-leg before the ‘winter’ was over, but the sharp correction was at odds with the wider bullish macro scene. It has now been revealed what was causing this disparity and once the dust has settled, the trend should consolidate and begin the next bull phase. A caveat is unless there is another ‘shoe to drop’ and how the market trades over the next few weeks will be indicative of this. Macro factors will continue to be a positive factor but may not be enough to change the trend whilst sentiment is so negative. ETH structurally remains more bullish, and whilst that is a small positive, a synchronisation of assets (i.e. BTC, and major alt. coins) is needed to confirm a major impulsive trend.

DXY

A break of the trendline and confirmation of a top has occurred with the catalyst the US CPI release. This confirms the short term trend lower and we look for a test of 102.35/103.42. This is not enough to change the direction of the moving averages, which continue to point in a classic bullish configuration. This anomaly will likely resolve in a large sideways range for the coming months before the major downward trend begins. There is a potential larger topping pattern that we will discuss next week.

US 10 Year Yield

A break of the short term trendline and a completion of a double top formation reverses the trend and checks the broader markets’ expectation of burgeoning rate rises. A test of 3.50% is the next target, but it may be difficult to breach this key level. A range will be viewed as bullish to the asset markets as cycle peaks were anticipated to be much higher.

Copper US$ lbs-

We maintain a bullish view of copper and the recent weakness in the US$ has propelled the market towards key resistance at 3.78. Our long term targets remain at 3.96, but we may have to revise this higher by year end. A two-day close below the medium term m.a. at 3.50 negates this view. US 10 year yields — Daily Bar Chart Copper -US$ lbs — Daily Bar Chart 3.50% resistance (now support) Break of the short term trendline and now a double top imply further downside. Double top completed Potential Neckline of a major.

S&P500

Relative to the Dow Jones, the SP500 has been under-performing as the tech sector heavy-weight components weigh on the emerging bull trend. We remain bullish (our core view is the major low is in) with the macro conditions supporting our bullish view. Whilst above 3636, this view will stand, unless other inter-market analysis calls for a change in trend. The two major obstacles ahead are; the 200 day m.a. and the main downward trend — both of which we expect to be breached by Jan 2023.

Ethereum

The nascent rally failed at the 200 day m.a. with resistance at 1720 untouched. We were gearing up for the prospect of a bullish trend here, but it was contingent on 1720 breaking. A major base can only be confirmed through 2035 and whilst ETH continues to outperform BTC, the close proximity of the 2022 low will remain a concern. Whilst the uncertainty continues, the 200 day ma. is the marker for a bullish recovery.

Bitcoin Daily Chart

The equivocal nature of the market has been resolved by a break of 18,000, setting in motion another leg of the bear market. 14,715/13,880 is the next major support zone (see long term chart below) and until we see evidence of outperformance against ETH, we will maintain a cautious view. Despite the gloom, the major upward trend is intact and will only become a critical concern if 13800 is conclusively breached. Admittedly with current vol. this is thinner margin than ideal.

Bitcoin Weekly Chart

The reason for including this chart each week was in case the break lower we have just witnessed occurred. We now look for a test of, and reaction from strategic support at 13,880/14,715 prior to evidence of a resumption of the bull market. Undoubtedly there will be some short term bottom-fishing, but it would take an out-sized rally to reverse the current technical picture and this seems unlikely.

This report is superficial in nature and may contain errors. No warranty is given to the accuracy of the data or text and any reader must understand that it should not in anyway form part of an investment process — that is reserved for that individual/business and an investment professional. No positions should be taken, exited or otherwise considered on the basis of this research. This is a condition of reading this document. The main function is of education into how different chart patterns might indicate a future trend (or lack thereof) and not for the purposes of speculation or investment.

Transcribed to Medium

Original Technical Analysis provided by

Paul Rodriguez — ThinkTrading.com

Technical Analysis: Weekly Market Strategy was originally published in Definity Network on Medium, where people are continuing the conversation by highlighting and responding to this story.

This is the next installment of a weekly, exclusive, series of technical analyses that DeFinity is proud to share with its community.

The analysis is completed by renowned, experienced financial analyst and successful global podcaster, Paul Rodriguez.

Paul Rodriguez lectured at the City University in London on the subject of Technical Analysis whilst working as an award winning analyst at NatWest Global Financial Markets (Now RBS) in the 1990’s, pioneering and promoting the education and use of technical analysis to City professionals and private investors. Paul set up Think Trading to continue that education and consultancy having appeared frequently on financial news channels seeking his views. He set up the State of The Markets Podcast with fund Manager Tim Price three years ago, which consistently tops the top 50 UK business podcasts and has a global audience. He provides bespoke research and consultancy to market-leading firms.

SUMMARY:

The FED hiked 75bps as expected, but issued a statement that it would be premature to call the end of the tightening cycle (they did acknowledge the rate of hikes will slow — which is aligned to our view and reflects our bullish view of asset markets and bearish US dollar outlook). The US dollar jumped, but in the context of a consolidation that has no conclusive direction. We maintain that the top is near and, whilst a new high in the DXY is possible, this may just to be to lift stops ahead of a more substantial reversal. Topping phases can take many weeks, sometimes longer, but we’re comfortable with the view that the majority of the rally is over. With rallies becoming harder to impel, eventually the new downside trend will take hold. Next week’s CPI should be interesting as a weaker number would negate the Fed’s comments and support a sea-change in the broader market view.

The UK Bank of England also hiked this week by an expected 75bs — they simultaneously issued a statement predicting the longest UK recession ever to be recorded. The incongruity of their statement set against their actions is puzzling. Our view is a recession is not imminent because UK equities look ready to trade much higher and it is the market that dictates to the BoE and not the other way round. More importantly they’ve unsurprisingly revised down a too hawkish cycle peak of 6% for UK rates to 4.5% and once the dust has settled, the market will focus on this.

Crypto assets continue to consolidate from both a long and short term perspective. Given the strong showing in equities, the crypto rally has been muted, but still has scope to run further in the next week or so. A major low may well be in and we’re currently seeing that start of the next bull phase. We have to leave the door open to a final correction due to the close proximity to the 2022 low, but ETH seems keen to get going and it’s more probable that BTC will play catch-up rather than vice versa — especially with the supportive macro conditions.

DXY

A rally sparked by the Fed hike was factored in here last week as the RSI was sitting close to oversold. The macro conditions are discussed in the summary, but in the next two weeks the top should be in — whether this is via a break of 114.78 is unclear, but the next test of 110.01/109.29 should see this key zone break and with a follow-on move through the trendline, signalling the new downward trend is in progress. (note 10th November CPI which could be the catalyst).

US 10 Year Yield

The dip below 4.00% was brief, but the trendline from June has been breached and whilst a short term rally has evolved, a sideways range looks likely. A break of 3.84% completes a top for a more substantial correction. We await confirmation.

USDCAD

With commodity prices a key driver of the Canadian dollar, it is interesting to see the potential for a head and shoulders reversal formation which, if completed, would be a key reversal signal for the US dollar. Resistance at 1.3836 should cap the current rally for a decline through 1.3580 to complete the top. Initial targets are at 1.2964. A two-day close over 1.3840 would suggest re-examination.

S&P500

Medium term resistance at 3896 has capped the first phase of strength in the SP500, but we maintain that the low is in and the market should continue to rally into year end. Key support is at 3636 should the downside extend further. A break of this level would imply caution, but we would only temporarily abandon the bullish view below 3506.

Ethereum

Our confidence is gaining that the major low is in. Whilst some doubts will linger until a major base is confirmed through 2035, macro conditions continue to move in the right direction to support the rally. Note a short term pennant should see a sharp move higher in the next day or so, but even if this should fail it would only interrupt the trend. The next major resistance zone is between 1720 and 1795, extending through there would reinforce the prospects for a base with final confirmation through 2035.

Bitcoin Daily Chart

Macro developments continue to improve and whilst BTC is lagging ETH, the signs that the market has based are increasing. Price action from June could be an accumulation phase and if BTC plays catch up through 21,868 and ultimately 25,401, the new bull trend will be confirmed. As we approach this level prospects will increase, but likewise any failure to hold support at 18,000 will revive the prospects of one final correction. This is not our favoured view, but we can not rule it out just yet.

Bitcoin Weekly Chart

We continue to include this chart whilst doubts linger over the potential base. Strategic support sits at 13,880/14,715 and should the market break lower, this area would be of great interest. A test of the zone is not required for a trend change, but we have to consider the possibility that one final break lower occurs, even if the long outlook is bullish.

This report is superficial in nature and may contain errors. No warranty is given to the accuracy of the data or text and any reader must understand that it should not in anyway form part of an investment process — that is reserved for that individual/business and an investment professional. No positions should be taken, exited or otherwise considered on the basis of this research. This is a condition of reading this document. The main function is of education into how different chart patterns might indicate a future trend (or lack thereof) and not for the purposes of speculation or investment.

Transcribed to Medium

Original Technical Analysis provided by

Paul Rodriguez — ThinkTrading.com

Technical Analysis: Weekly Market Strategy was originally published in Definity Network on Medium, where people are continuing the conversation by highlighting and responding to this story.

This is the next installment of a weekly, exclusive, series of technical analyses that DeFinity is proud to share with its community.

The analysis is completed by renowned, experienced financial analyst and successful global podcaster, Paul Rodriguez.

Paul Rodriguez lectured at the City University in London on the subject of Technical Analysis whilst working as an award winning analyst at NatWest Global Financial Markets (Now RBS) in the 1990’s, pioneering and promoting the education and use of technical analysis to City professionals and private investors. Paul set up Think Trading to continue that education and consultancy having appeared frequently on financial news channels seeking his views. He set up the State of The Markets Podcast with fund Manager Tim Price three years ago, which consistently tops the top 50 UK business podcasts and has a global audience. He provides bespoke research and consultancy to market-leading firms.

SUMMARY:

Evidence that equity markets have based continues to mount. Having forced a short-covering rally, there should be considerably more to go on the upside. However, next week the US Fed will raise interest rates by 75bps. Whilst the market knows it already, it will encourage some more equity short positions which should see a squeeze higher into next year. We maintain the normalisation of interest rates is not going create the sell-off feared by the markets and, as we highlight in this week’s chart, food prices have fallen considerably. Coupled with demand destruction, the Fed will move to a more neutral stance — perhaps in language, but certainly in actions.

Similarly the correction in the US dollar has been encouraging. We highlighted the failure to break-higher when the data pointed to increasing dollar longs — this almost always occurs at the end of the trend. Step one is a topping phase, which we are experiencing now, step two is a trend in the opposite direction — which should begin very soon — perhaps after the next week’s rate rise out of the way. Important tops should visually impact the ‘weekly bar’ charts — and so far important upward trendlines are still in place. When these break, the down-draft in the USD will be swift. Until this occurs we can not rule out a last ditch attempt to break 114.78. Even if that attempt does happen, the move should be short-lived.

Crypto markets have had a short term rally and we discussed the possibility last week. The timing matched the inauguration of a new UK Prime Minister, Rishi Sunak (ex-Goldmans) who will no doubt be pro-markets and has already stated his intention for the UK to be the world’s main crypto hub. This is smart and will add to the long term credibility of the sector. It is possible we have seen the base in BTC and ETH, but we need more evidence. We will be able to say with more confidence when the US dollar trend has confirmed a major (as opposed to minor) top.

DXY

Further evidence of a minor USD dollar top continues with the break 110.01 completing a double top formation and crossing the medium term m.a. There is still a support line to contend with in close proximity and support at 109.80 that might hold for a short term rally (encouraged by the Fed hike set for next week and a low reading on the RSI). There are a few larger formations in development, but we will highlight them when they are further along the process. Either way we maintain these are the last gasps of strength for the US dollar and a sustained downward trend is approaching.

US 10 Year Yield

Whilst above the short term trendline, further upside should be considered, but post next week’s interest hike, yield rises should be limited and greater evidence of a top should emerge. There is support at 4.00% which matches the upward trendline — hence a break of this followed by an extended decline through 3.84% would imply a larger correction is on the way.

Wheat

With all eyes on inflation and CPI data, we can see how a dramatic fall in food prices should impact the data and assuage the Fed’s fear of inflation (once they are presented with the data). Rice prices are topping out and Coffee futures have collapsed recently and, whilst there are some pockets of strength, the overall picture is dramatically improved.

S&P500

We maintain the view that equities have seen the low and we will hold that view whilst above 3636 (revised upwards from 3510). Traders are expecting a decline into next week’s rate rise and are positioning for the in the short term, however the longer term outlook implies a more benign interest situation, hence we should see a continued rally into next year. Naturally there will be corrections, but this will be viewed as a buying opportunity.

Ethereum

The prospects that a major low is in and the next bull phase is beginning have been raised by the recent rebound. Despite the strength here, caution will remain until we can confirm a major basing pattern has completed. Macro conditions continue to improve and if they continue at the current rate, we should be able to confirm a major low in the next few weeks. The next major resistance zone is between 1720 and 1795, extending through there would increase the chances of a base dramatically.

Bitcoin Daily Chart

We discussed the prospects of a small nudge through resistance opening the way for a more substantial rally and the current move is encouraging. However, if you look at the impact of the move on the downward trend, it is still too close to major support to call the end of the bear phase. It would take a rally through 25,401 to complete a major base, although we should be able to call a low before then due to improving macro conditions. An extension to 21,868 and then retracement seems likely into next week.

Bitcoin Weekly Chart

This chart highlights the impact of the current fledgling rally on the long term chart. Whilst welcome, it is not enough to confirm a base. Strategic support sits at 13,880/14,715 and should the market break lower, this area would be of great interest. A test of the zone is not required for a trend change, but we have to consider the possibility that one final break lower occurs, even if the long outlook is bullish.

This report is superficial in nature and may contain errors. No warranty is given to the accuracy of the data or text and any reader must understand that it should not in anyway form part of an investment process — that is reserved for that individual/business and an investment professional. No positions should be taken, exited or otherwise considered on the basis of this research. This is a condition of reading this document. The main function is of education into how different chart patterns might indicate a future trend (or lack thereof) and not for the purposes of speculation or investment.

Transcribed to Medium

Original Technical Analysis provided by

Paul Rodriguez — ThinkTrading.com

Technical Analysis: Weekly Market Strategy was originally published in Definity Network on Medium, where people are continuing the conversation by highlighting and responding to this story.

This is the next installment of a weekly, exclusive, series of technical analyses that DeFinity is proud to share with its community.

The analysis is completed by renowned, experienced financial analyst and successful global podcaster, Paul Rodriguez.

Paul Rodriguez lectured at the City University in London on the subject of Technical Analysis whilst working as an award winning analyst at NatWest Global Financial Markets (Now RBS) in the 1990’s, pioneering and promoting the education and use of technical analysis to City professionals and private investors. Paul set up Think Trading to continue that education and consultancy having appeared frequently on financial news channels seeking his views. He set up the State of The Markets Podcast with fund Manager Tim Price three years ago, which consistently tops the top 50 UK business podcasts and has a global audience. He provides bespoke research and consultancy to market-leading firms.

SUMMARY:

Last week’s CPI number had potential to be the pivotal change in market dynamics and the following price action has been encouraging. The most sensitive of risk-on indicators, the equity market, saw an initial swing downwards ( to a key Fib. level in the SP500) and a sharp rally. This type of price action is referred to as a ‘spike’ and implies the prior (downward) trend is over. Whilst it is not so clear that the DXY trend is over (and this will remain a fly in the ointment until we get confirmation) we continue to sight the lack of upside progress in the DXY when data and sentiment support a further extension. This divergence is normal during major trend changes, but we still need the price to respond impulsively lower. Yields have continued to rise, but the prospects for other central banks to play catch-up on the inflationary story makes it possible for yield rises to have a lower correlation to US dollar strength from now. The divergence will be resolved soon.

Crypto assets continue to consolidate and the muted follow-through to the bearish set-ups last week could spark a minor rally as stale shorts are covered. This does not mean the sector is out of the woods, merely that a decent rally could be at hand, mirroring the equity bounce. There are some pockets of strength in the alt-coin markets and, whilst this could be a case of the tail wagging the dog, it is nonetheless a minor positive factor. With the 35th anniversary of the crash and macro news flow negative, the markets have shrugged off bad new relatively well thus far.

DXY

The resistance high at 114.78 remains unbroken despite positive sentiment. Despite the muted response to recent data releases, a trend ending signal is still lacking and we await a break of trendline support and the medium term m.a. as confirmation of a major change in trend. Breaking 110.01 support would also complete a double top formation. We cannot rule out an attempt to clear stops over 114.78, but the clock is ticking for the bulls.

US 10 Year Yield

Yields continue to rise, having breached the key 4.00% level. With the main support line still in tact further upside can not be ruled out. However, divergence with the DXY must close by either a correction here or a rally in the DXY. This will be answered in the coming trading days. A decline through 3.84% is the first sign of a top, but a major correction would trigger through 3.5%.

Copper

Copper is a good measure of economic activity and having hit a major Fib. support in July 2022, it has clung to the main upward trendline. Whilst an impulsive upward move is still required, the stabilisation is a bullish sign in itself, with the next phase a push higher through 3.50. When the risk on rally commences a move back towards highs at 5.00 should develop into 2023.

S&P500

A spike reversal is a significant signal, coupled with a test of major Fib. support at 3506 (a minor breach is acceptable in a fast moving market) — this implies we could have seen the low and the trend should initially consolidate, and then move higher into 2023. The implications are the risk rally has begun whilst above 3510 we will hold that view. Spike reversals can form part of a larger reversal pattern — hence a decline back to 3560 as part of the basing process should be considered

Ethereum

We remain cautious, but given the lack of downside follow through and the improving macro conditions, a short term rally may be close, if only because the bearish flag formation failed to extend last week and stale shorts may have to cover. Long term we are awaiting the signal that the main downward trend is over — for the moment it is not conclusive.

Bitcoin Daily Chart

The market is little changed from last week and hence our view remains the same. The close proximity to the 2022 low implies caution — but interestingly, the medium term m.a. and resistance line are now close enough for a small rally to break both. This is a positive factor of a consolidation of this type — it could be base building for a more substantial move. We await further confirmation.

Bitcoin Weekly Chart

From a big picture perspective there is no material difference week-on week as BTC hovers close to 2020 lows. We maintain strategic support sits at 13,880/14,715 and should the market break lower, this area would be of great interest. A test of the zone is not required for a trend change, but the close proximity to the lows requires caution.

This report is superficial in nature and may contain errors. No warranty is given to the accuracy of the data or text and any reader must understand that it should not in anyway form part of an investment process — that is reserved for that individual/business and an investment professional. No positions should be taken, exited or otherwise considered on the basis of this research. This is a condition of reading this document. The main function is of education into how different chart patterns might indicate a future trend (or lack thereof) and not for the purposes of speculation or investment.

Transcribed to Medium

Original Technical Analysis provided by

Paul Rodriguez — ThinkTrading.com

Technical Analysis: Weekly Market Strategy was originally published in Definity Network on Medium, where people are continuing the conversation by highlighting and responding to this story.

This is the next installment of a weekly, exclusive, series of technical analyses that DeFinity is proud to share with its community.

The analysis is completed by renowned, experienced financial analyst and successful global podcaster, Paul Rodriguez.

Paul Rodriguez lectured at the City University in London on the subject of Technical Analysis whilst working as an award winning analyst at NatWest Global Financial Markets (Now RBS) in the 1990’s, pioneering and promoting the education and use of technical analysis to City professionals and private investors. Paul set up Think Trading to continue that education and consultancy having appeared frequently on financial news channels seeking his views. He set up the State of The Markets Podcast with fund Manager Tim Price three years ago, which consistently tops the top 50 UK business podcasts and has a global audience. He provides bespoke research and consultancy to market-leading firms.

SUMMARY:

We maintain that the final stages of the US dollar rally are upon as and major risk-on rally is not far away — perhaps days, perhaps weeks, but not months. Interestingly the US dollar index (DXY) has not surpassed the previous resistance high at 114.85 despite the strength of the NFP data. A new high cannot be ruled out, but with expectations skewed towards higher US rates, there is scope for disappointment and a sharp correction. As mentioned, we are eyeing the data releases for sentiment to change and initiate the new trend. A break of 110.01 from a technical perspective would be a good start.

US 10-year yields are hovering below key resistance at 4.00%, A major psychological level. Our long-term view on yields is bullish, but we expect a reversal phase to kick-start the risk-on rally, and turning downwards from this current zone would be an ideal candidate for trend change. Crossing back through support at 3.84% would be a solid initial signal.

Patience is still required in the Crypto space. Macro factors continue to weigh and whilst volatility has dropped, the price action is still too close to 2022 lows in BTC for comfort. As everything hinges on the US dollar (more accurately the interest rate trend which in turn is currently correlated to US dollar strength) we have to wait potentially a few more weeks before a conclusion to the downside trend occurs. On the plus side the ensuing rally should be worth the wait.

DXY

The trend has definitely slowed with resistance at 114.78 still unbreached following a strong NFP number. Because momentum still favours the upside we are awaiting a more pronounced signal to indicate the trend is over. We still cannot rule out a break into new highs, with resistance at 118 the near maximum we would expect from this trend. The medium term trendline comes in at 110.80 and a break of that would set-up a more substantial topping pattern, confirmed through 110.01 support.

US 10 Year Yield

Yields continue to consolidate below the key 4.00% If a break is to occur, it would normally be in the next week, else the risk will revert to the downside. 3.84% is the first key support level, but a break of the main trendline would be the initial indication of a trend change. We are bullish long term, but expect a trend reversal phase to kick-off the broader ‘risk-on’ rally.

Gold

The downward trendline stemmed the gold rally, but the sector is looking broadly positive and this will add weight to the signal when it eventually breaks. 1670 support is key, but as mentioned before, the rally will stutter until the US dollar trend has clearly reversed — hence a consolidation may be the best we can expect whilst the rally is ongoing. Our long term view remains bullish.

S&P500

Resistance at 3810 capped the short term rally, for a move below 3636 support. As the market is playing out the final stages of a trend retracement, we will look for evidence of a major low — a high probability area is the 50% retracement point from the 2020 lows to 2022 high at 3506 (below that 3394 is a massive level). This longer term chart highlights the broader upward trend — if the market does rally soon, this would be consistent with a secular null market. Sentiment remains bearish which normally indicates a low is approaching.

Ethereum

A break of the lower support line of the flag/pennant formation keeps the focus on the downside, but admittedly the move is not conclusive. Macro factors continue to weigh on the crypto space, but we maintain that these factors are nearing completion. However, we need to see an emerging trend to build on before changing our cautious view, despite our long term bullish expectations.

Bitcoin Daily Chart

A strong impulse move is required to take BTC out of the danger zone as the gap between 2022 lows at 17,593 and the current level is close. At a minimum, a two-day close over the medium term m.a. at 20,394 is required (which would break the resistance line in the process). For the moment, we remain cautious until the situation becomes clearer, despite our long term bullish view.

Bitcoin Weekly Chart

There is no material difference week-on week as BTC hovers close to 2022 lows. We maintain strategic support sits at 13,880/14,715 and should the market break lower, this area would be of great interest. A test of the zone is not required for a trend change, but the close proximity to the lows requires caution.

This report is superficial in nature and may contain errors. No warranty is given to the accuracy of the data or text and any reader must understand that it should not in anyway form part of an investment process — that is reserved for that individual/business and an investment professional. No positions should be taken, exited or otherwise considered on the basis of this research. This is a condition of reading this document. The main function is of education into how different chart patterns might indicate a future trend (or lack thereof) and not for the purposes of speculation or investment.

Transcribed to Medium

Original Technical Analysis provided by

Paul Rodriguez — ThinkTrading.com

Technical Analysis: Weekly Market Strategy was originally published in Definity Network on Medium, where people are continuing the conversation by highlighting and responding to this story.

This is the next installment of a weekly, exclusive, series of technical analyses that DeFinity is proud to share with its community.

The analysis is completed by renowned, experienced financial analyst and successful global podcaster, Paul Rodriguez.

Paul Rodriguez lectured at the City University in London on the subject of Technical Analysis whilst working as an award winning analyst at NatWest Global Financial Markets (Now RBS) in the 1990’s, pioneering and promoting the education and use of technical analysis to City professionals and private investors. Paul set up Think Trading to continue that education and consultancy having appeared frequently on financial news channels seeking his views. He set up the State of The Markets Podcast with fund Manager Tim Price three years ago, which consistently tops the top 50 UK business podcasts and has a global audience. He provides bespoke research and consultancy to market-leading firms.

SUMMARY:

SUMMARY: The dollar continues in the last phase of the bull run — the question is what will be the decisive data metric (or global event) that reverses the trend? Position wise, the market has tried shorting the dollar (paradoxically this has kept the trend supported as trends don’t normally end in this way), but this skew has reversed in recent weeks with the capitulation phase normally associated with the end of a major trend rearing its head. Whilst the ‘sell zone’ for the DXY at 112/115 has been hit, it is more important that the impulse trend to the downside begins. Non-farm payrolls (most likely out by the time you read this) could be that catalyst, but more likely inflation data on 13th October. Whilst economic data is not usually the preserve of the technical analyst, market psychology most certainly is and the expectations driving the markets are linked to the data most dominant in changing in market conditions, or in other words, what data is the market fretting over and most likely to upset the speculative ‘apple cart’.

Sentiment remains nervous generally as equities lurch around and cyclical fears (crashes usually occur in September and October) keep traders nimble. We are looking for a low to be achieved in the next few weeks (if this happens sooner then all the better) and the start of a major bull phase tied to a weakening US dollar. This could kick-start speculative interest in commodities (some signs have already appeared) and in turn boost the crypto space.

The question of whether BTC will make a new 2022 low before the trend resumes is still unclear. This is obviously frustrating to many, but a final shake-out of longs should leave bargain basement prices for the coming cyclical bull phase. Once the base is confirmed we will report the confirmatory signals and project potential upside targets. For now there continues to be fragmentation in the majors/alt-coins where clear winners and losers are divided. This will narrow as we approach the start of the next bull run.

DXY

More signs the top of the trend are emerging. The 115 DXY high may still be breached, but the trend is not smooth and the associated volatility at the end of the trend is increasing. Whilst the steep trendline has been breached (as is normal for the final stages of a move), the medium term m.a. at 108.28 (close to the trendline at 108) could hold the key to reversal in algo. positions from long to short. We will report a topping pattern signal when evidence emerges — if pressed for a time-line, a reasonable estimate is one-week to one month.

US 10 Year Yield

Last week we highlighted a few signals that yields could reverse, namely short term volatility, psychological resistance at 4.00% and the rising geopolitical tensions. Having breached a support line, the trend has been dented, but to extend the correction, a reversal pattern is required to challenge the main upward trendline from March 2020. Whilst this may be closer, it is not yet conclusive. Significant support at 3.50% (prior resistance) has held so far, a breach would increase the probability of a top.

Gold

Gold is at an important crossroads having recovered sharply from last week. Hovering below the main downward trendline/medium term m.a. the market appears to be readying for a break. Whilst this may fail, support at 1670 should hold retracements and the emerging signs of a bull trend in precious metals generally are now adding to the upside potential. Our long term view remains bullish, but until the US dollar’s trend is conclusively reversed, we can not align the medium term trend with our long term expectations.

S&P500

Sentiment is increasingly bearish implying the prospects of the final phase of the downward trend is approaching. Despite this, we cannot rule out one more attempt at a new 2022 low and in this regard resistance at 3810 may cap gains (top of the trend channel) for a retest of 3636 and below. However, long term we retain a bullish outlook and new lows will be placed in the context of that opportunity. Above 3886 would bring forward expectations of the bullish trend.

Ethereum

We are still braced for a correction beyond 2022 lows with one more week to go before the danger has passed. Short term price action resembles a flag/pennant formation which usually resolves quickly in the direction of the dominant trend (downwards in this case). After one more week the probability of completion will reduce. Long term we remain bullish and content we are approaching the final phase of the correction prior to a major bull market.

Bitcoin Daily Chart

Having recovered 19666 resistance, BTC has failed to extend the rally hitting a downward resistance line and in close proximity to the medium term m.a. For these reasons we contend the market is still in a precarious position and an attempt to hit lows beyond 17593 can not be ruled out at this stage. Our long term view remains bullish and we await the reversal confirmation to begin this phase.

Bitcoin Weekly Chart

We continue to observe the long term chart as it identifies strategic support in the 13,880/14,715 zone should the bear trend take one more downward phase. It is a crucial week for BTC, the lack of rally has been frustrating and whilst the potential still exists for a formation of a major base, the close proximity of 2022 lows requires caution. Preparing for a test of what could be a significant long term opportunity is prudent.

This report is superficial in nature and may contain errors. No warranty is given to the accuracy of the data or text and any reader must understand that it should not in anyway form part of an investment process — that is reserved for that individual/business and an investment professional. No positions should be taken, exited or otherwise considered on the basis of this research. This is a condition of reading this document. The main function is of education into how different chart patterns might indicate a future trend (or lack thereof) and not for the purposes of speculation or investment.

Transcribed to Medium

Original Technical Analysis provided by

Paul Rodriguez — ThinkTrading.com

Technical Analysis: Weekly Market Strategy was originally published in Definity Network on Medium, where people are continuing the conversation by highlighting and responding to this story.

This is the next installment of a weekly, exclusive, series of technical analyses that DeFinity is proud to share with its community.

The analysis is completed by renowned, experienced financial analyst and successful global podcaster, Paul Rodriguez.

Paul Rodriguez lectured at the City University in London on the subject of Technical Analysis whilst working as an award winning analyst at NatWest Global Financial Markets (Now RBS) in the 1990’s, pioneering and promoting the education and use of technical analysis to City professionals and private investors. Paul set up Think Trading to continue that education and consultancy having appeared frequently on financial news channels seeking his views. He set up the State of The Markets Podcast with fund Manager Tim Price three years ago, which consistently tops the top 50 UK business podcasts and has a global audience. He provides bespoke research and consultancy to market-leading firms.

SUMMARY:

We discussed the market psychology of a 75bps hike last week — which has caused uncertainty as to whether the Fed have finished hiking (more on that later). This incertitude means support for the dollar continues, but we are getting closer to the end of the trend (possibly within two weeks). Signals are mounting- acceleration in the trend, turmoil in the stock market and broadening of the effects of a strong dollar. In the UK much has been made of the tax cuts for causing the Pound to fall, which is of course utter nonsense, but the strong US dollar has been rampant and I’d wager a telephone call from the UK Central Bank (among others) to the Fed to discuss further action.

As equities continue to fall, the chances of further interest rate rises diminish and will paradoxically set up the conditions for the next major ‘risk-on’ phase. Commodities are still diving and next month’s CPI will most likely be much weaker than is generally expected — so although the Fed have raised quicker than I anticipated, they will pause for longer and even have room for a cut if the sell-off warrants it, which I suspect it will. When rates are on the floor, there’s nowhere to go, but if nothing else, the market is getting the feel for a normalisation. The question here is; Is this the same as 2007 when the stage was set for a major collapse? No because back then the idea of a crash was laughable, today it’s expected. Also, oil was trading at $147 and the Bank of England was merrily raising interest rates oblivious to the damage it was causing and the carnage set to come. That doesn’t preclude a major correction, only that it makes it more likely that this is a correction that will be bought into before the year is out (and hopefully long before). Usually moves of this fashion are characterised by a sharp sell-off, followed by a strong bounce (known as a ‘spike’ in technical terms). Naturally we will highlight the major signals as they appear.

Crypto assets remain under a cloud, but are holding in well considering. The risk-on phase discussed above may not come in time to prevent a new 2022 low in BTC, but the lack of downside progress thus far given the strong dollar and level fear sentiment (BTC as a safe haven perhaps?) is encouraging.

DXY

We anticipated 114 as a potential target as an outside probability and we are now within the upper end of the estimated sell zone. There are mounting signs the dollar is nearing the end of the trend, but until a conclusive reversal signal is obtained, an overshoot of the trend is possible (118 is a final resistance level) but ending here would be fine. One important signal is the market is yet to capitulate on shorting dollars (although the skew is reversing), even though we suspect the top is near, it is inadvisable to short a rising market. We will allow the top to play out and look to ride the potential considerable opposite trend when the top is in.

US 10 Year Yield

A sharp acceleration in trend beyond the 3.72 resistance and increase in vol. point to signs the trend is ready to reverse. Whilst the long term outlook is bullish, we anticipate a correction to allow risk-on trades to be established. Inflation may run hot for years, but bonds are viewed as a safe haven asset and the geopolitical risk favours moving into bonds. The primary signal than yields have temporarily topped will come from a break of the main upward trendline shown.

Gold

Gold is heading back towards 1670, but this is now a key barrier and we remain cautious of picking a low. The main downward trendline/medium term m.a. at 1725 is where a conclusive break would imply the start of a new trend. However, whilst below 1670, we must remain cautious as US dollar strength is driving the move and has yet to conclusively indicate a top. In other currency terms (such as Sterling for example) gold is performing well.

S&P500

We remain bearish short term as the 3636 support acted like a magnet for price action. The muted bounce risks an extension with 3300 the next target. There is scope for acceleration of the downside although we would monitor the extent of late Friday short covering. The market will remain nervous over the weekend as the global news flow causes further concern. We will stay short term bearish, but in the context of a longer term bull market. The S&P is way off the pandemic lows.

Ethereum

Whilst ETH has outperformed BTC, the short term price action is becoming a concern. We would brace for a correction beyond 2022 lows with a test of 677 support in prospect. If ETH can hold above the 2022 lows for the next two weeks, the danger zone will have passed, but caution is required. A recovery through key resistance at 1720 would be a primary bullish signal.

Bitcoin Daily Chart

The longer the base hold here, the greater the upside potential, however, it is prudent to brace for a breach of 17,593 this week as a series of declining highs and bearish sentiment in ‘risk-on’ trades prevails. The next two-weeks will be crucial and at a minimum a two-day close over 19666 is needed to alleviate the danger zone.

Bitcoin Weekly Chart

This long term chart highlights the next potential major support level should the June 18 lows be breached. The zone between 13,880/14,715 represents strategic support if the bear trend takes one more downward phase. We prefer the view that the market has already based, but observing potential outcomes is prudent when the outlook is less certain.

This report is superficial in nature and may contain errors. No warranty is given to the accuracy of the data or text and any reader must understand that it should not in anyway form part of an investment process — that is reserved for that individual/business and an investment professional. No positions should be taken, exited or otherwise considered on the basis of this research. This is a condition of reading this document. The main function is of education into how different chart patterns might indicate a future trend (or lack thereof) and not for the purposes of speculation or investment.

Transcribed to Medium

Original Technical Analysis provided by

Paul Rodriguez — ThinkTrading.com

Technical Analysis: Weekly Market Strategy was originally published in Definity Network on Medium, where people are continuing the conversation by highlighting and responding to this story.

This is the next installment of a weekly, exclusive, series of technical analyses that DeFinity is proud to share with its community.

The analysis is completed by renowned, experienced financial analyst and successful global podcaster, Paul Rodriguez.

Paul Rodriguez lectured at the City University in London on the subject of Technical Analysis whilst working as an award winning analyst at NatWest Global Financial Markets (Now RBS) in the 1990’s, pioneering and promoting the education and use of technical analysis to City professionals and private investors. Paul set up Think Trading to continue that education and consultancy having appeared frequently on financial news channels seeking his views. He set up the State of The Markets Podcast with fund Manager Tim Price three years ago, which consistently tops the top 50 UK business podcasts and has a global audience. He provides bespoke research and consultancy to market-leading firms.

SUMMARY:

Once the dust has settled from the US Fed’s 75bps hike on the 21st September, the outlook should become clearer that yields are approaching the upper end of the range and the US dollar is nearing a top. There was an elevated probability of a 100bps hike — paradoxically would have ended all doubt about where the top would be as, after a spike in the dollar, the market would have settled down to the realisation rates are being yanked higher too quickly. As it stands the 75bps move will leave some room for doubt as to the size of the next move higher — big enough doubt to provide support to the dollar. Once again given the outcome, the DXY is still only marginally higher than 110 and still within our reversal zone. This may extend to 114, but we maintain this is nearing the end of the trend.

Equities will stay nervous until it is clear rates have stabilised (hence a 100bps move would have helped settled those nerves). Technology stocks are under pressure and fragmenting, and the S&P500 is edging towards major support. European equities (other than the UK) look set for an extended correction, which should be the catalyst for a broad reversal in yields (and a move to a risk-on strategy).

We mentioned recently gold should puncture major support, but given the heightened Geo-political risk it seems unlikely to diverge from the rest of the precious metals for too much longer. Silver, platinum and palladium are exhibiting more bullish charts.

We remain cautious to further downside potential in crypto assets — BTC has held above the 2022 lows and ETH has tested and breached the original break-out level at 1280. Despite the short-term uncertainty, the long-term outlook remains bullish and either the base is broadly in now, or a final downward phase will complete the correction.

DXY

A knee jerk reaction where the DXY breached 110.80 resistance was caused by the Fed’s rate rise. Ultimately the market isn’t appreciably higher, although it is reasonable to expect further upward momentum and a test of 112 and at the outside 114 is still possible. We maintain this is the last phase of the trend and RSI divergence continues and is another factor pointing to the final stages of the trend. A break of the medium term moving average at 107.62 and then the trendline shown would solidify signals of a reversal.

US 10 Year Yield

A push into new highs was expected, but this feels like a late stage to become bullish and we retain a cautious view here. The first confirmation of a top would come from a cross back below 3.49% (breaking the short term trendline shown in the process). In the interim yields may squeeze further with 3.72% the next major resistance point.

Gold

Having breached support at 1670, gold seems to be diverging from other precious metals implying the move downwards is more an exception than the rule. Whilst we have to respect the breach, a sharp recovery and break of the downward trendline and medium term moving average (both aligned at 1739) would signal a long term recovery is underway. RSI divergence is also evident, but does not guarantee further lows will print at this stage.

S&P500

We outlined our cautious view last week and a break of 3886 has kept the bears in control. They will target 3721 support next and, if breached, the outlook will deteriorate quickly as the lows at 3636 will act as a magnet. To become strategically bullish a break of the 200 day m.a. (4247) or the main downward trendline (which sit close to it) is required. The macro conditions don’t support a recovery and it would be prudent to factor in a sharp downward move.

Ethereum

ETH has succumbed to broader macro conditions and whilst we allowed for a correction last week, a break of 1280 moves our view to neutral here. To restore the bullish view, a close over the medium term moving average is required and, to cement lows, a break of the main resistance at 1718.

Bitcoin Daily Chart

17,593 support is coming into focus. This key support level needs to hold, else the risk is for the next major Fibonacci support at 14,715 (see weekly chart below). Our outlook here short and medium term remains neutral until we get further confirmation. The market may be basing, but needs to hold over 19,666 for two-weeks minimum to put that back on the table. We still hold a long term bullish view as the macro conditions should have reversed by year-end — hopefully before.

Bitcoin Weekly Chart

This long term chart highlights the next potential major support level should the June 18 lows be breached. The zone between 13,880/14,715 represents strategic support if the bear trend takes one more downward phase. We prefer the view that the market has already based, but observing potential outcomes is prudent when the outlook is less certain.

This report is superficial in nature and may contain errors. No warranty is given to the accuracy of the data or text and any reader must understand that it should not in anyway form part of an investment process — that is reserved for that individual/business and an investment professional. No positions should be taken, exited or otherwise considered on the basis of this research. This is a condition of reading this document. The main function is of education into how different chart patterns might indicate a future trend (or lack thereof) and not for the purposes of speculation or investment.

Transcribed to Medium

Original Technical Analysis provided by

Paul Rodriguez — ThinkTrading.com

Technical Analysis: Weekly Market Strategy was originally published in Definity Network on Medium, where people are continuing the conversation by highlighting and responding to this story.