(For Those That Want To Know)
I’ve been showing a chart since July and commenting on what I call “The $4 Trillion Line.”
Before this week the machinations have been all but predictable with nary a serious concern for worry. Every time the technical analysis called for caution (because of a trend line break, et cetera) said “markets” would simply reverse within a day or even hours handily, and erase any losses and begin printing, once again, new, never before seen in human history, all time highs – daily.
That trend, suddenly, is in danger of being all but wiped out.
In a prior article I asked “Was Bitcoin’s Latest A Precursor?” At that time it had fallen some $10K, yet, appeared to be recovering, once again. As of today, that “recovery” has all been wiped out, and during the overnight sessions, it fell further nearly losing the $40K mark to possibly begin sporting a “3 handle.” It has recovered slightly, however, from a technical perspective, it is in dangerous territory.
Could it recover and propel to ever the more higher highs? Sure it can, but with that said, what one should be concentrating on is the mindset of those that are/were being told/sold the forthcoming “riches” in crypto for, it doesn’t seem to be doing what they’ve been told/sold and they are going from already “spent in their mind” gains, to possibly realizing losses. Depending on just when or, at what dip.
Remember: Bitcoin was supposedly on its way $140Kplus per Max Keiser (which was a reduction of his intial prediction from $220K earlier in the year) and was considered the low side this year, but many others were, and still, in the $250K minimum. And when it was up in the $65K area? Then $250K went to $400K and more.
Below is a screen shot of an article as late as August 31st showing precisely this mindset. To wit:
All I’m going to say about the above, is this: If that were true? Is it not going the wrong way? After all, if I use the high-side number as I type this of $43K, Bitcoin, for the year, is barely keeping up with plain old vanilla styled stocks. Or, said differently, it is not proving out to be the creator of riches many were told/sold this late in the game.
Back to the larger “markets.”
With the Federal Reserve on deck tomorrow, just what happens today, I feel, will be nothing more than noise.
If the market reverses and pares all its losses over the past week? It will be, again, in my opinion, nothing more than noise.
Everyone that has access to a ticker symbol is not going to make any significant move until 2:00pm ET Wednesday, after the announcement. Then, they will either pile on or, reduce their positions, again, after they give the Fed Chair every possible opportunity to sooth any reaction directly taken via the statement. That takes place at the presser between 2:30PM and 3:30PM.
If one remembers in that prior article mentioned above I made the following statement. To wit:
If I’m correct in my hypothesis, you’re not going to see some gradual stair-step down or something akin to it. No, what you’ll see is you’ll either wake up to a headline or you’ll be going about the day, and they’ll be some out-of-the-blue ‘market’ reversal that will take everyone by surprise, causing either a limit-down type price action or something more.
Well, yesterday should not only put a bit of caution into the BTFD aficionado club, rather, it should scare the crap out of one, because…
It was the 2nd largest sell-program event in the history of the markets. The price action, so far, is hiding that turmoil in an illusory fashion, for that metric is anathema to anything that has been told/sold as “BTFD because the Fed’s got your back!”
Think about it.
As always, we shall see.
© 2021 Mark St.Cyr
Note: This is not trading or investing advice of any sort. This commentary is for “big picture” discussion purposes only. Please read, or re-read the “About This Site” page for any questions or clarifications.