Market update

Going to break down this update using the 5 elements I have been looking at since learning more about market mechanics. Looking at the market in this way has helped me a lot recently when it comes to timing moves.
I have gone on a steep learning curve this year but it’s been really great.

So I look at 5 elements each day:

1 Technical’s
2 Fundamentals
3 Mechanics
4 Sentiment
5 On chain

Technicals – Some possible signs of a bottom when you look at SPX weekly candle – Inverted hammer. BUT absent of this generally overall the TA picture isn’t great. BTC still in a range, possible bear flag.

Fundamentals – Not great at all, macro environment is still grim as ever. This week we have some CPI data and some heavy Bank ER’s at the end of the week and I see this as a downside risk.

Mechanics – Smart Vs dumb money index is still at extremes with retail in fear mode and smart money feeling more optimistic. Looking at Long short ratios + Volumes we’re not in the ‘’overly bearish’’ state we were in before last weeks squeeze – I’d say we’re middle ground positioned here so no HUGE conviction in either direction BUT still a short side bias.

Sentiment – I still see influencer plebs trying to play short term longs – Still some evidence of denial when I look at sentiment but bullishness has cooled off a little since last week… Understandably.

On chain – BTC continues to look Ok – I am seeing some light signs of big money flows withdrawing BTC from exchange in big chunks but I still don’t feel I have enough evidence of big smart money flows here. @everyone I grew up in the generational bull as many as you have so I’ve really had to adapt and go on a steep learning curve this year but it’s been really great.

CONCLUSION : No clearly defined edge RIGHT NOW (But that can change throughout the week). But as of right now we’re in a kinda ‘’Middle ground territory’’ – The mechanics aren’t overly bearish or bullish, technicals don’t look good enough to long or short here and although I think influencer sentiment is still overly bullish its not euphoric enough or confused by the market enough to warrant an edge.
Take last week for example – All the plebs thought the markets were going up because of a possible pivot being priced in. HOWEVER we knew it was purely mechanics AND options showed the late shorts were almost all taken out. That’s an edge where you take a big bet on the other side.

No edge right now but as I said that could change. I imagine we range through to Thursday, maybe get some short term upside but keep your eyes on all of the above and an edge might reveal itself.

Posted Using LeoFinance Beta