Double top smashed without a hiccup. Next resistance is our blue trend line.

Did you see how the timing of the volatility was perfect, to the minute. Retail is so predictable sometimes.

Reminder that tomorrow I will be posting a detailed report.

Be very careful today. For now, Market is trying to move ahead but it keeps on looking over its shoulder for any escalation in the middle-east. Today is a critical day for this to occur, but know that the more days pass without happening, the more immune the markets become to this event (oil slightly down). Crypto is showing some strength due to increased liquidity in general, but pre-markets are flat. I don't think that the move in the circle and the timing of it justifies strength, but it would be interesting to see if BTC will stay above the 63220 support. If S+P is sideways today, yes, we may stay above and perhaps make an attempt to enter our comfort box but for now I think that BTC will range between 63220-64K. Both BTC and ALTS should have similar performance today. This is valid for the next 6 hrs.

I have said before that this week, starting from tomorrow, will have all the ingredients for a green week (inflation data, PPi) . If you remember a few weeks ago, I posted that you should note down the 11th of October. The reason is simple. During this day (Friday), before markets open, the earning results of JP Morgan, Blackrock and Wells Fargo will be released. The results are expected to be good, and strong earning results from the banking sector is bullish news for the stock market, so Friday should be a green day for stocks and crypto. Of course all these will fade if there is a direct attack on Iran.

Let’s dive into some more detail and see what the markets have in store for us. Use the following as information and education.
Note: It’s hard to put into words the cycle bracket technique. I have tried below to do that, but I realise I may not have succeeded. That is why in the near future, I intent to make a video, explaining how they work. My big thanks to Slim, an old school trader, who discovered this technique. I came across him by accident, and found his technique very useful for macro validations.

I will start with 2 factors that we depend on: DXY and S&P.
Let’s have a look at the DXY (dollar):

Traditionally, when there are troubled waters in the economy, many see the dollar as safe harbour and invest in it (there are other safe harbours such as precious metals). They do so by converting their assets (other currencies, stocks etc) to the dollar. They then place the dollar into a bank or Government bonds and enjoy the high interest offered. As you can see by the chart, before the tension in the Middle East, when the rate cut was announced, the dollar began to fall. This happens because, as interest falls, traders see more profit in high risk assets such as stocks, commodities and crypto. However, the war brought fear into the markets, and a selloff in stocks, translated to a return to the dollar. The latest missile attack on Israel (white arrow) started the selloff in markets and the jump on the dollar, as shown by the green candles and the blue trend line (1=rate cut, 2=war) It will go higher. No matter what happens now, it will go higher reaching 103.21 and I think it has enough momentum to reach 104.39 (green arrows). The higher it goes, high risk assets will find it more difficult to rise. It doesn’t mean that they can’t rise, it just means, that they will do so slower, and with less momentum. The reason, is that overall, there will be less liquidity, less money into stocks. Eventually this will change as shown by the cycle chart below.

According to this, we should see the dollar weakening from around the 20th until the end of the month (blue box). This correction will be very mild. From then onwards, the charts show an increase of the dollar value again, but remember that fundamentals always have priority. We are near the elections, hopefully the markets will be immune to the events in the Middle East, and we will be looking forward to further rate cuts. These will bring the dollar down, irrespective of what the cycles show us. Good for high risk assets. Good for us. This is a long term bullish factor, however, short term, this is bearish.

Now let’s look at the S&P 500

I have always said that right now we are more dependant than ever on the s&p. It goes up, BTC goes up and vice versa. There are instances when they decouple, but that’s on rare occasions for now, and these occasions don’t last long. Now, according to the cycle brackets, the s&p will form a correction until beginning to mid-November (red box). Again, fundamentals will influence this correction due to elections. I have said before that there should be enough momentum after the election to be safe for 5-7 days. I believe the correction, after these 5-7 days, will be small. It will then rise until 21st of January, before correcting again (green box). I cannot think of elections taking place with markets crashing. There are too many lobby groups involved. Regardless, know that a change in Government usually brings a 4-7% increase in markets. For now, the cycle chart is bearish but fundamentals convert it into bullish with a caution. Repeat, simply looking at the cycle chart, its bearish.

The S&P candle chart shows a nasty surprise. I posted this chart more than a month ago and is still playing out. There is a divergence between the price and both the RSI and momentum. The RSI divergence began mid-March and the momentum divergence began from the beginning of the year. This tells me that institutions are selling and retail buying, and eventually when money runs out, retail will be left holding stocks that nobody wants. This type of chart indicates an upcoming drop. It’s been playing out for a long time now and is still valid. I believe that we will see 6000, before this takes effect. Until we reach 6000, I am bullish/cautious on the S&P but after that, I am bearish. This will not play out before elections. This chart is bearish.

My next chart is the TOTAL
There are 3 cycles brackets on this chart (most of my charts have more than 1 cycle bracket). In this case, ignore the red and brown cycle bracket, I am using the white (22 weeks). As you can see, we are near the bottom of the cycle (white arrow). From the 7th of October, I expect an increase in Total volumes (green box) that should carry us until the end of the year. It is very important that we get this increase, because a flood of new money into crypto is the ultimate fuel that we need. Note that the end of the cycle doesn’t mean that we crash, it simply means that we are due for a correction. This chart is bullish.

My next chart is OTHERS
Again, pay attention only to the white cycle. To simplify, look at the current candles, the red box and the white cycle. Notice that we have been gradually going up since the 5th of August (max pain 29th of July-end of cycle, white arrow). We will continue to rise until the beginning of December (green box). After that, the cycle shows that alts will lose strength, but that’s not how cycles work. Notice the small cycle within the big cycle? That actually dhows an increase in OTHERS (blue highlighter), because this cycle accounts for possible fundamentals. This is bullish.

My next chart is the BTC
According to this chart, BTC price will start to decline and continue to do so until the 11th of November. If nothing was happening during this period, I would be obliged to follow this chart. However, as I mentioned before, fundamentals take priority, and during this period, we have the all-important US elections. Even though I won’t dismiss it, I have a higher confidence of following the next cycle, which shows a rise until the end of the year. This chart is bullish, but with a caution.

This chart is the BTC Dominance.
According to this chart, BTC Dom will continue to increase and will max out beginning of December (2nd?), before its starts falling until the middle of March. This period should be good for ALTS, provided the S&P doesn’t correct (I think it will). I see a lot of traders quoting BTC D maxing at 60%-61%. I see 59.84 as max dominance. Of all the charts to go by, the BTC Dom chart is the most dubious. Do not use this chart as an indicator for ALTS. There have been many instances, when even though BTC D is increasing, so do ALTS. I see this chart as being neutral, neither bearish nor bullish.

This is the ETH/BTC chart. It shows that it will continue to decrease until the 21st of October. It will then start to rise, maxing out on the 2nd week of February. Regardless of the cycle brackets, I think we are near the bottom. A rise in ETHBTC, will give ALTS a much better environment to grow. This chart is currently neutral/bearish, but it’s on the verge of turning bullish.

All these charts above give a road map of what awaits for us, with a time line. There are values to these charts (max price for BTC etc), but that’s for later on. You may need to read these 2-3 times, but do so, to get a better feel of the way they work. We will use these charts to time our exit strategy. We will get out of this with profits.
Much Love
Mr S.

In about 8 hours from now, I will make an announcement that I should have made last week. Nothing to worry about, it concerns 0.33 cents 😁

Markets are looking weaker. Pre markets in the red. 62449 will be hit.

Pre markets still flat/red but liquidity is drying up. Pressure for down.