Hidden Divergence and Where is the Bull Run Money Coming From?

The hourly is a pretty low timeframe to be making decisions on but as the triangle gets tighter and tighter we start to run out of the ability to wait for the price action to show divergence on higher time frames. The hidden bearish (low high on the price action but higher high on the oscillator) is subtle on the MACD but pretty clear on the RSI. Hitting resistance with bearish divergence smack of failed break out and desperation from the bulls so we will now need to see how we approach the support. So we have a relatively short term clue that this structure will break down.

But now a larger question... where is the money for the bull run going to come from? My ultimate FUD post made it clear I had a global bearish bias for dollar alternatives, please review that while we look at some new developments. Below is the S&P 500 on the monthly chart, a very significant timeframe, and we see clear classic bearish divergence has settled in, and we see that historically that has lead to massive losses. You can go and check the chart for the other indices if you want, they look the same.

The dollar index below shows hidden bullish divergence, with a higher low in the price action but a lower low in the oscillator. As the dollar strengthens against the basket of other currencies it obviously is becoming more expensive, which means the relative price of btcusd will go down.

So stocks are going to be pummeled and people are going to be eating real and paper losses. The dollar is strengthening and so fiat alternatives will become more affordable automatically. The Ultimate Fud Post makes a good case that real estate markets, especially those dependent on foreign investors will be beaten back and people will be experiencing more paper and real losses.

We are showing a continuation pattern of a downtrend on the daily chart. We have money being sucked out of the financial systems. We have the dollar strengthening. I cannot see any reason that the smart money wouldn't just sit on the side lines as the money supply contracts, short everything into the ground and then grab everything when the various central banks of the world, and especially the Fed, announce that Quantitative Tightening is practically over.

Where is the money for the Bull Run going to come from?

Comment:

We continue to meet resistance and support at 207-ish (on bitfinex) and when we slip out of this continuation pattern I expect it to be bearish and at least to 189 and then lower on the way down. The chance of this breaking to the upside in a sustained manner is probably somewhere below 15%. I continue to view the price spike of the 14th as a failed break out attempt fueled by a short squeeze and either it died as it was scalped to death organically or it was planned to fail and the insiders that did the squeezing also did the scalping.

Comment:

The log chart does not chart as cleanly as I would like, but we do see a triangle consolidation pattern in play predicting a continuation of the downtrend.

Comment:

As we chopped sideways the pattern developed to a longer nose symmetrical triangle than I saw in the last post. What I beleive we are seeing below is a proper breakdown of the longer nosed triangle with a throwback attempt that is in the process of failing.

The RSI clearly shows that we have been setting higher highs on the indicator but we have been experiencing lower highs on the price action on the hourly timeframe. I use the Hull MACD in most of my personal TA but generally use the classic MACD in my post because it is more widely used, but I here I think the Hull MACD is more useful.

Our Support on the triable has turned into resistance. We have bearish divergence on the RSI< and the Hull MACD is prepped for a power downswing. The histogram is in decline and the H-MACD is clearly about to roll over. With the short squeeze on the 14th taking up a whole lot of money that could be used to fuel another break out attempt I see the throwback playing out properly us going down impulsively.