Happy Friday, everyone! Global futures are taking a beating on Friday, as lockdowns in Hong Kong, Germany, UK, and across the euro area, tightened further. Traders have been on an absolutely ridiculous risk binge since November (really since March 2020), running straight towards a cliff, and are waking up today to realize they may be on the wrong side of risk. The ECB made mention in their latest statement, that the euro area could be heading for another recession this year. Imo it would be next to impossible for most G20 nations not to take a GDP hit this year, with much the world on lockdown, and the real economy of many of these nations hemorrhaging productivity.
Bitcoin continues it's sharp repricing after hitting a recent high of over $40k. We're now back to a $32k handle, after falling as low as a $29k handle in the overnight session. Treasury yields are holding on to recent gains, and the 10Y yield is still hovering around 1.09%. The dollar is holding on to it's recent gains, and seems to be finding some interim support at a 90 handle. We're still watching the neckline just above, along with the descending resistance trendline for indications of a break out. Vix is catching a strong bid this morning, and hit a pre-market high of 23.73, after being hammered back to post March lows yesterday on a more orderly inauguration than expected. Gold is getting smacked again, and is down around 1.28% to $1,841 an ounce.
As we mentioned yesterday, we're looking at overbought levels on almost every timeframe across the majors. The QQQ showed an RSI of over 80 yesterday, with the SPY showing an RSI of over 70. The russell is sitting about 25% above it's 200 day MA, which is presenting one of many fantastic opportunities for traders to profit off a potential imminent market-wide correction.
After hitting new ATH's this week, key levels to watch on SPY today are the 50MA (h) around 380, which is converging with the upper band of the white channel, and also the 21 day EMA at 375.79. Then, the bottom of the white channel around 368.12 could be in play, where the 50 day MA is also sitting. It's been a while since we mentioned the megaphone pattern, but it's sitting around 361, and based on this morning's price action, it looks like the bulls may lose this important support very soon.
As always, I appreciate your time today guys, and I hope you enjoyed the analysis. If you're interested in our live play-by-play, come join us over at the Hedge of the World website (link in profile). Cheers, Michael.
*I am/ we are currently holding positions in UVXY, HUV, HQD, QID.
Bitcoin continues it's sharp repricing after hitting a recent high of over $40k. We're now back to a $32k handle, after falling as low as a $29k handle in the overnight session. Treasury yields are holding on to recent gains, and the 10Y yield is still hovering around 1.09%. The dollar is holding on to it's recent gains, and seems to be finding some interim support at a 90 handle. We're still watching the neckline just above, along with the descending resistance trendline for indications of a break out. Vix is catching a strong bid this morning, and hit a pre-market high of 23.73, after being hammered back to post March lows yesterday on a more orderly inauguration than expected. Gold is getting smacked again, and is down around 1.28% to $1,841 an ounce.
As we mentioned yesterday, we're looking at overbought levels on almost every timeframe across the majors. The QQQ showed an RSI of over 80 yesterday, with the SPY showing an RSI of over 70. The russell is sitting about 25% above it's 200 day MA, which is presenting one of many fantastic opportunities for traders to profit off a potential imminent market-wide correction.
After hitting new ATH's this week, key levels to watch on SPY today are the 50MA (h) around 380, which is converging with the upper band of the white channel, and also the 21 day EMA at 375.79. Then, the bottom of the white channel around 368.12 could be in play, where the 50 day MA is also sitting. It's been a while since we mentioned the megaphone pattern, but it's sitting around 361, and based on this morning's price action, it looks like the bulls may lose this important support very soon.
As always, I appreciate your time today guys, and I hope you enjoyed the analysis. If you're interested in our live play-by-play, come join us over at the Hedge of the World website (link in profile). Cheers, Michael.
*I am/ we are currently holding positions in UVXY, HUV, HQD, QID.
