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Market Ate Too Much on Tuesday, Takes Big Intimacious Dump Wednesday Morning 6/22/22


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Back from a 3 day weekend yesterday, which I, living in France, had no clue was a 3 day weekend. Mea culpa, I shoulda! But stocks were rejuvenated and celebrated.

Apparently, traders ate too much, because this morning the market has taken a big old dump. The breakout from that nice 3-day base has been reversed, but so far, only to a classic return to the scene of the crime.

If bulls can hold their ground here, we may yet see more upside. But if this drops back under 3685 on the ES S&P continuous 24 hour fuguetures, bears' ball. The zone of contention will be between there and 3750. No decision either way until that range is busted. 

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Meanwhile the BTC/SPX tight correlation continues in June. Here's the hourly chart. 

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You can see on the daily chart that this thing still has plenty of downside. There's still an unmet short term cycle projection of 16,500, and the one year cycle now points to 7500. I have to wonder if the stonks/crapto correlation will hold if that happens. 

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Of course in the long run, we know that this POC is worthless, with a conventional measured move target of 5000 below zero. 

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The bond market doesn't look like it will do too much better. The 20 year Treasury bond ETF has a 3-4 year cycle projection of 85-90, and a conventional measured move target of 50-55. 

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Obviously, this has major implications for the stock market.  You too can follow how all that works, here . I will show you and tell you exactly how the major forces of macro liquidity move not just the bond market, but stocks as well. Liquidity analysis sets the context for technical analysis. It helps us to narrow the focus of our chart reading to the outcomes that are most likely, given the circumstances. 

To understand the big picture, check out the following:

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7 minutes ago, fxfox said:

EMA200 hourly at 3792 kissed from below, now going down somewhat, but once broken LOA. A huge upday today would not be good, would mean follow thru.

What am I doing wrong FX? I'm seeing the EMA200 at 3639.55. If so the S&P500 bounced off of it?

 

EDIT: Oh I missed that you were talking about the hourly. Thanks! Didn't notice that.

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2 hours ago, sandy beach said:

What am I doing wrong FX? I'm seeing the EMA200 at 3639.55. If so the S&P500 bounced off of it?

 

EDIT: Oh I missed that you were talking about the hourly. Thanks! Didn't notice that.

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Yes I was talking about the hourly on the ES.

We see very nicely on your weekly chart  that we are right at the EMA200, a reaction to the upside from here would be absolutely normal, a failure here would possibly mean an acceleration of the downmove.

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