norok

Gold Bugs Squished? I've been talking about Gold GC1! hitting a major high for my last two Livestreams (catch them Friday at 4pm Eastern after the market close). The current price action warrants a standalone post. Each Livestream for many months has had at least one person ask what I thought about Gold. It was very simple: Gold was trending UP to test the major Monthly highs. In many of my social market chats about two weeks ago my gold bug friends began getting very excited. I urged caution. Price MUST break the high and confirm the breakout before getting long at this major Resistance Level. Now it looks as of gold price is respecting this monthly high from the last few years. To be contrarian I had to short Gold (using GLD ) based upon a Spike setup from Friday May 5th's high. Last week price pulled back and "should have gone" to retest and break the high. It did not and returned back inside the range. This sets up a short. I also know from taking market sentiment that a lot of traders may have gotten a bit overly optimistic. This could setup for a good pullback to at least the 1850 Level.

Home Depot "Plunges" to Support All media invokes sensationalism to get clicks and views to see their ads. Some really play into the doomer mindset of their readers/viewers by selecting stories that amplify the theme of the world/economy/dollar ending and that the next crash is right upon us! I've been reading these headlines every day for over a decade now and it's just the way modern journalism works. As a trader I aspire to cut through the noise and negative bias (and sometimes the positive bias) and ask the more objective question: "what does the price action suggest?" Home Depot HD had earnings today and while the news was negative the overall long term trend (on the Weekly timeframe) has not changed. The key low of COVID and All Time High trend has defined most stocks for the last two years and may continue to define them for up to a decade. This past trend sets up a 50% Retracement level around 280.62 which Home Depot stock price has stubbornly held with an auction zone for a year of price action by now. Digging down through the lower timeframes the price action sets up a potential low-risk post-earning trade. The price action of the open poked below the near term low but failed to follow lower. What I would look for is price to hold today's opening action and NOT break the opening low. That sets up a stop for a reversal of this oversold condition while the broader price action on the Weekly is at a major Support.

Taking a walk with ON's Thanks to one of my Stream viewers @Casey_Louis for bringing NYSE:ONON to my attention. Many folks in my family love these shoes (my nephew even has the toddler versions). I like the initial survival of the 50% Pullback to $20/share. Now price is heading up for another leg. I do not like the breakout for myself... the reason being the initial IPO price just slightly overhead. This is yet another reason why we DO NOT BUY IPOs... very often you get a much better opportunity! How I want to play it: I want to look for a pullback to the next 50% Retracement level at $24. I hope we get it because trendy consumer goods have a good track record of yielding big gains.

Back in March, all we could read about was the "Banking Crisis" whether it was written by mainstream financial media or Bitcoin Maxi blogs. Truly, the great end of the US Dollar was upon us finally, right? Well, like all panics, the fear abates and we can now see that said crisis amounted to only 3 banks failing for specific and now well understood reasons. First, the trade. I went with a bottom play "TS Recap" on the Daily of TFC (title picture). I am play the low from March 15th as the line in the sand and stop loss. It goes up from here or it doesn't and I'm out. Pretty straightforward. There was a similar setup that is progressing a bit faster in BAC (Bank of America) but I preferred TFC for the dividend yield. Now, Let's talk Asset Narratives Asset narratives, both positive and negative, come around in different industries from year to year. Now in 2023 we have the "Banking Crisis" that has affected all non-too-big-to-fail banks. What is an "Asset Narrative? The most recent contrarian narrative trade comes to my mind... Energy of 2021. Remember 2021? Electric Vehicles were all the rage, they were going to replace all gas powered vehicles in the very, very near future. The smartest of experts were all telling people to divest from anything oil related. Oil was going the way of the dinosaur! Dirty energy was the most hated asset class. Oil futures even dropped below $0. Oil was FREE it was so devalued! People were GIVING IT AWAY! The comfortable trade of 2021 was to buy Electric Vehicle stocks and IPOs. It may have felt good at the time but does not feel good now to be a bagholder. I gas-lighted myself (pun intended) thinking I was crazy to buy XOM (just read the post title below). My reasoning was sound: oil was still very much necessary to our economy. Oil companies were still in the business of producing it. They clearly had lots of value. Why were they so cheap? It seemed like an obvious trade but almost TOO obvious. It was very uncomfortable to take the trade. Taking risk involves uncertainty and makes us uncomfortable. Early in my trading career I thought that one day I would become so accustomed to taking risk that I would be completely unaffected when putting on a trade. That never happened. Instead, I became comfortable with discomfort. These kinds of narratives come around once a year and in hindsight seem obvious. So now is that narrative for 2023 banking? I think it is. There are a lot of intelligent, reasonable, and well articulated REASONS that banks should be marked down. But that's where real opportunity lies... where is it not apparent.

The LEI (Leading Economic Indicators) has a great track record of predicting recessions. While a recession has been much anticipated for many months... now the data is coming in to actually support the possibility. What does this mean for Bitcoin? The two most important data points we have (because we don't actually have a major recession to draw upon in Bitcoin's lifetime) is the COVID crash and March 9th this year... the "banking crisis" FUD. When COVID fears hit the markets Bitcoin responded like a risk asset. It lost over -60% of its USD value from the high of 2020 to that point. As the "Banking Crisis" hit markets last month so too did Bitcoin fall over -20%. What this suggests is that when recession fears grow and become realized... Bitcoin will drop as a risk asset. The future of it though (in both cases) is V-shaped. So fear not. But also ignore not. Be thinking about buying opportunities.

This is a followup to my Bullish trades on Bitcoin since 2023 (see links below). I highly suggest you check them out to see how to find opportunity before it late into the move. So now it is time to start marking off Resistance Levels as this bullish move matures. The reasons: This is still a crypto winter and this is a bear market rally. Crypto trading platforms are starting to send unsolicited push notifications to remind people that Bitcoin is going up! Crypto social medias are busy intensifying Ron Paul "It's Happening" memes regarding the failure of 2 banks = collapse of US Dollar. There are three major levels where I will look for this rally to stall and possibly reverse. 32k : This is the closest and most probable level. It is respect of the lows of summer 2021 and importantly the 50% Retracement Resistance of the March 2022 high to the current Low of this Bear market. 36.5k : This is the inflection point where Bitcoin tried to hold the bullish trend in January 2022 and the 50% Retracement of the entire March 2020 - All Time High move. 42k : This is the 50% Retracement Resistance of the whole bear market move. Using Ichimoku theory: This is still a bear market pullback because price is well below the Ichimoku cloud signifying a bear trend. Price does not become bullish until it has cleared the entire Weekly cloud. What this move has done though is get Bitcoin into the Weekly cloud which is the first step from going to full on Bearish, as it has been since May 2022, to bullish which would not happen until time and the highest Resistance (42k) has been passed.

I have been watching SPY and /ES pull back from February's malaise, following January's rally, and it has now gotten to the key 50% Retracement Level of the October - January trend. My spike indicator also triggered on this morning's opening 30 minute bar. This sets up a textbook long trade in the SPY itself.

With VIX ripping on today's bank FUD the IV Rank and IV Percentile of SPY is the highest in a year's worth of trading days. This sets up opportunities for premium selling that have not existed for a very long time. Rules: SELL the 20 Delta Strikes at 45 DTE or greater in monthly expirations. BUY wings at 10 Delta Strikes same DTE That ended up being: SELL May 350 Put SELL May 414 Call BUY May 325 Put BUY May 425 Call For 4.64 Credit. The plan is to "manage deltas" and keep this position delta neutral through the duration until 50% credit received. That means if the sides get tested directionally roll up the untested side, increasing credit, to get the delta back to as close to 0 as is reasonable.

I had an alert set for Travelers NYSE:TRV that hit this morning. It is the 50% Retracement Support on the Daily for the last 2 quarters of price action. This sets up a good long to retest the high should the level hold.

Bitcoin BITSTAMP:BTCUSD has pulled back to the Major 50% Retracement of the January rally at 20360. This is a key Support level that must hold to continue the bullish trend . Watch how price behaves at this level. If price holds the level (closes today above) and remains above then the bull case remains intact. If price closes below the level for 2 or more days the rally is over. Using Ichomoku analysis the bullish trend is not yet broken as price has pulled back to the bottom of the cloud but not yet broken through. This is a followup to the trend breakout that began January 12th as per my last post using Ichimoku to define the breakout.