SquishTrade

Tüm gözler şimdi yukarıdaki birincil grafikte gösterilen BTCUSD 'nin bayrak desteğini izliyor olmalı. BTC'nin tüm zamanların high seviyesi 73.794 dolardan beri, BTC genellikle boğa bayrağı olarak adlandırılan aşağı eğimli bir bayrak kanalına uyan istikrarlı ancak değişken bir konsolidasyon modeline sahipti. Ancak alt kanal kesin bir şekilde kırılırsa boğa bayrağı artık boğa bayrağı değildir. Bu yüzden tüm gözler şimdi bu desteğe çevrilmiş durumda. İlginçtir ki, yukarıdaki birincil grafikteki sarı çizgi 51.985 dolarda bir Fibonacci .618 geri çekilmesidir. Bu .618 geri çekilmesi bir dereceye kadar bugünkü bayrak desteğiyle örtüşmektedir. .618 geri çekilmesi, alçalan kanalın dönüş çizgisiyle birlikte destek sağlayamazsa, one en azından 23 Ocak 2024'teki büyük salınım düşüklüğünü yeniden test etmek için daha düşük fiyatlar bekleyebilir. Jeopolitik çatışmanın tırmanmasıyla birlikte fiyatlar normalden daha oynak olabilir. Bu, destek/direnç sınırlarının daha kolay kırılabileceği anlamına gelebilir. Ve yanlış yükselişler ve düşüşler daha şiddetli ve baştan çıkarıcı olabilir. Bu yüzden dikkatli olun! Rahatlatıcı yükselişler gerçekleşse bile, fiyat gelecek yıla kadar mücadele etmeye devam edebilir. Ancak kimsenin tahminlerine güvenmeyin -benimkiler dahil! Objektif, tarafsız kalmaya çalışın ve fiyatın size ne söylediğini izlemeye devam edin -varsayımlarınızı fiyat hareketine zorlamaya çalışmadan. Başka bir deyişle, fiyatın bir hafta sonra, bir ay sonra, bir yıl sonra ne yaptığı, size hemen hemen her yatırımcının veya teknik analistin söyleyebileceğinden daha fazla bilgi verecektir. Son olarak, fiyatın bu bayraktan/kanaldan daha fazla kırılması durumunda izlenebilecek bazı uzun vadeli seviyeler şunlardır.

Birincil Grafik: SPX Anahtar seçenekler-OI seviyesine (JPM'nin üç aylık yakasıyla ilgili) ve bu hafta izlemek için birkaç önemli VWAP ile günlük zaman çerçevesindeki grafik. Hafta için destek ve direnç mavi yatay çizgilerle gösterilmiştir. SPX, agresif beslenen yetkililerin yorumu tarafından ürkütülmedikçe veya FOMC beyanından şahin görüşlerini sulandıran ve 14 Haziran 2023'te verilen arsalar tarafından teşvik edilmedikçe, bu hafta mütevazı bir aralıkta ticaret yapabilir. SPX'in 2023'ünün ortasından bu yana, fiyat büyük ölçüde 4300 s 'a mütevazı bir şekilde düştü. Bu Haziran ortasındaki zirveden demirlenmiş VWAP'ın altında kaldı. Bu, sadece bu hafta (bu yazı adresleri) değil, aynı zamanda gelecek hafta ve Temmuz ayına kadar direniş izlemek için yararlı bir seviyedir. Şimdilik, destek, JPM'nin üç aylık yakasının kısa çağrı grevi olan 4320'nin (önemli çağrı gaması olan) büyük seçenek seviyesinde yatıyor. Bu yaka Cuma günü bu bilgileri dikkatlice izleyen seçeneklere ve VOL uzmanlarına göre yuvarlanacak. Önde gelen bir aracılıktan haftalık beklenen move yaklaşık 57 puanla verilmiştir. Bu, 4291 ila yaklaşık 4405 aralığına eşittir. Haftalık beklenen move için 16-Delta hesaplaması biraz daha geniştir ve 4278-4410 $ 'lık bir move aralığını göstermiştir. 30 Haziran'ın sona ermesi için IV kullanan bir diğer hesaplama, 4260-4428'deki diğer iki aralıktan biraz daha geniştir. Hacim profili bile beklenen hareket aralığına denk geliyor gibi görünüyor. Ek grafik A: Neden bu beklenen move rakamları bu hafta kullanıyorsunuz? Mükemmel değiller, ancak TA da değildir ve bazen, özellikle opsiyon riskten korunma akışlarının eyleme hakim olabileceği bir zamanda yardımcı olabilirler - Fed gerçekten tutarsız bir şey yapmadıkça (fiyatları beklenenden biraz daha uzağa itebilir) veya Prigozhin / Putin saga göründüğü kadar çözülmez (tamamen bilinmeyen). Bu, bilinmeyen siyah-denizlerin özellikle sosyal medyada gizlendiği, ancak neredeyse hiç gerçekleşmediği diğer haftalardan farklı değildir. Bu nedenle, fiyat tarafsız kalırsa yönlü tüccarlar büyük ölçüde hayal kırıklığına uğrayabilir. Bununla birlikte, verimliliğe ve çevik hassasiyete sahip yönlü yatırımcılar, onay ve risk yönetimi olan kurulumlar için sabırlı olabilmeleri koşuluyla, intraday veya haftalık aralıkların kenarlarında fırsatlar bulabilirler. Bununla birlikte, bu bir öneri değildir, ancak RangeBound Piyasaları bazen en iyi yalnız kalır. Ünlü ticaret hattını uzun sürecek bir zaman, kısa sürme zamanı ve balık tutma (veya başka bir saptırma) gitme zamanı hatırlayın. Her halükarda, bu tür piyasalar kısa vadede ticarette bir avantaj için en iyi umut, fiyat tezgahı ve bir tersine çevirmeyi onayladıktan sonra kenardan (major destek ve herhangi bir aralık için direnç) ticaret yapmaktır. Kısacası, para üreticileri bu hafta için tüm olasılıkla premium satıcılar olacak. Yukarıda açıklanan JPM kısa yakalı greve ulaşmanın yaklaşık 8-9 puanı içinde geldi. JPM kısa yakalı grev hafta için destek oldu. Yukarıda özetlenen beklenen hareket aralığı, bu hafta Perşembe gününe kadar 4/5 gün boyunca güçlü bir şekilde devam etti. Cuma günkü fiyat eylemi, beklenen PCE enflasyon baskısından biraz daha zayıf bir şekilde daha yüksek bir boşlukta şortun sıkıldığı için aralığın üst ucundan geçti. Yukarıda verilen farklı beklenen move hesaplamalarına bakarken, fiyat bu aralığın daha geniş versiyonunun (4260-4428) üst ucunun sadece yaklaşık 23 puan üzerinde kapanmıştır. "Önde gelen bir aracı kurumdan haftalık beklenen move yaklaşık 57 puanla verilir. Bu, 4291 ila yaklaşık 4405 aralığına eşittir. Haftalık beklenen move için 16-delta hesaplaması biraz daha geniştir, 4278-4410 $ 'dan daha geniş bir hesaplama, 420 $' lık bir şekilde 42.

Primary Chart: Weekly Candle Chart of ETH/USD with Competing Flag Scenarios Longer-Term Analysis ETHUSD has been largely in a trading range since making its low in June 2022. Yes, some of the moves within that range have been quite substantial. The move off the June 2022 low to the early August 2022 high was about +130.59% higher. The next leg higher from the early November 2022 low to the April 2023 high was about a +99% move. In between those moves was a substantial -47.29% downdraft. (Downdrafts may have quite a smaller percentage because the starting point begins much higher than the starting point for an up move.) But big volatility, huge moves, don't guarantee a strong trend either way. A stock can chop up and down in a volatile way while its overall progress remains relatively insignificant given the volatility and moves. Consider the 1-year uptrend on the Primary Chart. The trend does not form a powerful, steep upward slope, moving sharply higher for many weeks consecutively like other charts we have come to see in recent months, e.g., NVDA, AAPL. Instead, the trend has largely been sideways with a modest uptrend with only a gradual incline despite the big moves within this well-defined channel. This could be a bear flag, though that is not yet confirmed. It's a scenario in any case that should be kept in mind on a break of the upward trendline from June 2022 lows. 1. Bear-Flag Scenario: Chart A (also shown on the primary chart) Notice how the VWAPs confirm the largely sideways ranging action. The VWAP from the all-time high and the VWAP from 2022 lows have been containing the price action YTD in 2023. Despite the gentle uptrend slope, the anchored VWAP from the all-time high reminds us of a more dynamic and flexible measure of trend, which is down from the all-time high in 2021. 2. Anchored VWAP from All-Time High: Chart B The anchored VWAP from the all-time high remains formidable to price. Notice is power in resisting price up until now. However, the last rejection did not send price to new lows. This confirms the choppy sideways thesis for now. While the dark-blue VWAP from the ATH did reject price in April 2023, price has remained well above the anchored VWAP from the major June 2022 low. Currently, the ATH-anchored VWAP lies at $2,038. A close above this level suggests at least further upside in the near term. Traders of all time frames should keep this area in mind—it's sort of like a super-highway. You don't want to run out in the middle of it without looking carefully both ways. The measured-move area is also shown here. Note that this is a logarithmic chart, so the measured move is somewhat higher than on a linear chart. This post will attempt to display measured moves on both. 3. Three Anchored VWAPS from Key Pivots: Chart C The anchored VWAPs on this chart confirm the consolidation thesis discussed above. The VWAPs are anchored to key swing lows and highs since the all-time high. NOtice how the VWAPs from these various pivots have been compressing and flattening for months. This signifies another major trend move is likely to occur when this long-term consolidation completes. Many hope it will be an upward move back to highs. SquishTrade is less confident of that conclusion given inverted yield curves (see prior posts on this); however, over the coming weeks, maybe months, choppy to somewhat higher prices can occur. 4. Triangle Patterns within Triangle Patterns: Chart D Triangles are consolidation patterns. The fact that we see triangle patterns within triangle patterns supports the idea that this 1-year channel is potentially consolidative of the move that preceded it. No guarantees, but that seems to be a logical inference. Some might counter that this is a major "cup base" though others may struggle to see anything resembling something that might hold one's tea. We'll see. Note: This is a linear chart, with a measured move based on the linear scaling. 5. Triangle pattern on a Logarithmic Chart: Chart E This chart shows a triangle on a logarithmic scale. So now, switching to log scale doesn't necessarily change the thesis just yet. The measured move for the log scale gives a 1-year measured move off of June 2022 lows around $2467. If we extend the measured move to a 1.272 projection of the first leg off the June lows, then it runs up around $3000. Long-term view summarized: As long as the uptrend from June 2022 lows holds, as well as the VWAP from that same bar, price can continue to remain supported, i.e., not crashing, sideways, rallies and dips within the defined ranges. In SquishTrade's view, $2,400 - $3000 is likely the maximum level ETH may achieve between now and the likely recession foretold by the yield curves. But higher-for-longer monetary policy in major European and North American countries may keep the ceiling even lower than that. Caution is warranted unless / until certain persistent (and 40-year record) yield curve inversions have proven that they finally gave a false signal for the first time ever. Shorter-Term Commentary Directional traders may be disappointed in the coming 2-3 weeks. A flag within a flag suggests more choppy price action overall—at least until a breakout of either occurs. The smaller flag may breakout first to the upside and lead us to the upper edge of the channel. The larger flag may breakout to the downside, and lead us to new lows. But neither has happened just yet. So price action for now may respect the ranges that are in play—both horizontal ranges and diagonal ones (channels). But it appears that price could largely could remain rangebound from a broader perspective for the coming weeks. Conclusion Traders and investors love a major directional move. It sparks adrenaline (maybe) and a combination of dreams / hopes or fears / frustration. Some traders wait eagerly at various levels to fade the move (long or short) once it has started to progress in earnest. Others who may have timed a good entry may be busy counting their profits, while trying to calm down enough to figure out a proper exit, and writing on their foreheads a reminder to "move the stop to breakeven." And still others may be sitting back patiently on the sidelines for months or years and hoping for an ideal capitulatory low after the dust has started to settle between buyers and sellers who may finally seem to have exhausted themselves. In short, the confusion and choppiness of sideways to slightly upward price action is merely the market doing price discovery between all sorts of players including long-term underwater buyers who bought above 3500 and keep hoping the price will rise just enough to make them whole (increased supply), long-term holders who are true believers in the holding (reduced supply unless emotions shake them out), short sellers (supply and potential demand when a squeeze starts), derivatives traders (supply and/or demand due to hedging flow), intraday traders, scalpers, and, let's face it, some gamblers too. In general, the market action is a device for transferring wealth from the impatient to the patient, according to one investing legend, Warren Buffett. But sometimes the patient can be the short-term trader and the impatient can be the long-term investor—because a long-term investor may lack the patience to enter or exit properly, and a short-term trader may have the patience and discipline to execute some excellent swing trades, provided risk is managed and entries and exits are well-planned, well-timed and well-executed. Minor disclaimer: This post is in no way advocating any particular investing or trading strategy. Short-term trading and long-term investing can both be either devastating or profitable (or somewhere in between those extremes) to the person engaging in it. And thanks for reading this and for your encouragement and support. ________________________________________ Author's Comment: Thank you for reviewing this post and considering its charts and analysis. The author welcomes comments, discussion and debate (respectfully presented) in the comment section. Shared charts are especially helpful to support any opposing or alternative view. This article is intended to present an unbiased, technical view of the security or tradable risk asset discussed. Please note further that this technical-analysis viewpoint is short-term in nature. This is not a trade recommendation but a technical-analysis overview and commentary with levels to watch for the near term. This technical-analysis viewpoint could change at a moment's notice should price move beyond a level of invalidation. Further, proper risk-management techniques are vital to trading success. And countertrend or mean-reversion trading, e.g., trading a rally in a bear market, is lower probability and is tricky and challenging even for the most experienced traders. DISCLAIMER: This post contains commentary published solely for educational and informational purposes. This post's content (and any content available through links in this post) and its views do not constitute financial advice or an investment or trading recommendation, and they do not account for readers' personal financial circumstances, or their investing or trading objectives, time frame, and risk tolerance. Readers should perform their own due diligence, and consult a qualified financial adviser or other investment / financial professional before entering any trade, investment or other transaction.It's hard to say yet before the week has already begun, but it looks like price is trying to spend some quality time with the down trendline from the April 16, 2023 high. If the breakout occurs, first it will be important to see whether the breakout is a trap and fails, or whether it passes on a retest. If it confirms the breakout with a successful retest, then the smaller-degree bull flag remains in play and the upside target may be achieved.No breakout yet as of this update. As discussed above, the idea is for continued sideways to slightly lower (perhaps) consolidation within this parallel channel until such time as a breakout or breakdown occurs.ETH is finding resistance at the upper edge of the downward sloping channel, i.e., the unconfirmed bull-flag pattern that lies nested within a longer-term bear flag. Here is an updated view of this chart: ETH also lies between all the longer-term anchored VWAPs discussed in the original post. Updated chart below: Note also that price is right at the upper bound of one of the triangles (on a linear chart). A decisive close above that may imply a flag-channel breakout as well which could lead to the conditional targets discussed above (upper edge of longer-term bear-flag channel, as well as measured move and Fibonacci 1.272 targets).On a 4-hour chart, it appears that the breakout occurred with a successful retest of the downward trendline (the bull-flag channel's upper bound). The next upside target logically is the VWAP anchored to the all-time high. This falls around $2037 currently.One way to gauge the continued validity / strength of the upward move is to focus on the gold uptrend line and channel from mid-June 2023 lows. It was this uptrend that propelled price through the upper boundary of the bull-flag channel shown in the main post above. And the VWAP anchored to recent swing lows is also a somewhat more flexible way to consider the short-term uptrend. Note that RSI is also pushing to a new high today relative to the prior RSI high. The immediately prior RSI high. So with RSI trending upward, this has become the bulls game to lose (in the short-term at least). Don't forget that this entire pattern appears to be nested within a larger bearish pattern.July 5 update: ETHUSD appears to be testing support at multiple trendlines at once this week.The pullback was deeper than the gold uptrend line would have suggested. But so far, the pullback has held critical support identified in the July 3 update—the VWAP anchored to the recent swing low on June 15. ETH saw a failed breakdown below this VWAP only to recover it, which can be a factor that support the short-term bullish case. If this recovery of this VWAP fails, however, this negates the short-term bullish case in favor of short-term bearish with price continuing in the downward sloping channel. If price holds above it, the breakout can still be in play. Please note that the gold uptrend line has been adjusted to account for this recent pullback. The pullback this week fell slightly below the original trendline (by about $75.00). This can happen in the early stages of any move, where initial trendlines get invalidated. Sometimes, the initial trendline is invalidated because the anticipated move / breakout fails. This is why we manage risk. But sometimes the initial trendline can be invalidated even if the move ultimately succeeds. Specifically, even a move that succeeds may invalidate the first (steeper) trendlines in favor of forming more sustainable (less steep) slopes, and such shakeouts can run stops and test / annihilate early positions. This is why it helps to have a secondary short-term gauge for a move's continued viability such as a VWAP, moving average, Fibonacci proportion, expected-move estimate based on IV, or something else.Price is arriving today at the anchored VWAP from the all-time high (red line below in updated chart). The main post on June 24 discussed this VWAP as being important (at the time, it showed a value of $2038). This ATH-anchored VWAP is now at $2033, a few points lower. On June 3, SquishTrade mentioned that a logical target after a breakout above the channel would be the ATH-anchored VWAP.The breakout from the bull-flag channel (downward sloping blue-purple lines) at first failed and fell back below this channel's upper bound. This is the channel from the mid-April 2023 highs. The updates on July 3-7, 2023, showed critical support for any viable uptrend (and continued breakout) as being the VWAP from the mid-June 2023 low. So the anchored VWAP from the mid-June 2023 low held firm as support for the recent pullback this month, and the VWAP from the mid-April 2023 low held support as well. This increased the chances of a secondary rally and breakout above the downward sloping bull-flag channel. But now the anchored VWAP from ETH's all-time high remains a point that has to be overcome for further progress upward. Please note the discussion in the main post about prior weekly tests of this ATH-anchored VWAP and how they have all failed with two-bar patterns (weekly bars). But the most recent failure did not push price significantly downward either, and prices have held trend support since the June 2022 lows last year.My technical notes for July 17, 2023: Today, here and now, several reasons have arisen to question the viability of breakout from the smaller bull-flag channel. 1. The apparent breakout from the short-term bull flag seems to be unfolding in fits and starts—sporadic and intermittent bursts higher followed by deep retraces. This sporadic and choppy action, combined with the continuing decline in volume on the weekly chart, suggests that the larger bear-flag channel controls the smaller bull-flag channel. So the longer-term bear flag perhaps dominates the overall price action despite the existence of an apparent bull-flag channel breakout. In other words, the unreliable and choppy price action post breakout could be explained by the bull-flag channel’s position as nested within a larger bear-flag channel, and the larger bear-flag channel (see primary chart above) is consolidative / corrective despite moving higher: consolidative price action is more choppy, less trendlike, and more unpredictable than trendlike action. 2. Significant failure and reaction lower at the all-time-high anchored VWAP (red), which SquishTrade had mentioned as the initial logical target for a breakout. 3. ETH seems to be taking a bit too long to make a typical trendlike move higher following the apparent smaller bull-flag breakout. Yet ETH has held the anchored VWAP from the June 15, 2023, low. 4. ETH appears to be testing important support levels shown in the chart below. Note the confluence of support being tested today: (1) Fibonacci level (yellow); (2) the downward trendline that forms the upper bound of the bull-flag channel (purple); (3) anchored VWAP from June 15, 2023. See yellow box in chart below: 4. At what point should one conclude price has fallen back within the scope of the downward-sloping bull-flag channel? —Price falls below the June 15, 2023, anchored VWAP —Price falls and holds below the downtrend line from mid-April 2023 that forms the upper bound of the bull-flag channelPRIOR ANALYSIS SUMMARIZED On June 24, the main post reviewed the consolidative nature of ETH’s price action since the June 2022 low. The analysis stated that ETH’s trend was largely sideways with a modest incline—and that this sideways to slightly upward price action appeared *consolidative* of the preceding 2022 decline. Despite a +130% move off the June 2022 lows, and another 99% move higher from the November 2022 lows, the chop and major retracements revealed that the price action was likely consolidative of the sharp and trending bear-market decline that came in 1H 2022. This is visible when looking at a higher-time frame chart such as the weekly primary chart that may be refreshed at the top of this post. At the larger / higher degree of trend, SquishTrade discussed major VWAPs from the June 2022 low and ETH’s all-time high—those VWAPs were largely sideways with price contained between them. This confirmed the consolidative nature of the price action since the 2022 lows occurred. A few triangle patterns were also shown on log and linear charts (triangle patterns also represented this larger degree consolidation). And an unconfirmed bear-flag channel—a > 1-year uptrend line that together with its return line creates a parallel channel, was noted. This modest uptrend from the June 2022 low presented the potential for prices to remain supported. In this context of consolidation, the post noted that “supported” meant that price action would remain consolidative / sideways and not crashing unless the uptrend broke. Nested within the 1-year bear flag at the larger degree of trend was a shorter-term bull-flag (a downward-sloping channel). This was tracked in the updates for a few weeks as price appeared to be breaking above it. But the breakout appeared quite weak and never rose past $2027. SquishTrade questioned the viability of this breakout on July 17. Squish described the problem with price action as follows (quotation in italics): "Today, here and now, several reasons have arisen to question the viability of breakout from the smaller bull-flag channel. 1. The apparent breakout from the short-term bull flag seems to be unfolding in fits and starts—sporadic and intermittent bursts higher followed by deep retraces. This sporadic and choppy action, combined with the continuing decline in volume on the weekly chart, suggests that the larger bear-flag channel controls the smaller bull-flag channel. So the longer-term bear flag perhaps dominates the overall price action despite the existence of an apparent bull-flag channel breakout. In other words, the unreliable and choppy price action post-breakout could be explained by the bull-flag channel’s position as nested within a larger bear-flag channel, and the larger bear-flag channel (see primary chart above) is consolidative / corrective despite moving higher: consolidative price action is more choppy, less trendlike, and more unpredictable than trendlike action. 2. Significant failure and reaction lower at the all-time-high anchored VWAP (red), which SquishTrade had mentioned as the initial logical target for a breakout. 3. ETH seems to be taking a bit too long to make a typical trend-like move higher following the apparent smaller bull-flag breakout. Yet ETH has held the anchored VWAP from the June 15, 2023, low. . . . . 5. At what point should one conclude price has fallen back within the scope of the downward-sloping bull-flag channel? —Price falls below the June 15, 2023, anchored VWAP —Price falls and holds below the downtrend line from mid-April 2023 that forms the upper bound of the bull-flag channel On July 24, one week later, price decisively fell below the June 15 low VWAP. After a retest or two, price continued to show weakness below this June 15 anchored VWAP. In short, price failed in its breakout of the bull-flag channel. In this regard, SquishTrade has so far been incorrect in the analysis that the breakout of the smaller (nested) channel would lead to the top of the bear-flag channel. But the bear-flag channel with a modest uptrend from June 2022 lows remains valid and intact. It also provides a good level to watch when and if it breaks to the upside or downside. In any case, for now, price remains controlled by and contained within the larger-degree consolidation represented by the unconfirmed bear-flag channel.UPDATED CHARTS Here are some updated charts. 1. Despite the major move downward this week, price has held (so far) between the all-time high anchored VWAP (green) and the June 2022 anchored VWAP (magenta): The June 2022 VWAP should be watched closely if the selling accelerates. A break and hold below on a daily / weekly close may suggest the consolidation being finished and a new downtrend leg starting. But that has *not* happened just yet as of this update. 2. Fibonacci levels coincide with the June 2022 VWAP (magenta) as the next levels of support if selling continues. This is emphasized with a blue rectangle on the next chart. The levels to watch (for continued viability of the uptrend since June 2022) = $1450-$1525.A couple months ago in August 2023, SquishTrade discussed ETH's confluence of support in the $1450-$1525 zone. This zone comprised a confluence of levels: (1) the upward trendline from June 2022 lows (represented by an uptrend line / parallel channel); (2) a VWAP anchored to the June 2022 bear-market low, and (3) several retracement levels shown in the August 2023 update as well. Since the August 2023 update, ETH has done a good job of holding above the anchored VWAP from the 2022 bear-market low. It has also held above the 50% retracement level shown in green below, which lies at $1510. Interestingly, the lows over the past 5 months of price weakness came in just a few points above this 50% retracement level—the October 2023 low reached $1520. Now, ETH appears to be reaching the top of the bull-flag channel—remember this bull-flag lies within an apparent larger-degree bear-flag consolidation, and this larger dominating force of bear-flag consolidation has helped explain the choppiness and unpredictability that has dominated ETH's price action since June 2022. Here is an updated chart showing the VWAP anchored to ETH's June 2022 lows along with ETH's uptrend channel (yellow) from June 2022 lows (an apparent but unconfirmed bear-flag consolidation). The light blue downtrend channel is the bull-flag channel that has guided the choppy, whipsawing price action since April 2022 highs. Further, the last chart update below shows ETH's 50% retracement level coming in at $1510 as discussed above.Furthermore, ETH longs have their work cut out for them. A bullish view into year end 2023 and into the new year requires some key levels to overcome. The most immediate level to beat is $1830 (green retracement level shown below). The next level is $1903 and the downtrend line from April 2023 highs (represented as a bull-flag / parallel channel in this post's charts). If those to levels can be overcome decisively, bullish traders may reasonably consider the measured move from June 2022 lows, which comes in at $2200-$2573 (depending on whether logarithmically charted or linearly charted). Afterwards is the upper edge of the uptrend channel from June 2023 lows around $2700 in January 2023.

A Cost-Benefit Analysis of Looking outside the Scope of Trend: To Peek or Not to Peek “The trend is your friend until the end when it bends.” - Ed Seykota Trend analysis lies at the core of technical analysis. Modern technical analysis derived from Dow Theory. In turn, Dow Theory emphasized the nature and importance of trends and their constituent parts and degrees. Many may recall Dow’s analogy of different trend degrees: the tide (primary trend), waves (secondary trend), and ripples on the waves (minor / short-term trend). Technical analysis includes many other concepts within its scope. But within technical analysis broadly, the primary focus remains the trend structure. Before considering trends, it may help to discuss the distinction broadly between technical analysis and fundamental analysis. A. Technical Analysis versus Fundamental Analysis Top traders and market experts have taken each side in the debate over whether technical or fundamental analysis has the greatest efficacy. Some have straddled the line, preferring a combination of the two. Some consider technical analysis to be not only superior but also relatively straightforward and efficient compared to other types of analysis, such as fundamental analysis or positioning analysis.FN1 Positioning analysis is beyond the scope of this post and is briefly explained in the first footnote. Jim Rogers, a famous investor who managed a reportedly very successful fund with George Soros in the 1970s, and who had had many accurate forecasts, expressed strong disdain for technical analysis—he once told Jack Schwager, “I haven’t met a rich technician.” But some of the greatest traders and market experts stand on the other side of this debate. For example, Ed Seykota is a trader of great renown included in Schwager’s 1993 Market Wizards: Interviews with Top Traders. Seykota chose the technical-analysis camp, giving the most weight to trends, chart patterns and good entries and exits. He once described markets in a way that evokes Charles Dow’s wave analogy: If you want to know everything about the market, go to the beach. Push and pull your hands with the waves. Some are bigger waves, some are smaller. But if you try to push the wave out when its coming in, it’ll never happen. The market is always right. A former portfolio manager for Fidelity Management who founded several other research and investment firms, David Lundgren, described how he came to follow the principles of technical analysis even though he still expressed great value for fundamental analysis. From an interview included in a 2021 Technical Analysis of Stocks and Commodities magazine, Lundgren shared some of his experiences and insights on this topic. In his view, fundamentals can matter significantly over the long term especially as to stocks. But Lundgren’s most outstanding remarks in this interview distinguished between these two conceptual approaches to financial markets. He aptly characterized fundamental analysis as being based on the view that the “market is wrong.” In other words, the valuations drawn from a publicly traded company’s financial statements (e.g., P/E ratio, enterprise value, book value) assume the market is “overestimating or underestimating value” and that the price should be above / below the current market price. By contrast, he said technical analysis assumes the contrary view that the market is actually right in its current price and price trend. The critical distinction between technical analysis and fundamental analysis boils down to ego, according to Lundgren, because pure technical analysis “accepts the verdict of the market” whereas pure fundamental analysis “involves hundreds of hours developing an opinion of what is attractive and often [conflicts] with the verdict of the market.” Much ink has and will be spilled on whether price discounts everything, and if so, how fast and efficiently (Charles Dow Theory). In any case, fundamental, technical and positioning modes of analysis are not mutually exclusive. B. Whether to Consider Data outside the Confines of Trend Since last year’s October 2022 lows in the S&P 500 (SPX) and other major US indices, the current equity market uptrend has been challenging and bewildering to many investors, traders and analysts. It has been especially difficult to comprehend for those who are keenly aware of the broader financial and macroeconomic environment, which includes purportedly tight monetary policy and quantitative tightening (reducing Treasury securities off the Fed’s balance sheet) as well as stubborn core inflation. Such an environment broadly speaking remains unfavorable to equities for the most part.FN2 But trends do not always move in the most sensible direction, and they do not always align consistently with the macroeconomic evidence. Sentiment or even positioning, discussed briefly in the first footnote, can affect the trend even when it may run counter to the macroeconomic evidence. And trends can stretch into an overbought or oversold condition longer than anyone expects, a principle captured by the old aphorism, attributed to John Maynard Keynes, that “markets can remain irrational longer than you can remain solvent.” Exhaustion doesn’t require a 180-degree turn but often appears more like a process, especially at market tops given the long-only nature of most equity capital. Pure trend followers, who supposedly consider only the technical trend-based evidence, may not care whether the trend makes sense. Indeed, they place their stops and align their trades / investments in accordance with one of many trend-based strategies. And this narrowed focus may be very helpful and exceedingly profitable at times. A recent example is the Nasdaq 100 (QQQ), or even some large or mega-cap tech names like AAPL, MSFT, META, and NVDA. These indices and securities could have rewarded narrowly focused trend-followers quite well on daily and weekly time frames over the past eight months, especially if discipline was used to enter positions at major uptrend supports with stops moved to breakeven or higher along the way. Such trend traders and investors may be busily counting their profits rather than being distracted with inverted yield curves and FOMC policy statements. The question becomes whether one may look outside the trend (or technical analysis generally). This issue likely generates pages of academic argument and hours of financial media debates between experts. And it may be something for all traders to ponder for a bit. Given how much of an influence positioning has developed on equity markets over time, as well as central-bank quantitative tightening or quantitative easing, it seems important to consider data from such sources. Such data may also include trend information that affects trends in everything else. For example, trends in the price of commodities may tell us about inflation and likelihood of tighter monetary policy / interest rate hikes by a central bank. And trends in the money supply may strengthen or weaken the case for a current trend in equities. C. Cost-Benefit Analysis of Looking beyond the Trend In this author’s view, it is not necessarily foolish or improper to sneak a peek or a long thoughtful gaze, outside a rigid trend-based framework. As with everything in life and trading, costs and benefits must be weighed. The biggest drawback to going outside the confines of trend is the tendency of many traders to try to consider far too much. Our brains are only capable of processing so much at a given time. Focusing on too much data can cause dilute confidence, weaken resolve, and obfuscate trends. In addition, by the time a trader considers a macroeconomic data point, computerized systems likely have informed all the largest institutional players, or even algorithmic or high-frequency traders, who acted on it before you even had a chance to review its implications. And the market’s reaction to non-technical data points is not always intuitive. But if one can manage understanding additional data outside the trend/price framework, one might find benefit in learning and following data on yield curves, bond-market dynamics, Fed Funds rates, macroeconomic data, inflationary measures, and volatility gauges can inform one’s outlook in useful ways. The key here is to avoid repeatedly (and blindly) fighting the trend in price—even if one fights that trend with some of the most rational, reasonable and persuasive arguments based on overwhelming macroeconomic, volatility, sentiment, positioning, or other such evidence as to why price should be going the opposite way. In short, this is the important general rule for trend-based systems—make the trend your friend until the end when it bends.FN3 D. Practical Application and Hypotheticals Just because one should make friends with the trend does not warrant chasing extended trends (see FN3), unless the trader or investor has developed particular expertise in momentum trading, and even then, caution is greatly warranted. Every trend has its proper entries for the time frame involved. Uptrends necessarily require countertrend retracements to support whether defined as an anchored VWAP, key moving average, Fibonacci retracement, upward trendline, or standard-deviation based measures such as linear regression or Bollinger Bands. Technically, this is not peeking outside the trend, but rather it merely considers evidence of trend exhaustion and the likelihood of mean reversion. Further, a trend-based framework should in fact include considering higher time frame trends such as a monthly chart where each price bar represents one month of price data. One of this author’s collaborators, spy_master , has performed some excellent trend-based analysis on timeframes as high as monthly, quarterly (even yearly bars at times). It is quite common, moreover, for higher-degree trends to move in the opposite direction as lower-degree trends, such as during a monthly or quarterly uptrend experiencing a corrective retracement to trend support that lasts for days or weeks. Or the hourly trend can move against the daily / weekly trend, frequently does so whenever a countertrend retracement to trend support occurs. Can one technically “fight the trend” merely by preferring a higher degree time-frame trend when it conflicts with a shorter one? The answer depends on one’s time frame, risk tolerance, position size, and rationale. In addition, trends involving a particular stock, index, or other security can be evaluated based on their relative strength, i.e., as a ratio of the subject stock, index or security to another stock, index, security or data series. The S&P 500 can be compared to the Nasdaq 100 or 10-year Treasures. Or ETHUSD can be charted as a ratio to another cryptocurrency. This author would argue that such metrics can provide useful trend-based insights even though they incorporate data that is technically beyond the scope of trend. Below are a couple such relative-strength charts that arguably fall within trend-analysis despite relying on data that would normally be considered outside of a price trend's scope: Example 1 shows this author's relative strength chart of AAPL to XAUUSD (Gold). This is a very long-term chart showing the outperformance trend in AAPL over two decades to the precious medal and commodity Gold. Example 2 shows spy_master 's relative-strength chart of NVDA , the AI-tech stock into which everyone's distant relatives are now inquiring after its meteoric rise from 2022 bear-market depths. The chart is a relative-strength chart of the ratio of NVDA to the 10-Year Treasury note, which aptly shows how overvalued NVDA is relative to a risk-free asset. It appears far too extended above the risk-free asset in terms of standard deviation on a linear regression-based model shown here. (Note that yields and bonds move inversely, so where an asset outperforms a risk-free bond, it means that the asset is extended given the level of yields produced by that bond.) Credit: SPY_Master (used with permission) To conclude, consider the following hypothetical scenarios as a thought experiment. Assume a stock has a monthly or quarterly chart that is extended multiple deviations above the mean (or multiple deviations as a ratio of its price to the money supply). NVDA presents a good case study for these concepts. Scenario A: A person entered the position at $290 and took profits on this stock at $405, preferring to exercise caution and avoid this stock as a long-term investment. Scenario B: A hedge fund with a 150-page report of deep research on NVDA and the macroeconomic backdrop has a 10-year time horizon and begins scaling into a short position to anticipate a mean reversion at the higher degrees of trend (monthly, quarterly time frames). The hedge fund will add one quarter at $450, another quarter position at $500, and the final two quarters between $500 and $600 if reached. Should either scenario be deemed fighting the trend? Is either scenario ill-advised use of capital? Any answers are welcome in the comments provided respectful towards others. FN1 This footnote helps explain some basics of fundamental and positioning analysis. Beyond this brief explanation, this article will defer to other educational experts for a more thorough explanation of these three modes of financial analysis. Fundamental analysis for equity indices like SPX or NDX considers macroeconomic data and metrics that focus on an economy’s growth (e.g., GDP), price-stability / inflation (CPI, PCE, PPI), consumption, real estate, money supply, central-bank rate policies, central-bank QE or QT, trade deficits, and more. Fundamental analysis as to individual stocks involves the use of financial data such as revenue, earnings per share, cost of goods sold, capital expenditures, and other data available from a public company’s certified financial statements, as well as financial ratios relying on such data, e.g., earnings per share (EPS), price-to-earnings (P/E) ratios, price-to-sales ratios (P/S) and liquidity ratios (current ratio). In the US and other major economies, securities rules mandate that companies file full disclosure of their financial health, certified by CEOs and CFOs, in annual reports (10-K and quarterly reports (10-Q) on an ongoing basis. Positioning analysis looks at a complex array of data that covers institutional market positioning and order flows for stocks, options, indices, commodities and futures. It also looks at increasingly important dealer hedging flows (volume and open interest) in options markets and the effect of implied volatility and time on such flows. It can include such insights as net positioning on each side of a given futures market or index by hedgers and speculators. This is an area where expert commentary is helpful to learn even the basics. FN2 Yet the central-bank and US Treasury actions behind the scenes may have masked, or even partially or wholly offset, tight Fed interest rate and monetary policy at times during the first half of 2023. For example, many financial publications and analysts discussed the US Treasury’s accounting maneuvers intended to prolong its borrowing authority in light of the debt-ceiling standoff. Commentary also noted that such maneuvering, draining the TGA account (the US Treasury’s “checking account” held at the Federal Reserve), injected money / liquidity into the financial system, which likely muted Fed’s efforts to tighten policy in the short-term while those actions were ongoing. FN3 But as is often the case with a general rule, the exceptions can dilute the rule somewhat. One prominent exception is mean-reversion analysis / trading systems. In addition, some traders and institutions are trend-reversal traders—a high risk, high reward type approach that requires immaculate risk management, timing, precision and patience, often scaling into and out of massive positions that cannot be acquired or unloaded in a period of days.

PRIMARY CHART: S&P 500 (SPX) with VIX/VIX3M ratio in subgraph on a weekly time frame Tricks for Reading the VIX Part I SquishTrade's original 2022 article on VIX entitled "Tricks for Reading the VIX" covered the basic concepts of the CBOE's Volatility Index (VIX) to aid in understanding and interpreting VIX and its behavior relative to the S&P 500 ( SPX ). It also explained generally how VIX values are derived, reviewed a few historical examples, and identified the historical mean (20 VIX) as well as some outliers. Furthermore, the original piece delved into the usual inverse relationship between VIX and SPX. But in its later sections, it explained how divergences from this usual inverse relationship between VIX and SPX may distinguish lasting market bottoms from interim trading lows. If interested, the following link provides the original article on VIX. A couple of points from this original article on VIX may be beneficial to readers who are less familiar with VIX. VIX is a measure of implied volatility for SPX derived from the pricing of a wide range of options prices with approximately 30 days to expiration. Specifically, only SPX options with more than 23 days and less than 37 days to expiration are included. CBOE introduced the VIX in 1993 to measure the options market's expectation of implied volatility from at-the-money SPX index options (where strikes of the options are at or very close to where the underlying index price is trading). But ten years later (2003), CBOE updated the VIX formula to track not only at-the-money options, but a wide range of SPX options focusing now on out-of-the-money strikes. CBOE's website contains a helpful FAQ on VIX here . A relevant excerpt with more detail on how VIX is calculated is available in a footnote (FN 1) at the end of this post. The last two concepts for this introduction are important. SPX implied volatility, which is what VIX is intended to measure, and realized volatility should be distinguished as they are not the same. And VIX index values tend toward mean-reversion in the long term rather than trending action. But trends within VIX can nevertheless be identified within the broader context of its mean-reverting character. SPY_Master has an excellent chart covering a recent VIX trend shown as Supplementary Chart A: Supplementary Chart A tradingview.com/x/TD6QqHDJ. VIX/VIX3M: Tricks for Reading the VIX Part II In this sequel to the original post, SquishTrade will cover the VIX/VIX3M ratio. To understand this ratio, it is important to understand basic concepts about VIX, its interpretation, and its inverse relationship as well as excepts to that relationship, which topics are covered in the prior article or elsewhere on trustworthy financial websites including CBOE's. VIX3M Basics Furthermore, VIX3M is vital to understanding the VIX/VIX3M ratio. VIX3M is essentially a 3-month forward implied volatility index for SPX. CBOE's brief description of VIX3M index follows: "The Cboe 3-Month Volatility IndexSM (VIX3M) is designed to be a constant measure of 3-month implied volatility of the S&P 500® (SPX) Index options. (On September 18, 2017 the ticker symbol for the Cboe 3-Month Volatility Index was changed from “VXV” to “VIX3M”).The VIX3M Index has tended to be less volatile than the Cboe Volatility Index® (VIX®), which measures one-month implied volatility. Using the VIX3M and VIX indexes together provides useful insight into the term structure of S&P 500 (SPX) option implied volatility." The term-structure of implied volatility (IV) means the relationship, or comparison, between different implied-volatility measures based on different terms (time periods) for measuring implied volatility such as a one-month period, three-month period, six-month period, or one-year period. Term structure can be also understood by remembering that this term is used to describe the yield curve, varying interest rates on risk-free government bonds (same type of security) with different maturities ranging from short term to long term. In short, the ratio of VIX/VIX3M allows insight into the shorter end of the IV term structure by allowing investors and traders to see both the 30-day (one-month) and the 90-day (three-month) outlook for expected volatility for SPX based on its index options premiums. VIX and VIX3M Comparison VIX3M and VIX can be distinguished based on the time frame as discussed in the prior paragraphs. One is a constant measure of approximately 30-day IV for SPX, and the other is a constant measure of approximately 3-month IV for SPX. VIX3M tends to have higher values than VIX. This is because VIX3M considers longer-dated option prices than VIX considers. The exception occurs at significant SPX lows, including interm trading lows both in bull-market retracements and in bear markets, and in more lasting bear-market lows. VIX tends to be more volatile than VIX3M. This is true even though VIX3M tends to have slightly higher values. The final point of comparison between VIX and VIX3M is that two indices are highly correlated as one might expect. This can be seen from placing them both on a chart together. Try placing them both on a chart together in TradingView, which may help some visualize and remember the close relationship between VIX and VIX3M by working with the symbols themselves. It's relatively easy to do in a couple steps. Load a chart of VIX. Then click the plus symbol next to the ticker symbol on the left upper corner of the TradingView chart screen, ad then add VIX3M to the chart. Be sure to click "New Price Scale" option when selecting VIX3M as the new symbol to be compared. VIX/VIX3M Ratio Interpretation The Primary Chart above shows the VIX/VIX3M ratio over the past six years of market history. This ratio is included in the subgraph below the SPX price chart. This chart uses a weekly time frame to ensure the data can be viewed over several years with ease. Notice how peaks in this ratio correlate to some extent with lows in SPX. Interestingly, peaks were higher in the left half of the chart between 2018 and 2020. Peaks in the current bear market have been lower relative to prior peaks in this ratio. Many peaks have been labeled on the Primary Chart for ease of reference. As discussed, VIX3M tends to have higher values than VIX. This is because VIX3M considers longer-dated option prices than VIX considers. To understand the VIX/VIX3M ratio, it helps to focus on the exception to the general rule that VIX3M tends to have higher values than VIX. The exception occurs typically when an SPX selloff causes a spike higher in VIX relative to VIX3M. Why does VIX spike higher on a relative basis, causing the ratio to rise above 1.00 / 1.10? When short-term panic occurs in markets around trading lows (or final lows as well), VIX outperforms VIX3M because VIX focuses on 30-day IV and VIX3M focuses on 90-day IV (longer-term on the IV term structure). This causes the term structure to invert briefly when VIX rises above VIX3M (which is the same as VIX3M trading at a discount to VIX). When VIX spikes above VIX3M even briefly, it shows that the market expects IV farther out on the term structure at three months to be lower than current implied volatility levels. In plain English, this means the market expects volatility to fall in several months relative to current 30-day forward levels (based on SPX options prices 23 to 37 days until expiration). And when the IV term structure normalizes as it always does after an inversion, meaning that short-term vol is lower than longer-term vol generally, this means that VIX has to fall relative to VIX3M. And remember that when VIX falls, SPX rises given the usual inverse relationship between the two. Don't forget that exceptions to this usual inverse relationship occur when VIX and SPX move in tandem, and such aberrations in the normal VIX-SPX relationship are crucial to notice as discussed in the original 2022 article on VIX. Finally, here is a chart showing a close-up view of the bear market starting in January 2022 with VIX/VIX3M shown simultaneously. The highs in this ratio were lower than prior highs at market lows over the prior decade or two. Highs have been approximately 1.05 to 1.11. Does this mean vol sellers are more opportunistic and effective? Or does it mean that we haven't seen a capitulatory low? Either way, it helps to see the current bear market levels. Enjoy! Supplementary Chart B Please see footnote 2 (FN 2) for this section on interpreting VIX/VIX3M. FOOTNOTES FN 1 Note that the formula is complicated and most likely accessible only to those still in higher-level math concentrations in their education, or those working continuously in a math field. The rest of us who have seen a few years pass since our math education must rely on the detailed verbal explanation of the formula. The formula, moreover, is unnecessary to reading and interpreting VIX values, trends, and mean reversion. CBOE's FAQ on VIX, linked above, contains the following helpful and detailed information about how the VIX Index is calculated: "Cboe Options Exchange® (Cboe Options®) calculates the VIX Index using standard SPX options and weekly SPX options that are listed for trading on Cboe Options. Standard SPX options expire on the third Friday of each month and weekly SPX options expire on all other Fridays. Only SPX options with Friday expirations are used to calculate the VIX Index.* Only SPX options with more than 23 days and less than 37 days to the Friday SPX expiration are used to calculate the VIX Index. These SPX options are then weighted to yield a constant maturity 30-day measure of the expected volatility of the S&P 500 Index. Cboe Options lists SPX options that expire on days other than Fridays. Non-Friday SPX expirations are not used to calculate the VIX Index. Intraday VIX Index values are based on snapshots of SPX option bid/ask quotes every 15 seconds and are intended to provide an indication of the fair market price of expected volatility at particular points in time. As such, these VIX Index values are often referred to as "indicative" or "spot" values. Cboe Options currently calculates VIX Index spot values between 3:15 a.m. ET and 9:15 a.m. ET (Cboe GTH session), and between 9:30 a.m. ET and 4:15 p.m. ET (Cboe RTH session) according to the VIX Index formula that is set forth in the White Paper." FN 2 The source for some of the key concepts in this section was a January 2018 article on CBOE's website blog on the VIX / Trader Talk, and the article referenced was "Vol 411 Follow Up: More on the VIX3M / VIX Ratio." This article appears to no longer be available. ________________________________________ Author's Comment: Thank you for reviewing this post and considering its charts and analysis. The author welcomes comments, discussion and debate (respectfully presented) in the comment section. Shared charts are especially helpful to support any opposing or alternative view. This article is intended to present an unbiased, technical view of the security or tradable risk asset discussed. Please note further that this technical-analysis viewpoint is short-term in nature. This is not a trade recommendation but a technical-analysis overview and commentary with levels to watch for the near term. This technical-analysis viewpoint could change at a moment's notice should price move beyond a level of invalidation. Further, proper risk-management techniques are vital to trading success. And countertrend or mean-reversion trading, e.g., trading a rally in a bear market, is lower probability and is tricky and challenging even for the most experienced traders. DISCLAIMER: This post contains commentary published solely for educational and informational purposes. This post's content (and any content available through links in this post) and its views do not constitute financial advice or an investment or trading recommendation, and they do not account for readers' personal financial circumstances, or their investing or trading objectives, time frame, and risk tolerance. Readers should perform their own due diligence, and consult a qualified financial adviser or other investment / financial professional before entering any trade, investment or other transaction. Thank you for reading. If this post added clarity or prompted additional thoughts on the technicals of SPY, please comment below!spy_master raised a very good point in the comments about the term backwardation. First, backwardation and contango are technically terms used in the futures context, and this article represents indices. Nevertheless, the concept is the same. When near term vol rises above longer term vol, this is inversion of the normal term structure, and it's called backwardation. The futures curve for VIX becomes "backwardated" or "in backwardation" when when near term contracts rise above longer term contracts. This illustration provided by spy_master in the comments is instructive: Note VX refers to a Vix futures contract. So when VIX rises above VIX3M (so that the ratio VIX/VIX3M rises above 1.0), this is analogous to at least a portion of the futures curve being in backwardation. One key point here is that an inversion in VIX and VIX3M represented by VIX/VIX3M rising above 1.0 does not necessarily mean the entire VX futures curve is in backwardation. This still provides valuable information. In a bull market, a brief pop above 1.10 or 1.20 might signal a near term end to a pullback—which is signaled without the need for a full VX futures curve inversion / backwardation. But the lack of a backwardation in the entire curve is also instructive, and this is something that would require watching the VX futures curve. Please be sure to check out SPY's comments below about the lack of full backwardation at the October 2022 low, which is something that you may find important to ponder! Thanks to SPY for the post-hoc collaboration in the comments! Any other commentary, debate or disagreement is welcome as always (provided it's civil)This week has seen a swift increase in volatility coinciding with the sharp downward move in SPX / SPY and equities in general. To illustrate how short-dated vol rises much quicker and higher than longer-dated vol, notice the following performance comparisons for different vol-term lengths. Note that the comparison shows the percentage move off the recent mid-April vol lows in each vol index. The vol lows didn't necessarily land on the same day, though they were all in mid-April generally. 1. VIX9D rose 57.6% off mid-April lows 2. VIX rose +22.82% off mid-April lows 3. VIX3M rose +14.12% off 4/18/23 lows 4. VIX6M rose +11.76% off 4/18/23 lows. Those buying shorter vol tend to see a much bigger move in options premiums. Shorter dated vol may mean (in this context) shorter-term VX futures or shorter-dated VIX options or it may mean short-dated SPX or NDX puts that have much higher risk for example. This bigger move is not without higher risk that always comes with shorter-dated options, which have exploded in recent months and years, rising to nearly 40-50% of total options volume on major indices per options-hedging flows experts.Yesterday, VIX hit 1.4 year lows. The lows in VIX had not been seen at this level since November 2021. VIX also showed positive divergence using momentum indicators—in other words, as values made lower lows, momentum made higher lows (RSI in particular). Assuming TA can be applied to such a mean-reverting index, it's unsurprising to see a push higher in VIX today.VIX has been making 1.5 year lows since April this year. So it's no surprise that this ratio of VIX/VIX3M is as well. VIX/VIX3M, discussed in this educational post, is this week pushing back toward major 1.5-year support ■ shows steep contango in this segment of VIX term structure ■shows potential complacency in short-term, which *could* coincide with short to intermediate term peaks in SPX and lows in vol. Let's see what happens. And here is a chart by GammaLab , one of SquishTrade's favorite follows. This chart shows a comparison of both 1-month realized vol and 1-month IV. And it goes back far enough to shows trends in both implied volatility (IV) and realized volatility (RV). Notice how RV (green) fell hard into new lows in April 2023 reflecting SPX's choppy, tight sideways price range that lasted nearly 1.5 months from the start of April to mid-May 2023. With the big move up in SPX from early June 2023, with SPX 4448 new YTD highs last week, realized vol has risen, and IV along with it. Other analysts and technicians have been noting that the "vol up / spot up" phenomenon was starting to be seen in fixed strike vol last week. Will this upward curve at the right-hand side of the chart continue? There are reasons to think it could at least in the near term. Opinion Disclaimer : The views and opinions expressed in this update are solely those of SquishTrade and do not reflect the views or opinions of GammaLab, the source of the second chart shown in this update.

Regardless of whether you are a bear or a bull, BTCUSD will probably take the scenic route. This may sound like max pain theory, and it probably is. One follower asked recently for an update on BTC. My last BTC post called for another push higher before going lower. A the time that was published, BTC traded in the upper $18000s and the downward TL (log scale) was just overhead. BTC then moved higher to the downtrend line, paused, and then broke above it. This coincided with major US equity indices and many other risk assets that broke above similar down TLs. This removes some of the certainty that an effective downtrend line provides, i.e., it contains price and provides a reasonable entry point for short positions in a downtrend and reasonable entry point for long positions in an uptrend. For those who think the break of an uptrend is conclusive signal that price is returning to all-time highs, beware of the history of past bear markets in equities. This happened with SPX in 2000-2002. A chart of SPX from 2000-2002 is also included to show the break of the down TL that eventually failed. Supplementary Chart A SquishTrade does not assert that BTC will necessarily follow this pattern in SPX shown by a upside break of its major down TL in the 2000-2002 bear market. Rather, this example serves to illustrate why a trendline break alone isn't necessarily and all-clear signal or a trend-reversal signal on a larger time frame. It just takes away some of the certainty that had existed when that trendline effectively contained price below it, and reversed price every time it rallied to meet it. Furthermore, a down trendline is not the only measure of a trend. Moving averages, Ichimoku Cloud and others perhaps capture the more flexible nature of a trend, and include a cushion (much like the wider cloud does within the Ichimoku system). Not every market participants market memory is at the same exact angled line. Using a weekly Ichimoku Chart, BTCUSD remains in a downtrend, characterized by the very wide cloud that is red colored (because the Senkou Span B line remains above the Senkou Span A line—bullish would be a green cloud where the SSA line is trending above the SSB line), and confirmed by price trending well below the cloud. Supplementary Chart B (Ichimoku Cloud Weekly Chart) The daily Ichimoku Cloud chart, however, looks quite bullish. Price has broken above the cloud, the cloud has turned green, and things look hopeful on this timeframe. So why is price stalling? Probably because major resistance lies overhead despite what shorter time frames suggest. Another measure of trend includes VWAPs and long-term moving averages. The VWAP from the November 2021 all-time high lies around 30,000 today. The 50-week moving average, interestingly, lies right at the major resistance level shown by the blue rectangle sitting at mid-August 2022 highs. This 50-week MA (not shown) is at 25,040 today. The 100-week MA is even higher. These are important trend measures as well and lie overhead and slope downward. Fibonacci retracements help to show where a corrective move may end, and the 50% retracement seems like a very firm resistance level that would not be broken in the near term absent market chicanery. The 50% retracement is at $32,681. In fact, corrective retracements at every degree of trend (here the primary degree is shown) can retrace up to 61.8% or 78.6% of the prior wave. In this case, the prior wave could constitute the decline from the ATH to the November 2022 low, and the retracement could run all the way to $38,900 before failing and returning to lows. Wish more certainty could be provided, but these possibilities remain on the table. But overall, the technicals remain highly uncertain. Price could tag the $25,000 resistance, move down to the magenta uptrend line and then return to tag some key level in the lower half of the massive trading range that formed BTC's topping pattern in 2021. When price action is this uncertain in an asset, it makes sense to step aside unless one is acquiring for a very long term hold (like a buy-and-hold investor or a "hodler"). Even buy-and-hold investors should incrementally scale into their investment (a key tactical strategy often noted by spy_master ) with sound technical and fundamental arguments and invalidation levels too on larger time frames. In the near term, price could easily move up to tag the resistance from the prior August 15, 2022 high, which may create a final, and more drastic divergence before a pullback. This seems a bit more likely, but again, don't rely on anyone's forecast, watch the price action and the levels if you can. To reiterate, that key level is just overhead, and lies at $25,200. If that $25,200 level is broken above and held, then the .382 retracement—which coincides with the lower-edge of BTC's topping range—could easily be reached at $27,300-$28,032. But before price can move any higher, it has to move over the teal-colored VWAP shown on the Primary Chart above. That has been a difficult level for BTC in the last couple weeks. BTC seems to be chopping above and below it. In the bulls favor (short term), that VWAP is flattening however. The intermediate-term uptrend is defined by the magenta line on the Primary Chart above. A pullback to this line would actually be reasonable and healthy consolidation for bulls if this uptrend is to continue and actually attack the larger downtrend on weekly Ichimoku Charts or the downtrend as represented by the VWAP from the all-time high (dark blue at $30,000 today). Finally, consider that major negative momentum divergences have appeared on the daily chart. This doesn't mean price will crash suddenly to new lows, but it does suggest the upward move is in its final stages right near major resistance levels. This could lead to a sharp pullback at a minimum to the uptrend line. Or it could break that uptrend line if enough fear and force allow. That should be watched closely. If the magenta uptrend line is broken decisively, watch out for a new low. Hope this post helps provide new perspectives about what levels to watch in the coming weeks, and what price levels are important to consider. ________________________________________ Author's Comment: Thank you for reviewing this post and considering its charts and analysis. The author welcomes comments, discussion and debate (respectfully presented) in the comment section. Shared charts are especially helpful to support any opposing or alternative view. This article is intended to present an unbiased, technical view of the security or tradable risk asset discussed. Please note further that this technical-analysis viewpoint is short-term in nature. This is not a trade recommendation but a technical-analysis overview and commentary with levels to watch for the near term. This technical-analysis viewpoint could change at a moment's notice should price move beyond a level of invalidation. Further, proper risk-management techniques are vital to trading success. And countertrend or mean-reversion trading, e.g., trading a rally in a bear market, is lower probability and is tricky and challenging even for the most experienced traders. DISCLAIMER: This post contains commentary published solely for educational and informational purposes. This post's content (and any content available through links in this post) and its views do not constitute financial advice or an investment or trading recommendation, and they do not account for readers' personal financial circumstances, or their investing or trading objectives, time frame, and risk tolerance. Readers should perform their own due diligence, and consult a qualified financial adviser or other investment / financial professional before entering any trade, investment or other transaction.This chart is the same as the Primary Chart at the start of this post. But instead of covering the whole topping range in a yellow rectangle, this chart shows it with a narrow rectangle along the bottom edge of that topping range, the most critical portion, which is where the ATH VWAP lies and two of the major retracements are within or nearby to this zone:After several days of contending with its anchored VWAP from 2022 highs (March 2022 teal colored VWAP), BTC showed that this was an important level and got rejected from here initially. Now, it will be important to see where the week closes. In addition, BTC appears exhausted before even reaching $25,200, i.e., the mid-August 2022 peaks, a critical level of resistance in the near term.BTC bulls will want to see the downtrend line from the all-time high hold as support. Bears will want to see this break. This is important technically. And given how devious equity and crypto markets have been the past year, don't be surprised to see trappy choppy action around the down TL. But keep an eye on that level. BTW, it's on a log chart: \Looks like BTC is working on a more distinct divergence—forming a higher high while momentum weakens and forms a much lower high. BTC has been diverging for a while, but it has not formed a *distinct higher peak) along with a dramatic divergence—until now. Instead, in the past weeks, BTC has trended slightly higher while it's momentum has waned and RSI or Stochastics have gently sloped downward as marginal new highs were made. Then BTC made a pullback, and now it's making a higher high for its current rally with a much lower momentum high in momentum indicators (e.g., Stochastics, RSI, etc.). RSI shown belowOn February 7, SquishTrade that BTC may likely tag the resistance from the prior August 15, 2022 high at $25K. That was tagged today. Below are excerpts from the original post—and the divergence issue remains relevant now: "Price could tag the $25,000 resistance" "In the near term, price could easily move up to tag the resistance from the prior August 15, 2022 high, which may create a final, and more drastic divergence before a pullback. This seems a bit more likely, but again, don't rely on anyone's forecast, watch the price action and the levels if you can. To reiterate, that key level is just overhead, and lies at $25,200. "And here is the bearish divergence mentioned in yesterday's update complete with a reversal candle. This signals exhaustion and reversal of the shorter-term trend at a minimum. How price responds on the pullback (whether it will find support where it needs to for bulls or whether that will break) will be critical.This post was originally published almost a month ago, and at the time, BTC had traded at $23,268. A month later on March 3, BTC is nearly at the same level, $22,300 - $23,200. BTC seems to be taking the scenic route now in early March just as it was in early February based on technicals and price action then. Most of the levels discussed in this post remain the same. Some have changed to a small degree as would be expected when the level is affected by new price and volume data, which cause a VWAP level, for example, to be fluid over time. The weekly Ichimoku Cloud was given as another example of a more "flexible" gauge of trend than a mere straight trendline (see discussion above). Here is that chart updated: This chart shows that the trend on this higher TF remains clearly down. But the possible price range remains quite wide. Support below lies around $20,374.50 and 20,911 where the Kijun Sen and Tenkan Sen lines are. But the cloud above remains quite thick and impenetrable for the time being. Based on Ichimoku on the weekly TF alone, price could rally quite a bit higher without breaking above the cloud. The top of the weekly cloud lies at $43K through early May 2023. Other lower levels of Ichimoku resistance are at $27,400 to $33,000, more likely reversal spots should BTC catch a bid in the coming two months. Check out the uptrend line from BTC's November 2022 lows. It lies quite a ways below current price action. For the next month, this uptrend line of support ranges from $18,000 (early March) to $19,000 (early April). As mentioned, BTC has a wide price range to travel without giving a lot of clarity in the larger picture. But the uptrend line from November 21, 2022 lows does show that an uptrend is underway in the intermediate term, i.e., a secondary trend for now. But the range of outcomes remains unpredictable. If you like to trade choppy ranges, trade from the edge (long or short) to gain an edge. And risk management is even more critical in this environment.Compare the daily Ichimoku chart with the weekly Ichimoku. The daily TF is shown below. Speaking of mixed signals and uncertainty—the daily and the weekly Ichimoku, placed side by side, show the uncertainty and mixed signals coming from the crypto space. Wonder why trades don't work so well the last few months? They never do when trends are not aligned and in conflict on various key TFs. The cloud shows firmer (and nearer) support than even the uptrend line mentioned above. For the time being, price has broken below the blue Kijun line but founds support at the top of the green upward sloping cloud. But the strongest cloud support lies at the base of the cloud at $20,000 - $21,000. So a wide range of prices is possible in the coming weeks based on technicals alone.Price is still doing the "scenic route" path. BTC has traded pretty much sideways for a month, chopping up those with directional biases except for the very long-term holders and the short-term swing traders (who may have caught some nice moves within this chop). The resistance overhead at mid-August 2022 peaks ($25,200 or so) shown on the Primary Chart as a rectangle has held firm and remains the level to break for now for those seeking upside. With yield curves being in record inversion territory this week (esp. the 2s/10s), it's important to consider how BTC may respond to an economic recession in the coming months. This may limit any further upside to the major resistance levels discussed above.As BTC approaches $28K, here is an update on BTC in several charts: 1. BTC broke above a very important level of resistance that goes back to the breakdown in May 2022. 2. BTC is rapidly approaching the most important VWAP of all—the VWAP anchored to the ATH. This VWAP has not been touched since April 2022, approximately 1 year ago: 3. During the pullback during the first 10 days of March 2023, BTC successfully retested its down TL from the all-time high (on a log chart) and this retest coincided with BTC's retest of its VWAP from its intermediate-term Nov. 21, 2022 low (light blue). The teal-blue circle highlights this area of confluence that held as support several days ago: 4. Finally, BTC is rapidly approaching one of the most significant resistance zones above. This is the blue-bordered yellow rectangle shown at the lows made during its entire 2020-2022 topping pattern, which is a zone from 28,000 to 32,000:5. One more chart that should be considered is the Ichimoku Cloud on the weekly TF. Notice how BTC is just now meeting the red, wide downward-sloping cloud just as it is meeting important resistance (yellow rectangle in number 4 above). This cloud can provide a wide layer of resistance wall the way up to 43K, where the top of the cloud lies—not saying BTC gets there, but just pointing out how wide the cloud is as an Ichimoku resistance zone:In the original post from February 7, 2023, SquishTrade hypothesized as follows: "If that $25,200 level is broken above and held, then the .382 retracement—which coincides with the lower-edge of BTC's topping range—could easily be reached at $27,300-$28,032." The $25,200 level has been broken on a daily candle. And within a day or two of that break and close above, price has reached the next target zone of $27,300-$28,032. Bulls (short term) will want to see this week's candle close above 25K as well. And bulls will want to see that this candle is not negated by next week's candle either by a two-candle reversal pattern. Finally, the original post on Feb. 7, 2023, explained the likelihood of BTC taking the scenic route, and it largely did so, chopping sideways for about 5-6 weeks, making little progress upward, but chopping downward toward the uptrend line from lows without quite reaching it. The primary chart also noted that it would not be unreasonable for BTC to retest the topping pattern at $28K-30K (lower edge of the large yellow box on the primary chart). This retest is happening this week finally. It's possible that price can keep pushing higher on this move. Next target looks like $30-$32K, which can likely be achieved within days to weeks.Update on the weekly Ichimoku Cloud, covered in the original post as well as some of the prior updates. The cloud on the weekly chart continues to slow the momentum of this massive move. But then again, only a massive move would have taken price up to that cloud as price had dropped far below it on the weakness seen from 11/2021 to 11/2022And price stalled right at the center of the resistance zone at the lower edge of the topping pattern (discussed in the main post above). The anchored VWAP from BTC's all-time high is also causing problems, and it's right in the area where BTC's weekly Ichimoku cloud resides. Anchored VWAP from the ATH shown at 29,426 on this chart:On the primary chart, click the refresh button. Price continues to stall right at the base of the massive topping range described. Three weekly doji candles side by side appear since the tall green candle that ran right into this level. As discussed in the prior updates, this coincides with the anchored VWAP from the all-time high which has not yet been overcome. The supply from this 1.5-years-long topping range is likely enormous. Essentially nothing has changed since the next most previous update on March 25, 2023. Here is an updated chart though with the all-time high VWAP as well as some longer-term Fib levels. The main thing to see is the coincidence of the all-time high VWAP near 29K with the lower boundary of the 1.5-year topping range, and how price has for 4 weeks stalled at this level.After forming quite a few smaller divergences on the initial move up to resistance (at the lower edge of the 2020-2021 topping range), BTC pulled back in early March only to make another push higher. The smaller divergences (clustered closely together rather than further apart) likely warned of that consolidative but sharp pullback in March. But the ensuing push higher created a wider and more significant bearish divergence in RSI vs. price. The chart below shows this. Also notice the prior update from today showing doji candles on the weekly TF right at the base of the important range. This appears to be a retest of the topping range / pattern that was broken to the downside in mid-2022. This is critical. If this retest fails, then from a technical perspective, new lows could be in store. This needs to be analyzed more thoroughly in the coming weeks, but if 29-33K cannot be broken decisively, i.e., several weekly closes above, bulls may be unpleasantly surprised.Lastly, the weekly Ichimoku Cloud helps reveal a more "flexible" and dynamic trend measure with a cushion reflecting the variety of market memories for levels / supply. Unsurprisingly, the weekly Cloud is wide and red with resistance largely aligned with the levels discussed using other technical methods above. Ichimoku resistance = 29K - 33K Ichimoku support = 19K - 22K This is similar to the two key VWAPs shown in the other updates from today. The Nov. 2022 VWAP is at 21.5K (support) and the ATH VWAP at 29.4K, while the topping range is around 28-32K.

Which Way Will the SPX Triangle Break? Consider All the Arguments Ever since the October 2022 lows, the S&P 500 SPX has been consolidating especially when considered on larger time frames like daily and weekly. This consolidation has formed what is known as a triangle pattern (or symmetrical triangle). A triangle is a consolidation pattern that represents equilibrium in the balance between buyers and sellers. The range narrows and price action compresses until the consolidation ends. The Primary Chart above shows the current triangle that has formed. It is essentially a collision between a 3-month uptrend and a 13-month downtrend (lasting over a year since January 2022 highs). So long as price remains in this triangle, uncertainty about the intermediate term direction will likely remain. Many triangles have arisen this year, and each one has led to new lows. This one may as well, as the yield curves and macro data support this outcome. But price could whipsaw out the top of the triangle for a month or two before heading to lows. All possibilities remain on the table. For further discussion on the details of this triangle, please refer to the linked chart and post under Supplementary Chart A below. Supplementary Chart A 1. Arguments for Bear-Market Continuation and Further Declines to New Lows VIX has been trending lower to new lows. But this argument cuts both ways—it lies at multi-year support as well as the support zone for this entire bear market. It’s not a spot to be complacent. On the other hand, VIX could be forming a new seasonal range lower than the past few years. The downtrend in volatility must be respected until it breaks. But the break could be vicious and fast, occurring in a matter of hours / days. For now, VIX keeps failing right at the down TL from early October 2022 peaks. Supplementary Chart B (VIX) Consider the orange-colored down trendline from mid-October 2022 highs. Price continues to fail at that down TL. But price is also in the yellow rectangle, which is the major support / demand zone for volatility over the entire bear market to date. The pink uptrend line is a multi-year uptrend line where VIX has found support since 2017. SPX shows a daily bearish divergence on RSI. But no weekly divergences yet. Stochastics and another indicator (EFI) both show clear divergences on the daily. But sometimes triple divergences form. And sometimes, these divergences are erased with higher price action. Divergence create the conditions for a decline, they don’t guarantee one. And without weekly divergences yet, this minor daily divergence is too weak a signal to take to the bank. As of the December 2022 FOMC meeting, the Fed had not paused and it had not pivoted. In fact, the Fed remained hawkish, communicating a “higher for longer” message to markets. The FOMC’s published SEP (Summary of Economic Projections) showed that rates were forecasted to peak at 5.1% (on average) which was higher than its prior rate forecast of 4.6%. The Fed’s projections also showed that it expected no rate cuts throughout 2023. In other words, higher for longer, even if rate hikes were paused. Will the Fed’s messaging and policy from December 13, 2022, remain steadfast? If so, the markets will likely struggle to find a way higher unless they continue to completely disbelieve the Fed. Note that rate markets (and equity prices) are currently disagreeing with the Fed about rate cuts later this year. That all could change on February 1, 2023. Money supply has continued to shrink. Tom McClellan said to financial media recently that M2SL has been shrinking while GDP has been growing, and this has never happened—the ratio of M2/GDP has never been shrinking this fast. Note that there is a lag b/w M2 changes and the effects on markets. But M2 has been shrinking for a while now. Note that when M2 rises faster than GDP, this can fuel rallies a year later, but this is the opposite of that scenario. However, note that US Treasury Department maneuvering relating to the debt-ceiling crisis could hamper the Fed’s efforts to drain liquidity from markets. Other than its general effect on markets, this maneuvering is well beyond the scope of this article and the author’s knowledge. Consumer spending and corporate profits cannot hold up much longer given the leading economic indicators (PMIs, ISMs, Empire State Manufacturing Index, retail sales reports from December, mortgage applications, and housing data). But equity markets don’t seem convinced. Markets can remain irrational longer than traders can remain solvent. Gold on a ratio chart to SPX (GLD/SPX) is still outperforming. This is not an all-clear signal for equities, especially the blue-chip index of US stocks. Supplementary Chart B (GLD/SPX) Typically, a bear-market bottom / final low does not happen while yield curves remain inverted. One WS analyst stated unequivocally yesterday that 85% of the yield curves are currently inverted. According to that firm's indicators, if more than 55% of the yield curves are inverted, a recession always follows. But when? The timing is the tricky part especially for traders and investors. Bear markets can fool the vast majority. The 3m/10y curve has been inverted to levels not seen since 1981. The inversion has fallen deeper into negative territory than any other inversion on the data available on TradingView’s charts. The final bear-market low typically happens after the Fed has pivoted and cut rates for some time. And remember, when the Fed cuts, it’s not because the economic outlook and corporate earnings are bright. Rather, the Fed cuts because of deteriorated economic conditions, tanking earnings and earnings estimates, horrible employment numbers (a recession). Supplementary Chart C.1 (3m/10y) For further discussion on the 10y/3m yield curve, see the post linked here: Supplementary Chart C.2 Recent PMI data from SP Global was negative economically (US Manufacturing PMI at 46.7 while December was 46.2, and US Services PMI at 46.6 while December was at 44.7) though it moderated somewhat (slightly less negative) from the prior month’s data. “The US economy started 2023 on a disappointingly soft note with business activity contracting sharply again in January. It showed subdued customer demand and impact of high inflation on client spending. January data also indicated a “faster increase in cost burdens at private sector firms. Although well below the average rise seen over the prior two years, the rate of cost inflation quickened from December and was historically elevated.” The commentary by SP Global’s economist provided along with their recent PMI report noted that “not only has the survey indicated a downturn in economic activity at the start of the year, but the rate of input cost inflation as accelerated into the new year, linked in part to upward wage pressures, which could encourage a further aggressive tightening of Fed policy despite rising recession risks.” This suggests that even if inflation has peaked, it may not be heading to the 2% target as fast as it moved down from the peak to the current levels. And it implies that stagflation may be around the corner as economic growth slows but sticky inflation does not dissipate. Major past selloffs in markets have been preceded by a very low unemployment (UE) rate. The rate has been as low as 3.5% recently. One analyst, Eric Johnston at Cantor Fitzgerald, noted that investors would do well by buying markets when the UE rate is 9% to 10%, and selling the market when it reaches extreme lows from 3% to 4%. UE rates haven’t begun to significantly roll over, and the Fed has remained focused on the tight labor markets and services sectors as sources of more sticky inflation. So if PMIs from January are showing wage pressures increasing somewhat, that doesn’t suggest the Fed will be *cutting* rates soon, though a pause may be discussed as rates approach 5%. Taxes as a percentage of GDP are at the level that coincides with recessions. Taxes are 18% of GDP. 2. Arguments for a Rally That Precedes New Bear Market Lows First, a rally that breaks the down trendline does not immediately negate the bear market. The 2000-2002 bear market experienced a substantial multi-month break of its down trendline (complete with a successful backtest after the break) before the next major leg down to new lows occured. Supplementary Chart D (2000-2002 Example) SPX continues to stabilize above major support / resistance zones such as 3900 and 3950. And it has closed above 4000 three consecutive days this week: January 23, 24, and 25. When it meets the down TL, it has not been reacting lower the way it has on every other test of the trendline during this bear market. It’s spending quality time with the TL, which is a new phenomenon / characteristic when price and the TL meet. SPX continues to hold above major anchored VWAPs from August, October, and December 2022, which range from 3850 to 3900. AAPL's price action is fairly bullish in the short-to-intermediate term. Here are the bullish technicals arising on AAPL's chart. AAPL’s daily chart shows a failed breakdown beneath major support levels over the past year. AAPL broke below $134.37 and $129.04 and fell to a new low, but quickly reclaimed $129.04 and $134.37, so this constitutes a failed breakdown. The failed breakdown is visible on the daily chart, so this is supportive of prices for several weeks to a couple months. $134.37 was the level coinciding with the lows from October 13 and November 4, 2022. $129.04 was the June 2022 low, which was undercut in December 2022 and early January 2023. Price broke below all these levels and then immediately reclaimed them. AAPL’s failed breakdown coincided with a tag of the parallel downtrend channel from the all-time high. AAPL shows positive (bullish) divergences with momentum indicators on both the daily and weekly charts. AAPL remains right at or slightly above the down TL from the mid-August 2022 highs, which was a fairly steep 5-month downtrend. AAPL remains above a short-term TL from June lows, but it also remains contained in its downtrend channel from the all-time high. AAPL is in no-man’s land, with some bullish forces that brought it here (divergences and failed breakdowns) Supplementary Chart E.1 (AAPL's Failed Breakdown) Supplementary Chart E.2 (AAPL's Parallel Channel Support) NDX (Nasdaq 100) broke above its down TL (linear chart only) and has held above it as well. It also has been making higher lows since the October 2022 lows. Supplementary Chart F.1 (NDX QQQ Log TL) Supplementary Chart F.2 (NDX QQQ Linear TL) IWM broke above its down TL on both log and linear charts. But it remains at critical resistance at the $188-$192 zone. It remains above intermediate term VWAPs from swing highs and lows in August, October and December 2022 (which are around $180), but it still remains below the VWAP anchored to its all-time high. Supplementary Chart G (IWM Linear TL) HYG broke above its down TL. Like other TL breaks, this could ultimately be a false signal, but here it has persisted for some time. HYG had a breakout above its down TL in the 2007-2009 bear market driven by the great financial crisis. This breakout was a false signal b/c the bear market was not over until early 2009, when the SPX made new lows. HYG resumed a downtrend after breaking above its down TL and went back to lows again and made lower lows, a move that coincided with SPX heading to new lows in Q1 2009. HYG shows a small bearish divergence on RSI on the daily chart. Wait for a larger bearish divergence to form on both daily and weekly charts perhaps. VIX has been trending lower to new lows. But this argument cuts both ways—it lies at multi-year support as well as the support zone for this entire bear market. It’s not a spot to be complacent. On the other hand, VIX could be forming a new seasonal range lower than the past few years. The downtrend must be respected until it breaks. VIX keeps failing right at the down TL from early October 2022 peaks. Consumer spending and corporate profits cannot hold up much longer given the leading economic indicators (PMIs, ISMs, Empire State Manufacturing Index, retail sales reports from December, mortgage applications, and housing data). But equity markets don’t seem convinced. Markets can remain irrational longer than traders can remain solvent. Earnings at major publicly traded companies may not be deteriorating quickly enough to disprove the “soft-landing” narrative that pervades markets. Recession does not mean stocks go straight to lows when yield curves have inverted. Recessions take time to unfold, just as the damage to economies takes time when rates are restrictive. There is a lag. Both FTSE and DAX have taken out the highs from mid-December 2022. FTSE is approaching multi-year highs. Both have broken above down TLs from the bear market. Both have decisively reclaimed 200-day SMAs. Both have been forming higher highs and lows Multi-week bear-traps occur frequently where significant down trendlines are broken until the bear market resumes in earnings in a period of several weeks or months. The 2000-2002 bear market provides an excellent example of this. So a break to the upside in the triangle pattern on SPX may last for several weeks or even months before the real downside move begins. Just because it’s been challenging and choppy does not mean it won’t get worse and more trappy. The third year of a presidential term (US markets) is nearly always bullish. There have been exceptions according to Tom McClellan (technical expert citing 1939 as an exception to this rule but noting that Hitler’s army was marching across Poland at the time). Some have said that the most bullish quarter of the presidential cycle is Q1 of the third year (technical expert Mark Newton speaking to financial media on January 24, 2022). Breadth has been strong lately, and some technical analysts have cited “breadth-thrust” indicators as giving bullish signals. Markets continue to disbelieve the Federal Reserve. Consider the differential b/w the Fed’s forecasts and the rate markets forecasts about whether rate cuts will happen this year, and where the terminal rate will be. So even if the Fed remains hawkish at the next meetings, perhaps it won’t matter. Markets will do what they want to do, including "fighting the Fed." You don't have to fight the Fed though or any other central bank. But don't fight the trend either. The Fed’s messaging at the February 1, 2023 FOMC presser may be slightly more dovish, or it may be interpreted as dovish if Powell so much as mentions a pause in hikes, or that the FOMC is discussing a pause. Even if Powell remains hawkish, sometimes markets can interpret the Fed Chair’s statements (sometimes ambiguous) the wrong way—recall that this happened at the July FOMC in 2022, after which Powell cleared up the confusion at Jackson Hole in August 2022 (tanking markets immediately). Equity positioning remains fairly underweight US equities according to financial experts on this subject. This could lead to momentum chase higher to trap all the bears before the real decline gets underway. Maybe stocks continue higher until two things occur: EPS estimates fall further, employment numbers start getting quite ugly, and the Fed is not as accomodative as it has been in past economic recessions (because while inflation has peaked, it may not fall directly to the 2% target, and with easing financial conditions, perhaps inflation could stop falling rise in Q1 2023) Equal-weighted S&P 500 (RSP) has broken above its down TL on a daily close as of January 25, 2023. The offense-defense ratio (consumer discretionary divided by consumer stables) RCD/RHS shows a breakout in this ratio above 8-month highs in the ratio’s value. This potentially signals near-term strength in equity markets as offensive stocks (consumer discretionary) outperform stocks defensive names (consumer staples) ________________________________________ Author's Comment: Thank you for reviewing this post and considering its charts and analysis. The author welcomes comments, discussion and debate (respectfully presented) in the comment section. Shared charts are especially helpful to support any opposing or alternative view. This article is intended to present an unbiased, technical view of the security or tradable risk asset discussed. Please note further that this technical-analysis viewpoint is short-term in nature. This is not a trade recommendation but a technical-analysis overview and commentary with levels to watch for the near term. This technical-analysis viewpoint could change at a moment's notice should price move beyond a level of invalidation. Further, proper risk-management techniques are vital to trading success. And countertrend or mean-reversion trading, e.g., trading a rally in a bear market, is lower probability and is tricky and challenging even for the most experienced traders. DISCLAIMER: This post contains commentary published solely for educational and informational purposes. This post's content (and any content available through links in this post) and its views do not constitute financial advice or an investment or trading recommendation, and they do not account for readers' personal financial circumstances, or their investing or trading objectives, time frame, and risk tolerance. Readers should perform their own due diligence, and consult a qualified financial adviser or other investment / financial professional before entering any trade, investment or other transaction.Correction: This article intended to provide arguments for a "bull trap" (coinciding with a multi-week break *above* the down TL) before the bear market resumes to lower lows. A bear trap is a fake out to the downside, and this article intended to discuss arguments for a significant rally, which would constitute a bull trap if it ended up being a fake out to the upside.SPX hit the VWAP from the all-time high and reacted lower. Keep an eye on that VWAP at 4080 or so.It looks like the upward breakout is occurring across equity markets. Beware the FOMC meeting--markets seem to be front-running a pause. But what if a pause is discussed, but the Fed reiterates a hawkish "higher for longer" message? No one knows what will be said or how markets will interpret what is said. It's tough to be a bear so far in 2023. Still bearish longer-term, but don't like shorting blindly into a steep squeezing uptrend. Yes, it can be a bull trap. But that doesn't mean we know where it ends. Have a good weekend.Just measured the trendline breaks in 2002 and 2008. They both ranged from about 2.3% above the trendline to 3.4%, give or take a few basis points (because TLs aren't an exact science). So if this TL is to fail, it may do so very soon. We're already over 2% over the TL depending on where it's drawn, maybe a smidge more. Also, I noticed that the 2002 TL break was followed by a retest of the TL (several solid weeks of decline) that actually broke back below the trendline on the backtest (see blue circle below), and then SPX made a high very near the high from the initial TL breakout. So the bear market trapped bulls and bears more than once before running to lows!Here is a more precise and detailed analysis of the 2001-2002 bear market with TL breakouts. This definitely doesn't have to play out the same way. But it shows that TL breaks are not necessarily a joyride to all-time highs like everyone already believes. To present a complete picture, though, there have been some bear markets where the TL break did lead to new all-time highs. We'll see.This pullback makes sense this week given the bearish / negative divergences (triple in some cases) appeared on intraday charts for major US indices. The divergences also appeared on 4hr charts in the futures markets (ES / NQ) But now that the up move from last week is consolidating, those divergences' signal could now be spent. And much of what happens in the next day and a half before FOMC will be noise, not to be trusted just yet. So far it still doesn't tell us which way markets will trend after the Fed. And often, the first move (or the first two or three moves) during / after FOMC pressers are also fake outs.If Powell talks tough tomorrow due to easing financial conditions in markets generally, don't be surprised to see a pullback to support at 3950 SPX / 395 SPY, maybe down to 3900. Watch that uptrend line from October lows. Will it get broken on a close or not? One problem—if the Fed raises 25bps, are the Fed's actions (raising much less) going to be perceived in time as speaking louder than its words (talking tough b/c of markets rallying and easing financial conditions)? If so, markets might drop on the hawkish talk, and then rally back to fill the gap at 4200. No one knows for sure. This is just a hypothesis I'm watching as a possibility.Fed raised its target range for the Fed Funds rate by 25 bps (quarter point) to 4.50% to 4.75%. Fed gave no indication of cutting or pausing in the statement. The statement said, "inflation has eased somewhat but remains elevated. And it said that the FOMC "anticipate that ongoing increases will be appropriate" to return inflation to their 2% target. Chair Powell will speak in about 15 minutes.On January 26 when this post was first published, SPX traded right at 4000 (4016 to be exact). This post's analysis raised the potential for an SPX rally through its down TL decisively and trap bulls in an significant move before bear market continuation. The strength of the momentum really increased after the FOMC on Feb. 1. Though no targets were set, SPX has rallied straight through its down TL resistance and nearly reached 4200 today. Other gauges of trend have more cushion than a trendline. A well known market analyst, Katie Stockton, commented recently that many other trend measures do a better job of reflecting the cushion required to account for many market participants' collective "market memory." Not everyone's memory is in the same exact level. Though consolidation looks likely in the coming days, pullbacks at a minimum, it appears that this rally could continue to 4200 to 4250, and challenge the August 16, 2022, swing high. Note that options dealers' hedging flows have been part of the cause of this rally. Call volume has been off the charts, which means that dealers must buy the underlying index ETFs, ES Futures, or underlying stock to hedge short call (and negative delta) positions. In addition, as puts decline in value, and as the IV falls around the "events" requiring hedging (like FOMC), the put deltas decline, and traders unload (close) puts, meaning that dealers must buy back short futures / stock hedges (for their short puts they sold to traders). Lastly, FOMC was dovish in response to reporter questioning despite holding the line on the idea of keeping rates higher for longer. Powell had the chance to "talk markets down" and push back against the idea of loosening financial conditions. But he chose not to do so. Markets took this as a cue to rip and rally in his face. Also it's important to note that big tech FAANG names are reporting tonight. Some are missing. This likely could spark some consolidation after exhaustion in the indices and key tech names. But it seems that into Feb. OPEX, markets remain fairly supported as long as SPX holds within the 4000 - 4150 range.Weakness early in the week seems likely. sblk.io/2023/2/6rr3s9CdSnHzs2E.pngFor a while, markets strongly disagreed with the Fed's forecast in December 2022 that the Fed Funds rate (FFR) would remain above 5% for all of 2023. Now, the market is starting to agree (since the hot jobs report on Friday last wee). Here is an example showing August Fed Funds Futures, which now imply a FFR at 5.145%. A few days ago, this was quite a bit lower around 4.7% to 4.8%.Why are markets rallying? Probably for two reasons. They have been rallying already on both bad and good news, so there is continued upward momentum. Markets will do what they want. The time has not come for the next downward trend leg to begin it would seem. It may be very close however. 4200-4300 is major major resistance, as well as gamma resistance. Gamma hedging flows by options dealers is another reason for the rally, according to experts on options hedging flows and gamma levels. But because so much options volume has been short-dated, that rally booster may not be long lasting or available for much longer. OPEX is on February 17. Here is a summary of some of the main points from Fed Chair Powell's speech today at the Economic Club in Washington DC. Some of the points below are quotations and paraphrases by a key Fed analyst, Nick Timiraos: Main Points 1. Powell did not push back on financial conditions easing. This was similar to his response at the FOMC presser on February 1, 2023. 2. Powell sticks to the script, however. More rate hikes are coming. The process is taking longer than anyone anticipated 3. Nick Timiraos: “Fed Chair Powell said labor markets’ surprising strength shows why the Fed thinks it will face a longer battle to bring inflation down than many investors have been anticipating.” Powell noted that the labor market remains extraordinarily strong. Last week’s NFP report “showed hiring accelerated in January 2023 (517K jobs added, 3.4% UE rate) and this was certainly strong—stronger than anyone expected,” said Powell. He added, “It kind of shows why we think this will be a process that takes a significant period of time.” 4. Timiraos paraphrased Powell’s points about inflation as follows: “Despite many people believing (hoping) the Fed’s recent inflation projections were too high because inflation would come down faster, the Fed didn’t see it that way, and given last week’s jobs report, still doesn’t.” Powell then said “We are going to react to the data so if we continue to get, for example, strong labor market reports, or higher inflation reports, it may well be the case that we have to do more and raise rates more than has been priced in.” 5. Powell said the 2% inflation target is not going to change. The interviewer asked again, and Powell without hesitation confirmed again, “Not going to change, no.”Using the CME Fed watch tool, the probabilities of two more rate hikes have risen dramatically. For example, 1 month ago, the probabilities for a 25 bps (quarter percentage point) hike in both March 2023 and May 2023 was as follows: March 2023: 66.8% probability May 2023: 37.3% probability Now where are those probabilities for two more hikes? March 2023: 90% May 2023: 72%Four days ago, the update noted that weakness was likely this week. That is happening. But it's not clear whether bears have a straight shot to 4000 SPX yet. 4084 is the VWAP from the all-time high, and SPX closed below that, which is bearish. SPX also closed below 4100 (and SPY below 410), which was the mid-December 2022 highs—so the breakout above and the failure back below could be seen as signaling lower prices. However, a bull flag and uptrend channel support still exist intact. Until the bull-flag is invalidated, and the magenta uptrend line broken, the rally can make one more leg, or at least prices can remain in the critical 4080-4200 zone.Fed Funds Futures are finally pricing in a rate path that is consistent with the FOMC’s messaging. August Fed Funds futures rates are showing a peak around 5.26% to 5.27% as a terminal rate. In December 2022, the Fed reiterated that rates would need to be higher for longer. The Fed saw a terminal rate above 5% (5.1% at the time), but markets have largely disagreed in December 2022 and January 2023. Now, this has changed. After the hot NFP print (517K jobs added and a downtick in the UE rate to 3.4%), and Powell’s interview at the Washington DC Economic Club, Fed Funds rate futures have been rising across the curve. As of Feb. 14, 2023, the Fed Funds futures show rates at the following levels in the coming months: August 2023: 5.26% September 2023: 5.25% October 2023: 5.24% December 2023: 5.115% Note that December 2023 K peaked at 5.02 intraday on November 4, 2022, but fell well below 5% that same day by the close. It has not been above 5% since that date Over the past 2.5 months, the lows for the December 2023 K have been from 4.30% to 4.40%. This has risen a whopping 75 bps from swing lows over the past 2-3 months! Markets are now aligned with the FedFed Funds futures showing implied terminal rate in August now above 5.34%. Those bears and hawks saying that the Fed was right about rates being higher for longer are being proved right this week. It's odd how a major bond market expert a few weeks ago said to "trust the market and not the Fed." While I get this sentiment, trusting the Fed Funds rates futures market in January has been proved a disaster. Another example: Look at how the Fed Funds rate futures for the end of the year have risen over 17%: In early January, the FF futures market saw rate cuts by the Fed throughout the year. The lows for this Dec. 2023 contract were 4.3%-4.4%. Now the December K is over 5.20%!There are a lot of reasons to watch 3900 / 390 SPY this week. See the blue circle above. If price reverses higher, then a rally could ensue and continue into March 17 OPEX. Watch out for a bear trap below it as well, a break into 3800s, for example. In any event, keep an eye on this area as it's a backtest of the down trendline from ATHs that was broken a while back, and it's near critical Fibonacci and price support.Considering whether this may be a dip for the final relief rally before the big sell. This makes sense here. We've retested the down TL, and it seems like a decent risk-reward to consider buying the SPX here into April 2023 for a swing trade. It will continue to be choppy, so this won't be easy. But Squish sees higher SPX prices into April 2023. Longer-term bearish though. Invalidation on daily / weekly close below 3900 SPX. Wanted to publish an update quickly while prices are nearing 3900 / 390 SPY. A post takes longer to produce. ST will try to publish a more detailed article later.Please see my most recent post on SPY / SPX for further updates:Here is a sector relative-strength watchlist. It's not something one would watch every day, but it may help to have as a resource when you need to see how sectors are doing relative to the S&P 500 or relative to the equal-weighted S&P 500. Some of the sectors have sub-industries w/in them. Let me know if you find it useful: tradingview.com/watchlists/108842462/

Primary Chart: ETHUSD on a 2D Time Frame The Primary Chart shows ETH's major down trendlines over the past 14 months. The first down trendline (magenta) remains effective and has contained price since the all-time high in November 2021. The second down trendline (gold) has been broken. The anchored VWAP from the all-time high (teal) is currently at $2230. Fibonacci levels are also shown on the primary chart, as well as major support and resistance levels from the past few months. This is a short-term bullish idea. It's odd having a bullish idea in the crypto space—but this idea is very short-term. Despite recent progress, much more structural change is needed before bulls can call victory with a new primary degree uptrend. Bear markets commonly see multi-week and multi-month corrective rallies. SquishTrade is *not* calling a new bull market / long-term uptrend in ETH. To the contrary, this is just a corrective rally until the weight of the evidence proves otherwise. Down trendlines can break and be readjusted without a new uptrend being established, and inversely, up trendlines can break and be readjusted without a new downtrend being created. In any event, long-term buy and "hodlers" should be careful here and use stops consistent with prudent / professional trading principles. If the time horizon is extremely long (forever) because you believe no other technology could ever possibly render ETH obsolete, then maybe you have inside information that does not require any caution whatsoever. The key technical points are summarized below: The logarithmic down trendline remains intact currently. BTC's equivalent down trendline (on a log chart from all-time highs) has been broken, and it remains to see if that break will hold. It might hold for some time as the shape and structure of the downtrend is reestablished. The best the bulls can achieve, however, is a sideways to neutral trend for some time. Major bear markets do not typically reverse in a V-shaped fashion. Price is currently contending with a key Fibonacci level, the .618 retracement of the mid-August 2022 to November 2022 decline. This level lies at $1664.82. Price could push a little higher from here if it wants to extend a bit more. The move in BTC and ETH has been nothing short of explosive, typical in bear markets, likely fueled by shorts covering and a lot of upside hedging and FOMO. But in all likelihood, a consolidation / pullback is in the cards soon. See the RSI divergence (bearish) on Supplementary Chart A that has now arisen on daily charts. Divergences also appear in momentum on the 8-hour and 4-hour charts using RSI and other indicators, including the Bollinger Bands. Supplementary Chart A Because the November 3, 2022, high was broken, this sets up a shorter-term bullish structure potentially. The key word here is shorter-term. Again, this is not a call for a new bull market. But traders can try to capture upside moves with tight stops at logical supports. Right now, price is extended. Don't recommend chasing unless you really know what you're doing! If the down trendline (magenta) is broken, the measured move target is the more aggressive target for this move. That target lies at $2473. This target is not worth discussing, and not viable, unless and until the down TL from the all-time high is convincingly broken. Thank you for reading this post. ________________________________________ Author's Comment: Thank you for reviewing this post and considering its charts and analysis. The author welcomes comments, discussion and debate (respectfully presented) in the comment section. Shared charts are especially helpful to support any opposing or alternative view. This article is intended to present an unbiased, technical view of the security or tradable risk asset discussed. Please note further that this technical-analysis viewpoint is short-term in nature. This is not a trade recommendation but a technical-analysis overview and commentary with levels to watch for the near term. This technical-analysis viewpoint could change at a moment's notice should price move beyond a level of invalidation. Further, proper risk-management techniques are vital to trading success. And countertrend or mean-reversion trading, e.g., trading a rally in a bear market, is lower probability and is tricky and challenging even for the most experienced traders. DISCLAIMER: This post contains commentary published solely for educational and informational purposes. This post's content (and any content available through links in this post) and its views do not constitute financial advice or an investment or trading recommendation, and they do not account for readers' personal financial circumstances, or their investing or trading objectives, time frame, and risk tolerance. Readers should perform their own due diligence, and consult a qualified financial adviser or other investment / financial professional before entering any trade, investment or other transaction.The first part of this forecast has been working. The pullback to consolidate. The second part—a push toward the down TL around $1800, has not been satisfied. Risk assets looked to be in an uncertain spot as of the close on Friday, 2/3. Max uncertainty for bears and bulls in major equity indices. = If long, tighten stops.The original forecast still appears to be on track. ETHUSD has created a massive divergence on the daily chart. Wouldn't be surprised to see it push to one more high, then exhaust right when it meets major logarithmic downtrend-line resistance.ETH's momentum continues to diverge. But the bulls are holding price above a key Fibonaccci level of $1550. But they haven't been able to break $1664 with conviction. Breaks above that fail. It seems possible that ETH can push one more leg higher before exhausting this up move. Notice the angles of ascent in price. The initial angle was steep as momentum increased and price powerfully rose. Then as supply entered and buying pressure waned, the angle lessened. Two angles (blue lines with angle information) shown below:The trouble is that ETH will likely exhaust and run completely out of steam right when it hits major resistance at this down TL. But bears should be careful here too. Perhaps wait for confirmation before shorting. Why? Because so many other assets have broken both log and linear down TLs in the past 2 months. Here is daily RSI. Momentum continues to diverge negatively. However, if price pushes one final move higher, the RSI would spike again, but it's unlikely to spike above the prior peak from January, so this would be a more pronounced divergence rather than another smaller divergence in the current series of divergences (shown below)

BTCUSDBTCUSD has traded in a choppy fashion for some time. Since mid-June 2022, it has traded modestly downward (downward and sideways) relative to the steep downtrend it experienced from the November 2021 all-time high to the June 2022 lows. This author has refrained from posting on crypto for a while given the choppy and uncertain nature of the space. Supplementary Chart A: BTC's Weekly Chart with Yellow Box Showing Choppy, Sideways to Modestly Downward Price Action for the Last Half Year But BTC looks to be pushing back to downtrend resistance. This will be a make-or-break time for BTC if the downtrend resistance can be reached. Bears will want to short, and intelligent bears will want to define their risk at the downtrend resistance levels—either the downtrend line, a key Fibonacci cluster, or the prior swing high (where the bluish-teal rectangle is placed on the Primary Chart).BTC's downtrend remains intact on a log chart. The burden is on the bulls to break that downtrend structure, convert it to a sideways or neutral trend, that may base for some time, and then refashion the structure in to a series of higher lows and higher highs (an uptrend)BTC may reach the following levels, which will not be considered "corrective-rally targets" given that the downtrend seems ready to resume at any time. So perhaps consider these as levels to watch:(1) $19,183.29, which is the .618 retracement of the most recent leg of decline, to $19,339.19, which is the measured-move area (a 1.00 Fib projection of the first leg of the bounce from the start of the second leg) and $19,500, which is the 200-day SMA (magenta);(2) $20,190 to $20,262, which zone includes the .786 Fibonacci retracement and the 1.272 projection of first wave off the November 2022 lows (projected from the start of the second wave); and (3) $21,300 to $21,478, which zone lies at the prior swing high and the downtrend line resistance. To determine whether this post is successful, price must fail at one of the levels presented above, and resume the downtrend with a leg lower that breaks the uptrend line from November 21, 2022. This outcome will serve as the standard / criterion for evaluating this idea later on. Of course, the price paths shown on the primary chart are hypothetical only, no one knows exactly which path price will take.Regardless of one's view (bullish or bearish or neutral) the simple uptrend line from November 21, 2022, lows guides this corrective bounce. When that is broken, expect impulsive movement lower again.No one knows with certainty whether the bear market is over in crypto and equities. Traders and chart watchers can simply make their best guess based on the probabilities presented by the patterns and technical analysis. Markets will sometimes violate the patterns and move in a manner that confounds the indicators. That is why risk management is so vitally important for traders.Thank you for reading, and Happy New Year / Feliz Año Nuevo!________________________________________Author's Comment: Thank you for reviewing this post and considering its charts and analysis. The author welcomes comments, discussion and debate (respectfully presented) in the comment section. Shared charts are especially helpful to support any opposing or alternative view. This article is intended to present an unbiased, technical view of the security or tradable risk asset discussed.Please note further that this technical-analysis viewpoint is short-term in nature. This is not a trade recommendation but a technical-analysis overview and commentary with levels to watch for the near term. This technical-analysis viewpoint could change at a moment's notice should price move beyond a level of invalidation. Further, proper risk-management techniques are vital to trading success. And countertrend or mean-reversion trading, e.g., trading a rally in a bear market, is lower probability and is tricky and challenging even for the most experienced traders.DISCLAIMER: This post contains commentary published solely for educational and informational purposes. This post's content (and any content available through links in this post) and its views do not constitute financial advice or an investment or trading recommendation, and they do not account for readers' personal financial circumstances, or their investing or trading objectives, time frame, and risk tolerance. Readers should perform their own due diligence, and consult a qualified financial adviser or other investment / financial professional before entering any trade, investment or other transaction.BTC broke above it's 200-day SMA (pink line). It appears to have reached (and possibly hold on a close) the first level of interest at $19,183 - $19,339. The next level to watch was given at $20,190-$20,262 (two Fibonacci levels). That level is not far off and may be reached over the weekend.Bears must be covering as BTC has rocketed higher over 5% per day for three consecutive days. The weekly gain so far is +22.48%. We will see where it closes. One of the most important qualities in top traders is being flexible, willing to see the probabilities on a given day as the technicals stand, but also being willing to change and be wrong when price starts breaking levels and doing the opposite of what the technicals suggest. That's also strong technical evidence that can't be ignored. A famous author and trading expert, Jack Schwager, talks about how the best investors and traders are quite flexible, able to change their view "on a dime," willing to flip their view from bullish to bearish or vice versa in a matter of days or weeks. So ST is working on being willing to be wrong about the continued validity of the downward TL. The macro environment and liquidity issues (and higher for longer rate policies) don't support a new bull. Nor does the current structure of longer term price action.But trendlines simply don't last forever. Sometimes they are replaced by less steep ones as bigger intermediate-term corrective moves occur, and a downtrend has an intermediate-term period of consolidation. BTC is not going immediately back to all-time highs or even to 50K. But if the downward TL breaks, it could push to 32K to 38K (50% or 62% retracements of the bear market). So watching how price responds to that TL is critical. Ultimately, no one knows what happens next, but we can see what signals appear when price reaches critical technical levels.BTC is looking exhausted here, but with a 22% to 24% move in the past week, don't discount the ability to push through some key levels to wreck the TA and make the whole picture a lot more messy and confusing. All the upside levels (zones) of interest mentioned in my post have been hit except for $21,478 (prior swing high) and the down TL on a log chart. Don't discount the ability of markets to trap bulls after whipsawing bears. Price could push through the down TL and up to 25K before reversing with the wild price swings we're seeing.But next week could bring some surprises in either direction. Be prepared.Also notice the divergences on momentum indicators. The two quickly reviewed here were ROC and RSI. Both showed divergences that were quite prominent -- The 2H and 4H charts show striking bearish divergences. Daily may eventually show one as well, but that would require a final push higher in a few days after a pullback. Watch the nature of the pullback to either define the uptrend channel or invalidate this whole push as a bull trapBTCUSD holding steading just over 21K. It has shown strength, but negative divergences are everywhere. It could make one more minor high for this short-term move with another divergence. Today, it has been failing at the .618 retrace of the last major leg down (the decline from mid-August 2022 highs).But keep an open mind about whether BTC will break the downtrend line or not. As mentioned in a previous update, down TLs are meant to be broken. Breaking a line that held for a long time doesn't mean it's a new bull market, though it could mean higher prices as buyers get sucked in for a while. Instead, it means that the trend is being redefined. It may remain a downtrend but less steep after a messy corrective move higher. It also may turn into a neutral / sideways period before another major leg ensues.Divergences on the 8-hour chart too. Another higher RSI peak that is lower than the prior ones could still occur before the bigger pullback. The pullback will determine whether this goes to 30K or whether it goes to new lows.Who thinks BTC is breaking above that log down TL since all-time highs? That would make a nice bear trap before prices make their next leg lower. Max pain and confusion. Not convinced either way yet. Price could fail right at the TL, or it could push through the TL to confuse everyone and trap bears before a flush lower in a few months. Both scenarios seem plausible. Keep tight stops whatever direction you play thisUpdate on the divergences (bearish) forming here. The daily now nearly has a completed divergence. Just need a higher high. So the divergence may be complete right when price hits the down TL and makes a marginal new high perhaps? All eyes are on this, as BTC has everyone's attention. Here is the 8-hour with clear divergences:And here is that marginal new high mentioned earlier today. With a complete negative divergence now on the daily and 8 hr. Will the TL break?The down trendline shown above has been broken on a daily close. Now it will be important to see whether this is a whipsaw or whether it will hold for some time. As mentioned, 8-hour and daily divergences exist (negative for top ticking buyers). But if BTC holds above the down TL on any backtest, it will have further to run for this move, which presumably remains a corrective upward cycle. The next higher targets will be $25,212 (mid-August 2022 highs) and the VWAP from the all-time high at $30,120. It may also be that BTC has to do some sideways price discovery for a few months before putting in a final low.In this chart updated as of late in the day today, one can see that BTC is contending with a key area at .786 Fibonacci retracement and the VWAP from a significant peak in March 2022.The first part of the forecast seems to have worked out, though the second part has not. BTC has rallied from $18,812 when this forecast was published to a price of $23,362 as of a couple days ago (January 21's intraday peak).The second part of the forecast seems more tenuous at this point. As noted on the primary chart, "decisive closes above the down TL may mean the corrective rally has more room to run." Several daily closes have occurred above that down TL. This break could be a whipsaw (let's see where the weekly close occurs). The VIX remains at a major support level for both the entire bear market in 2022 (daily chart) and an uptrend support from several years ago (weekly chart). This suggests complacency in a precarious time. Would not be surprised if this is a whipsaw. OR this could be the start of an adjustment to the slope of the downtrend. Downtrends are often redefined by TL breaks (same happens with uptrends). This can redefine the slope somewhat as price consolidates / retraces upwards over a larger time frame.Going forward, the guiding technical level for this rally is the uptrend line from November 21, 2022, lows. This was made clear in the summary of the original post: "Regardless of one's view (bullish or bearish or neutral) the simple uptrend line from November 21, 2022, lows guides this corrective bounce. When that is broken, expect impulsive movement lower again."As long as BTC remains above this logarithmic down TL, prices can rally to $25,212 at some point, and if that level is taken, perhaps $30,120.SquishTrade is starting to lean toward this corrective rally running a bit further to $25,212. Let's take this one level at a time. After $25,212 comes $28,000 - $30,000 zone. Despite the down TL being broken, this remains a bear market until prices can convincingly change the longer-term structure. The decisive break of the TL does suggest prices have a bit further to run, likely to $25,212 at a minimum, perhaps 28K - 32K

Primary Chart: 2D Chart of ETH Showing Fibonacci TargetsETH and most cryptos are moving fast so this post will be brief. But ETH is headed to new lows. It has sliced through every single major retracement of the rally off the June 18, 2022 low. Squish has remained bearish on BTC and other cryptos despite very brief counter-trend forecasts on occasion to take into account the strength from bear rallies.ETH is plummeting along with the rest of the crypto market due to a well-publicized liquidity crisis that has seen SBF's net worth fall over 95%. Further, crypto market cap just broke below a long-term logarithmic TL. That strengthens the bearish outlook for the entire crypto space given the nature of the break. Supplementary Chart: Total Crypto Market Cap with Long-Term TLSquish's first price target is the YTD low around $880. The second price target is $569, which is still conservative. Yes, that sounds extreme, but for those who lost 80% from buying at the peak, consider that buying at $1000 can quickly lead to a -50% to -60% loss. Caution is warranted for anything other than well-managed, disciplined trades for counter-trend bounces, which are actually low probability as scheplick discussed today in a livestream (highly recommend his livestream events in the future). The most aggressive downside target target is $367, which should not be considered unless and until price falls below $569 decisively. This is the measured-move area as well as a Fibonacci 1.00 projection of the first major segment of the decline projected from the peak of the summer's rally.________________________________________Author's Comment: Thank you for reviewing this post and considering its charts and analysis. The author welcomes comments, discussion and debate (respectfully presented) in the comment section. Shared charts are especially helpful to support any opposing or alternative view. This article is intended to present an unbiased, technical view of the security or tradable risk asset discussed.Please note further that this technical-analysis viewpoint is short-term in nature. This is not a trade recommendation but a technical-analysis overview and commentary with levels to watch for the near term. This technical-analysis viewpoint could change at a moment's notice should price move beyond a level of invalidation. Further, proper risk-management techniques are vital to trading success. And countertrend or mean-reversion trading, e.g., trading a rally in a bear market, is lower probability and is tricky and challenging even for the most experienced traders.DISCLAIMER: This post contains commentary published solely for educational and informational purposes. This post's content (and any content available through links in this post) and its views do not constitute financial advice or an investment or trading recommendation, and they do not account for readers' personal financial circumstances, or their investing or trading objectives, time frame, and risk tolerance. Readers should perform their own due diligence, and consult a qualified financial adviser or other investment / financial professional before entering any trade, investment or other transaction.The shallowest retracement level of .236 for ETH's entire move (based on available BITSTAMP data) would involve a drawdown to $535. The next retracement, a .382 retracement which is also considered a relatively shallow retracement of a move, would put ETH at $136.ETH has reclaimed the downside breakout point which is short-term bullish. ETH still may likely find its way to $569, but it won't be in a straight line. For the time being, this forecast is in doubt until ETH breaks back below 1155. As several famous traders and fund managers have said, it's okay to be wrong, but it's not okay to stay wrong. Until ETH reclaims the breakout to the downside, this forecast will be placed on hold.As mentioned in the last update on Nov. 10 (during the massive squeeze across equities and cryptos), this forecast is placed on hold until ETH reclaims the breakout level to the downside around (Breaking back below the $1100-$1200 zone).Interestingly, although a failed breakdown is short-term bullish, a failed breakout is short-term bearish. And ETH's 2-hour chart shows a major failed breakout to the upside followed by this weeks failed breakdown to the downside. This leaves price inside the chop range again from the past couple months of $1200-$1500, and it leaves price in a sort of equilibrium b/w buyers and sellers, with no clear winner yet, and no clear trend direction until a successful breakout / breakdown.ETH has been looking weak since it whipsawed back above the breakout level. It's hovering right at the $1200 level as shown below. The fact that it's spending a lot of time here at the $1200 level without reacting higher suggests significant weakness.On Nov. 10, the forecast for new lows was placed on hold. The forecast remains on hold until such time as a break back below the breakout zone—$1150-$1200. In the meantime, ETH continues to chop sideways in corrective, consolidative price action.