After the Storm: Is the Market Ready to Rebound or Is More Pain Ahead?

It was certainly a tumultuous week but something that we have been well prepared to navigate. The major question still remains…is the pain over or do we still have more downside?

First, let’s do a quick recap of the week in stocks. Monday opened with pure panic only to have those emotions dissipate after just 24hrs. That was the time to look for a low as we mentioned in our Monday morning market outlook. We had been saying to watch the 5th for a low and it did in fact come in right on that date. Again, 60 years to the day of our 1964 cycle. The 60 year cycles proves its overwhelming correlation is still strong.

Looking at the daily chart above the market got pretty oversold and a bounce was due. However, we have yet to confirm a three day reversal and as we highlighted at the beginning of the week we should expect some choppiness in the weeks and months to come as we sort out what was a nasty drop.

The weekly chart above also shows the three week reversal and low similar to what we had back in April.

Finally, you can see the time by degrees dates coming up towards the end of next week so I remain cautious that we could see a roll over into those dates before the market gets more steam.

As for crypto we nailed the major August window we had been warning about for a significant low.

Keeping it simple here with the weekly chart, the market came right to the 50% level from the previous run up. The weekly candle looks great and I would like to see it close above the blue line which marks the previous weekly swing low. So far so good, and I expect it will finish the week strong.

However, similar to stocks I have the beginning of next week as a possible short term high where we could see a rollover in the price. 60-63k is the area of important resistance that we need to break through and ultimately close the monthly above those levels.

So, was that THE low or will it get worse. My view is that the market will not go lower although I see a lot of people calling for a final low in September. I strongly doubt that will happen mainly due to time.

From a pure time perspective in relation to previous cycles and the one we are currently in, the market cannot make a new low. It would violate the time rules of previous cycles and in my view be a major red flag if that were to happen. Also it’s very hard to see it getting any worse from a sentiment standpoint given the level of fear we just saw in the market. With confirmation on a strong weekly close and then ultimately a monthly close above 60k this market will not look back.