August Market Outlook: Final Buy Opportunity in Stocks and Crypto?

This week we have the FOMC meeting on Wednesday coinciding with the monthly close. This should give us more direction in the short term and bring us into our August time window with confidence.

Readers know I don’t put much emphasis on these types of events but they can coincide with our timing analysis and often do. So in this report I want to reiterate my game plan over the next few weeks and why we may see a final low to buy in the upcoming month of August.

First of all let’s take a look at the correction in the SPX.

Last week I said we should expect a move to between 5300 and 5400 and that’s exactly what happened. However, because the market has made a lower high, and another lower low, I fully expect there to be another flush to a final low. I have outlined what that may look like in black.

With respect to time, the last correction was 22 calendar days and 15 trading days. If we are to see time and price balance here we should be looking for that low to come in around the 6th of August with a possible double bottom later in the month. Important to note that a natural date is coming up on the 8th of August so we are getting some confluence there.

Overall, stocks are still a bit oversold so don’t be surprised if we grind up a few more days into and around the meeting before ultimately making a new low in the middle of the month.

Crypto is also in a similar setup but slightly stronger as we should be expecting going into this second half.

Above is the weekly chart of BTC. As you can see, we were just barely able to squeeze out a third consecutive green candle last week. This marks the first time that has happened since the March top and our signal that time is now overbalancing to the upside.

Below is my plan going into August. This is a chart I shared last week in our Friday report.

As you can see I think there is a good chance we may see BTC make a new ATH very soon but, that high could be followed by a quick -20% dip that would give us a higher low to buy. The key here is that we make a new high. If a new high is made then it would confirm the major low came in early July and we will not see a new low going forward.

Finally, I want to show you the BTC line chart on the monthly time frame because it reveals a lot that the bar chart does not.

This is a very powerful breakout after what has been a 5 month range. I continued what the path may look like in black if we are to get that major August low. It gives us a nearly perfect backtest of that same level I outlined in the daily chart above near 62k.

This is a window we have been talking about since April and we are now entering the month of August. In our view it will very likely be your last chance to load up on cryptos at these prices before a very powerful advance.

We have laid out this evidence over the last few weeks in our report here and this one here. If you have not had a chance to read them or are a new subscriber I suggest you do so.

As for the takeaways this week, they remain mostly the same. For stocks I believe there is one more leg down to this correction. For crypto continue to accumulate strong alts and memes. I do believe you may get one more chance at a discount so do not fomo but at the same time there are many of our watchlist holdings that are near the bottom of their ranges. If you are strictly a buyer of BTC there will may be a better opportunity, but alts are mostly bottomed and 70-90% off the highs so don’t be afraid to build positions because we are getting very close to a point where the market will leave sidelined people in the dust.