Navigating the Market Storm: Stocks Soar, Crypto Stumbles - What’s Next?

Stocks have been pushing higher this week just like we talked about with the seasonality. I don’t have any real concerns other than the way the DOW is completely left out of the move. It’s possible we see either a grind higher in stocks for the next few weeks or a correction followed by a bigger move.

Another week where the SPX ran down everyday and then closed on the high.

Thats something we will cover in next weeks outlook. Meanwhile, crypto has been putting people through the gauntlet. Reminiscent of last summer’s pain where stocks continued to soar but crypto was left in the dust.

I have to call it like I see it. I am bullish on the overall market and I think this is a great time to accumulate majors. HOWEVER, I do not like the look of alts and memes one bit.

So let’s start with the majors.

Here’s ETH.

The daily chart on the left looks like the third wave down in a panic. It absolutely, has to hold the purple box in any scenario to be considered in a short term position of strength. Long term I’m not worried one bit but short term that box has to hold and with yesterdays lower close it looks concerning.

Same thing on the weekly. I added the weekly chart here to show you the count of three weeks down if we close like this today. That would be an overbalance of time. Notice how we still haven’t seen a 3 week green reversal.

Overall, what I see here is that price is fine right now, its holding a short term important level and thats a good place to add with a tight stop just below.

However, it’s the time overbalance that we are facing that concerns me. As we know time is the most important factor. So if we are unable to stage a significant rally by Sunday’s close then I think there will be more downside in the coming weeks.

Looking at BTC

I see the same thing. While we have not had as many weeks down on BTC we are at a critical junction as you can see the cluster of the orange black and green support levels just above the 50% retracement box. So same thing short term the price is actually strong still but the closes look weak suggesting more downside if we don’t close the week strong.

Now, it’s the alts that really concern me here.

This is the weekly chart of OTHERS ( crypto total market cap excluding the top ten). A good representation of small caps and risk sentiment. As you can see on this weekly chart it looks quite bearish. Working on 3 weeks in a row down here also breaking down below the 50% level and the trend line. So not a good look if your in small caps.

Finally, I want to show you what I see on meme charts and the leading memes. It’s always important to look at leading tokens and watch for them to top or bottom. Memes have been the leading sector and coins like MOG PEPE and TRUMP led this round so let’s check in on them.

First MOG. A total retrace of the move. Notice, very important I have showed you this on several different occasions a lower high and a lower low after a top is the signal to GET OUT. Here we have the lower high the lower low then the drop with a panic still to come.

Unfortunately, we see the same thing here on PEPE. If PEPE takes out the low here and its very close, there will be another leg down before the low.

And lastly, TRUMP. To me it while it still is showing the most strength, it looks like it want to put in a lower high here. If it does the market will follow a path like the white line.

So what to do?

If alts and memes are going to be saved at these levels then I believe the majors need to turn around in very short order. As in they need a convincing close to the week. Otherwise, they break down and the memes go with them hard. Fundamentals are already down bad and usually memes are the last to move so will memes follow here? It’s possible and given where we are in the cycle it would not surprise me at all.

All in all, if you are in crypto now is the time to accumulate majors. These levels will likely never be seen for the rest of the bull market once we leave this zone. However, I would be very cautious in alts and memes. They don’t look safe here and if majors get a small shake up they will drop and bleed out.

Understand the level of risk you are comfortable with here. I have said this since the beginning of the summer but most people should not be messing around in this market until easy mode returns. You will be better off de-risking and coming back in August.

If you are taking risk here then you want to see the levels I highlighted above hold and you’ll want a strong weekly close. Otherwise patience patience patience don’t roundtrip your gains. Most of you are likely down quite a bit from portfolio ATH (so am I) but don’t even think about it. It’s more important to protect your capital here for a much bigger run in the fall than to start back at square one by doing something stupid here.