Summer Surge or Market Dip? Key Levels to Watch After NVDA's Earnings and ETH's ETF Approval
Last week we got the big news with NVDA beating earnings and ETH getting the green light for the ETF. This week is all about follow through and key levels.
As we cross Memorial Day weekend in the United States that usually signals the start of the summer holiday months. With that, we are also inching closer to a major election now just 6 months out.
We are already seeing this impact, particularly in the crypto markets with both parties now politicizing it in an attempt to gain ground with voters. The rhetoric is only going to heat up going forward and market participants are will be getting overly emotional on the topic.
Similarly, with stocks we will see a lot of discourse around the economy and its overall state of being. Biden will tout stocks at all time highs and Trump will attack inflation. The reality is both of these narratives are true. However, stock generally do better than average in the lead up to an election.
The 60 year cycle and the election cycles we have been closely following suggested to us that we could expect a major low in late May for the stock market. So far we are starting to deviate slightly off the 60 year path for the first time this year.
I mentioned last week that we would need to see the SPY start to roll over if we were going to get that correction to buy. It did just that on Thursday. Friday it was unable to make a new high and then it closed the weekly candle red.
The Nasdaq and Dow also showed weakness into the end of the week. So it’s certainly a setup to watch for that correction this week.
In the 60 year cycle we made a low around the 4th of June. Regardless I would expect to see some more downside this week after that reversal candle we got on the time by degrees date from the SPY IPO.
Same thing for crypto.
No major or minor dates for BTC this week but it did fail to get above the red line which is the weekly closing high. Not a lot else to say here as the focus on the crypto market has swiftly shifted to ETH.
ETH/BTC and BTC.D are both at key levels so again, watch for a slight pullback here and some BTC strength as it tries to hold its ground and ETH tries to take the lead once and for all. At the moment we are not getting much resistance.
Finally, looking at ETH its at a major weekly level. That has been historically hard for it to get above. The red line marks the weekly highs from 2021 and the most recent weekly highs as you can see before the correction. So ETH needs to get above that level and close the week for us to really get going.
Overall, you can see we have many major weekly levels to beat in the next week or two. I have no doubt that the market will beat these levels its just a matter of if we get a slight pullback first. Selfishly, I was hoping for a pull back last week to buy. Although, we are in great position if you have been a premium reader.
It’s no secret ETH memes have been flying and we have been well positioned for that with our portfolios. Several of our holding recently crossed the 10x and even 20x mark. Now the thing to do is simply be patient and observe strength. If we do get that slight cool down into early June I would look to buy more of the strongest coins.
Same thing with stocks. Given the close last week I maintain that you should be patient here and look to buy on a pullback that may last one or two weeks into that early June window.