Weekly Market Outlook: NVDA Earnings, Risk On Resurgence, and ETH ETF Speculation

The stock market closed last week at new record highs but the rally will be put to the test this week with NVDA earning on Wednesday.

NVDA has been the poster child of this bull market yet it failed to make new highs last week with the rest of the market. In fact the semiconductor index as a whole failed to make a new high while the SPX and DOW did.

So the market continues to give us a lot of mixed signals here. While more stocks make new highs signaling a strong run, the leaders are failing to break out and the overbought levels are hitting an extreme.

Additionally, with the return of the GME crowd we are seeing a historically dangerous level of call buying. Suggesting that the risk taking here is reaching a turning point.

And while, did not get any meaningful inflection point last week on the anniversary of the 60 year cycle (May 12). What we did get was a market that produced the exact same setup.

So while last week we did not close red we may have just seen the tipping point. A further look at the 60 year cycle shows that the market did not turn down significantly until the week of the 18th although it made a high on the 12th.

Again, to be clear this is not a market I am trying to short. As readers know this is a major bull market we have been calling the whole way. And new all time highs are typically a sign of more strength to come.

We are instead looking for a buying opportunity going into June that would likely be THE buying opportunity of the year.

This market has been following the 60 year cycle beautifully and until it proves it wrong we will err on the side of it being right. If the market screams higher this week I would consider it to have finally altered course. Gann even says that we can expect 10-20% of the year to be opposite. So eventually we will get the opposite price action. But with the current setup and the big cycle in play I would still wait to see a dip before chasing this market here.

Turning our attention to crypto.

BTC is back in a position of strength. It has reclaimed the blue 1/1 downtrend line. It was also able to make a higher higher and close above the .5 retracement level. I don’t have much else to comment on here.

I expect we wont see much volatility in price this week. The last week of May and first week of June is what we will be watching. Specifically that June 9th window.

Again, I will emphasize that we do not have any MAJOR inflection points in the next two months. So that either means boring sideways summer or big run with little corrections until August. The case for that would be 2012 and I detailed that last week in the chat.

A quick teaching point on the chart above and why I have the 18th as a possible minor turn date (proving to be correct so far.) Price ranges often turn into time ranges. Notice the run from the Sept low was 48000 points. We then had a 48 day correction. That correction was 17000 points from the top. We then had a turn 17 days from the May 1 low. Check for yourself. Again, minor turning points, nothing major but a turning point none the less.

Finally, this week we have the supposed ETH ETF announcement. It certainly looks like a rejection is priced into ETH. Given that the bottom is in on ETH and ETH/BTC is in capitulation zone I imagine the ETF will not go through but that is already being reflected in the price. Similar to the way BTC went through its first few rejections and then started pricing in the inevitable acceptance I imagine ETH will follow suite.

As for the rest of the Alt market lets just look at Total 2.

Just using a number of fib levels to analyze this chart. The truth is that ALTS are still weak here being below that cluster of 3 black lines. That is a confluence zone two of which mark .5 retracement levels. So again while I do believe the bottom is in on cryptos. We are in that grinding period that should get us to that early July decision window.

Overall, I continue to stress patience until that last week of May/ first week of June for both stocks and cryptos. I believe it will be a pivotal moment for determining the summer run. Don’t chase here as we saw last week with crypto. Lot’s of overly excited people thinking the market was going to take off. I believe we got the initial starting gun as I talked about but if we get the buying opportunity into June with stocks, I imagine crypto will present a similar opportunity.