Weekly Watchlist Update: Stock Surge and Crypto Catch-Up Expected by July
Stocks are looking to cap off another strong week as we open up the month. Crypto is lagging for now but should play catch up going into July.
We had a lot of big developments this week from the GameStop saga to new stimulus and even talk of a new Texas stock exchange. We covered all the latest news in our first X spaces yesterday. Give it a listen if you haven’t
In short, I believe we are headed for a substantial summer rally that should take us into mid July at the least. Below is a chart of the SPX which I have added 3 fractals to that are most related to our current scenario. I know it looks horrible but just follow along for a second.
These fractals are from years in which we had an incumbent democrat running for reelection. It has only happened 16 times going back to the beginning of our country. The years I have in orange, red and the dotted line are respectively 1964, 2012, and 1944 because they were the most similar in price action.
As you can see indicated by the blue arrows in each of these years we had A major low in Q2 and finished the year much higher. But, in the summer was the most intense rally of the year. Roughly from now until second half of July which is why I am bullish this move.
Crypto always lags the stock market. So I expect it to follow to new highs in the coming weeks. BTC is still looking to get that weekly close above the red line in which case I believe we will see the $84,000 mark hit shortly after.
As for ETH there is still a lot of room to go here. The ETF hype is far from over yet it hasn’t even hit new highs. Meanwhile, the RSI is setting up a very strong bullish signal.
Look at the small blue lines. Price is making higher lows while rsi is making lower lows. I expect a big pop to the upside soon.
Otherwise, outside of memes I would say the alt market is generally suffering. I shared this graphic the other day that shows that alts compared to BTC are at the furthest deviation from the mean in their history.
And if you look at a lot of the AI and RWA coins that were hyped in the first half of the year they are down 90%. So I have to believe a very sharp mean reversion will happen here and we may see a big rotation from memes back to fundamentals in the second half of the summer.
For now, I continue to be positioned risk on in memes. I believe with the setup in the stock market and our dates of the 9-12 coming up we could see a breakout that will take us into that mid July window where we can reevaluate.