TL;DR

  • The DXY breaks its Triple Top
    • Last week, we identified a topping pattern on the DXY and it broke as expected
    • The result was a nice rally in equities
  • S&P 500 bear market rally could be nearing its end
    • After the 2008 GFC, tech stocks took 6 to 8 years to recover and reach their previous highs
      • Energy stocks, on average, recovered much quicker – in 3 to 6 years
    • After 2020, energy companies have enjoyed a bull run without the downsides we’ve seen from tech stocks
      • This should signal where priorities are for investors and consumers during recessions
      • Energy companies like ConocoPhillips and Chevron remain long term holds for me
    • Lumber stocks have been slumping – a clear sign that your home may not be worth what you think it’s worth
  • Crypto remains unstable
    • As the FTX story unfolds (and becomes increasingly insane), investors continue to lose faith in crypto markets
    • Bitcoin rallied after Elon Musk tweeted that it will eventually recover – but I still believe price will go lower to $14k range

Dollar Index / $DXY

  • Broken triple top formation
  • I’m expecting the index to go back up this week as investors take profits on equities
  • The bottom for stocks (and even crypto) is very close – if not already here
    • But this doesn’t guarantee a bull run

S&P 500 / $SPY

  • Price is approaching overbought levels and – coincidentally – the main line of resistance from all-time-high
    • Overbought levels tell us price strength is starting to wane and we’ll see a topping formation soon
    • This is a signal for me to start selling many of my positions
  • Other stocks are printing a similar story
    • Tech/ communication stocks are rallying but some commodities are crabbing or dipping
      • This could be a good time to sell tech at profits and buy commodities like copper, energy, and agriculture at cheaper prices
  • Recession signals

AT&T / $T

  • Nice v-shaped recovery from its $14 low
  • But price is overbought here at $19 (this is a sell signal) – likely dip back down to support at ~$17 to get us back to oversold levels

ConocoPhillips / $COP

  • I’m waiting for price to test the uptrending red support line to add to my position
  • Keep this on your radar

Louisiana-Pacific Corporation / $LPX

  • It’s not a coincidence that lumber stocks have been dipping with home prices
    • And also not a coincidence home prices have been dipping with every Fed interest rate hike
  • I expect LPX to continue this downtrend
    • Increased unemployment coupled with inflation (see Misery Index) means homeowners will not have the extra spending cash to upgrade their homes

Bitcoin / $BTC

  • Bitcoin price is back to following the downtrending resistance line from ATH
  • Technicals aside, I do not see a substantial recovery until one of two things happen:
    • Faith in exchanges is restored with full transparency:
      • Crypto exchanges need to understand they are not fractional reserve banks; they’re wallet holders
    • A flash crash triggered by another exchange going insolvent
      • A sudden crash in price (I’m predicting $14k range) will trigger investors to jump on the opportunity to buy

Ethereum / $ETH

  • Ethereum flipped support to resistance – a bearish move
    • This is another example of price strength slowly waning in the crypto market
  • Price is having difficulty breaking through the ~$1265 line
  • I am not buying until we get some answers on FTX, Cypto.com, and other exchanges wrapped in the Sam Bankman-Fried ponzi scheme
The Rebel Economist
Author: The Rebel Economist

Civil Engineer // Aviator // Photographer // Avid Coffee Enthusiast // Your investment strategies could differ from mine based on your risk tolerances, research, and time horizon, so I encourage you to do your own research as information provided by The Rebel Economist or Breaking Metrics should never be considered financial advice.

Leave a Reply

Your email address will not be published. Required fields are marked *