Is Bitcoin in a Bear Market

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Market Sentiment Analysis

• Magnificent 7s are pushing SPX and NDX to new highs while most of the market is not following.

• Most market sectors topped in March or May.

• The sentiment in multiple sentiment indicators is extremely bullish, typical of previous significant market tops. But note that the sentiment indicators are not short-term (ST) timing signals. They are more of an MT or LT warning signal.

• The Investors Intelligence Advisors’ Survey has risen to 63.1, on par with 63.7 in April 2021, characterized by speculation in several sectors.

• Market Vane’s Bullish Consensus of 72 is the 2^nd highest in 10 years; it was 73 in Jan’2018.

• Investment managers are leveraged long, i.e., over 100% invested; see the NAAIM chart below.

• The second chart below shows a 5-year picture of the NAAIM index. The index's level is like that at previous significant stock market peaks.

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Bitcoin Update

• Bitcoin had a mini crash last week.

• It is now below it 50D, 100D and 200D MAs, a sign of a bearish downtrend.

• Bitcoin and other cryptos are bouncing from the last week's low.

• Could the drop below the 200D MA be a fake out? Or could the bounce be a “dead cat” bounce? I suspect it is the latter.

• See my X posts below for more details.

Market Summary

Market Data

As of close on 6 July 2024.

What Has Been

• The 4^th of July week was nicely green for SPX and NDX, as expected and as it is traditionally. Other sectors/indexes did not do as well.

• On Friday, The SPX rose 30.17 points (0.54%) to 5,567.19; the $DJI rose 67.87 points (0.17%) to 39,375.87; the Nasdaq Composite^® ($COMP) climbed 164.46 points (0.9%) to 18,352.76. Russell 200 was down more than 0.5%.

• However, the breadth was negative on both the NYSE and NASDAQ.

• Longer-term treasuries recovered this week from the weakness on Friday the previous week and Monday. The 10Y Treasury note yield dropped 7 basis points from the previous Friday to 4.28%.2Y Treasury note yield traded on Friday afternoon at 4.61%, the lowest level since March 27.

• Gold and silver were green, while crude oil and natural gas were red.

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What is Next

• NDX and SPX keep pushing higher, defying gravity, though it was not unexpected due to the positive seasonality in the first week of July.

• Will they . . .

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