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- Dark Clouds Above the Market
Dark Clouds Above the Market
BraVoCycles Newsletter
February 07, 2024
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Table of Contents
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Market Summary
Despite dark clouds from numerous technical indicators, the market keeps grinding up in the short term.
Based on my multi-pronged analysis, the indexes should turn south soon toward the March trough.
The devil is in the details, i.e. very short term. In my opinion, even in the short term, most indexes reached and/or exceeded targets and should roll over very soon, perhaps as soon as tomorrow.
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Market Breadth vs Performance
On Monday, I showed the NASDAQ breadth chart as a yellow flag.
Below is a more comprehensive chart from SentimenTrader showing how the SPX breadth has recently deteriorated concerning 10, 50, and 200-day moving averages and creating negative divergences relative to the price. According to SentimenTrader, this is the first such occurrence since August 2029. 1929 was one of the most significant market peaks in the last 100 years.
This is one more nail in the coffin of the deteriorating technical picture of the market, reinforcing my view that the outlook this year is not so good, as I have been hinting at since late December. Despite those warnings, I have been allowing and calling for still higher despite yellow/red warning signs, but it is getting red hot.
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ES Hitting ST Target
A few days ago, I mentioned in the premium content that ES (SPX futures) had one more ST target above 5,000. Today, the target was reached, although there is still some room for up toward the upper range of the green box. I do not have any higher cycle targets. To generate higher ST targets ES would have to pull back and turn up again.
Figure 1 – ES 20D cycle target.
GBTC (Bitcoin ETF) Seasonality
According to the Seasonax seasonality chart GBTC should have a down bias in February, a bounce into May, and then down into October. Seasonality charts often work but not always.
Source: Seasonax
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