So Far So Good – Part 2

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Crypto – Bitcoin

Bitcoin reached the 80D cycle target of 62.83-65.17k and immediately bounced. It produced the green box target for the 20D cycle. The 5D and 10D cycles also have targets in that area. But Bitcoin needs to stay above the lower gray FLD boundary, or else the target will be invalidated.

Likely Elliot wave count for the bounce is an expanded flat a-b-c for (ii).

Do You Make Your Investment Decisions Based on Media Articles?

If you do, please check this chart, and think twice next time. They are often wrong at turning points.

Liquidity

The liquidity provided by central banks was probably the most important factor supporting markets. “Money printing” has been extreme in the USA for the last 20 years. How else to explain the extreme outperformance of the US stock market vs Chinese market while Chinese economy was growing much faster than the US economy? Do you think that investors expect that the US economy will significantly outperform the Chinese economy in the next 10 years? I doubt.

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Sentiment vs Economy

Does this cover page qualify as Montgomery’s Cover Page Index as a contrarian indicator? I think it does.

Economic and investor sentiment normally track each other. There are occasional deviations between the two but they always realign. Right now, there is a significant gap between them. How do you think this gap will close?

Whipsaws Next Week

Looking at the economic and earning schedule for next week, I am preparing myself for volatile trading.

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