Snap Market Update - Day 9 of the crash

mastercore(48)

Published in

#cryptocurrency

Words

786

Reading

4 min

Listen to this post

~5 min

alt
19/10/2018/08:40CET

#Crypto markets are going sideways looking for a catalyst, but traditional markets have plenty catalysing them! into the ground!!

DJI

The big daddy of the US equities is the Dow Jones index.

Here is the daily...
alt

I has been falling off a cliff since the 10th Oct, but caught a bid last tuesday 16th. Was this organic BTFD traders, corralled like sheep to the buy desk? Or was it the big institutions that face mutual destruction teaming up to prop the buy side of this crash? Probably both.

Tuesday had a bounce. A nice bounce! By index standards, fucking amazing day! Bottom to top, 1.7%
So many pinned their hopes and dreams that the last week of red was just a passing thing, a bad dream.

The hourly...
alt

Wednesday came and, even though the first hour looked ugly, there was abundant courage in teamwork at hand. But despite this effort, the day closed only green by the most razor thin of margins.

Then came Thursday. A dark day!

The sell off continued and another large red daily candle was painted. Only at the very end of the trading day was there some attempts to reverse the tide.
The only silver lining to thursday was a close still north of the 200 dma.

Here is the DJI on a monthly chart .
alt

Here you can see just how crazy high this market, fueled by high octane debt fuel has risen!
This is what is called parabolic and unsustainable.
I noticed that a retracement back to the 200 mth moving average, a not so ridiculous correction metric also coincides with a strong resistance level established back at the peak just before the 2009 crash. This would likely act as stiff support. But this would be a 45% retracement. Remember that the crash in 2009 was 50%!

S&P500

alt

Mirroring the DJI, the S&P500 also had a nice bounce on Tuesday only to have no steam left to do much of anything on Wednesday and then resume the plunge on Thursday. Worse than the DJI, the S&P closed right on the 200 dma.

NASDAQ

alt

Again the sentiment between these 3 indices carry a high degree of correlation, so it is no wonder that they are crashing in the same way. The only notable exception is that the NASDAQ closed below its 200 dma.

This is looking pretty bad.

The geopolitical backdrop of this market behaviour could not me worse

Trade War tension between US and China drags everyone else to the party because of WTO rules
Interest rates are on the rise and this Fed Governor seems hell bent on higher rates, much to Trump's chagrin. (Even though he himself campaigned on the complaint that the fed was too easy with its monetary policy! He certainly has no problem with such contradictory mind sets
Global bond yields are jumping around like crazy showing volatility that is quite unusual for such a sedate and stable asset class. Additionally since it is safe haven territory, this makes predicting what comes next all the harder.
The US with Trump at the wheel has weaponized the USD in its fight against everyone.
Everyone wants to get as far away from the US and the USD as it flails around destroying anything close by
US military budget expands as if there is no problem paying for it all, while the country's infrastructure and society crumble
A growing chorus of countries are openly calling for an end to the USD as the reserve currency
Tension between US and Saudi Arabia has flared dramatically over the alleged murder of 1 journalist
Saudi Arabia is the linchpin to the Petro Dollar standard. If its support for the USD wanes, it could be the straw that breaks the back of the US as the global financial reserve currency. And along with it all the privileges and advantages that the US economy enjoys, and with it the global financial system all together.

Just to close out the party...