Bullish Signals Emerge After BOJ Panics Investors With Dovish Talk, Bitcoin Rips, Gold, Oil, More

This week's trades, market movers, and
technical levels [music] that count,
wrapped up with clarity and precision.
This is Weekly Wrap-up with Verified
Investing.
>> Hey folks, welcome to this Friday
edition of the Weekly Wrap-up. My name
is Gareth Soloway, chief market
strategist here at
verifiedinvesting.com.
So, we had the Bank of Japan throwing a
wrench in the system after they hiked 25
basis points, which was expected this
morning, but then they came out much
more dovish than anticipated. In other
words, they talked about maybe not even
raising again versus the consensus,
which was multiple more raises to get
their situation under control. Much like
the US, inflation is running rampant,
and again, the problem is their debt to
GDP is up at 230%.
So, you're starting to see the banks,
the central banks being nervous about
how high rates go with the amount of
debt that these countries are holding.
And the US is inclusive of that, but so
far, Kevin Warsh has been firm raising
rates, and the market here is even
pricing in another hike later this year
for the United States and the Federal
Reserve here. All right, so, that
initially threw a kink in the the
situation of the market rally from
yesterday, but before you knew it, we
saw the late afternoon flow come in on a
Friday, and the S&P and the Nasdaq both
closed green on the day. Now, what's
interesting about today, and what keeps
me bullish on the S&P in spite of all of
the things that are going on that are so
negative out there, oil at $100 a
barrel, rates at 5% on the 10-year, all
of those factors out there, what keeps
me bullish is just that. The stock
market remains relatively resilient in
the face of these negatives. What What
it tells me is that if you get any sort
of pullback in yields of significance,
if oil just comes down five or ten
dollars a barrel, there could be
significant upside. All right, let's
jump into the charts, take a look. This
is the S&P 10-minute chart, so this
guides us to what the markets did today,
and we can see we had a little bit of a
gap up today, and then the selling came
in. We bottomed out literally at the
12:30 candle, right in the middle of
lunch 12:30 p.m. Eastern time, and then
the afternoon Friday float took us right
back up, essentially back to almost the
highs of the day. S&P 500 on the daily
chart closing up 0.17%,
so really again, this was a nothing
burger of a day in terms of gains or
losses on the market, but it was with
the yield on the 10-year pushing back to
5%. So that's a good sign. Right? If
you're looking for the breadcrumbs, if
you're looking for the silver lining,
that is an absolute silver lining that
the markets were able to close green
even with yields pushing back up to 5%
on the 10-year. All right, where are we
in terms of the levels on the charts?
Here's your neutral zone right in here.
This is the neutral zone, and we can
clearly see we remain above the bullish
line. So this continues my overall angle
of believing the S&P near term is
bullish right now, and I continue to
have my positions in my portfolio
favoring further upside at least for
now. Now, if we close below this white
trend line, you got to go into neutral.
Neutral just means it's more of a 50/50,
and then if we break the yellow line,
that's where things get really nasty.
That's where I'd be exiting a lot of my
long positions on the S&P 500 and moving
potentially into more shorts as well.
All right, so that's a rundown on the
S&P. Nasdaq had a great day as well.
What was interesting about the Nasdaq
today is that we finally saw the chip
stocks, the Microns and the Sandisks,
starting to perk up. And remember, those
drove the markets earlier this year. So,
if they can start having another
subsequent move up, that also could be a
factor that drives further upside into
the midterm elections, possibly into
year end. All right, speaking of which,
let's before we go into those stocks,
let's touch base on the US dollar.
Remember, the dollar per this morning
was into resistance, and it worked like
a charm. Look at this, guys. We had a
major trend line ascending here
connecting through low after low after
low. This was a down move that bear
flagged, and then we broke down, which
is exactly what you would expect. Now,
look at what happened. We rallied back
up, and look at this candle. It goes
right into the yellow trend line that's
ascending and the white resistance zone.
Look at where the white resistance zone
comes from. This high pivot, this high
pivot all the way over here, then it
breaks out, then it becomes support
here, and there it is, right back to
that level. What did the dollar do?
Well, once it got into that level, it
got rejected, which is case in point
exactly what technical analysis says it
should do. So, just interesting to kind
of see that there as we continue through
here, but nonetheless, the dollar did
close a little bit to the downside. More
importantly, it reversed the strength of
being sharply higher on the BOJ decision
and came back in.
10-year yield, this is what I'm talking
about, guys. This is what's so
impressive about the stock market's
performance today. This move up reversed
the entire drop yesterday that we saw on
the adults in the room, meaning Kevin
Warsh doing what should be done, raising
rates, talking extremely hawkishly about
raising rates again, and the Federal
Reserve being that adult in the room, it
was undone today by the BOJ, and rates
went right back up, negating yesterday's
drop. Now, usually when rates go up like
this, the markets drop significantly,
especially that we're back to 5%. But,
as we saw, the S&P 500 was able to get
back and close in the green. Bullish
sign for next week, at least for now.
Now, listen, that could change. Keep in
mind that if yields push through 5% and
take out the major resistance trendline
right here, this trendline right here,
if we really break through this and
start trading up here, then I don't know
if anything can save the markets. That's
going to really freak the markets out.
But, right now, as long as we stay below
here, it seems like the markets can
fight off
the downside action in the S&P and turn
green as long as yields don't push
through this level. All right. So, we've
talked about yields, we've talked about
the dollar, we've talked about the S&P
500. Now, let's turn our attention to
crude oil. Now, I think crude oil had
something to do with the markets today
being able to float back up. But, what I
thought was interesting is that even
though crude oil fell throughout the
course of the day and closed down a
little bit today, yields were still
pretty much at their highs. And so,
again, that shows you this little bit of
a divergence. It's has been recently
that when oil goes up, yields go up.
When oil comes down, yields come down.
Today, not so much. And again, I think
that a lot of that has to do with the
BOJ decision kind of throwing everyone
for a little bit of a loop. But, the
point here is is that WTI crude did fall
today. Let's look at the chart. Here we
go. We closed just below $100 a barrel,
trading at $99.95.
We are down today, which I think again
allowed the markets to creep off their
lows, or at least was a helping hand in
the resilience of the market. Now, on a
technical basis, we know that the oil
chart is into resistance, so we have our
key trend line here, connecting key
pivots right here, through here, through
here. We then broke down, and we've made
our way back into resistance, and price
is being rejected, right? So, that makes
a lot of sense. The question is, how
much downside is there in oil? First
technical support, and I expect this to
be hit as early as Monday or Tuesday, is
back into the 93-ish area here, 93-94.
This high pivot now becomes support. If
that breaks, we can go all the way down
to this secondary pivot at 88, but
really, what should happen, and what
will
I think within, basically by the
midterms, we could find oil back all the
way down to retrace into this zone
around $80 a barrel. I honestly think
it's unlikely we'll get below 80 before
the midterms. I guess anything is
possible, but I do think there's a
decent chance that we could hear
negotiations have started up again. We
could hear there's a deal close. Now,
the market won't believe that like it
did at one point. Remember, at one
point, we thought a deal was done, and
oil went back to $67
a barrel. Now, we know we're a little
bit smarter, right? We're like, "Eh,
they Sure, he says the deals are there.
We hear a deal could be coming, but
let's wait till we actually see it." And
that's why I don't think oil goes below
80 before the midterms. Now, after if we
get a deal, okay, and it's actually
followed through. Remember, all these
deals are like, "Well, we'll have a
understanding and a a
of understanding of this and then before
you know it a ship is hitting the Strait
of Hormuz. So, I think again, it keeps
oil from really going down significantly
back to 67 or 65 dollars a barrel, but
at the same time, if there are
negotiations again, if there are certain
things, it can drop oil back to that $80
level, right in here, guys. Notice the
descending trendline, we broke out.
Technical analysis tells us that if we
fall, that becomes major technical
support. All right, let's go over
natural gas today, not much to talk
about, a little bit of a gain, about
1.16% gain. Next week, I'm going to
continue to follow the $3 threshold. I
am noticing, are you guys seeing the
pattern on this chart? Do you guys see
it?
Good eye can pick it up. Most people
won't pick it up, but you guys see the
inverse head and shoulders that might be
forming, which is a bullish reversal
signal or upside move. Take a look, do
you see it now?
Look closely. Here it is. Shoulder,
head, shoulder. If we can get a breakout
here, we easily should go up right
there, that would be the measured move
from this low straight up, we take that
measurement and that gives us that
target. Now, listen, an inverse head and
shoulders means absolutely nothing until
we break the neckline at $3. Once that
breaks, that's where we start to be able
to calculate out that we should get that
upside target, but keep an eye on it. A
lot of people are sleeping at the wheel
on natural gas. I think it's about ready
to make waves out there and rip higher.
Gold today, a little bit of upside here,
uh continuing from yesterday's bounce.
Unfortunately, gold's in a tricky
scenario with silver. What I'm seeing in
the charts is basically a whole lot of
chop likely, where we continue in a
pattern formation where we've kind of
gone up, then we're down, then we're up.
Something like this could continue into
year end with not a lot of vertical
moves one way or the other until the
price resolves itself. So, keep an eye
on that. I'm going to be watching
closely. Couple lines I'm keeping an eye
on here. Obviously, this upside
resistance would be right here around
4,800. That would be a little bit of a
short-term higher high, but you'd have
to assume price would get rejected. And
then really, I'm going to start to watch
this trend line. This is an interesting
one. Number one, notice how this trend
line is virtually parallel to this one.
So, are we in a new parallel channel?
Number two, this gives us a perfect
pivot lows right through here and right
here. If we break, that's where the door
opens to more downside, but it wouldn't
shock me, like I just said, if we end up
trading inside of this range for a while
as we go like that. So, just keep that
in mind. Again, I'll keep you guys
posted if anything changes, but right
now I see range-bound trading on gold
and honestly on silver as well. Silver
same sort of deal here where we're kind
of just chopping, chopping, chopping,
and chopping sideways following the
breakout. And same thing can be applied
here. You have this beautiful little
ascending trend line that we can start
to put in and we can follow it for if we
break here, then it would get a bigger
move down. And then on the upside, I
think very much the same. We can do a
perfectly parallel trend line here. Look
at that. Isn't that cool? Right to this
low to these highs. And look, parallel
lines, it looks very similar to gold.
So, so again, just something to watch.
Now, the big story of the day.
Obviously, today was triple witching, so
a lot of options, 7.7 trillion or so
expiring. And remember, that's that's if
you had converted the options. So, it's
not just dollars of options bought, but
it's the leverage that was in use. So,
huge day today with options expiration
triple witching. Um overall though, the
markets, like I said, pretty orderly.
Sometimes you get wilder moves. We
didn't really see that as much today,
but the story of the day was Bitcoin.
Bitcoin, what a resounding move to the
upside, and I love this because I gave a
level at 75,500, and I said, "Listen,
guys, we have a bull flag on Bitcoin.
If it closes below 75 five, it's broken,
and you're going to likely see a move
down to 67,000." Well, guess what
happened? The Clarity Act got kind of
sidetracked and didn't pass the chamber
to be pushed forward to a vote. It all
fell apart. Then you had obviously the
Fed decision, and even after all of
this,
Bitcoin flushed, piercing 75 five, and
somehow got back off the mat and closed
back above each and every day. Look at
this chart here, guys. This is what I
wanted to show you. Right here. So,
here's clarity failing. We dipped. We
pierced 75 five. 75 five is the lower
yellow trend line, the zone of support.
We pierced it. We bounced. The next day,
the Fed, boom, down initially, but it
reverses. Now, that was very telling,
and I'll tell you why, because you saw
the stock market when the Fed came out
on Wednesday and raised rates and was so
hawkish. The Fed rate the the the price
of the market the markets fell, gold
fell, silver fell.
Initially, Bitcoin did, and it turned
green.
If that's not a wake-up alarm bell going
off, I don't know what is. So,
ultimately, the level held, and what
happens? Boom. And honestly, I think a
lot of today's price action was a short
squeeze because I think after clarity
failed, the Clarity Act failed to get
through the chamber, then you had a lot
of people dumping positions and shorting
Bitcoin, and all of a sudden those
shorts today got wrung out. They got
hammered. They had to cover, which is
forced buying on Bitcoin surging up.
Now, on Bitcoin, what we have to monitor
here is is even with today's move, we
haven't taken out the recent high, let
alone the past high.
To get a bull market, to get a back to
to basically say that this is the bear
market low, you got to take out this
high. So, we can't proclaim that just
yet. We cannot say that Bitcoin has a
bear market low in and we're now in a
bull mode. If we take out 80, let me see
what level on this is, 82,800
and change, then we have a higher high
in the chart. If we look at what the
definition is of an uptrend, higher
highs and higher lows, that would change
the game. So, it's great to see the
bullish pattern is intact, great move in
Bitcoin. Can it take 80 out 82,000
uh 850,
we'll call it. Can we make a higher
high? We're going to be watching to see.
Really fascinating stuff, guys. I love I
love chart analysis, as you can tell.
Again, I do it because I'm passionate
about it. I think it comes I I I hope it
comes through in and my analysis and
kind of the excitement I have on the
charts, but I do want to say this, thank
you all. Seriously. Without you guys
watching, I wouldn't do these. And
honestly, if I wasn't doing them, I
probably wouldn't pay as much attention.
I trade on my own, sure, but I make sure
I analyze all these assets because you
guys spend your hard-earned time, your
valuable time watching here at Verified
Investing. And so, I thank you from the
bottom of my heart. I hope I've helped
each and every one of you a little bit,
at least understand a little bit more
about the macro, the insights, the
technical analysis. And all of us here
at Verified Investing do thank you for
being so great with your comments, your
shares, your likes, your your sharing
with friends and family. You guys are
awesome. Go have a great weekend, guys.
I'll be back Monday morning with my game
plan, bright and early at 9:00 a.m. on
this Verified Investing Network. Have a
great one. Take care.