Rotation Rotation Rotation

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Market Analysis

Bitcoin

Let's start with Bitcoin. Despite a couple of days left for the weekly candle, the chart shows a potential bullish harami pattern. This indicates that bears might have failed to push prices lower, suggesting a possible bullish reversal if the next candle confirms the pattern.

Ethereum

Ethereum continues to hold strong compared to Bitcoin. If there's a cryptocurrency to watch, it's Ethereum, due to its relative strength. It's performing slightly better than Bitcoin, making it a preferable choice for potential upside.

Forex

U.S. Dollar (DXY)

The dollar showed weakness, continuing its decline with a potential support level insight. If this support breaks, we might see further declines. Historically, a falling dollar has been good for stocks, but correlations can change.

Other Currencies

• Aussie Yen (AUD/JPY): The Bank of Japan's interventions are evident, causing significant reversals.

• British Pound (GBP/USD): Watch for potential pullbacks to support levels for a buying opportunity.

• Canadian Dollar (USD/CAD): Despite the falling USD, CAD shows strength with several bottoming tails, indicating a possible support zone.

Commodities

Gold (XAU/USD)

Gold had a strong push, breaking through key levels. Relative strength indicators and algorithm outputs have flagged it as a buy.

Silver (XAG/USD)

Silver is underperforming compared to gold, showing relative weakness. As a trader, focus on the stronger asset, which in this case, is gold.

Equities and ETFs

QQQ (Nasdaq 100)

The QQQ had a significant topping tail and closed near the week's lows, indicating potential selling pressure.

IWM (Russell 2000)

In contrast to QQQ, IWM had a strong week, hitting new highs. This divergence suggests a rotation from big tech to smaller stocks, a rare occurrence that hasn't been seen in 25 years.

Key Sector ETFs

• TAN (Solar): Twice it undercut the $41 level and then bounced back. Keep an eye on solar stocks for potential buys.

• XHB (Home Builders): Strong breakout with a promising bull flag pattern.

• XLI (Industrials): Similar high-tight flag setup, indicating potential for continued upward movement.

• XLV (Healthcare): Reached new all-time closing highs.

• XLF (Financials): Strong breakout, adding to the rotation narrative from tech to other sectors.

Summary

The key takeaway is the market rotation from big tech into other sectors like home builders, industrials, healthcare, and financials. This shift rewards diversified traders over those solely focused on big tech.

For Premium Members

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