In the most recent FOMC meeting, the Fed held rates unchanged, which was no surprise, and it meant that this liquidity-driven long-term bull market in stocks and crypto will continue running.
Stocks and crypto are actually pretty correlated, and the biggest danger to the uptrend is if yields start rising.
In this post, I’m going to do an overview of the stock and crypto market, as well as review some of our recent trades.
Covid updates
Before we go into the markets, let’s take a quick look at the Covid situation, with a focus on vaccination.
As you can see from this chart, vaccination rollout globally is progressing slowly, with less than 10% of the world population having at least one vaccine dose.
In addition, numerous variants have been detected globally, such as Britain’s B117 strain, Brazilian P1 variant, South Africa’s B1351 and India’s “double-mutant” variant called B1617.
This does not bode well, and we can see a large disparity between the richer and less affluent countries.
Nevertheless, the financial markets seem to disjointed from the real world, as asset prices continue to climb.
Earnings & Employment (NFP)
If we look at the daily trends, the crypto market, stock market, and even the oil market are all in a strong bull trend.
And with the recent earnings season, a record 87% of S&P 500 companies have beat earnings estimates, and earnings look to be growing by more than 46%, according to Refinitiv.
Credit Suisse’s chief U.S. equity strategist, Jonathan Golub, has raised his forecast for the S&P 500 based on strong earnings.
He wrote, “we are raising our 2021 S&P 500 price target to 4600 from 4300, representing 9.2% upside from current levels, and 22.5% for the year.”
This coming week, we will also see the data from the NFP (non-farm payrolls), which will tell us how good the job market is amidst the US recovery from Covid.
Stock Market Targets Hit
In my previous market analysis posts, I predicted the breakout of the S&P 500 with the first target of around 4120 and the second target of 4215.
On 13 April 2021, it hit the first target of 4120, and in the Telegram screenshot above, I said that it would continue to the next price target of 4215.
Just a few days ago, we saw that exact target being hit. Congrats! ???
Bitcoin: a short off the rising wedge, then a long off the low
We traded Bitcoin both ways in this period: a short first, then a long.
We spotted this rising wedge in Bitcoin. A rising wedge is a bearish pattern, so we took a short position as price broke down from its all-time highs.
Following that, I looked for signs of a rebound in Bitcoin.
Price then rebounded from the lows, but the move was not over yet.
After 7 days, we closed the long at the resistance level.
Dogecoin: waiting for the pin bar
Dogecoin admittedly was a more volatile creature, so we had to be more careful in finding trading opportunities for this.
Finally, we spotted a huge pin bar (bullish hammer candle), and this was the perfect opportunity for a long trade.
From there, the price rose over the next 5 days, and we were still holding the position when this was written.
Ethereum: buying at support
I mentioned in my previous market analysis post that Ethereum is even more bullish than Bitcoin based on the chart, and now you can see why.
We bought when the price came back to the support level. Over the next 13 days it moved up, and it still looked to be heading higher.
At this point, I planned to close most of the position and wait for the next pullback to enter again.
I have come to the end of this market analysis.
Now that I have shared my views on the various markets, do you think the markets will continue going up, or will it be a case of “sell in May and go away”?
Let me know in the comments below!
