– Many markets continue trudge higher and higher.
– Lack of corrective moves is a sign of weakness.
Cryptos and stocks continue to spike higher
Above: Bitcoin (BTCUSD)
Bitcoin’s weekly chart above shows one weekly candlestick after the other continuing to make higher and higher highs for almost an entire 360-day period. Since Bitcoin first moved above it’s weekly Kijun-Sen level back during the weekly of April 20th, 2020, Bitcoin has not retested the Kijun since then. That is 41 weekly candlesticks or 287 days of no test of the Kijun-Sen. I’ve previously written that I considered the December 2020 candlesticks as tests of the Kijun-Sen, but then I took another look and I’ve changed my mind. I’ve changed my mind because not even a weekly candlestick’s wick has touched the weekly Kijun-Sen level. Heck, we’ve spent 17 consecutive weeks with the weekly candles trading above the weekly Tenkan-Sen! That’s crazy! Now, we could see Bitcoin continue to rise here. If you’ve watched my cryptocurrency video for today’s date (February 2nd, 2021), you’ll see me discuss why I am still skeptical of further upside pressure. A lot of it has to do with the extended moves with little to no correction. Take a look at the NASDAQ’s chart.
The chart above is the Micro E-Mini NASDAQ-100 futures contract. Similar to Bitcoin, the NQ has spent a considerable amount of time moving higher with little or zero corrective price action. Bitcoin’s chart at least showed the bottoms of the weekly candlesticks near the Kijun-Sen, but the NASDAQ has gone into full on stupid mode and has spent the last 43 weeks or 301-days moving straight up! I’ve drawn a box around the top 4 bars of the Volume Profile. With the exception of the bottom bar, the top 3 show significant more green than red. Green measures buyers while red measure sellers. At the $13,500 value bar, there are 920k contracts bought versus 225k sold, that’s nearly a 4:1 ratio! The next bar below shows 1.798 million bought versus 750k sold. And finally, the third bar shows 1.633 million bought versus 400k sold – another 4:1 ratio. Clearly there’s a lot of buyers at the top of this market! But if we look at the vertical volume bars below, what we do we see? Divergence between volume and price action. The average weekly volume has been dropping (with clear exceptions for two of the weeks) while prices have accelerated higher. There is another measure of extremes on the NASDAQs chart that we need to be aware of and that’s the percentage away from the Kijun-Sen price is. The average max percentage that the NQ moves away from the Kijun-Sen is around 12%, which is where the NQ is currently at. Almost every single risk-on or highly speculative market is nearing the end of its current drive higher. Our first hints of this occurring is the DXY (US Dollar…