Crypto Trading Tips – Dollar, Gold, Silver & Stocks correlation, 8th Oct 2021
Here we have the vix correlations dixie gold 10 year note spx, ndx nikkei. These are all correlations against btc generally. How this works is ptc has a negative correlation to risk off assets such as the dxy and gold. Although it really has had mixed correlations on the 30 week rolling against gold, it has a strong positive correlation with risk on assets or risk on mentality like the spx and ndx. Currently, all of those assumptions or classical correlations are kind of on their head because we are positively correlated with the dxy minimally negatively correlated with gold to a large degree, also negatively correlated with the spx and ndx minimally. So we are in a weird limbo land right now. One thing i dont like for my bullish q4 narrative is a rising vix. The vix is a volatility index, volatility is high or if the index is high, it generally suggests a risk off mentality. What we dont want to see if were bullish crypto is a vix continuously rising or spiking in q4, because inevitably, that will mean weakness for crypto. Crypto thrives on a risk on environment. One thing that could disrupt even that correlation would be an etf approval in the u.s which would be based on the futures market, not spot markets. We saw some moves up. I think over the past week, based on some front running of that potentially also. I think you know it just lines up with seasonality as well, so i, like the seasonality, narrative better than front running etf narrative, but i can see the case there.
Certainly, theres been a lot of talk and chatter, about a bitcoin, etf, more and more lately in bloomberg and in other places gary gensler himself has talked about it frequently. So the dixie on a chart to me looks incredibly bullish. Ive said this for weeks said this: for months it was setting up for this slow motion, inverted head and shoulders triple bottom. Whatever you want to call it, it was setting up for a bullish, tk cross below the cloud which is a short closed signal or a momentum shift signal currently its in the cloud, and i would trade this as an edge to edge trade to 96 plus the Problem here with that is, the key june is still pretty far down the red line here and generally, when you get these edge edge trades, you want the averages close with price, because at this point your stop loss is either the other end of the cloud. This end of the cloud at around 93 and a half or the key dune and thats, just a massive risk, reward disparity there. So, ideally, i dont think this is going to happen, but ideally dxy pulls back into q4. The key gene catches up and then it makes a run in q1 2022. We sell off in crypto, as we typically do in q1 for tax purposes and whatever else and everythings right and marry in crypto land dxy is a 62 percent index against the euro and the euro is looking quite weak with a bearish tk across below the club.
I dont have a chart for that, but it looks it looks bad. So that looks awful, which means dxy should continue to show some strength here: gold on the weekly cloud, um im using crypto settings just in case some people ask me about that. Im kind of too lazy to switch them back and forth to me, it doesnt make that much of a difference. I know what im looking at what i see for some of the timing stuff like this might look different on the non crypto adjusted settings or the traditional settings. Whatever settings you use, it may look slightly different, but the concept is still the same. So to see gold um, it attempted this inverted head shoulders that it looks like its trying to fail now its in the cloud theres theres, no momentum here, theres, nothing which is good if you are expecting risk on stuff the moment this flips bullish on the cloud. The moment the tk crosses bullish on the weekly again, which may not be until q1. You know, ideally it isnt. Ideally all this stuff lines up. Dxy is bullish: q1, golds, bullish, q1, kryptos mega bearish, q1 thats, fine, im, all fine with that. What we dont want is a bullish gold, anything in q4. So hopefully this can stay. Stay sideways, stay tamped down until q1. Right now it just looks momentumless uh, nothing to me. Silvers continued to take a downward spiral, probably reaching for the 200 200 week moving average.
As well as the cloud flat commode here, it had a chance. It had this multi year, multi year, white, coffee and accumulation, setup just textbook broke out ascending triangle, again textbook markup phase and then just dumped um im still holding whatever i have. I dont really care but trend wise. It told you weeks ago, to get out of this thing, so its no surprise that this continues to just slowly melt lower, lower lower. I like 20, as far as the target for for the lows here. If it breaks below this 200 week, moving average um thats real ugly, because then its potentially setting itself up for another multi year, accumulation party spx on the weekly continues to scream continues to post the tk dis. Equilibrium continues to be infinity far away from the 200 week moving average um if this yearly pivot breaks its going to the key june, its probably going to the 200 a week, its probably one of the yearly pivot, which is much farther down from here. The question is when, when does that happen, i dont know i dont know when that happens, but maybe were all just in fake fantasy, pretend land and this thing just goes higher every day for the rest of our lives. I dont know but uh. It looks like its setting up for a meaner version. Hopefully that doesnt happen until q1. That way, crypto can do its thing. Q4 ndx looks a little less mean reversiony.
The momentum is slower up here relative to spx. It certainly looks primed for a potential pullback up to 10k, but doesnt. Look as threatening as spx does to me gme on the four hour im watching the meme stocks and robinhood just to see what retails up to um four hour looks. Bearish has looked bearish for a couple days now on the cloud. This would have to get above 195 really and for this thing to get going again, i think much like it had a little move here in uh may above the cloud as long as its below the cloud, your expectation is lower lows, uh, amc same thing, expectation Here is lower lows, even though it has. This potential inverted head shoulders here shoulder head shoulder until this is above 40 45. You know the expectation is bearishness thats, just how the trends work and vby absolute dumpster, fire uh, rsi absolute bottom of the barrel, scraping here. It is an excellent case for 200 day moving average, because the moment this thing thing was finally below the 200 day moving average. It gave you plenty of time and opportunity to get out, so that was a gift to anybody still in its also below the cloud. So this is why i use what i use when things are above the cloud and the 200, its bullish when things are below the cloud and the 200, its bearish, you know thats its just that simple theres really nothing else to it, and this thing still looks Super mega bare – maybe you get a bull div here, but it doesnt look great robin hood sideways down bearish, nothing specific! This probably just stays sideways, flattened out until the payment for flow regulatory stuff gets clarified uh, whether or not its made illegal or legal or whatever.
This probably does a bunch of nothing until then uh coinbase actually has had quite a move off the bottom here with another falling wedge channel bulldiv in the same zone it had in may june. So i think coin and mstr should both do well in q4. If crypto does well in q4, i dont think thats like gigabrain mentality but uh coin above 260, and i, like i dont, know 300 300 plus for q4. Rsi is quite high on the two hour here, but if it can get above this vp vr selling, this could be um just inside our selling zone. I dont know id have to look at the numbers on that, but that could be why theres so much volume here i know kathy at arkhanvest. Uh has been probably more selling than buying of coin at some of these levels. I id have to look at that deeper as well, but technicals trend. This looks fine to me for at least an attempt at a push higher um mstr same thing. You had this triple bottom div. I think i mentioned last month or last week. Sorry now its above vp vr levels, anything above 800 and q4 and its potentially off to the races for mstr to shoot to an all time high re test square. They hold a lot of crypto. So i like to look at them weekly as well momentum just flat sideways uh trendless. They need to get out of this rsi downtrend in order to reach for 365 plus new, all time high territory, no real chart pattern here.
I dont think this represents my coffee and distribution either and its just random walk, nothingness, momentumless. At the moment, twitter actually looks okay. I know it had some down day or something this week, but to me on the daily, this thing looks primed for new. All time highs to like a hundred plus uh, i like that theres an inverted shoulders up here, like that its held above the 200. I like that, all of this lines up with bullish, cumula breakout so anything above 79 and its probably good to go as far as a measured move is concerned for this, its probably somewhere between 80 and 100. But i definitely like polish continuation here. If it can hold above the 200 day, moving average um, ethy grayscales product looks just like ether its got cup and handle narrative on its side. For me, um heres, your cup heres, your handle for the pattern to play out generally, you want a retracement to the 50 or higher. Now, if it retraces the 618, it usually has a better momentum spring um. It has to hold above the 50 retracement in order to be valid based on statistical back testing. So i think this fits that bill. I like this for all time highs, just like i, like 50 60 somewhere in there, based on measured, move and yearly pivots uh. The e cme product also looks just like that looks like a cup and handle to me. I mean this isnt a surprise, its all eat, but i think its important to look at this stuff that doesnt trade 24 7, because a lot of the big money, i think, is watching this as well.
And to me this thing looks amazing for for new all time highs. It looks amazing for 5k plus 6200, 5, 5k to 6200 and q4, certainly extremely possible, based on chart patterns trend above the 200 above the cloud above vpvr its got everything you want it slices. It dices it looks really good for continuation, looking at all the grayscale premiums or discounts etc has slipped into negative 40 and btc and ether kind of just in a holding pattern at um, 15 to 20 or 5 to 10 uh for eth, ltc and bch slightly Positive, so no real sentiment gauge here, but in q4, if this flips positive, which it should never, but if it does, that again, is just added sentiment. Indication for legacys bullishness on on crypto stuff, especially if the btc etf gets bullish or gets approved. Itll be interesting to see what happens the premium here, because the gbtc etf conversion probably wont happen initially so itll be interesting to see if money floods out of this product – and this goes deeper, negative or people start to pile into this at the discount, assuming it Flips positive, assuming you get a conversion eventually, i dont know what the game theory. Is there exactly, but itd be interesting to see what happens. Um the btc cme features product also looks not cup and handly to me, but it does look more bullish than spot btc because its way above the cloud here with the bullish, dk cross bullish cloud today this week, whatever above the 200 very close to um 55k, Which is the vpvr resistance currently and above that, its its 100k? Its six figures were not going to stop at 75 were not going to stop at 89.
, its going to be 100k test thats, what its going to be just like it was from three figures: the four figures, four figures, the five figures uh to at 10k; and Now five figures to six figures: thats, just how its going to be, i think, and then the cme futures contract. We survived the terrible september that we usually have. We survived the rollover in september and weve started off extremely strong for this contract, making a new higher high. So i couldnt be more optimistic and bullish on q4 honestly, based on trend based on some fundamental narratives with the etf stuff. Everything looks like its shaping up for quite a good time. We just got to keep the vix down, we got to keep the dixie muted and we should have an excellent run up here over the next three months last ill, just mention the ptc fund and d5 portfolio. I trade for technology, careful enzyme.