Category: Technical Analysis

Bitcoin and Microsoft Positions Update

Posted on by io-fund

The below 2-week chart in Bitcoin has been quite accurate at identifying the cycles that have caused a trend change. This chart shows the next two cycles as April 10 – 25, and June 7 – 2. What will matter the most here is how we trend into these time factors. I'm forecasting that we see weakness into one of these regions. It also shows the levels (on the right) where we will be layering in. We will set up limit orders for these buys, 2% at each level. BTC trades 24/7 and loves to spike and reverse at lows. So, we've found limits are the best answer for this. This means that you may receive a trade notification on Sunday morning from a limit that hit while we were sleeping. So, be prepared for that.

The below chart shows the bigger counts I'm tracking. The blue count is my primary. Here, we will see a multi-week/month drop into the $35K – $27K region (likely into one of the time factors listed). My backup is the green count, which has us in a 4th wave of a larger 3rd. This will bottom between $40K – $38K, hence our buying at these regions. I don't know what count will play out. The cycle work suggests the blue. However, if we are in a 3rd wave, expect to be left behind with shallow pullbacks. So, we will keep layering in at each support zone. The red count will be taken more seriously if we see a 5 wave drop below $34,800. If this happens, and it is followed by a 3 wave retrace, be prepared to exit crypto.

Microsoft

MSFT hit our first target at $395. We are now in a 5th of a 5th of a 5th of a 5th wave. It's best to wait and see how we correct and if we break below $370.

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Stock Tip: Look for SPX below 3795

Posted on by io-fund

If the S&P 500 breaks below 3795, then the next support zone will be around 3730-3615. There is a chance that we can go as low as 3505-3390. As long as the Dow holds its October low, we will be looking to buy weakness in Q1.

Below, we describe why the broad market is the most important signal to watch for a tech portfolio right now as it determines every action we will take in Q1: when we buy, when we sell, and/or when we wait on the sidelines.

In other words, providing a regular stock tip right now is futile because nearly every tech stock will be trading lower in the near term. We only provide actionable analysisactionable analysis including what informs our own portfolio. Therefore, the most actionable information we can provide is on the broad market.

In Late November/Early December we began raising a lot of cash in preparation for a difficult December. The bounce we were expecting was quite weak, which is signaling that the volatility is not over. We believe that we could see one more small bounce, but the most probable path is down into Q1.

We’ve been trained to follow the FAANGs as leading indicators. This is not so in this market. Money is and has been rotating into high quality Value names that are profitable, safe, and not solely tied to the consumer. That being said, we expect to see the NASDAQ-100 make fresh lows, and even the S&P 500 come close to making new lows. In fact, it can even make slightly new lows.  The only index that matters to us is the Dow Jones Industrial Average.

The Dow is the new leader in this market, along with some choice tech names. As long as it holds its October low, I expect the coming weakness to be a tremendous buying opportunity as we set up for a large, multi-month rally into Q2-Q3 of 2023.  If the Dow breaks that low, then 2023 could be a continuation of 2022, as we will start looking to sub-3000 SPX in a more direct fashion. We remain hedged in our premium service, and will wait for the market to make a decision before putting our cash to work.

 Provided the Dow holds up, our most ideal buy zone is going to be when the S&P 500 is sub-3700. However, we will wait for a trend reversal to put the bulk of our cash to work.