In today’s briefing:
- Bitcoin (XBTUSD) – Recent Decline Is Logical / Necessary / Counter-Trend
- MSCI Emerging Markets Index (MXEF): Weekly Close Confirms Bearish Multi-Week Risk
- “Sell in May” Another Reason to Be Defensive; Value to Lead?; Buys in Medical Devices, Footwear
- Late April Break for a 6-Week Decline
Bitcoin (XBTUSD) – Recent Decline Is Logical / Necessary / Counter-Trend
- At TMA we deliver high probability outcomes by focusing on our 3 pillars of technical analysis. 1) Response to key levels. 2) Price action. 3) Momentum confirmation.
- Bitcoin (XBTUSD) confirmed a meaningful top in the past 2 weeks when it rejected material MT resistance levels and completed a bearish weekly reversal pattern.
- With definitive bullish price and momentum triggers in play, we anticipate that a multi-week period of consolidation / correction will remain counter-trend. Searching for the next MT base towards 25200/25250.
MSCI Emerging Markets Index (MXEF): Weekly Close Confirms Bearish Multi-Week Risk
- At TMA we deliver high probability outcomes by focusing on our 3 pillars of technical analysis. 1) Response to key levels. 2) Price action. 3) Momentum confirmation.
- Throughout Q4 2022 / Q1 2023 each material turning point has been confirmed by a definitive weekly reversal pattern. Last week produced a definitive bearish weekly reversal pattern.
- Long-Term charts imply that MXEF has entered a sustainable multi- quarter uptrend. Last week’s bearish weekly confirmation however, confirms risk of a further counter-trend correction in the coming weeks.
“Sell in May” Another Reason to Be Defensive; Value to Lead?; Buys in Medical Devices, Footwear
- The SPX made a high of 4169 last week, tagging our 4165-4200 resistance range. We still believe 4165-4200 will cap upside in 2023, with a reach to 4300-4325 also possible.
- Considering limited upside in both scenarios, and with the seasonably weaker “sell in May and go away” period approaching, we continue to recommend higher allocations to defensives
- This includes Utilities (XLU, RYU), Consumer Staples (XLP), Health Care (XLV, PPH), and gold miners (GDX).
Late April Break for a 6-Week Decline
- Late April capitulation turn unfolding on the SPX trendline break and RTY wedge support breach. We turned bearish (shorting) on April 18 just under SPX 4,200.
- A number of breakdown coming through in Asia – Korea’s bear impulse and Taiwan’s break of trendline support that turns the cycle to bearish. Japan will lag.
- SPX MACD bear turn is in line with our late April bear phase. A cycle trough is due in 6 weeks time (second week of June).
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