Stock Market It's been two weeks since the May 19th "3800" post where a support line in the sand was drawn just under then current SPX level of 3910, below which all hell was supposed to break loose. The 3800 level was never touched, so that support test still lays ahead. Monday, Tuesday, next week, whenever.....it's coming. The purpose of that May 19th Update and again today's Update, is to be prepared when 3800 falls, whenever and however it falls. SPX closed Friday at 4108. about 200 points higher than on May 19th and 300 points above key support. First circuit breakers kick in on a 7% intraday decline, i.e., 280 SPX pts. We are describing it now in the calm of a non-trading day, because when it hits calm will be like baby formula, i.e., in short supply. The only asterisk is whether the bulk of the decline will occur before Jun 17th expiration. Accordingly, if this move down doesn't start in earnest in the next few days, then the Jun 17th options need to be rolled into July 15th options. Trade Management SPX's low print last week was 4073.85. Breaking that low will be the first indication that a test of 3800 is unfolding. That test should fail: Note on the chart above how a break below the small wave 1-2 trend line will break the back of the entire May 20-Jun 3 counter-trend rally. Accordingly, SPX breaking down through last week's support at 4070, especially a week before the FOMC meeting, will have me posting new short positions for an anticipated deep dive into July 4th weekend. If SPX declines below last week's lows (4070) at any time, check the website for new option recommendations. Time may very well be of the essence. Bitcoin The Bitcoin long-term chart sports a very bullish EW pattern indicating that an (a)-(b)-(c) correction ihas or is about to end, leading into a new 5th wave advance well above $85K. Except, I'm not buying it, at least not yet. Financial assets of every kind have had 10-12 years of unbridled growth, that includes stocks, bonds, real estate and crypto. If that growth is not done, than stocks, real estate and crypto have not yet seen their highs, meaning there is plenty of time to get back on the growth train for the next leg higher. But for this one EW pattern, everything else is saying "Costanza," (the opposite). In any case, I will be keeping close watch on this Bitcoin pattern, which is eerily similar to the TSLA pattern. Bottom Line: If the stock market doesn't crash this summer, Bitcoin and TSLA are both headed a lot higher. TSLA
