Markets are sending mixed signals today. While they’re still holding above support, certain cryptos like ETH and SAND are giving bulls something to worry about.
Today, I discuss these mixed signals in detail and share my thoughts on what markets need to do to stay constructive, and what I’m eyeing if they don’t.
Updates include the S&P 500, BTC, ETH, SAND, and GMT!
S&P 500 (SPX500)
The S&P 500 is grinding higher today, although it did sell off some into the close.
That’s now two daily closes above 3,900, which is currently support. As long as the S&P 500 is above that level on a daily basis, I’ll remain cautiously bullish risk assets.
Alternatively, a daily close back below 3,900 would be bearish, especially if the S&P were to close back inside this channel near 3,850.
But, for now, I’ll continue to look toward 4,200 as long as 3,900 holds.
Bitcoin was breaking above $24,000 today right before sellers stepped in to force a retest of $23,000 support. No doubt the result of the news about Tesla selling 75% of their Bitcoin.
However, the fact that BTC is only down 0.5% as I type this seems relatively bullish. Or at least it doesn’t hint at an imminent collapse like many might expect following news like that.
Still, we need to see Bitcoin hold above $23,000 to keep this breakout intact. A daily close below would confirm that this bullish move is a fakeout and send the market lower, potentially toward $21,500.
But if BTC can stay above $23,000, I think it has a shot of reaching $25,000 and maybe even the $28,000-$30,000 region.
ETH put in a mini deviation above the November trend line today, which I’ve talked about before.
We saw a 4-hour close above that level, followed by a close back below it. That confirmed the minor fakeout and this slight pullback we’re seeing now.
However, as always it’s going to come down to where ETH closes the day. A close above $1,560 would be bullish whereas a close at current levels ($1,524) would be more neutral.
Key support comes in at $1,420, followed by $1,320. Just keep in mind that if we do see a break above $1,560 that the $1,700 region isn’t far above that.
SAND found resistance at the trend line I pointed out in yesterday’s newsletter. It didn’t quite make it to $1.53 but came pretty close.
SAND also tested the $1.30 level I mentioned yesterday, where it’s finding some support as of now.
The concern at the moment is today’s potential bearish engulfing day. If SAND closes the day below $1.37, it will confirm the pattern. That said, sellers would still have to get through the $1.30 support area.
Alternatively, SAND has to close above $1.53 to turn bullish to expose the $1.80 area.
GMT has tested the area just below $1, which should serve as support following this week’s break above it.
As long as GMT stays above $1 on a daily closing basis, I like the market higher toward $1.28.
And if we see BTC start to rally again, I’m not ruling out a run at $1.65 over the coming days and weeks.
Just keep in mind that the $1 area is critical. GMT needs to stay above this on a daily closing basis to remain constructive. If it can’t, then we could see a return to $0.87.