Risk markets are pulling back today after lower-than-forecast PPI numbers.
That may sound strange until you consider that several markets were up considerably going into the inflation data, especially Bitcoin.
In today’s video, I discuss my plan for trading today’s pullback, including where I think the crypto market is heading this quarter.
Updates include DXY, SPX, BTC, and ETH.
US Dollar Index (DXY)
Support: 101.30 and 99.30
Resistance: 103.50 and 105.60
Idea: DXY bounced following Wednesday’s PPI numbers, which were actually quite bullish for risk assets. But I think markets got ahead of themselves, so a lot of that bullishness was already priced in. DXY faces a big hurdle at 103.50, and the same can be said about support at 101.30. So for now, we’re dealing with a range-bound market between those two levels.
S&P 500 (SPX500)
Support: 3,910 and 3,780
Resistance: 4,000 and 4,140
Idea: SPX pulled back today from the all-time high trend line near 4,010. That’s an area I’ve mentioned nearly every day this month. However, SPX is fast approaching 3,910, which has been a pivot for the market for months. So a bounce from there is likely, but a daily close below that would open up the March 2020 channel support near 3,780. My gut tells me we eventually see the SPX break above its all-time high trend line, but probably not without a further pullback or at least more consolidation.
Resistance: $21,500 and $23,000
Idea: BTC broke below the channel I mentioned recently and gave us a nice retest of that level as new resistance. Bitcoin needs to cool off a little after a 28% gain in just 18 days. Key support for BTC is $20,000, although we might see a dip below that area before the uptrend resumes. I like Bitcoin higher toward $25,000 and potentially $29,000, but not without a pullback into the $20,000 region first.
Support: $1,500 and $1,420
Idea: ETH is pulling back today after closing below the channel I mentioned yesterday. We even got a retest of that $1,570 area as new resistance before the pullback. For now, $1,500 support is holding. But a daily close below that would open up the $1,420 region. I’m still short-term bullish on ETHUSD, but we probably need a few days to pull back/consolidate first.