Major market indexes ended the first week of July and the second half of 2023 in bearish fashion after the indexes reversed off their intraday highs on Friday following a melt-up rally earlier in the day. A light Bureau of Labor Statistics jobs report of 209,000 new jobs vs. estimates of 240,000 set the stage for an early rally once the market found its feet an hour after the opening bell. As the market rounded the bend into the latter third of the Friday trading session the intraday melt-up began to melt down with all the major market indexes closing firmly in negative territory. The Dow and the S&P 500 ended the day below their 10-day moving averages as the Dow appears set to test its 50-day moving average.
The broader NYSE Composite and small-cap Russell 2000 Indexes closed up on Friday but churned badly, with the NYSE Composite closing just below its 10-day moving average.The Ten-Year Treasury Yield ($TNX) is now back above the 4.00% level, ending the week at 4.05%, telegraphing higher rates to come.
Two weeks ago we reported on a stalling pocket pivot in Bitcoin ($BTCUSD) along the 10-day moving average. Two days later $BTCUSD moved marginally higher but immediately gave that move up and retested the 10-day line. On Monday of this past week $BTCUSD attempted to break out but reversed badly to test the 20-day exponential moving average. Support at the 20-dema held, but now we are looking at a possible cup-with-handle base failure if $BTCUSD breaks below the 20-dema. If that occurs then it would trigger a potential short-sale entry using any move back above the 20-day line as a covering guide. One could then use the ProShares Short Bitcoin Strategy (BITI) ETF as a vehicle for the trade, buying BITI on any $BTCUSD break below the 20-dema while using any move by $BTCUSD back above the 20-dema as an inversely correlated selling guide for BITI.
Furthermore, the alt coin market is looking ill, nowhere near how it appeared during the bull run of 2020-2021. Total value of altcoins excluding bitcoin can barely get into any sort of uptrend which bodes badly for the general crypto market.
We reported on MongoDB (MDB) and The Trade Desk (TTD) as pocket pivots two weeks ago, but only MDB followed through with a valid pocket pivot volume signature. TTD's volume fell short, but now both breakout attempts are failing as MDB triggered a short-sale entry at the 10-day moving average on Friday as it reversed along the line. TTD gapped down on Thursday and then rallied back up to the 10-day moving average where it offered a reasonable short-sale entry. It stalled at the line closed mid-range, just above the 20-day exponential moving average. A break below the 20-dema would trigger a second short-sale entry and can be watched for.
The Market Direction Model (MDM) remains on a CASH signal. This one trick pony AI-meme market which may be running out of steam, at least in the short term, remains the most bifurcated market we have observed in decades.