Strateš¾ Update - Week 39 | Q3 | 2024
SP500 at new ATH's, crypto gearing up...
The information and insights are based on my knowledge; donāt take it as financial advice.
News
Kamala Harris pledges support for expanding "AI and digital assets" initiatives if elected President.
The SEC grants approval for options trading on BlackRockās Spot Bitcoin ETF.
MicroStrategy, led by Michael Saylor, secures $1 billion to acquire additional Bitcoin. The company purchases 7,420 Bitcoin, totaling $458 million.
Donald Trump makes a Bitcoin payment during a visit to a New York bar.
For the first time in four years, the Federal Reserve implements a 50bps interest rate cut.
BlackRock and Microsoft announce the launch of a $30 billion AI-focused investment fund.
Singaporeās top bank, DBS, is set to introduce options trading for Bitcoin and Ethereum.
Current status 100% Winning strategy: (šµ)ā> (ALL-IN)
a weekly candle close below $56k would really flash the black signal.
Rate cut
For the first time in four years, the Federal Reserve implements a 50bps interest rate cut to 4.75-5.00.
Just three months ago (see outlook June below), no one at the Fed predicted that the current rate would be reached in 2024. The median, shown by the green rectangle, has now dropped another 25 bps for this year (see outlook September), with another 50 bps decrease for 2025.
Risk-On Warning: First Blow-Off incoming!
The Yield spread (10-2Y) has reversed well back above zero after staying below for over 2 years. Yield curve has flipped back above zero. With the FED rate now really cut strongly, indicators are lining up in a prerecession formation.
Similar patterns preceded a recession within 6 months in the past, but ignited a final rally first. After that? Sharp collapse. Compare it yourself in the chart below.
Bitcoin
As long as the price closes the week above the 56k level, the iv-v wave shown below will likely be confirmed by surpassing the ATH set earlier this year. It's evident that the price is still in the iii-iv correction phase, with the exciting final blow-off wave iv-v yet to begin.
Invalidation for wave iv-v to play out lies at $31.8k. Based on historical data a fifth wave seems unlikely whenever price closes two Fibonacci levels lower, in this case a close below $40k.
Notice how wave iii-iv now qualifies as a descending broadening wedge, comparable to the correction containing the COVID-dip [(1)-(2)].
