I am still looking at this through a prism of fading short-term rallies.

• The West Texas Intermediate Crude Oil market initially tried to rally on Tuesday but has also seen quite a bit of selling pressure.
• The market continues to be a scenario where we are looking at the possibility of a severe lack of demand.
• After all, if the global economy is going to continue to slow down, then it’s likely that we have further to go.

Will Iran Increase Supply?

Furthermore, the Europeans continue to give good signs that the Iranians may be able to come to the table and start selling more crude into the markets, and that of course will increase supply in a market that’s already starting to see a serious concern about being oversupplied. Whether or not that will last for the long term is a completely different question, but right now it’s a very negative type of market.

The $100 level above is a significant resistance barrier, and if we were to break above that level that it’s possible that we could go higher. If we do break above the $100 level, then it could open up a move all the way to the $120 level. That being said, it’s worth noting that the market is continuing to pay close attention to the down-trending channel, so that’s worth paying close attention to as well. That being said, we have plenty of reasons to be bearish, at least in the short term.

The $85 level would be a potential support level, but if we were to break down below there, then we could go down to the $80 level. The $80 level is a large, round, psychologically significant figure, and an area that will probably attract a lot of attention. That being said, I think the only thing that you can count on is that there’s going to be a lot of volatility, especially if there is a sudden shift in the situation coming out of Iran and the European Union. If they suddenly blow up the idea of a potential deal, that will take roughly 1 million barrels of potential supply out of the market each day. That obviously would be bullish for the price, but ultimately, I think it’s very unlikely that the global slowdown will continue to saturate the headline, so I am still looking at this through a prism of fading short-term rallies.

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People will be paying close attention to any little bit of a pullback as an opportunity to build a longer-term “buy-and-hold” scenario.

• Ethereum fell a bit on Tuesday as we continue to look at the $2000 level above as a major resistance barrier.
• If the market was to break above the $2000 level, that would obviously be a very bullish sign and could send the Ethereum markets much higher.
• There are a lot of crosscurrents at the moment that continue to throw things around.

Ethereum Technical Analysis

The last couple of candlesticks have been shooting stars, and that does suggest that perhaps we are going to continue to see a little bit of downward pressure. The $1800 level is an area that had previously been the beginning of this resistance barrier that we are in and it’s likely that we would see is a little bit of a reaction. That area should in theory be a bit of a small support level as “market memory” could come into the market. Ultimately, this is a market that I think will continue to be very noisy, and it’s likely that what we see is a situation where buyers could come back in and pick up little bits and pieces of Ethereum, but you should keep in mind that the $1600 level being broken to the downside could send this market lower.

Ethereum does have the distinction of the major upgrade coming, so it’s likely that will continue to keep Ethereum a bit stronger than many other cryptocurrencies around the world. Nonetheless, we have reached a major inflection point and it looks like a short-term pullback is more likely than not going to be the case. The markets will continue to be volatile, so you do need to be cautious about your position size, but more often than not we are going to see traders look at this through the prism of a longer-term standpoint. After all, if Ethereum is going to turn around and show signs of life, it is possible that we will turn things around and see a major breakout. That could take a while, and I think what we have is a situation where people will be paying close attention to any little bit of a pullback as an opportunity to build a longer-term “buy-and-hold” scenario. We are in an area that could be thought of as an accumulation zone.

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This is a market that I think will continue to see a lot of choppy behavior, with the 4200 level above could offering a bit of a barrier.

• The S&P 500 Index drifted a little bit on Tuesday as we are awaiting the CPI numbers on Wednesday.
• The CPI numbers will give us a bit of a hint as to where the Federal Reserve will be looking as far as monetary policy is concerned.
• Keep in mind that the market is likely to see a lot of noisy behavior ahead of this announcement, and then most certainly after it.

Keep an Eye on CPI

The Core CPI is going to be the measurement to watch and is expected to come in at a 0.5% month-over-month reading. If it comes in hotter than that, the S&P 500 will almost certainly get sold into. If we break down below the 4100 level, it’s likely that the market could go down to the 4000 handle. The 50-day EMA is sitting underneath there and could offer support as well, but it’s closer to the 4900 level.

This is a market that I think will continue to see a lot of choppy behavior, with the 4200 level above could offering a bit of a barrier. If we were to somehow break above there, then it’s likely that we could go to the 4300 level. Keep in mind that we are at a major area of noise in the past, and an area where I think a lot of “market memory” could come into the picture. The size of the candle is neither here nor there, but the fact that we pulled back from a shooting star is not a huge surprise. I suppose you could take a look at this through the prism of a “hint”, as we had formed a hammer followed by a shooting star, and then actually had a bit of a body in this negative candlestick. However, if there is enough of a surprise from the announcement, that could cause the volatility to pick up in either direction.

When you look at the chart, you can see that I have attached a blue box where we had action previously, and I think this is what we are struggling with right now due to the “market memory” in that general vicinity. This is a market that continues to see a lot of interest, so it’ll come down to whether or not Wall Street thinks it’s going to get it’s fixed.

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I continue to sell on signs of exhaustion and have no interest whatsoever in trying to get long of this market anytime soon.

The US dollar has been like a wrecking ball against almost everything, including the euro. If interest rates continue to rise in America, then it’s likely that the euro will suffer as a result. Ultimately, this is a market that I think will continue to drop over the longer term, especially as the ECB is essentially stuck with a lot of problems right now.

The European economy is going to have to suffer at the hands of a shortage of energy, especially now that even Germany has suggested it is going to go back to using coal. Ultimately, the European Union has a weakened economy, and as a result will probably have to resort to stimulus much quicker than the Americans, which are hell-bent on fighting inflation. Furthermore, bond yields still favor the Americans drastically, and therefore favor the US dollar.

The 1.04 level underneath is a bit of a double bottom, but I think if we break below there, it’s likely that we will take off to the downside, reaching the 1.02 level, and then the parity level. I do think that we will get to the parity level eventually, but it is probably going to take a bit of time, due to the fact that the markets are typically quiet this time of year and we have sold off so drastically already. Because of this, I think we will continue to see rallies sold into, but I also recognize that the market is probably best thought of as a short-term market because the euro tends to be very noisy under the best of circumstances.

The 50-day EMA sits just above the 1.06 level, so if that area gets approached, I would anticipate plenty of sellers coming in to push the market down. The market has been in a downtrend for quite some time, and I think that is something that you need to understand as well, as markets very rarely change trends that easily. I continue to sell on signs of exhaustion and have no interest whatsoever in trying to get long of this market anytime soon. That being said, if we were to take out the 1.08 level, I’d have to stand up and take notice, but right now like that would be a very difficult thing to achieve in this environment.

Right now, I believe that you are more likely than not going to get an opportunity to buy it at much lower levels if you are patient enough.

Cardano tried to rally Tuesday but continues to drift lower as crypto is being manhandled lately. That being said, we have lost almost 2.5% during the day, after initially trying to go green. Cardano is going to be no different than any other cryptocurrency, as it is under the thumb of fear right now. After all, risk appetite has been absolutely decimated, and markets like Cardano will continue to look far too risky for a lot of the “big money.”

When you look at this candlestick, it is yet another shooting star, just as we had seen shooting stars during the previous two sessions. However, if we were to turn around and take out the high from a couple of days ago, that would actually be a very strong sign, perhaps opening up the possibility of an attempt to reach the 50-day EMA, and then eventually the 0.70 level. Nonetheless, I think that would take a lot of momentum, and I certainly think that the most likely of directions is the downside.

If we were to break down below the $0.45 level, then I think it is only a matter of time before Cardano reaches the $0.40 level, and then possibly even much lower than that. In fact, I think it is more likely than not that we will end up breaking down. The 0.30 level underneath would be a potential target, and then we could be looking at $0.20 after that. Cardano seems to be taking its time rolling out its network and all of the roadmap that goes with it. However, that can be said about most crypto, as it is developing much slower than people thought.

Cardano has a branding problem as well because although it is a sound and fundamentally interesting technology, the reality is that there are a lot of competitors out there, some of which are much more publicized. That being said, so far the real-world use case scenario of Cardano has been underwhelming, but the potential is still there. If money starts to move out on the risk spectrum, Cardano might have a real shot at a turnaround. Right now, I believe that you are more likely than not going to get an opportunity to buy it at much lower levels if you are patient enough.

This means there is still plenty of momentum, so trying to pick up value at this point is a fool’s errand.

Elrond had a slightly negative trading session on Wednesday as we continue to see the crypto markets fall apart. Elrond has lost 66% of its value over the last several months, right along with the rest of the markets. At this point, there is no differentiation between Bitcoin or anything else, only that you are either Bitcoin, or you are nothing.

This is not to say that Bitcoin is something that is doing well, just that it has a high likelihood of existing over the next couple of years. Elrond probably will as well, but at this point, it looks as if we still have further to go. The $40 level almost certainly will offer a little bit of psychological support, and if we were to break down below there, then I think it brings even more selling. This is an area that previously had been important to traders, so pay close attention to it. If we see the $40 level get broken through to the downside, that might be it for several months.

In that scenario, Elrond drops quite drastically, perhaps reaching the single-digit area. This would be an enormous breakdown from the previous all-time highs near $550. In that scenario, you need to start paying attention to a lot of fundamentals out there when it comes to crypto, but quite frankly there’s nothing out there to pick it up. As long as we continue to see a lot of uncertainty when it comes to risk appetite in the world, the smaller crypto markets are going to continue to be absolutely decimated.

That being said, if we break down from here, then it’s likely that we could see some type of base-building process, but Elrond is something that should be a small part of your portfolio, not something that you put a ton of money into. That being said, if we do rally from here, it’s likely that the $80 level will offer a significant amount of resistance, especially with the 50-day EMA breaking to it, and offering a bit of dynamic selling pressure. Speaking of that selling pressure, you can see that the 50 and the 200-day EMA indicators are spread out and falling. This means there is still plenty of momentum, so trying to pick up value at this point is a fool’s errand.