I do believe that the longer-term outlook for crude oil is probably going to be very dependent on GDP figures, and central-bank policy. 

• The West Texas Intermediate Crude Oil market rallied again on Monday, to break above the 200-Day EMA.
• This is a bullish sign, and at the end of the day we are hanging around the 50-Day EMA as well, perhaps trying to keep the market from forming the so-called “death cross.”
• There are a lot of different things going on in the crude oil market that you need to be aware of, and therefore it’s not exactly the easiest market right now to be involved in.

For example, we are near 2 of the biggest moving averages, but we also have a rising wedge that measures for a move to about $100 or so. In other words, the bullish pressure may be somewhat limited based on a little bit of chart reading. However, charts do not move markets, it’s the other way around.

The Iranians possibly being able to throw another 1 million barrels of crude oil into the market certainly could be negative. However, OPEC is also starting to talk about production cuts, because they believe that the “paper price” of crude oil does not represent the actual physical issues in the real world. That’s probably true because all one must do is look at the silver market to understand that being a possibility.

Recession and Monetary Tightening Likely to Bring Down Prices

Nonetheless, I believe that the upside move is probably somewhat limited in the short term because we must worry about the fact that economies around the world are slowing down, and that means that demand for crude oil will continue to fall. That doesn’t necessarily mean we need to break down significantly, just that it may put a bit of a drag on price.

In this scenario, I prefer to keep my position size rather small, and I recognize a trading crude oil right now is probably more of a gamble than anything else, but I do believe that the longer-term outlook for crude oil is probably going to be very dependent on GDP figures, and central-bank policy. As central bankers continue to tighten monetary policy, that should in theory bring down demand for crude oil as economies enter recessions. Because of this, I think it’s probably only a matter of time before we see an exhaustion candle that we can start to think about shorting.

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We are getting relatively close to “The Merge” but is becoming increasingly obvious to me that perhaps we are “buying the rumor and selling the news” when it comes to this market. 

The ETH/USD has fallen hard during the trading session on Friday, as Jerome Powell gave his Jackson Hole speech. He reiterated that the Federal Reserve was in fact going to remain very hawkish, and therefore tight monetary policy should continue to work against the value of risk appetite-related assets such as Ethereum.

Furthermore, we are getting relatively close to “The Merge” but is becoming increasingly obvious to me that perhaps we are “buying the rumor and selling the news” when it comes to this market. The market now looks as if it is going to break down below the $1550 level. If we break it down below there, then it’s likely that we see the $1500 level would be potential support. If the market were to break down below there, then it’s likely that we could go lower, perhaps down to the $1200 level.

A Lot of Volatility Ahead

• At the $1200 level, there is a previous area of consolidation the traders will be paying close attention to, that extends down to the $900 level.  This is an area that has been important previously, so breaking through all of that it’s likely that Ethereum gets crushed.
• Breaking down below the $900 level would bring the next move lower.
• This would almost certainly coincide with a stronger US dollar, something that looks very likely to be the case going forward.

On the other hand, if the market were to turn around and break above the $1750 level, it’s likely that the market goes looking to the $2000 level. The $2000 level is a large, round, psychologically significant figure, and an area where we have the 200-Day EMA approaching. Ethereum is going to suffer at the hands of risk appetite being suppressed, and I think it’s also probably worth noting that this chart looks a lot like the NASDAQ 100, which suggests that the market is more likely than not going to fall right along with stocks, just as Bitcoin has. All things being equal, this is a market that I think continues to see a lot of volatility, but ultimately for people who are long-term believers in Ethereum, any significant selloff would be a nice opportunity to pick up bits and pieces of Ethereum to accumulate a larger position. It looks like the sellers are starting to jump into this market.

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 I think we are going to see a lot of noisy behavior over the next 24 hours, before continuing for all drift higher that we have been in for a while.

The USD/CAD initially fell during the trading session on Thursday but found a little bit of support underneath the show signs of life. It’s worth noting that the 50-Day EMA is sitting just below, and a lot of traders will pay close attention to that indicator. After all, longer-term traders consider that a short-term support level.

The fact that we ended up forming a bit of a hammer during the trading session on Thursday is interesting because we had formed an inverted hammer during the Wednesday session. In other words, the market is hanging around the 1.2950 level, an area that previously has been resistant, and therefore the market is trying to figure out what we are doing next. Jerome Powell is speaking at 10 AM on Friday at the Jackson Hole Symposium, and therefore a lot of people will be looking at the speech for signs of what the Federal Reserve may do next. Unfortunately, Jerome Powell has a long history of blowing up the statements and being misunderstood, because he’s not very good at his job.

Friday Session Likely to be Noisy

• The market breaking down below the 50-Day EMA opens up the possibility of the dollar dropping down to the 200-Day EMA, underneath the 1.28 level. On the other hand, if we can take out the 1.30 level on a daily close, it opens an attempt to reach the 1.32 handle.
• When you look at the longer-term chart, you can see that we have been drifting higher in a bit of a channel, and I would assume we you to do the same over the longer term.
• The session on Friday is likely to be very noisy.

The oil market has a certain amount of influence on the Canadian dollar as well, so if it starts to rise that may bring this pair down. However, all things lead to the Federal Reserve before it’s all said and done, so if we get some type of overly hockey statement, that could send this pair higher, just as more fumbling by Jerome Powell could send the market lower. I think we are going to see a lot of noisy behavior over the next 24 hours, before continuing for all drift higher that we have been in for a while.

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This is a market that I think continues to see choppy volatility.

• The West Texas Intermediate Crude Oil market has pulled back a bit, losing over 2% during the trading session on Thursday.
• Because of this, the market is likely to continue to see a bit of selling pressure, and the 200-Day EMA looks as if it is offering a significant amount of resistance.
• Furthermore, the 50-Day EMA is sitting just above there and is dropping, so it’s likely that we would see some type of “death cross” form in that area.

Looking at the situation in the oil market, you need to pay close attention to the fact that there are a lot of moving pieces. The Saudi government has recently started complaining about the fact that the paper market is not keeping up with the physical market, and therefore they may cut production to boost prices. On the other hand, there’s also the possibility that Iran may be able to enter the markets if they sign some type of deal with the West when it comes to nuclear constraints. If that’s the case, that could add 1 million barrels a day.

Market Expects Volatility

Furthermore, you have the Federal Reserve and its monetary policy. The Chairman of the Federal Reserve Jerome Powell will be speaking on Friday at the Jackson Hole Symposium, and traders will try to figure out whether the Federal Reserve is going to get aggressive as far as being hawkish is concerned. This is a market that I think continues to show a lot of noisy behavior, therefore it does make quite a bit of sense need to be cautious with your position size, assuming you are involved in the market at all.

If we can break above the 50-Day EMA, then it’s possible that we could go to the $100 level. If we can break above the $100 level, then it’s possible that the market could go looking to the $105 level. On the other hand, if Jerome Powell becomes hawkish, it’s possible that we could see oil drop due to the idea that the Federal Reserve is going to slow down the economy, and therefore demand for crude oil could drop through the floor. All things being equal, this is a market that I think continues to see choppy volatility.

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The WTI Crude Oil market rallied significantly during the trading session on Wednesday as we are now approaching the 200-Day EMA. The 200-Day EMA is sitting just above and now could offer a bit of resistance. The $95 level will be resistant, with the 50-Day EMA sitting just above there. There are a lot of questions when it comes to crude oil right now, so does make a certain amount of sense that we should see noise.

If the 50-Day EMA breaks down below the 200-Day EMA, then we have the “death cross.” This is a longer-term negative signal and could have some algorithms starting to sell. Furthermore, we have a lot of fundamental questions, not the least of which we whether not the Iranians are able to produce and sell crude oil into the markets. If that’s the case, and I do think that eventually ends up being the situation, that will flood the market with supply.

On the other hand, Saudi Arabia is now talking about cutting, so it’ll be interesting to see how this all plays out because they are complaining about the paper market not representing the physical market. At this point, the market is trying to break out and break higher from a rising wedge, but I think $100 is about as good as it gets to the upside.

Market Noise Ahead

• If we turn around and break down below the $90 level, then it is likely that the market could go much lower. At that point, we could see the market go down to the $80 level.
• The $80 level is an area where we should see quite a bit of interest, and a lot of longer-term analysts are starting to think that’s the target.
• Regardless, I think what we are going to see is a lot of noisy and choppy behavior, and therefore it’s likely that you need to think more or less of short-term trading more than anything else.

Keep an eye on the overall attitude of risk appetite as well, because if risk appetite is strong, then oil should do well. On the other hand, if risk appetite starts to pull apart, that could be negative for oil. A lot of this comes down to what central banks are doing as well, because if they raise rates drastically, that could drive down industrial demand.

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• The S&P 500 has rallied slightly during the trading session on Wednesday as we are waiting to see what Jerome Powell has to say on Friday.
• This sets up Thursday as being a very lackluster day, and probably one that more likely than not is going to be better off avoided.
• If you are a short-term trader, then we probably have a nice range bound to set up for the day.

The 200 Day EMA sits just below the 4200 level, and therefore I think it will offer a bit of the ceiling in the short term. Traders will more likely than not be a bit hesitant to get overly aggressive during the Thursday session, so I think at this point you’re probably going to be trading something along the lines of 15-minute charts. It’s likely that the market will continue to see Friday as the day that could set up the next move.

For myself, I will be placing a trade until Monday, because the day of the announcement and speech typically has a lot of noise. It’s not uncommon for Wall Street to run the market up in one direction, only to turn around the next trading day. This will be especially true if they have the entire weekend to “rethink their interpretation.”

Markets Waiting for Interest Rates

The 50-Day EMA underneath could offer support, and if we were to break down below the 50-Day EMA, then I think the market could unwind because the 4000 level will be challenged at that point. Anything below the 4000 level opens up a flight of selling. As far as getting bullish is concerned, I need to see a daily close above the most recent high, which is just above the 4300 level.

Take your time to pay attention to the interest rates coming out of the United States, because interest rates will directly counter what the stock market is going to do. Higher interest rates will drive the stock market lower, and vice versa. It appears to me that Wall Street is trying to convince itself that the Federal Reserve is willing to support it again, so the next couple of days should be rather important. Nonetheless, it’s astonishing to me how many people believe that the Fed will ultimately ride to their rescue.

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The ETH/USD has gone back and forth during the trading session on Tuesday as we continue to trace the 50 Day EMA. The 50 Day EMA is an indicator that a lot of people pay attention to, so it’s not overly surprising to see that the market is just simply hanging around this area. Furthermore, the $1600 level is an area that has been important more than once, so it’s not overly surprising that we are hanging around.

Looking at this chart, it appears that we are finding short-term buyers on small dips, but it does not necessarily mean that we are ready to take off to the upside. The market is going to continue to see a lot of concerns, because quite frankly the risk appetite globally is anemic, to say the least. Furthermore, you also have to keep in mind that Ethereum is pretty far out on that risk spectrum. In other words, the market needs to see a lot of confidence in order to truly take off.

Waiting for Stocks to Take Off

• If we were to break above the 50 Day EMA, then it’s likely that we could open up a move to the $2000 level. The $2000 level of course is a large, round, psychologically significant figure, and sitting just below the 200 Day EMA.
• The market is going to look at that as a major ceiling in the market, so we need to break above there before we could take off to the upside.
• At that point, we could see a significant “buy-and-hold” type of move at that point.

On the other hand, if we break down below the $1500 level, it’s likely that the market could go down to the $1200 level. In that area, you would expect to see a lot of support considering that it was the top of a consolidation area that so many people had been paying attention to as marked on the chart. Breaking below there then opened up a much deeper correction.

Although cryptocurrency is supposed to be its own asset, it has a lot of correlations. Stock markets have huge correlations to cryptocurrency, and therefore you need to see stocks truly take off to see Ethereum take off. It has not decoupled from the traditional market check, despite the fact that “The Merge” is coming.

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The NASDAQ 100 has fallen hard during the trading session on Friday and has broken down below the 200-Day EMA. The market is going to continue to see noise around the 13,500 level. The market pulling back the way it has suggests that perhaps we have a little bit of negativity ahead of us. The 13,000 level underneath would be a potential support level, as it was a previous resistance barrier. A certain amount of “market memory” is going to continue to be a major factor there. Furthermore, we also have the 50-Day EMA reaching towards that area as well.

If we were to break down below the 50 Day EMA, then it’s likely that the market could go down to the 12,000 level. The 12,000 level would have a certain amount of support from a psychological standpoint, and an area where we had bounced from. If we can break down below the 12,000 level, then it’s likely that we are going to go down to the 11,000 level. The 11,000 level was a major scene of support and any move below that level could open up a firestorm of selling.

What will be for the week ahead?

We have been rallying for a while, and now that we have challenged this area and failed, it’ll be interesting to see how next week plays out, due to the fact that central bankers are going to be speaking at the Jackson Hole Symposium and talking about inflation. After all, inflation is roaring around the world, and central bankers are going to have to do something to address this. In other words, they will more likely than not continue to pound on the idea of raising interest rates, and if that’s going to be the case that works against the NASDAQ 100 quite stringently.

• This next week is going to be very noisy, and today probably will be a continuation of the pullback.
• If we do rally, it’s not until we get through this coming week that I would be comfortable going long unless, we make a fresh, new high, after some type of litany of speeches in Wyoming that could be looked through.
• I don’t necessarily think that the situation is going to continue to see a “whistle past the graveyard” type of move.

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If we start to see rates and the dollar fall, then it’s likely that we will see Bitcoin jump into the mix and go much higher.

• Bitcoin has drifted a bit lower again during the trading session on Thursday.
• It looks like the cryptocurrency markets are simply killing time at this point.
• Tthis is a market that needs to see a lot of risk appetite out there, due to the fact that Bitcoin is so volatile, and of course, is pretty far out on the risk appetite spectrum.

Bitcoin Breakdown – What You Need to Know

It’s worth noting that the $25,000 level continues to offer a significant amount of resistance, and now that we are hanging around the 50 Day EMA. It’s very possible that we will see a bit of a squeeze in this general vicinity. If we break down below the $23,000 level, then it’s possible that we could drop from here. If we drop from here, then I anticipate the BTC/US currency pair could drop down to the $20,000 level. The $20,000 level is an area that will attract a lot of attention due to the fact that it is a large, round, psychologically significant figure, and an area where we have seen support previously. If we were to break down below the $20,000 level, it’s likely that Bitcoin will get cratered.

On a break down below that level, then we are talking about a potential move down to the $18,000 level, followed by the $12,000 level. Alternately, if we were to turn around and take out the $25,000 level, then it’s possible that the $28,000 level will be targeted. Above the $28,000 level, it’s very noisy all the way to at least the $32,000 level. Ultimately, this is a market that has a lot of work to do in order to change the entire trend, and it’s not until we break above that $32,000 level that I would be convinced. Because of this, I think we have more noise than anything else ahead of us.

The Bitcoin market will have a lot of negative correlation to the US dollar and the interest-rate markets, so you need to see whether or not the rates are rising over the dollar strengthening which would work against the value of the Bitcoin markets. However, if we start to see rates and the dollar fall, then it’s likely that we will see Bitcoin jump into the mix and go much higher. In general, I think this is a market that continues to see volatility more than anything else.

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If we were to break down below the bottom of the candlestick, it’s likely that the €6400 level will be targeted.

The Parisian index had a picture-perfect pullback from the 200 Day EMA during the session on Wednesday, making for a classic technical analysis pullback. The Parisian index has been a bit overdone for a while, so it’s not a huge surprise to see that we are starting to see a little bit of hesitation. After all, the European Union has a whole litany of problems coming its way, and therefore it’s a bit difficult to get bullish.

Recently, the big bull argument has been low yields that are dropping, and then the fact that economic indicators are pointing to a slowdown, meaning that the ECB will have to be loose with monetary policy. This is the same nonsense that New York has been doing for a while, as the idea is about liquidity and not actual economic growth. I recognize that there is a bit of a threat that we could continue to go higher based on “bad news.” However, it’s a little bit different this time in the European Union since the economy is probably going to get pummeled this winter.

CAC 40 Forecast

The size of the candlestick does suggest there might be a little bit of follow-through, and it’s probably worth noting that the Jackson Hole Symposium is next week, and a lot of people will be paying close attention to what central banks have to say.

• This is a market that I think continues to see the central bankers out there as the main impediment to higher prices, so people will be paying close attention to Christine Lagarde.
• Unless the ECB is willing to step in and save Europe from its almost certain recession, stocks will take a huge beating.
• There are a lot of energy concerns for the European Union, and France cannot get away from that.

Ultimately, we are overdone anyway, so if we were to break down below the bottom of the candlestick, it’s likely that the €6400 level will be targeted. If we break it down below there, then the 200 Day EMA is near the €5200 level.

On the other hand, if we were to break above the 200 Day EMA, then it could open up a move to the €6800 level. Obviously, that would take quite a bit of effort at this point, but it is a situation you need to be aware of.

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