Market Milestones: The Three Bs

[Image] Good morning , Welcome to another installment of Market Milestones. We had a relatively tame start to the week as the markets consolidated and tried their very hardest to grind a little higher. SPY and QQQ showed some continued bullish strength while IWM took a nosedive all week long. Thursday morning opened with a gap up on SPY which perfectly filled the bearish retest gap from Thursday, September 21st. When I say perfect, I mean it. The SPY gapped and opened at $438.43 which is the exact, to the penny price of the gap fill! It proceeded to run a full four pennies higher before faceplanting lower all day long. SPY [Image] Thursday’s gap fill on SPY reminds me of the September 1st gap fill on QQQ. Check out the chart that we sent out on August 31st which shows my thoughts and the anticipation of a rejection at the gap fill. This shows the sheer power and importance of gaps. Both charts show strong bullish moves into strong and significant gaps. The SPY had eight higher closes in a row and moved a face melting 7% in 9 trading days. To make the gap fill that much sweeter, SPY was gapping up at open. Even without the gap, that was a prime area to lock in gains. QQQ August 31st QQQ November 9th [Image]( [Image]( So, what now? This rejection by no means has to mirror the top of the market, down only rejection we saw after September 1st. In fact I think there could still be nice bullish moves after a retest, following the red bars. A retest into $430.00-$425.00 would be very healthy before another push higher. Keep a close eye on the DXY at this level. A continued bullish grind higher should mean more pain in the near term for equities. However, a bearish rejection leading to the confirmation of a double top could be just what is needed for new highs into the end of the year. [Image] You may have heard that there was a small amount of chaos in the bond market on Thursday. Long term bond yields had been falling precipitously all November after the September breakout took them to 15-year highs. Earlier in the week, the U.S. Treasury auctioned off 3-year and 10-year bonds with better than expected ease, causing yields to fall even more and bond prices to increase. However, panic arose after Thursday’s $24 billion sale of 30-year bonds showed much weaker demand than expected, spiking yields which peaked at just over 4.8%. Market participants say much of the muted demand came from a ransomware attack on the Industrial and Commercial Bank of China leaving them unable to participate. However, this nonparticipation could be showing a disinterest from market participants in owing government debt with inflation, rising federal deficits, recession and other uncertainty looming overhead. Speaking of inflation, the President of Money, Jerome Powell is back at it again trying desperately to get the market to believe him when he says that he will not hesitate to raise rates again. Inflation is by no means under control, even though October CPI will likely hit consensus, or lower, numbers due to falling energy prices. CPI will still be over 1.5% percent above the stated 2% goal. If there is any kind of hotness in next week’s CPI numbers, watch for Powell to crank up the hawk rhetoric to Ferruginous Hawk levels. That is the biggest hawk in North America. And yes, I Googled it. POM Powell is already dropping F-bombs on a hot mic, which is total hawk behavior. Honestly, have you ever heard a dove use such vulgarity? Didn’t think so. Looks like we have closed the case on the hawk or dove mystery once and for all, or should we say, closed the door. Most of our heading is filled with BlackRock and Bitcoin so we better have something to say about the two. If you have not heard, BlackRock is closer than ever to securing the first spot Bitcoin ETF. A spot ETF, as opposed to a futures-based ETF, requires the ETF to actually buy the asset in question. This would mean that BlackRock could soon be buying billions of dollars in Bitcoin as demand for their ETF grows. This would give people who want exposure to Bitcoin but are unwilling or unable to buy it directly, the option to buy in a simple and easy ETF. This is big news and news that many Bitcoin bulls have been waiting on for years. It also comes just a few months before the halving. The Bitcoin halving happens approximately every 4 years, or ever 210,000 blocks to be exact. The halving decreases the amount of Bitcoin a miner is paid by, you guessed it, one half. The current block reward is 6.25 BTC but will drop to 3.125 BTC sometime in April 2024. In simple terms, it will decrease the supply of Bitcoin. Simple supply and demand says that all things being equal, if the supply of an asset is reduced, the price must increase. However, Bitcoin could have the perfect bull storm hit in 2024. Supply will for sure decrease by ½ in April, but demand could also increase exponentially with the approval of different spot ETF’s by the SEC. The SEC could approve any number of the 12 Bitcoin ETF applications between now and November 17th. Oh and by the way, BlackRock is also perusing an Ethereum ETF which cause quite the jump in ETH on Thursday. Check out the beautiful parallel channel on the BTC chart below. BTC Parallel Channel [Image]( If you made it this far, I appreciate it. [Let me know your thoughts](mailto:support@thetradersplan.com). Will you be buying the Bitcoin ETF or will you stick to self-custody with the real thing? Strive On, Yates Craig, RLT & TPN Market Analyst Disclosure: You are responsible for your own trading decisions. 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