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Stocks Snap Back But Bottom May Not Be In Yet; Bitcoin Tanks

By Michael KramerStock MarketsJun 22, 2021 12:55AM ET
www.investing.com/analysis/stocks-snap-back-but-bottom-may-not-be-in-yet-bitcoin-tanks-200587469
Stocks Snap Back But Bottom May Not Be In Yet; Bitcoin Tanks
By Michael Kramer   |  Jun 22, 2021 12:55AM ET
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Stocks rose sharply on Monday in a large snapback rally from oversold conditions. The S&P 500 managed to fill the gap from Friday’s sell-off; the only surprise was how fast it filled. I tend to think the selling price action is not over yet.

The news from last week was a big change from the Fed, and those changes don’t typically just get brushed off.

S&P 500 Index Chart
S&P 500 Index Chart

Additionally, it isn’t often that the advance/decline falls 6 days in a row, let alone 7, so the S&P 500 was overdue for a snapback. In fact, the last time the advance/decline fell 6 days in a row was on February 28, 2020; before that, it was around October 24, 2018, January 13, 2016, August 25, 2015, and July 24, 2015. Now, I don’t remember exactly, but those weren’t the smoothest periods.

So is the bottom in? Maybe. But history would suggest there is a good chance it is not. The chart below shows the times when the Advance/Decline fell 6 days in a row.

S&P 500 Daily Chart
S&P 500 Daily Chart

Transports

The Dow Transports were completely oversold on the RSI and the Bollinger® Bands. It even hit the long-term uptrend. So again, no surprise there was a bounce; there might be some follow-through even today.

DJT Daily Chart
DJT Daily Chart

JPMorgan

JPMorgan (NYSE:JPM) had a good day yesterday, reversing some of last week’s losses. Again, like the rest of the market, Monday appears to have been a bounce off of oversold conditions. Could it rebound some more later today? Yes. Does it matter much? Not if spreads continue to collapse.

JP Morgan Chase Daily Chart
JP Morgan Chase Daily Chart

UPS

United Parcel Service (NYSE:UPS) seems no different, with the potential to push back to the 20-day moving average at $207.35.

UPS Daily Chart
UPS Daily Chart

Micron Technology

Micron (NASDAQ:MU) has traded horribly, and despite the market being up sharply as of yesterday, this stock did nothing. I don’t know what to say here, but the price action is overwhelmingly negative.

Micron Inc Daily Chart.
Micron Inc Daily Chart.

Bitcoin

Bitcoin (BTC) traded down on Monday, another 9%. I’m just waiting for this thing to break 30,000. Once it breaks 30,000, it lights out. The next stop is probably around 16,000. Yesterday, I noted that it was very close to breaking an uptrend on the log chart. Indeed, it is very close to breaking support on the linear chart.

If there was actually some fundamental way to value Bitcoin, there might be a level where buyers would have some confidence to step in. But since Bitcoin-only trades on emotions and imagination, there is no way to guess where a reasonable place would be that the crypto may stop. So the charts are all you have. Good luck...

Bitcoin Daily Chart
Bitcoin Daily Chart

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Stocks Snap Back But Bottom May Not Be In Yet; Bitcoin Tanks
 

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Stocks Snap Back But Bottom May Not Be In Yet; Bitcoin Tanks

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Hape Fritt
Hape Fritt Jun 22, 2021 1:08AM ET
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Thanks Michael.
 
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