Weekly Market Overview February 15, 2021

This week is a shorter week in the markets, obviously that's why the weekly overview is a day late. 

NASDAQ $NQ $QQQ $NDX

The first and most important thing we have going on in markets right now is the $NQ has moved into Bull Volatile market regime. Using the SQN indicator (blue) in the bottom panel, this represents the Bull Volatile regime. 

I've been talking about this for weeks/months adding to my positions since the September bottoms, 11 additions, giving me an average price around $12,400 on $NQ, meaning I've built up a very large position slowly and methodically all the way up, using weakness to add and continue to reinforce my hypothesis that the best sell setups in the world will fail, giving low risk entries all along the way.

Now is not the time to be throwing up your arms and capitulating long $NQ, that ship has sailed. Risk is now much higher. But that's how bull market tops are formed, when everyone was calling market tops every day since $10k, was the easy money. 

When we enter the Bull Volatile regime is when all of those people calling market tops do capitulate and FOMO in on the long trade, thinking that it'll be off to the races. That's not likely. But there are some very likely outcomes here, and we know what the typical characteristics of Bull Volatile regimes are. 

These are not laws, these are typical outcomes we keep an eye on.

• From entry into Bull Volatile to peak the average price gain is 10% higher, so 10% higher from here is a little above $15k. 
• Bull Volatile regime is a requirement for a major market top, it doesn't mean we will top out here but we don't put in major market tops in other regimes.
• An 8% or greater down move from the major market top is average, it can certainly be much more, but 8% is average. 
• The major market top comes AFTER a parabolic rise, usually a number of bullish candles that break ABOVE the trend channel.
• This doesn't signal a bear market.

I typically hedge my long position and often times the futures contracts expire after, so that is how I take profits. 

When I see the parabolic move AND/OR the 10% up move I hedge. 

I may also hedge a bit sooner, depending on price action. 

Currencies

The FX markets have really started to pick up in trends as the USD drops

I've been heavily focused on $GBP pairs and the move back to the $1.50-1.70 as my target for GBPUSD which will benefit all GBP pairs. This will be a move that takes months/years to play out.

EUR pairs have been a bit weaker after big moves up in 2020, while AUD and NZD pairs show much more strength. 

Commodities

We are long April Platinum still and expect this is just the beginning of the Commodity major bull market. We aren't taking profits on Platinum with the potential of it moving above the $3k mark this year.

Silver via $SLV is one we got in to a few weeks ago (before the Reddit war) with DOTM calls, already >100% gains there

$XLE is another DOTM (Deep out of the Money calls) position that we are in and up about 26% since putting the trade on. We have targets above $100.

As we continue to find opportunities in the commodity space we'll be calling them out in the Trading Lab as we put the trades on. 

Crypto

This is simple.

Long $BTC, Long $ETH, Long $LTC, Long $DOT

This is my exposure and I expect some massive moves higher in probably every single crypto asset traded. So rather than get all ADHD and chase every shiny move I've decided to lock in my positions and let them play out with the following potential price targets

$BTCUSD 100k, 200k, 488k

$ETHUSD 3500, 20k

$LTCUSD 12k

$DOTUSD 1400, 2k

There is a lot of focus on major publicly traded companies adding $BTC to their treasury, but I know a lot of SMB's who have Dollar Cost Averaging their excess capital into BTC and other big cap crypto's on BlockFi and borrowing against the assets to invest in growing their company. 

In essence they have grown the value of their Balance Sheet of their business by 200% 2020/2021 by simply owning BTC and leveraging that asset to re-invest in to growth.