Weekly Market Overview June 27, 2021

if you've been following me for a while now you know that we've been making a killing the last year or so in these mega trends that we caught buying the lows on $NQ Nasdaq back in April of 2020, getting long $BTCUSD Bitcoin in September and getting long Alt's (non Bitcoin cryptocurrencies) in January 2021, then going to cash in the alt cryptocurrency (non Bitcoin) portfolio on May 18, while the market fell over 50%. 

Those are the big highlights of the past year and they far overshadow the other swing trades that we had decent success with over the year. 

This is what you should expect when mega trends happen, you should be able to jump on to them and ride them out. 

That's all and good, but did you know that markets spend 86% of their life mean reverting, that is banging around in a trading range day after day. You may open up a daily or weekly chart and see it moving higher, but if you look at it on lower time frames you can see the price bounces around, sometimes gapping up and trading sideways.  

This makes jumping on to a trend and riding them out is easier said than done.

In nearly all markets that we trade, the mean reversion/trading ranges are dominating, from Equity Indices, to Cryptocurrencies, to Currencies, to Commodities, Metals and Energy. 

Yet at the same time, they are making new all time highs. 

$ES (S&P 500)

Since April, the beginning of Q2 the S&P 500 $ES has been in a trading range, this week, we close above the top of that range closing at all time highs. 

Stepping back to look at the weekly chart last week shows real strength and might open the door to the next leg in our epic 5 year forthcoming bull market where I expect to see prices on this index up to 10x higher from here.

And yet while this index has drifted to new all time highs, we've made a killing trading the $ES using our mean reversion strategy since April. 

Here's a look at the last 30 days trading the $ES in the Trading Lab.

For those unfamiliar with what 42R means, I'll convert it to % returns

• At .25% risk per trade 42R is equal to 10.5% return in a month
• At .50% risk per trade 42R is equal to 21% return in a month
• At a whopping 1% risk per trade 42R is equal to 42% return in a month

$NQ (NASDAQ)

The $NQ has moved gently into the neutral market regime as seen by the histogram below, while price action has risen steadily. 

Since February of this year, $NQ has had a rather rocky go of it. We haven't spent any time in this one and will only be looking to get long when weakness appears and FAILS to drive prices lower. 

Much of the bullishness since the March 2020 lows has been metabolized by the market but it is just as likely that it has a few more months to work on cooling off. 

$BTC Bitcoin

Not much has changed since last weeks look at Bitcoin. The only noticeable change is the amount of shorts has dropped significantly. 

After that extreme short position, prices dropped below the 30k levels and shorts appeared to have exited, while older bitcoin wallet addresses bought the dip. 

We can run surveillance on these addresses very easily, unlike traditional markets, we can actually see how old a wallet is, how much bitcoin they have, when they bought and a number of other on chain analysis. 

This week we saw addresses older than 155 days, that means that addresses that have bought bitcoin before February or so, were buying this week. That's people who at least bought their first Satoshi around the current price levels. Addresses older than that are the stronger hands as they would've bought in the 20's, the teen's, 4-digits, 3 digits, etc...

This cohort is important to watch, they are the diamond hands, and they've been buying. 

$GC Gold

After the selloff the previous week, gold mellowed out and offered a FVBO long entry. This is our main systematic strategy, not looking for a big trend but a move to 1815 to our profit target. It certainly can run much higher, but that's not how we trade this. 

Until Gold decides that it wants to take another run we aren't going to chase it, as always we let it pull us into the trade instead of using witchcraft and magic to guess our ways into trades. 

$NG Natural Gas

We got long $NG back in May, and have added twice to the position since then. Last week was a very strong move higher and after buying again on Tuesday we've raised our trail stop up to lock in profits. 

If this one pushes higher and we start a nice long campaign we can expect to add to this position 10+ more times, or more. 

And Finally...

The short squeeze game seems to be kicking back up, remember $GME 

And $AMC

We will be paying attention to this side of the market a lot more heavily this week in the Trading Lab. 

There are times and places to focus on different strategies, the next few weeks seem to be another "hot" time for the Reddit crowd to put the hurt on the hedge funds, again. 

It is a repeatable pattern and formula to catch these short squeezes, and it doesn't take a rocket surgeon to figure it out. We'll be covering this method in the Trading Lab this week. 

If you are an equity trader, one of our Lab members Macro Prince on Twitter has been white hot on some big equity calls the past few weeks. He's worth a follow!

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Current Weekly Livestream Schedule in the Trading Lab

• Monday: Weekly Crypto Strategy update
• Tuesday: Scalping strategy live trading (the strategy that I shared the results on $ES)
• Wednesday: Mid-week Total Market Check In, updates, deep dives
• Thursday: Pollinate Trading Course - Strategy Show and Tell
• Friday: Week in review, Q&A, Inverviews, Livetrading

And we always reserve the right to change this schedule if something important comes up, if there's consensus around a new idea to research. 

In addition we share our trades 24/7 in the live Slack Channel for members