Weekly Macro Analysis 24.11.24
Bulls and the Banana Zone
Last week was an insanely bullish week, with Mid Caps leading and making new ATHs, all the while BTC just keeps pumping… It didn`t quite touch the 100.000USD yet, but it came very close.
Bull Market Ratios:
These are some of my Bull market sustainability ratios, that should capture rotation from Risk On to Risk Off sectors, or rotation within Risk On sectors:
XLY/XLP - Consumer Discretionary against Staples found support and are in an Uptrend: Clearly Bullish!
IWM/SPY - Small Caps had been underperforming the S&P 500 since early 2021, but it looks like they are putting in a bottom, this would be confirmed above the July high, which would probably also mean a new ATH for IWM
USDT.D - This measure of USD Tether dominance, is an indicator for Risk On/Off in Crypto Currencies, if the dominance of USDT goes down, most Alt Coins move up and the Alt Season starts.
This is what the Crypto guys call the “Banana Zone” which is obviously bullish.
IWF/IWD - Growth vs Value has made no progress last week. But it is at support right now. Even if it would touch the lower line of the Channel it would still be in an uptrend, but it is better if it holds here and goes up quickly.
BTCUSD - Just to show how close we got:
I feel actually a bit better that we didnt just rip through it, but maybe we touch it, get rejected and build a bit of a structure here, while shaking out some weak hands before we rip through.
MID - S&P 400 Mid Cap ETF, Making and CLosing at a new ATH (for now). Very Bullish, I think Small Caps will follow soon.
What do those ratios tell us right now:
Crypto Currencies, Small and Mid Caps, Consumer Discretionary… all of them look great and although the market may be overheating soon, I don´t see why we should not be very long right now.
As long as the structure is not broken, we are in a “Buy The Dip” market.
Last week, I showcased HUT as an opportunity to go long, and it did not only work out, but it is still setup as a Buy for me, and I will add to my position at 27$:
COIN is a way to play a potential Alt Season, it recently broke out of a rectangular consolidation zone and has been shaking out some late buyers.
I can see it going down to 279$ which would be a gift, but it could also hold the 10EMA right here, I have a Buy Stop at 307.10$ and a Limit Buy for 279.40$
(Limit Buy will be cancelled if the Buy Stop fills and vice versa)
COIN and HUT are very volatile and position size should be adjusted accordingly to not lose sleep over a trade. If you can´t handle a 15% swing, then those names are not for you. It serves no purpose to get stopped out only to see the stock ripping higher afterwards.