🗞 Weekly Market Newsletter | Edition No. 22
News Update + A Full Analysis of Major Indices Including Stocks, Crypto, Commodities, Bonds & Forex
Sunday, December 4th,
Hello Friends,
As the cold Winter sets in here in Kelowna (Canada) it’s the spirit of the season that we must allow to warm our souls.
For the first time in two years there’s an opportunity for many families to reunite together over the holiday season with no masks, no fear and borders open for travel - for this I’m truly grateful.
It’s a wish of mine that joy finds its way to you, your family and loved ones as we head into the merriest month of them all.
As I typed *December 4th* above I couldn’t help but take a moment and reflect on the last 12 months and what a truly vicious year it has been for the markets.
The year started with interest rate hikes taking center stage and liquidity pouring out of risk into treasuries and cash.
We experienced some of the world’s strongest stocks tank 60-80%, as the Dow Jones, Nasdaq and S&P fell into bear market territory and an inverted yield curve dominate the discussion on if the U.S economy was entering a prolonged recession.
In the crypto realm, the tumultuous shitshow drama continued with the collapse of UST / LUNA whirl-pooling a cascade of bankruptcies and liquidations which created panic amongst retail investors and even brought the largest financial players to their knees facing 90% drawdowns on their investments.
You could hear the quacks coming from the sidelined ducks that ‘Cash’ is king, yet inflation reached a staggering near 9% in the U.S and over 10% in Europe.
The savings of the middle class were depleted as consumer credit card debt soared to all time highs and gas became a luxury with oil reaching over $125 per barrel.
Yes Elmo, that is correct.
As I typed *December 4th* above I couldn’t help but have these thoughts run through my mind, yet I sit grinning from ear to ear as parallel to all of the emotional turmoil we gained something far more valuable than money can buy, we gained experience as investors.
While the masses were busy distracted by common matters, we followed the headlines. We triangulated news into lifelong knowledge.
We dollar cost averaged into quality assets and invested our energy into education by studying the movements and patterns of the global financial system during one of its worst years in recent history.
…and that’s how you navigate tough times!
Yet the work isn’t done and the horizon isn’t showing sunny skies anytime soon.
The financial system is still bleeding badly and the high level order that once controlled the world has likely been disrupted permanently.
We’re in the eye of the financial paradigm shifting storm, but we’re ready for whatever 2023 wishes to bring.
For now all eyes are on the yearly close and one last hurrah from the FED to make a dent on inflation with one last anticipated rate hike on the 14th, expect volatility.
Have a wonderful month of December and may the best vibes find you in mind, body and spirit.
Enjoy edition No. 22
- Bramwell
📰 BramwellFox MetaCapital’s Weekly News Recap
You may press the 🗞 to read more about each headline.
Major News + Crypto Headlines
🗞 Ripple vs. SEC
💭 Bramwell’s Thoughts…
The last line of defence prohibiting cryptocurrency adoption in the United States is the lack of legal clarity surrounding digital assets and their status as a commodity, security or currency.
The Ripple v. SEC case has been a two year long saga which wiped tens of billions of dollars of personal wealth from XRP token holders who were the ones primarily disadvantaged (ironically) when the SEC launched their lawsuit against the Fintech unicorn in December 20’.
This week, Stuart Alderoty, the general counsel for Ripple announced their final submission of documents to Judge Torres.
Torres now has the power to make history should she grant the litigation in favour of Ripple as the case would set a sweeping legal precedent for digital asset clarity in the United States and grant the XRPL the power to onboard U.S customers waiting on the sidelines for the green light to use the fastest blockchain technology for payments and settlements.
🗞 Is the Bitcoin FAD over? European Central Bank FUD
💭 Bramwell’s Thoughts…
The biggest threat to the legacy banking mafia system is blockchain technology due to its transparency, decentralization and ability to create an inflationary controlled hard money source available to all humans globally to use in trade.
Is Bitcoin the one-shoe-fits-all solution, likely not.
Bitcoin was the first. The rough draft. The test run.
However Bitcoin is unlikely to be the standard or last stop digital asset when the dust settles.
It’s worth noting that the first form of any disruptive technology seldom takes a monopoly forever as technologies evolve.
My take on the ECB’s statement is that they are articulating what I just said in a very fear mongering way that mistakenly blankets all of *crypto* under the umbrella of ‘Bitcoin’.
In reality blockchain isn’t traveling the road to irrelevance at all, it’s actually driving a Tesla to heaven moving full speed ahead.
Ignore the FUD.
🗞 Wen Flare? TDE January 9th
💭 Bramwell’s Thoughts…
Flare promises to be the technologically advanced and decentralized blockchain in the ecosystem yet is flying by radars of the masses due to it’s proxy association with XRP.
The value that Flare will bring to the Web3 world by enabling interoperability without losing custody of ones assets is paramount.
After a multi-year delay (seems fishy to me that it happens to align with a Ripple v. SEC settlement or case finale) the airdrop of the Flare token is expected to be January 9th and the development team has launched a full list of major exchanges still standing that will be participating in the largest token distribution event that has ever occurred in crypto.
Hold on tight, Q1 23’ is going to be a fireworks show for XRPL adoption and utility.
🗞 Remarks by FED Chair Jay Powell Spark Optimism
💭 Bramwell’s Thoughts…
Jay Powell has adopted an almost celebrity like status amongst fintwit in 2022 with each of his public appearances being broadcasted and analyzed down to his word choice, tone of voice, shoe shine and hairdo.
He has been hawkish all year yet all of a sudden this past week his tone has shifted some, to a softer, more empathetic man who feels for the peasant investors who had their portfolio’s destroyed this year at the mercy of his monetary policies.
With 12 months of labour market data slowing, 11 months of unemployment rising, 10 months of consumer net worth peddling, 9 months of bankruptcies climbing and a partridge in a pear tree - Powell signaled it may be finally time for the rate of interest rate hikes to slow and eventually pause.
We await December 14th to learn if we will get coal or gold in our stocking.
🗞 Is a Stock Market Reversal Imminent? Expert issues warning.
💭 Bramwell’s Thoughts…
I super enjoyed Michael’s thread below where he effectively triangulates the relative strength of Lumber to Gold and Utilities to Stocks to predict leaks in the financial market that signal a leading warning shot for investors that an apocalypse is coming.
It’s actually impeccable timing for this thread as the U.S Dollar is resting on support meanwhile the majority of major risk-on indices are facing important resistance zones.
If his hypothesis is correct, we should be looking to the news headlines for something that sparks a black swan event in the coming days and weeks.
I won’t lie, my head remains on a swivel right now as the charts are also giving me an eerie feeling.
🗞 Big Week for Artificial Intelligence | OpenAI & ChatGPT
💭 Bramwell’s Thoughts…
What does AI have to do with our profits?
Technically speaking, everything.
Disruptive technologies are exponentially shifting the way us humans live on earth and from blockchain to AI we’re now entering uncharted waters of discovery.
Imagine a world where Google was a fad from the past and there are no more banking institutions other than interactive platforms online to connect your digital wallet. Imagine no cashiers at your grocery store, no teachers and no schools and the worlds brightest minds not having blood in their brains, but circuits powering their algorithms.
I want for you to imagine a world where decisions are made not as a result of a oligarchy disguised as a democracy, but where citizens vote on matters by using their smart device which triggers an instant result for important matters concerning nation leadership, to seemingly less important matters such as city allocation of funds for paving roads or investment into a new park.
Artificial intelligence will have a profound shift on the world as we know it - and this past week it has officially arrived at our door with a loud knock.
BramwellFox MetaCapital’s Weekly Market Review & Technical Analysis
📈📉 The Week Ahead in Charts
Symbols 📈 or 🐂 = Bullish / Positive | 📉 or 🧸 = Bearish or Negative | ⚖️ Ranging or Low Volatility
FOREX
⚖️ 📉 DXY(U.S Dollar) + 📈 CAD
💬 Bramwell’s Commentary, Analysis & Prediction for the Week Ahead:
The DXY is sitting on support while continuing its free fall on the bottom half of the descending channel that originated from the highs of 114 in September.
It’s possible that the DXY is setting up for a year long Head & Shoulders pattern having already formed the Left & Head of the three pronged bearish setup.
It will open the week on support at 104 and overextended on the RSI with a bullish divergence forming on the lower timeframes which indicates to me that a short rally may be fuelled by risk hedging heading into December 14th FOMC meeting.
In my opinion, we may see demand for the U.S Dollar rise as it’s consumer spending season as well as the S&P at critical resistance which may encourage nervous investors to take profits on the recent rally.
At best, I predict we may range between 104-106 before breaking support and flushing down towards the 101 range in due time which will give risk assets room to breathe.
Featured Chart DXY 12HR (click to enlarge photo)
The maple leaf coin has had a nice rally of its own and is following the path I set up weeks ago.
After a retest of .735 I believe the next leg up is in store and I still hold my bullish thesis on targeting .775 by end of year.
Featured Chart CAD 1D (click to enlarge photo)
Equities
⚖️ 📈 S&P500 + ⚖️ 📉 TSX + 📉VIX
💬 Bramwell’s Commentary, Analysis & Prediction for the Week Ahead:
It’s do or die time for the S&P and I’m confident many investors are holding their breath awaiting the futures markets to open Sunday evening.
In the 12HR chart below you will see the S&P pushed up against the descending resistance with a breakout being big news for equities should it occur with volume.
The two scenarios I’m forecasting are as follows:
My bullish ego predicts early week selling pressure after a red futures market opens Sunday evening. A retest of the trend line or demand zone ~3950 and a follow through to the upside with the DXY falling to start the week of trading.
My supporting evidence for this theory is the VIX making lower lows on the daily and appearing to have more room to the downside in the immediate future. (see 1D VIX below)
My less-bullish side hedges on a harsh rejection from this zone fuelled by bearish headlines yet to surface with the S&P falling 250 points down to 3750 before finding support and attempting a breakout in Q1/Q2 2023. (see 3D chart below the VIX)
My bearish side is the harsh rejection with black swan event that has the S&P collapse into February 2020 highs of 3300, but as of now this scenario has no merit and pure speculation of all worst case scenarios combined.
Featured Chart S&P500 12HR (click to enlarge photo)
I have possible support levels drawn for the VIX and two possible pivots that I expect to occur.
I believe we will see the VIX fall for another 4-5 days before investors brace for volatility heading into the week of the 14th FOMC.
I do believe any volatility will be short lived and an immediate reversal once the VIX returns to range highs (red arrow).
Featured Chart VIX 1D (click to enlarge photo)
Featured Chart S&P500 3D (click to enlarge photo)
The TSX has had a strong rally from its lows of 17,800 in October to closing last week just below 20,500.
It wouldn’t surprise me if the TSX revisits the 19,500 range for a pullback before attempting its next leg up to the 22,000 region.
It’s worth noting that most equity indices will move in sync, thus the macroeconomic conditions that would create a harsh downturn for the U.S economy will likely be mirrored by the TSX.
High time frame bullish, low time frame ranging.
Featured Chart TSX 1D (click to enlarge photo)
Treasuries
📉 US2YR & 📉 US10YR
💬 Bramwell’s Commentary, Analysis & Prediction for the Week Ahead:
Will cash remain king? More like class Jester if we look at the 2 & 10 year treasuries.
With interest rates slowing in pace it’s likely liquidity returns to the bond market and yields begin their corrective waves after an incredibly scary run in 2022.
I have descending channels drawn on both treasuries with the 10 year target 3% and 2 year target 4% - which still indicates recession territory.
You’ll notice these chart patterns are possibly forming into falling wedges which may indicate a future break to the upside which I’m on high alert for in terms of macro fundamental headlines.
For now, it appears we have some breathing room for risk to bump up.
Featured Chart US2YR 1D (click to enlarge photo)
Featured Chart US10YR 1D (click to enlarge photo)
Cryptocurrencies
📈 Bitcoin + 📈 XRP 📈 Total Crypto Market Cap
💬 Bramwell’s Commentary, Analysis & Prediction for the Week Ahead:
Bitcoin is chugging along attempting to fill a fair value gap (FVG) with a move up to $18-19K.
The king of crypto certainly isn’t out of the woods yet even if this move occurs as it could also be interpreted as a bearish retest of the 2017 all time high region of $19.8K.
Right now it’s best to play Bitcoin (and all of crypto) level to level if you’re trading or accumulating a cash position in the event the move to $13.8K or lower arrives.
Featured Chart BTC 1D (click to enlarge photo)
While utility for XRP has bullish news on the horizon, the Ripple case on its own will not decouple the asset from Bitcoins gravitational force should a market downturn emerge due to further bankruptcies, regulation FUD or a possible Tether time bomb exploding.
I’m expecting XRP to make a direct push up to the supply zone in red ~.44-45 cents or at its worst path re-test the lows of 37 and or 33 respectively if a pullback occurs across the market.
It’s important to remember that the black swan low for XRP is projected to be .20-25 cents if that nightmare scenario does arrive.
Else, once .50 cents is reclaimed as support it should be smooth sailing for XRP to begin its rise to 85 cents before encountering further high time frame resistance.
Featured Chart XRP 12HR (click to enlarge photo)
My bullish bias for the crypto ecosystem is the total market cap chart eyeing the $1 Trillion mark and looking primed to make a move.
Featured Chart TOTAL 1D (click to enlarge photo)
Commodities
⚖️ 📉 Oil + ⚖️ Gold & ⚖️ Silver
💬 Bramwell’s Commentary, Analysis & Prediction for the Week Ahead:
We await a response from Russia on the proposed Oil price cap of $60 in the early part of the week ahead, but as it stands Oil is certainly looking like it wishes to make that move down to $65-70.
A head & shoulders formation has already completed and a fakeout to the downside breached the neckline last week. Typically this move would be in favor of a strong move in the opposite direction, however with geopolitics interfering with the supply & demand it appears there is manipulation occurring on the technicals.
On a high timeframe it appears as if Oil may be forming a falling wedge of its own leading the price into the $60-$65 region before a possible rally in Q1/Q2 23’ where we could see Oil revisit $100 per barrel.
Featured Chart Oil 2D (click to enlarge photo)
Our Gold targets from July have officially been reached at $1800 per oz.
Gold is acting like the old wise owl of the financial markets and appears to be eagerly awaiting the collapse of the U.S Dollar to continue its run up.
I’m expecting a short pullback and some ranging action for Gold heading into 2023 with no decisive move until a victory lap (or defeat) has been declared against inflation.
Featured Chart Gold 1D (click to enlarge photo)
The volume on Silver has been impressive and a near 6 month rally is finally feeling overextended. I’m expecting a short pullback into the $20 region before 2023 sets the stage for a 20% rise in the shiny commodity that is essentially for the digital age of technology.
Featured Chart Silver 1W (click to enlarge photo)
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