🗞 Weekly Market Newsletter | Edition No. 04
News Update + A Full Analysis of Major Indices Including Stocks, Crypto, Commodities, Bonds & Forex
Sunday July 31 11:49am
Hello Everyone,
We experienced an incredibly important week last week that sent the markets bullish and into green territory for a much needed relief bounce in risk-on asset prices across the board.
The question on everyone’s mind heading into this week; was last week the turning point of a market bottom reversal - or simply a dead cat bounce.
Are we 🐂ish' or should we prepare for more 🐂💩?
Let’s dive into todays newsletter as i’ll cover what i’m watching in the charts and in the news for the week ahead.
- Bramwell
Weekly Predictions
Recapping Last Week's Predictions + This Weeks Forecasts
DXY (U.S Dollar Index)
✅ DXY Prediction : I was bearish on the DXY (U.S Dollar) going into last week despite the anticipation of the FED raising interest rates by .75-100 basis points (read more about last week's FOMC meeting here) and my prediction was correct.
The DXY corrected down from 106.75 to 105.5 by end of last week - largely due to investors hedging that the Federal Reserve may be pivoting away from quantitative tightening in 2023 and re-entering long bets on bottomed out risk-on assets primarily in the consumer discretionary and technology sectors.
Featured Chart DXY 4HR
Bramwell’s Technical Prediction for the Week Ahead: This week for the DXY I’m expecting a slight rise (blue arrow) into Wednesday to retest the supply region in red before a markdown to the blue ray 104.50 region.
Bramwell’s Commentary: There are a number of very important events occurring this week including continued Q2 earnings releases (Alibaba, AirBNB, BP & HSBC amongst the group), rate decisions from the Bank of England & Reserve Bank of Australia + US Employment data which I expect may coincide early in the week with the forecast i’ve made with the DXY rising to re-test supply. Due to this I expect early week selling pressure for risk-on as profits are taken from last week's bullish momentum - this will set the tone for the remaining indices we cover throughout the report.
S&P500
✅ S&P 500 Prediction; I was bullish on the S&P last week as it had broke out of the trading channel and I expected a deviation to the upside target of 4000 - 4125 before meeting resistance and my prediction was correct.
The S&P500 reacted bullish to the tone of Jerome Powell in his FOMC speech on Wednesday as the relief bounce closed above 4100 on the week.
Featured Chart S&P Futures 12HR
Bramwell’s Technical Prediction for the Week Ahead: I’m expecting early week selling pressure and profit taking to bring the S&P down, re-testing the 100 EMA before heading towards my next target of 4250-4325 within 7-14 days.
Commentary: “If it’s in the news, it’s already priced into the charts.” I love this quote and it sets the stage for my contrarian bet that risk-on returns in Q3/Q4 as smart money calls bluff on future rate hikes at the same time the U.S Government attempts to re-define the meaning of a recession. Due to this, I'm placing my bets on smart money front-running these bargain prices on high quality stocks despite the sluggish earnings and near misses we’ve seen and the S&P continuing to rise in the coming weeks.
Dow Jones Utility, Transportation & Industrials
✅ Dow Jones Utility Index Prediction; The DJUX is the heart of economic activity meaning it’s a leading indicator of economic growth or contraction. I had a 3.75% bullish bet last week and my prediction was correct.
Commentary: The DJUX experienced strong bullish candles to finish the week with a close just under an 8% gain on the week. The DJUX is pushing up into resistance to start the week and I'm expecting a short pullback (black arrow) into the 985-990 region before its next leg up. An inverse head & shoulders pattern is potentially forming if this scenario unfolds which is a bullish indicator for the month of August continuing further into Q3 with targets of 1075 in sight.
Featured Chart DJUX 1D
✅ Dow Jones Industrial Average Prediction; Similarly, the DJIA had a bullish week meeting my target of just under 33K, my prediction was correct.
Bramwell’s Technical Prediction for the Week Ahead: I believe the Dow Jones Industrial Average will continue its momentum into the early part of this week and I have short term targets of 33750 to be met before a correction back down to the resistance-turned-support region is red ~33150-33200.
Featured Chart DJIA 1D
The VIX (S&P 500 Volatility Index)
✅ VIX Prediction: it was the VIX last week that got me excited as it was sitting atop a trendline with downward momentum and I expected it to break - it did, my prediction was correct.
Commentary: In last weeks VIX update I highlighted the inverse correlation between the VIX & DXY with risk-on assets by comparing together their charts against the Total Crypto Market Cap (black line)
I was hoping to see the DXY break trend alongside a VIX trendline break - we achieved both in one week.
Featured Chart VIX, DXY & TOTAL 1W
Zooming into last week's VIX 1D action below, we can see a clear trend break with the VIX now heading down into the support region of 20.
Featured Chart VIX 1D
Bramwell’s Technical Prediction for the Week Ahead: as the VIX is a volatility indicator I'm not discounting its strength to regain in the weeks and months ahead as the geopolitical macro landscape is still uncertain. I do believe the VIX will touch down into the green region (20) allowing markets 4-6 weeks of growth unless any unforeseeable events occur between now and September.
Gold
✅ Gold Prediction: in last weeks report I shared that I was so bullish on Gold that ‘it hurts’, and while no physical harm was done my prediction was correct as gold began it’s leg up rising by $50 per oz.
Featured Chart Gold 1D
Commentary: I had expected for the Federal Reserve to raise interest rates going into last Wednesday's FOMC meeting and for the U.S to officially declare a pseudo-recession.
Precious Metals (Gold / Silver) are always the recession / inflation hedge and I expected Gold to bounce while forming a higher low on a high timeframe and begin its next leg upwards.
Bramwell’s Technical Prediction for the Week Ahead: I’m expecting precious metals including Gold to have a bullish end to the year and targeting another 100$ increase per oz by Q4
Crude Oil
❌ Oil Prediction: while I expected a break at the pumps for consumers which arrived perfectly in time for a fill-up, my downwards price targets for oil missed, my prediction was incorrect.
Featured Chart Crude Oil 6HR
Commentary: Oil ranged last week above the $92 region however in my opinion demand appears low and it doesn’t appear as if oil will break the red region of supply above $97-99
Bramwell’s Technical Prediction for the Week Ahead: With the OPEC meeting on Wednesday it may give rise to price momentum but I’m sticking to my predictions that Oil will break down and test the $85-90 region within the coming weeks.
Technical Note: This price action could be setting up the high timeframe Oil charts for a whipsaw event where a failed breakdown ends up skyrocketing Oil to new highs in the coming months.
Time will tell and it’s important to monitor the events in Russia v. Ukraine heading into Winter as an indicator over this commodity.
Bitcoin
✅ Bitcoin Prediction: Bitcoin rallied alongside the S&P 500 last week and broke the diagonal resistance holding it back from my next target of 28.5-30K, my prediction was correct.
Bramwell’s Technical Prediction for the Week Ahead: I’m expecting a hard re-test of 22.5K to start the week with BTC creating a small bear trap for eager short sellers.
Commentary: Riding my predictions of the DXY & VIX - i’m expecting bullish momentum for risk-on and anticipating a rise to 26.5K-28K by the end of week (black arrow).
Final Bullets
I’m 🐂ish, no 🐂💩 on the week ahead.
August appears to be shaping up for lower volatility, perhaps a calm before the storm.
I’m calling bluff on the concept of a prolonged recession in the short - medium term and saving all fear for 2024.
I’m expecting earnings releases for S&P500 to be ‘meh’, but better than feared which should create front-run momentum for smart money and hedge funds returning to long bets.
I’m bearish in the short-medium term on commodities, including Oil.
I’m bullish on precious metals, Gold & Silver are great plays atm.
The majority of high quality alt-coins in the crypto market are screaming near-bottom or bottom, now is the time to be adding to your portfolio.