🗞 Weekly Market Newsletter | Edition No. 06

News Update + A Full Analysis of Major Indices Including Stocks, Crypto, Commodities, Bonds & Forex

Aug 15, 2022

Hello friends, it’s Bramwell here! For just $5 per month you can join a great community of #web3 investors and hear my take on the markets each week as we navigate the seas of the financial paradigm shift together. ⛵️🌊

Sunday August 14th 12:56pm

Hello Everyone,

It was a calmer week in the markets over the past 7 days as overall trading volatility decreased and we felt a mild bullish breeze blow some liquidity back into risk / growth assets.

…but is this the calm before the storm?

We’ll find out together in today’s edition as we cover (5) important news headlines that broke this week before diving into our normal technical analysis across major market indices.

Enjoy the weekly recap,

- Bramwell

BramwellFox MetaCapital’s Weekly News Recap

📰 FIVE headlines that (you-need-to-know) happened this week!

Biden Administration passes the $430B Inflation Reduction Act
- The bill is an amended version of Biden’s original Build Back Better Act.
- Aims spending & investment towards the energy sector to reduce climate change and healthcare sector to offset the high costs of medicare.
- To fund the Bill, an estimated $437B in Government revenue will be raised by:
  - Legislating a 15% minimum corporate tax on revenues >$1B
  - Hiring 87K new IRS agents to search for $~125B in unpaid taxes of ~~struggling Americans~~.
❗️Bramwell’s Commentary;
- I’m never impressed when I hear a Government attempt to reduce inflation by ~~printing~~ spending more of taxpayers money especially when it comes down to spending said taxpayers money on IRS agents to collect more taxpayers money.
- Anytime I see spending aimed to ‘Fight Climate Change’ I immediately assume that the money will end up not helping to fight climate change and that they added this into the bill as a feel-good bullet point that will be mis-managed and re-directed as pleased for other purposes.
- At its worst, the Bill gives me a slight grin that the Democrats are trying to restore hope in the economy and that they will do their best to stop the markets from bleeding into Q3/Q4.
CPI Data Better Than Expected @ 8.5% YoY
- The Consumer Price Index for July was released below economists expectations of 8.7% mostly due to softening demand for Oil and the price of Gas falling for over a month straight leading into the report.
❗️Bramwell’s Commentary;
- Market’s immediately reacted bullish to this move anticipating that the reduction in inflation may trigger the FED to lower or reduce interest rates quicker than expected or at the very least cement the notion that quantitative tightening will be coming to an end sooner rather than later.
- It’s worth noting that while the Biden admin bragged about the CPI release, all is not what it seems. The U.S has been depleting their reserve Oil supply thus creating a softening in demand which ultimately brought down the price of gas marginally, and the price of gas is weighted heavily in the CPI numbers thus the lower than expected % - however, the other factors such as housing, food, consumer staples are still eating away at the pockets of consumers.

Elon Musk Sells $6.9B in Tesla Stock
- Elon sold $6.9B in Tesla stock under the guise that he may need additional capital to fund the Twitter deal and did not want to risk a ‘flash sale’ if funding options collapsed.
❗️Bramwell’s Commentary;
- Elon’s sale of Tesla stock just happens to be on the most aggressive bear market rally bounce for equities we have seen all year - does the richest man in the world expect further decline for risk assets and is he selling the top with a fitting excuse? I’m curious…
ETH Proof of Stake Merge
- The most anticipated crypto event since the genesis block of Bitcoin has been given an official date for ~September 15th when Ethereum, (the world’s largest smart contract network and the second largest crypto by market cap) will merge to a Proof of Stake consensus blockchain.
❗️Bramwell’s Commentary;
- The entire crypto community has been awaiting this event and many believe this will be a catalyst for the next crypto bull-run.
- I trust the intelligence of Vitalik Buterin (Founder of Ethereum) and his team to complete the merge successfully without any major disruptions or hiccups; however, the devil on my shoulders is watching carefully for any exploits, security issues or tech disasters that may arise close to this event.
- The merge to Proof of Stake will dramatically reduce gas fees for using the network and brand $ETH as a climate friendly blockchain, this is very bullish for crypto as a whole.
Canada’s Report Card Week
- The Canadian economy has a busy week ahead with big numbers being released on Home Sales, Manufacturing Data, Wholesale Trade, Inflation & Retail Sales.
❗️Bramwell’s Commentary;
- While I’m a Canadian and living here on the West Coast of Canada, I’m generally pretty unexcited about macroeconomic news relating to the maple leaf economy because on a large scale what happens in Canada doesn’t create large ripples in the investment markets…yet.
- I’m bullish on Canada over the next 20-50 years to become increasingly important on the global scale as a major mining & minerals + agricultural exporter; however for now I do not invest tremendous energy triangulating its economic data releases to forecast movements in global markets.
- Being said, I'll be paying attention to the home sales and inflation numbers this week.

BramwellFox MetaCapital’s Weekly Market Review & Technical Analysis

📈 The Week Ahead in Charts

DXY (U.S Dollar Index)

✅ Last Weeks DXY Prediction: I was anticipating a weakening dollar last week and nailed the prediction. The dollar fell to my area of interest (104 3/4) and broke it’s trendline (black) stemming from February 22’

Featured Chart DXY 12HR

🐻 Bramwell’s Prediction for the Week Ahead: I’m still bearish on the U.S Dollar. After the trendline break I'm expecting a very early week re-test of the black diagonal support line followed by a continuation downwards (red path) into the local area of demand for a re-test of the 104 region green zone.

💬 Bramwell’s Commentary: Important weeks and months lay ahead for the DXY. In my chart you’ll notice I've highlighted a yellow circle that appears to bounce off of a red dotted line - let me show you why this region is super important.

The red dotted line marks the mid-way point of a 14 year uptrend channel for the US Dollar, break it and we may see the DXY weaken and touch the bottom of the channel with a target of 95; however, hold the mid-way point and we may see a bullish impulse up to 117.

A weakening dollar means a return to risk assets, a strengthening dollar means a return to risk-averse assets such as bonds or inflation best-hedged assets.

S&P500

✅ Last Week's S&P 500 Prediction: As expected, the S&P 500 remained bullish last week after the CPI data release + Inflation Reduction Act announcements and hit my target of 4250.

Featured Chart S&P500 12HR

🐂 Bramwell’s Prediction for the Week Ahead: I was expecting a pullback correction last week and we didn’t get it. This troubles me as I feel we’re full steam ahead into both the 400MA (red moving average) as well as a multi-month diagonal resistance (black line). I’m expecting a touchdown wick up to 4375 (green path) before a correction late this week or to finish August back down to the 4000 region (red path).

💬 Bramwell’s Commentary: While I’m fully anticipating the DXY to retest the monthly highs from 2017 & 2020, the significance of that region for the Dollar is keeping me up at night and it’s showing in the overbought indicators of S&P 500. It’s too far ahead to forecast what event may trigger a strengthening U.S Dollar (collapse of foreign economy, events of war, hawkish monetary policy in September) but I'm treading cautiously for risk assets until more significant areas of support have been re-claimed across all indices.

VIX (Volatility Index)

✅ Last Weeks VIX Prediction: I expected the VIX to continue it’s decline and take out the April 22’ lows at 19.5 which hit the target perfect.

Featured Chart VIX 12HR

🐻 Bramwell’s Prediction for the Week Ahead: I’m continuing my bearish take on the VIX given a combination of it’s weak indicators + a bearish 100MA (purple) crossover below the 400MA (thick red) and expecting the VIX to take out the January 22’ lows of 16-17 within 1-2 weeks.

💬 Bramwell’s Commentary: The VIX is typically inverse correlated with risk assets thus a declining VIX would mean a bullish take on Crypto + Stocks. Given the overextended weakness of the VIX I'm treading cautiously bullish on the S&P + Bitcoin in the immediate short term, but expecting a surprise rebound at any point between now and September. Such a rebound upwards on the VIX will give us the correction on equities and crypto needed to re-charge liquidity for further upside, or in the worst case, confirmation that this was simply a corrective rally.

Oil

❌ Last Weeks Oil Prediction: I was expecting for Oil to have a short term rally upwards before continuing down to $80 per barrel - I nailed the rally path, now will we see the continued correction downwards this week?

Featured Chart Crude Oil 1D

🐻 Bramwell’s Prediction for the Week Ahead: I’m continuing my bearish take on Oil downwards to the weekly demand region and 400MA (red line) targeting $80 per barrel.

💬 Bramwell’s Commentary: I also triangulate falling oil to a falling ~~petro~~ U.S Dollar. The timelines appear to be matching for an Oil rebound + DXY rebound. All eyes on September.

Bitcoin

❌ Last Weeks Bitcoin Prediction: I was incorrect on Bitcoin’s momentum last week as the slow choppy price action upwards lacked the impulse structure to get us to the 28.5K region.

Featured Chart Bitcoin 6HR

🐂 Bramwell’s Prediction for the Week Ahead: Bitcoin is overdue for a correction; however i’m anticipating any corrective action to trap bear’s before an impulse upwards as a short squeeze. The perfect area for a bear trap would be the highlights circle region testing the bottom support line of the upwards channel. I’m predicting an early week correction into the high 23K before an impulse upwards towards the major 28.5K resistance.

💬 Bramwell’s Commentary: Bitcoin has been lagging the typical correlated indices and i’m expecting a catch-up to occur very soon. The total crypto market cap is overdue for a correction however I believe it will be short lived before a short squeeze occurs. All eyes on the potential bear trap this week.

👋🏼 Hey!

Thanks for reading this week's edition of the Weekly Recap + Looking Ahead.

If you have any comments, feedback or questions on any material written in this edition please share as I'd love to continue a dialogue below.