WARNING: This is BAD 🔥 Stock Market Analysis +BTC

Summary

In this financial analysis video, the host discusses market indicators and technical patterns, highlighting a bearish 'island top reversal' in the S&P 500 chart. He anticipates a bullish move for AI and Nvidia but advises caution. The host also addresses Bitcoin's potential resilience in a recession, suggesting it could perform well in a low-rate, quantitative easing environment. He provides specific technical indicators for Bitcoin's trend, emphasizing the importance of closing monthly candles above certain thresholds for a bullish outlook.

Takeaways

• 📉 The presenter discusses a bearish 'island top reversal' pattern in the S&P 500 (SPY) chart, which could indicate a significant downturn ahead.
• 📈 Despite the bearish signal in SPY, the presenter remains cautiously optimistic about a potential bullish move for the AI narrative and Nvidia's earnings.
• 📊 The market is awaiting several key data releases, including CPI data and Q2 earnings reports from major retailers like Home Depot and Walmart, which will provide insights into the economy's strength.
• 💡 The presenter highlights the importance of the small business optimism index, noting that small businesses have been left behind during tech rallies and may benefit from potential Fed rate cuts in 2024.
• 🤔 The presenter questions whether Bitcoin will be negatively affected by a recession, suggesting that Bitcoin's performance could be independent of macroeconomic downturns.
• 📊 The presenter analyzes Bitcoin's chart, noting that it's still in a bullish overall trend despite recent declines, and emphasizes the importance of closing monthly candles above certain price points.
• 🚀 The presenter mentions past successful trades on Apple (AAPL) and provides technical analysis for potential future trades, suggesting a watchful approach due to the current market environment.
• 📅 The presenter also mentions other companies reporting earnings, such as Alibaba, and the implications these reports may have on the market.
• 🔒 The presenter advises on risk management strategies, such as using spreads to play Nvidia's earnings and setting stop losses above the top of the gap in SPY as a protective measure.
• 📝 The presenter encourages viewers to use technical analysis to inform their trading decisions, rather than trading blindly in the current volatile market conditions.
• 💌 A personal note is included, expressing condolences for the loss of a friend and asking for support for an upcoming video tribute.

Q & A

Why was the last intro video taken down by the Olympic Committee?

The video was identifying some problems in the market, which the Olympic Committee found inapplicable or inappropriate, leading to its removal.

What is a reversal pattern and why is it significant in the market?

A reversal pattern is a chart pattern that signals a potential change in the trend direction. It's significant because it can be one of the strongest confirmations of a reversal, indicating that the market might move in the opposite direction.

What economic data is expected to impact the market this week?

The market is anticipating data such as the Federal Reserve's decision on Tuesday and July's Consumer Price Index (CPI) on Wednesday. These are crucial as the market is pricing in four rate cuts this year and looking for assurance from the Fed on liquidity.

Why are the Q2 earnings reports of Home Depot and Walmart important?

The Q2 earnings reports of these retail giants are important as they provide insights into the overall strength of the economy and consumer spending habits.

What does the term 'island top reversal' refer to in technical analysis?

An 'island top reversal' refers to a situation where the price gaps up, forms a small V-shaped top, and then gaps down to the same price level it initially gapped up from, indicating a potential significant downturn.

How is the 'island top reversal' pattern typically traded?

Traders typically enter bearish positions when the pattern is recognized, placing stop losses above the top of the gap. If the price does not gap back up or close above the critical level, it confirms a downtrend.

What is the significance of the 21 EMA in determining bull or bear cycles in Bitcoin?

The 21 EMA (Exponential Moving Average) is used as an indicator to determine the trend direction. If the price moves far away from the 21 EMA and then comes back close to it, it suggests a potential continuation of the trend.

What is the current stance on Bitcoin's performance in relation to a potential recession?

While some believe Bitcoin might be dragged down by a recession, the speaker argues that Bitcoin has shown resilience and could perform well in an easing environment, as it did in 2021.

What are the key technical indicators for Bitcoin's future movement?

Key indicators include closing monthly candles above 56k to maintain a bullish run and watching for weekly candles to close above 60k for a bullish trend confirmation or below 60k for a bearish trend.

Why is the 'Chart Goat University' mentioned in the script?

The 'Chart Goat University' is a community or platform where the speaker shares insights, conducts live trading sessions, and educates viewers on using charts for trading, which is the main focus of the video content.

What is the speaker's strategy for trading Nvidia's earnings report this month?

The speaker suggests using spreads to trade Nvidia's earnings and emphasizes the importance of hedging risk, given the uncertain market environment.

Outlines

00:00

📉 Market Reversal Patterns and Economic Indicators

The speaker begins by discussing the removal of a previous video due to the Olympic Committee's objections. They then address current market issues, highlighting a reversal pattern in the S&P 500 (Spy) that signals a potential market downturn. The day's trading was characterized by low volume, suggesting a lack of buyer interest. Upcoming economic data releases, including CPI figures and Q2 earnings reports from major retailers like Home Depot and Walmart, are emphasized for their market impact. The speaker also mentions monitoring other companies like Apple and Nvidia, whose earnings could influence the AI narrative and market direction. Additionally, the National Federation of Independent Businesses' optimism index is noted as a key indicator of small business performance and the broader economy's health.

05:01

🏝 Bearish Island Top Reversal in S&P 500

The speaker identifies a bearish 'island top reversal' pattern in the S&P 500 chart, which is considered a strong signal of a potential significant downturn. They explain the pattern, which involves a gap up followed by a price movement forming an 'island' before gapping down to the original gap-up price level. The speaker advises that this pattern typically calls for entering bearish positions with stop losses placed above the gap's top. They note the importance of confirming the pattern's validity through sustained price action above the critical level and express caution, suggesting that the market may not be ready for a V-shaped recovery and could face further declines.

10:02

🤔 Bitcoin's Resilience Amidst Economic Concerns

The speaker tackles the question of how Bitcoin might perform in a recession, countering the notion that it must follow traditional market downturns. They argue that Bitcoin's performance has historically been influenced by monetary policy, such as quantitative easing, and could potentially thrive in a more accommodative economic environment. Analyzing Bitcoin's price action, the speaker notes the importance of closing above certain price levels to maintain a bullish trend and suggests that Bitcoin is not out of the woods yet, with potential for further volatility. They conclude that Bitcoin's technical indicators will guide its future direction, with key levels at 60k for bullish confirmation and below 60k indicating a bearish trend.

Keywords

💡Intro Video

An 'Intro Video' is a short video segment used at the beginning of a content creator's video to introduce the main topic or theme. In the context of this video script, the creator mentions not having an intro video due to a previous one being taken down by the Olympic Committee, indicating a conflict with the content of the video.

💡Reversal Pattern

A 'Reversal Pattern' in technical analysis refers to a chart pattern that signals a potential change from a current trend. The script discusses a specific reversal pattern, the 'island top reversal', which is seen as a strong confirmation of a trend reversal in the S&P 500 chart, indicating a bearish sentiment.

💡Volume

In financial markets, 'Volume' refers to the number of shares or contracts traded in a security or market during a given period. The script mentions 'low volume' on the Spy, suggesting a lack of buying interest and contributing to the market's choppy and uncertain behavior.

💡CPI

CPI stands for Consumer Price Index, a measure that examines the weighted average of prices of a basket of consumer goods and services. The script highlights the importance of July's CPI data, as it affects market expectations for Federal Reserve interest rate cuts and influences economic policy.

💡Fed Rate Cuts

A 'Fed Rate Cut' refers to a reduction in interest rates by the Federal Reserve, aimed at stimulating economic activity. The script discusses market expectations for aggressive rate cuts and the need for liquidity to support market growth, indicating a significant impact on investment decisions.

💡Earnings Reports

An 'Earnings Report' is a periodic release by a company detailing its financial performance over a given time. The script mentions Q2 earnings reports from major retailers like Home Depot and Walmart, which serve as market indicators reflecting the overall health of the economy.

💡Technicals

In trading, 'Technicals' refer to an analysis of a security's trading patterns, primarily through charts, to predict future price movements. The script discusses using technical analysis on specific stocks like Apple and Nvidia, to anticipate their performance and make informed trading decisions.

💡Island Top Reversal

The 'Island Top Reversal' is a specific type of reversal pattern characterized by a gap up followed by a price movement that forms an 'island' on the chart, and then a gap down to the original price level. In the script, this pattern in the S&P 500 chart is used to illustrate a bearish outlook for the market.

💡Bitcoin

Bitcoin is a decentralized digital currency that operates on a peer-to-peer network without the need for intermediaries. The script discusses Bitcoin's performance in relation to macroeconomic conditions, questioning whether a recession would negatively impact its bull run, and analyzing its technical indicators for future price direction.

💡21 EMA

The '21 EMA' refers to the 21-day Exponential Moving Average, a technical indicator used to smooth out price data and identify trends. In the script, the 21 EMA is used as a gauge to determine whether Bitcoin is in a bull or bear cycle, with the price's proximity to this average being significant for future price predictions.

💡Small Business Optimism Index

The 'Small Business Optimism Index' is a measure of the confidence and economic outlook of small business owners. The script mentions this index in the context of the National Federation of Independent Business's report, indicating a prolonged period below its historic average, which could suggest challenges for small businesses and their potential impact on the broader economy.

Highlights

The presenter discusses a reversal pattern in the S&P 500 (SPY) chart, indicating a potential strong confirmation of a reversal.

Low trading volume on the SPY suggests a lack of buyer participation, hinting at a potentially unstable market.

Upcoming economic data releases, including CPI and FED rate decisions, are crucial for market direction as investors anticipate aggressive rate cuts.

Q2 earnings reports from major retailers like Home Depot and Walmart are seen as indicators of the overall economic strength.

Technical analysis of specific stocks, such as Apple (AAPL) and Nvidia, is highlighted to monitor potential investment opportunities.

The presenter mentions the 'island top reversal' as a bearish indicator in the SPY chart, suggesting a possible significant downturn.

A detailed explanation of how to trade the 'island top reversal' pattern is provided, including risk management strategies.

The impact of the National Federation of Independent Businesses' optimism index on small business performance is discussed.

A potential 'great rotation' from large cap to small cap stocks is predicted as the FED moves towards rate cuts.

The presenter's personal experience with long-term chart patterns and their implications for market trends is shared.

Bitcoin's performance during different economic cycles is analyzed, with a focus on its potential resilience during a recession.

Technical indicators for Bitcoin are outlined, emphasizing the importance of closing prices above certain levels for a bullish trend.

A cautionary approach to trading Nvidia's earnings is suggested, recommending the use of spreads to manage risk.

The presenter expresses concerns about the S&P 500's technical setup, advising close monitoring of critical price levels.

A commitment to providing ongoing chart analysis and updates for the audience is promised, emphasizing the importance of using charts for trading decisions.

A personal note about the presenter's friend Larry Jones and a call to support a memorial video is included, showing the presenter's community engagement.

Transcripts

all right I've got no intro video today

because the last intro video I did the

Olympic Committee made me take it off

even though I thought it was pretty

applicable it was identifying some

problems that I saw in the market and

today we had some new indications of

some even bigger problems I'm going to

take you into the spy and show you what

I see there because we've got a reversal

pattern that is said to be one of the

strongest confirmations of a reversal

that can be found in a chart and I'm

going to show it to you guys today we've

got a lot of data coming out that the

market wants to digest today was a

seesaw choppy day low volume the volume

was basically an indication that the

buyers didn't show up to the party we

were down 40% on volume on the Spy today

so it was a wobbly seesaw day and until

we get that data it might not get any

better so what data are we looking at

well we're looking for the

on Tuesday and we're looking for July's

CPI on Wednesday and yes it matters a

lot because the market is wanting to

price in four Cuts this year not two and

they're wanting aggressive Cuts they

want Assurance from the FED that he's

going to be careful to produce the

liquidity that the markets need to grow

and not be held back in addition to that

we're at the tail end of Q2 earnings and

we've got a couple big retail Heavy

Hitters which are going to tell us a

little bit about how retail is doing

that's Home Depot is reporting tomorrow

morning and Walmart is reporting

Thursday now those are also market

indicators because it tells us a lot

about the overall strength of the

economy and so this is going to be a big

data driven week I've also got my eye on

two other companies that are reporting

and I'm going to drop some technicals on

them this week one is apld it's a stock

that we have successfully traded and

made some really big gains on in the

past my very first trade on a plld was

an entry at $3 that ran up to $10 a

massive win I'm not saying it's going to

happen again but we're going to keep our

eye on it because sometimes these stocks

that you make a big bag on you can come

back and make another bag but the

environment the environment that we're

in right now is very sketchy we're

moving towards the end of this month

where nvidia's earnings are going to

come out and that's going to tell us a

lot about the AI story and whether it

can continue to perform in 2024 Alibaba

is reporting earnings this week it's

another one that has been beaten down

and largely moving sideways for months

and months and months and we'll be

keeping an eye on those charts as well

this week this is the stocks with Josh

show thank you guys for joining me thank

you for hitting the like thank you for

dropping a heart in the comment we had

another successful day in the chart goat

University the swj harf Discord I traded

Google puts to the downside we got 20%

the first time and got it again uh going

into close as as well as many other

successful trades guys don't sleep on

the stocks with Josh Discord I also

dropped a detailed Deep dive on Amazon

on Saturday a deep analysis of where I

see that stock going in the coming days

and I'm going to be dropping more deep

Dives there on Saturday and more

technicals all throughout the week guys

don't miss it check it out I'm G leave a

link in the top pin comment for the uh

stocks with Josh website one other

interesting data point that we're

waiting on this week comes from the

small business of America this National

Federation of Independent businesses is

releasing their small business optimism

index for July and what you need to know

about this indicator is that it has been

below its historic average Going on 30

months so what does this mean well it

means that when big Tech rallied in 2023

and the end of 2022 and most of 2024 it

meant that most small businesses were

left behind why were they left behind

because the banks won't lend them any

money because the FED has tightened

interest rates now this is a reminder of

what I referred to in July as the great

rotation from large cap to small cap

which I believe is going to continue in

2024 as we move towards those Fed rate

Cuts we're going to see money begin to

flow back into small cap small business

and they're going to outperform large

cap that's why we're keeping our eye on

ETFs like iwm okay just like I said at

the open there is a huge problem with

the Spy right now I'm going to take you

into that chart and show you an

indicator that's set up very bearishly

today and could be pointing to a much

larger down turn ahead and what is that

well it's actually referred to as the

island top reversal now this is

basically when price is moving up or

down in a trend and it gets to a place

where the movement heats up and it gaps

up and then it continues until it makes

essentially a small V topped Island and

it begins to come down to the same price

that it had gapped up at and it gaps

down in that same price zone now I'm

going to show you guys in the Spy that

this has happened creating a nice little

island top and then I'm going to explain

to you exactly how this is traded and

you guys can decide from there whether

these markets are getting ready to

explode higher and give us a v-shaped

recovery or whether the last month that

we've had and going into August is

telling us that there more the pain

trade ahead all right guys we're looking

at the S&P 500 the daily time frame and

you can see we had this Monumental Gap

up here we formed a nice little island

we came right back to that price point

and we gapped down this is as clean and

clear of an island top reversal as I've

ever seen in the charts this obviously

is one of the technical dynamics that

the market responded to giving this this

really bearish move down and you might

say okay Josh is that been cancelled out

by the beautiful green candles that

we've gotten bringing us back up to the

Gap no the way that this is

traditionally traded is that when you

get to this level that's where you would

enter puts for a much larger move down

so that's the textbook definition of an

island top now the way that you protect

yourself because even though this has a

very high success rate the way that this

would be played is that you would put a

your stop losses for your bearish

positions taken right above the top of

the Gap so if it doesn't Gap back up or

close Above This price on the Spy of

541 well then the market is confirming a

downtrend and so we have to watch this

very very closely because it's a very

high concern so yeah I hate to be the

bearer of bad news but technically if

we're following the charts this setup in

the charts is a huge warning sign until

we cross that Gap and close above it on

the daily time frame and I will tell you

from personal experience on a time frame

as broad as we're looking at which

basically means an island Gap that's run

over the course of months you don't just

want a single candle to confirm that

it's been cancelled that the reversal

from the upside to the downside has been

canceled you want to get a couple

candles above that critical level I'll

keep you guys posted on this in the

charts this is the one of the main

things that I try to do is to highlight

what I see coming in the charts for the

days ahead we're also going to look at

the chart of Bitcoin and let me before I

even do that comment on one of the more

common questions that I've been getting

now I think the reason why I've been

getting this question more commonly is

because there must be some influencers

out there uh spreading this fud and I'm

going to give you my opinion right and

it's just an opinion I don't know but

I'm going to tell you what I think the

question I've been getting is Josh bit

coin has never been through a recession

if we go into a strong recession will

that drag Bitcoin out of the bull run

and into a long trending downturn it's

very that's been the number one question

I've been getting recently and I think

that's highly debatable I would first

ask was 2022 not a recessionary year and

so I am not of the mindframe that

Bitcoin has to attach itself to the

macroeconomics and go down with the

NASDAQ it has moved with the NASDAQ more

in recent years as a overall risk asset

but I want to remind you that Bitcoin

took off big to the upside when we had

quantitative easing and a low rate

environment back in 2021 and so if we

are moving towards more easing Bitcoin

could begin to perform well in that

environment so don't just jump on board

the bear wagon uh and bring Bitcoin down

to it it knees Bitcoin chart is still in

a bullish overall trend even though we

have been in Decline for the last 160

days the fact is that the setup overall

still points to an opportunity to the

upside so let's go take a look at that

all right let's just take a look at this

chart and analyze a few things first

thing is that every single time we've

pushed through and made a new all-time

high above the previous cycle High we

haven't had a follow-up month that's

opened and closed above that price the

next month we came back and closed

beneath the previous all-time high so

that's the problem and that's why we

haven't had a continuation move higher

on Bitcoin in addition to that if you

study the previous Bitcoin cycle high

you can see that after we made a very

strong initial push out of winter we got

very far away from the 21 EMA which I've

been talking a lot about because it's a

very easy gauge to determine whether or

not you're in a bull cycle or a bare

cycle moment we ultimately had to come

back to it and get pretty darn close to

it right before we went on to make the

market high for the last bull cycle so

what are we doing now well we're doing

the exact same thing and I made that

clear when we were back here that we

would likely have to come back and get

close to this 21 EMA before moving on to

make a new market High this time so I

think it's still possible I don't think

we're out of the woods yet we came down

we got very close to it you can see that

we had previously done that once before

in the previous cycle in the following

month we actually continued into some

volatility we never came back and

touched it and so I have said that we

could come back and test the lower range

move of Bitcoin still in the days ahead

uh we can still come back and do that

before the FED ever gives us interest

rate Cuts so bitcoin's not out of the

woods so what is the borderline of the

woods well you want to see the monthly

candles close above 56k so that's the

number one thing that I want to

highlight to you guys that Bitcoin is

still in a bullish run if we can keep

closing these months above 56 I think

that this last Wick that we got on

bitcoin was an extremely healthy bull

Wick which meant that buyers came in as

we moved closer to this price of the

below 50,000 and so also want to remind

you that we had to close this month

above

60,61 K above 70 closer to our 80k Mark

which is one of my first targets uh for

a breakout Bitcoin move we're still in

this bullish descending continuation

pattern and I still believe that we're

going to get that move between 2024 and

20 2 so the story of today's video is

that I have heightened concerns about

the S&P 500 I'm still anticipating a

bullish move for the AI narrative and

Nvidia at the end of this month but we

need to be cautious even there that

people are not selling big Tech into

strength and so no matter what I think

some of the safest ways to play nvidia's

earnings uh this particular cycle is to

do it as a spread and uh head your risk

my overall opinion on bitcoin is that we

are still going to be moving sideways

we're still going to be between 55 and

65,000 for the months ahead until

perhaps we get that First Rate cut where

I believe that Bitcoin could move higher

but even if the timeline is in weeks and

not months and everything speeds up the

technical indicators that you need for

Bitcoin are the ones that I gave you in

that chart Bitcoin will get bullish if

it closes a weekly candle above 60k it's

going to be in a bearish trend if we

remain in weekly candles beneath 60k

that wraps it up for me today I'm going

to drop more charts in the chart goat

University hope to see you guys over

there in the chat as well as the stock

Squad patreon I'm going to be checking

in there you guys know that my dear

friend Larry Jones Lost a brother this

weekend he had been ill but the exact

moment of his passing had not been

anticipated uh so I appreciate you guys

showing him as much love and support as

you can I'm going to be showing up on

his page Wednesday to do a video for him

and I want you guys to make sure and

come go over there and support that

video when I drop it uh we love Larry

he's a great friend of this Channel and

uh any support that any of you guys can

think to give him in this time would be

greatly appreciated thank you for being

here today hit that like And subscribe

and stop trading blind in these choppy

markets without using the charts that's

what I do and that's what I teach in the

chart goat University hope to see you

over there we'll be doing live trading

Wednesday and Friday this week peace and

blessings take care

[Music]