Ride or die from here?
Let's walk through the charts, events and outlook
Where it began:
Worst Day for Japanese Market in 37 Years: Japan's Nikkei 225 suffered its largest decline since 1987, plummeting 12.4%.
The market reaction stems from an unexpected interest rate hike by the Bank of Japan
But the mechanics behind that seem more complex than just interest rate hikes:
The sharp rise in the JPY/USD is causing a massive unwind of Yen carry trade positions, contributing to the sharp decline in US stocks. For those who don't understand how this works, here's a brief explanation
#Cryptocurrencies, and #Stocks have been pulled down along. Major indices like NASDAQ or S&P500 are down more than 5% which is huge!
Even #Gold , the investors' safe haven is down >-4
Let's take a look at #Bitcoin :
$BTC has lost-30% within one week!!
The good thing is: A lot of liquidity has been grabbed by liquidating longs in the range of 49 - 51k.
These levels usually act like magnets and are often necessary for a rebound
From a TA point of view, we see the 50k level as critical support level.
Daily / weekly close will determine the mid-term direction.
As shared earlier today, this coincides with the bull market support line (12 Month SMA)
On top of that, we have an ongoing bad news flow.
Geopolitical tensions in the middle east, Warren Buffett dumping half of his apple shares are just two examples
Outlook:
We expect this sentiment not to be over soon. A mid-term correction that could send us lower is possible and we have to wait how strong the current support is.
An emergency FED interest rate cut is likely and starting to be priced in. It's doubtful if this will be sufficient for a lasting turnaround.
However, this drop is very similar to previous black swans events.
Supports. Must. Hold!
HODL
