The Market

Good morning everyone! I hope you are all enjoying your week and welcome to another Friday in markets! As you prepare for the weekend, let's do a quick recap of the week and the previous week as we now find ourselves in an important range.

Right now, I want to take a short position off the highs, however I really do not like trading on Friday. That's because Friday is normally the laziest day in markets, and it makes sense why. So I will not be taking a position. Markets are open all next week so there is no point in trading on Theta Friday.

There were also other things I mentioned, such as the possible Bitcoin Retest and Rejection breakout to the downside.

There were 4 retest candles to the upside, all of which failed. This tells me that buyers are strong, but the sellers have more liquidity. In other words, the strength of the sellers is outweighs the strength of the buyers.

There is still that safety net at the $50,574 - $51,515 range, but nothing much in the way to the downside on Bitcoin.

The only support would be at the $58,188 level.

Here are the charts.

I think there is still room for more upside. We are experincing a very normal pullback in markets, however breaking another all time high will be tough.

Analysis:

SPY found support at the $494.97 Fibonacci level

The RSI is approaching overextension to the upside

The VI is still bullish on the weekly

-This supports my "technical top" setup because the volumetric indicators are still bullish. The pullback from the highs is normal.

No large liquidity to the sellside or buyside on the weekly

The daily chart is not really too attractive. From the candles alone, there is a lot more volume to the downside than the upside. I think these moves to the upside are due to news and greed, therefore unstable. There was however a bullish hammer candle on the daily which resulted in a move to the upside.

From the hammer candle, the sellers tried bringing the price lower, but the $500 level on the SPY is too strong. Now we know that $500 is a strong area of support.

Analysis:

There is large selling liquidity at the all time highs, attracting the price to the upside

There is a bearish gap at the $512.55 - $513.30 level

The RSI is neutal and bullish

The VI is approaching overextension to the upside

The $519.87 sellside imbalance level is acting as support on the day

Large buyers stepped up at the $515.00 - $517.81 range, but other than that the W setup is playing out from the daily and supported by the 4 hour.

Analysis:

The RSI is overextended to the upside

The VI is approaching a bearish reversal, but the sellside band is neutral

-This could mean the market is temporarily reversing and we might see another move to the upside. I expect some sideways price action on the SPY today or Monday.

Markets found sellers at the $421.39 level

Sellers are at the all time highs, I think this means Smart Money expects another move to the all time highs

The 1 hour is showing me a reversal playing out with tons of buyers pushing the price to the upside.

Analysis:

There are 4 areas of buying liquidity

The: $497.62 - $500.00 range

The: $501.35 - $502.84 range

The: $506.20 - $507.17 range

The: $506.66 - $510.97 range

The: $515.90 - $516.34 range

The RSI is reversing to the neutral zone

The VI is approaching a bearish reversal

The 20EMA on the 4 hour is acting as support for now

The 15 minute is not forming any market structures or patterns on the day.

Analysis:

Buyers entered at the $520.24 - $520.47 range

The RSI is approaching overextension to the downside

The VI is neutral with the sellers in control, however the buyers are trying to reverse the price to the upside

There is a possible bearflag forming

The bearflag on the 15 minute is finding structure on the 5 minute for now, however we are approaching reversal o'clock. This could be a fake breakout.

Analysis:

Buyers have liquidity at the $519.56 - $519.86 range

The RSI is overextended to the downside

The VI sellside and upperside range is too far apart to be stable the entire day

-I think there could be a reversal to the upside on the day. The probability of a reversal upside is slightly higher than a selloff all day

The bear flag is finding its first candle under the structure

-I am not convinced we will see a larger move to the downside yet, I would not be suprised if there was a sweep candle to the buying liquidity to the downside

Remember when I said there would be some sideways action? I have seen this structure before. There could be a possible break to the upside from a fake breakout to the downside.

There are two possible structures:

This is acalled a Box Breakout / Bearish or Bullish Rectangle

While trading in markets, I have seen a fake breakout to the downside on the day followed by the Box Breakout to the upside. A lot of the time these setups have to do with the time of day they occur and overall market sentiment.

-If the sentiment is bullish, the probability of a fake breakout to the followed by an upside reversal plays out

-If the sentiment is bearish, the probability of a true breakout to the downside plays out

-If we are around reversal o'clock, the probability of an upside reversal is higher than a breakout to the downside

-If we are in the early hours of the market, or the later markets of the hour, whichever direction the continuation is in has a higher probability of playing out.

I think there will be a reversal to the upside in markets since there is a lot of liquidity on higher time frames around the lows that will act as support. If there is no news or larger catalyst, the reversal to the upside has a higher probability than a continuation lower on the day.

This structure is on the 1 minute time frame, therefore only relevant to today. Friday is known as a sideways day prone to reversals in any direction.

Thank you for reading and all of the support! There is a 99% probability that I will not take a trade today, however if the markets give me a strong setup around power hour or leading up to it, I might enter some longs. However, I really do not like trading on Fridays, so I will not feel any FOMO from missing the upside reversal. There will be other days to trade.

I hope you all have a great weekend, right now the SPY is moving to the downside.

Update:

There's the move! Looking for a retest and rejection off the flag for more downside. Looking for a wick on the 5 minute for possible upside.

At the time of writing, SPY is at $520.11 and Bitcoin is at $60,981