81. Price Action Lecture (2024-08-07)

Market Analysis and Trading Insights

Current Market Conditions

• The speaker expresses that there has been a lack of high probability trading opportunities this week, stating they have not placed any trades.

• The absence of impactful news events is highlighted as a reason for the low trading activity, with no significant price action observed on Wednesday.

• Anticipation builds for next week's Consumer Price Index (CPI) report, which is expected to bring volatility and potential trading opportunities.

Currency Performance Overview

• A review of the four-hour chart shows divergent movements among major currencies: the US dollar dropped while the Euro and British pound remained stagnant.

• The speaker emphasizes the need for price alignment across currencies to consider entering trades; currently, the British pound's performance is concerning due to political turmoil in Great Britain.

Political Influence on Currency Value

• Discussion centers around instability in Great Britain's government affecting the British pound's value, likening it to a "shitcoin" due to its poor performance.

• The speaker suggests that current market conditions are designed to confuse traders and undermine their established strategies.

Historical Context and Future Predictions

• Reference is made to upcoming US presidential elections and how historical cycles may influence market behavior during this period.

• Observations about index futures indicate that while some price movement aligns with expectations, overall market action remains unpredictable.

Market Sentiment Analysis

• The Dow Jones index liquidity levels are discussed, with expectations set for prices to gravitate towards specific levels in future trading sessions.

• Commentary on financial news outlets like CNBC reveals skepticism about bullish market sentiments being potentially misleading or manipulative.

Market Dynamics and Cycles: Insights from Recent Trends

Understanding Market Reactions to News

• The speaker discusses the inverse relationship between market price movements and media narratives, suggesting that headlines often mislead traders about market direction.

• Emphasizes a relaxed approach to trading, indicating a preference for waiting for clearer signals before making decisions, particularly in light of upcoming events.

Anticipating Volatility

• Highlights the significance of the Consumer Price Index (CPI) report expected next week, predicting it will bring substantial volatility to the market.

• Introduces the concept of a 16-year cycle in market behavior, explaining its relevance to current trends and future predictions.

The 16-Year Cycle Explained

• Defines the 16-year cycle as a pattern derived from previous cycles, with current observations spanning from 2023 to 2026.

• Notes that even-numbered years within this cycle (e.g., 2024, 2026) are typically associated with increased market volatility due to election years.

Market Behavior Patterns

• Discusses how political events create significant movement in markets over four-year periods—consolidation followed by upward or downward trends.

• Suggests that historical analysis of these cycles can provide insights into future price movements and trader sentiment.

Current Market Analysis

• Analyzes recent highs in Bitcoin's price relative to past cycles, noting emotional reactions among traders during downturns.

• Argues against panic selling during minor pullbacks, advocating for a focus on time rather than immediate price fluctuations.

Technical Indicators and Trading Strategies

• Describes an analytical approach focused on quarterly patterns rather than daily price changes; emphasizes patience in trading strategies.

• Points out sequential swing highs as indicators of potential reversals; highlights Ethereum's performance compared to Bitcoin's recent actions.

Conclusion on Market Sentiment

• Concludes that liquidity influxes can be anticipated based on observed patterns within higher timeframe analyses like the 16-year cycle.

Understanding Market Dynamics and Price Action

The Role of Fear in Market Control

• Discussion on how society has become desensitized to ongoing wars and crises, which is part of a broader strategy to control the population through fear.

Bitcoin Price Predictions

• The speaker expresses skepticism about Bitcoin reaching $100,000 soon, indicating that current price movements are not conducive to such a rapid increase.

• Speculation on potential price drops for cryptocurrencies like GNA, suggesting that significant fluctuations are expected before any major moves.

Analyzing S&P 500 and NASDAQ Trends

• Introduction of charts showing S&P 500 and NASDAQ trends; the speaker reflects on previous bearish sentiments despite rising prices.

• Observations on price movements during specific time frames, highlighting unexpected bullish behavior before subsequent drops.

Symmetrical Price Action Explained

• Explanation of symmetrical price action between the US dollar and NASDAQ, noting how opposite movements can indicate market dynamics.

• Clarification that symmetrical price action also occurs when assets move in the same direction, emphasizing its relevance in market analysis.

Consolidation vs. Expansion Patterns

• Insights into how consolidating assets often precede expansions in opposing assets; this pattern is crucial for predicting future market behavior.

• Discussion on the implications of one asset consolidating while another extends; this can signal accumulation or manipulation within the market.

Current Market Conditions and Future Outlook

• The speaker emphasizes the need for consolidation within tight ranges to predict upcoming tradable moves or expansions effectively.