This will end horribly

Abraham George Macro View

It was only a few days back we talked about the widening price action between Gold and Bitcoin. While gold stalled, Bitcoin continued its fall. The air was really coming out of Bitcoin and it took many other cryptos down as well. The fall was visible in some other asset classes too that had made steep run ups. Tesla and Lumber for example.

If anybody was buying into Bitcoin as an inflation hedge, their bubble also got busted. With all that is going on this is the perfect time for gold to shoot up but it is clearly stalling. So my technical level is still not out of play. The market is crying for the Fed to start removing the punch bowl but as we have discussed many times before, the Fed is adamant the time is still ahead of us. Finally this is going to end very horribly.

Equities

The rise from 4061 in S&P 500 to 4116 yesterday is part of a topping pattern. It can rise to 4127 to fill a gap that exists from May 18 but it is not required. The subsequent fall can take prices down to 4050 or below.

Bonds

The move down in bonds started from 160^15 the high on May 07. The internal waves are being worked out and soon it should push down to 146^25 to 148 area. Any move above 160^15 means that the corrective structure to the top side has more to run.

Euro

The move down in Euro from Jan 06 at 1.2350 to 1.1703 on Mar 31 could be viewed in differing ways. This price action could eventually resolve to break above the Jan 06 high to complete the larger pattern.

Gold

The million dollar question in gold is, is this break up a break out or fake out. The more it stalls around current levels of 1870 , it can break down soon to trade close to 1800 or even lower. Otherwise the break up should lead to 1930 to 1965.

Abraham George is a seasoned investment manager with more than 40 years of experience in trading & investment and portfolio management spanning diverse environments like banks (HSBC, ADCB), sovereign wealth fund (ADIA), a royal family office and a hedge fund.