Bitcoin, Inflation, and the SEC Walk Into A Bar
Stop me if you've heard this one - Market Update January 11, 2024
Bitcoin Exchange Traded Funds are finally here.
With much anticipation and a couple of odd mishaps, the long-awaited approval for Bitcoin ETFs was finally announced yesterday — after being announced — and then unannounced — the day before.
Tuesday afternoon, a post on X indicated that SEC approval had been confirmed. That post quickly disappeared, and then this one showed up.
Truth is stranger than fiction.
Yesterday, the announcement was made again — and confirmed — after some confusion and the possibility that the same ‘compromise’ had happened again. Doh!
But the SEC quickly said, “No, for real this time.”
Today, 11 ETFs began trading, including symbols IBIT and HODL.
It was a rocky start in multiple ways.
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Stocks sold off today, too, on slightly higher-than-expected inflation data (CPI). Charts looked to be damaged as the selling tested support levels and short-term moving averages.
Small caps took it the hardest, down more than -1.50% at the lows.
However, an afternoon rally muted the impact, and things looked much better at the close. ‘Buy the dip’ is still alive.
9 of 11 SP Sectors were still lower on the day, though. Energy XLE and Tech XLK were the only ones to close positive.
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SPY continues the bounce from Monday despite a quick dip today. It's back near the highs again, with the 21-day MA pushing steadily higher. Can it close the week with a breakout?
QQQ isn’t as close to its recent high. And the 8-day is below the 21-day MA. Today’s ‘dip buy’ rally shows strength. Can new highs come in to confirm?
IWM is still the laggard, trading beneath the short-term averages, and even looked to be at risk of breaking down early in the day. A follow-through rally lifting it back over the 8 and 21-day is needed to confirm the repair.
DIA closed near the highs after trading below its 8 and 21-day MA and is close to another breakout now.
TLT has touched or crossed its 200-day moving average for seven days. Can it get above and stay there?
DXY The Dollar stayed below the support/resistance line for seven days. Another failed breakout attempt today is a good sign for stronger stocks.
BTCUSD The ETF approval and launch was a ‘sell, no buy, no sell the news’ event for Bitcoin. Lots of action in three days without any resolution. It continues to consolidate the breakout for now.
The Closing Bell
This afternoon, there was a strong rally as the buyers wouldn’t be scared off so easily by the CPI data. More inflation data (PPI) will come tomorrow morning, accompanied by earnings from some big banks - Citigroup, Bank of America, JP Morgan, and Wells Fargo.
Plenty of market-moving action.
Also, there will not be a Weekly Chart review this coming Saturday due to a quick family trip to the mountains and, hopefully, the snow.
But markets are closed on Monday for the Martin Luther King, Jr. holiday. So maybe a ‘catch-up’ look then.
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***This is NOT financial advice. This is NOT a recommendation to buy, sell, or trade any security. The content presented here is intended for educational purposes only.
Andrew Moss is an associated member of T3 Trading Group, LLC (“T3TG”), an SEC-registered broker/dealer and member of FINRA/SIPC. All trades placed by Mr. Moss are done through T3TG.
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January 11, 2024, 4:00 PM
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