To The Moon

All the Magnificent Seven names experienced losses. Tesla Inc. (NASDAQ:TSLA) nosedived over 4%, while Apple Inc. (NASDAQ AAPL) shed 2.7%, marking its fifth consecutive session of losses. This decline followed a report indicating a 24% drop in iPhone sales in China during the first six weeks of 2024.

⚠️ Trading tips: looking to add to position under 17908 towards highlighted area. Jerome Powell will speak at 10am on Wed and Thu with jobs data to shake the market. Big moves expected to happen on both days so trade with care.

Gap filled perfectly as anticipated yesterday

The SPDR S&P 500 ETF Trust (NYSE:SPY) fell 0.9% to $508.02, the SPDR Dow Jones Industrial Average (NYSE:DIA) fell 0.7% to $387.42 and the tech-heavy Invesco QQQ Trust (NASDAQ:QQQ) tumbled 1.7% to $436.45, according to Benzinga Pro data. 

The Energy Select Sector SPDR Fund (NYSE:XLE), was the outperformer, up by 1.3%, while the Technology Select Sector SPDR Fund (NYSE:XLK) sharply underperformed, down 2.4%. 

Bitcoin continued to seize headlines. The largest cryptocurrency surged past all-time highs above $69,000 before plunging by 6% just minutes after reaching the milestone, reflecting some profit-taking behavior among investors.

Bearish RSI Divergence On BTC/USD Daily Chart

Bitcoin has been and will always be a high-risk investment, drawing investor flows during periods of bullish market sentiment. Historically, it has exhibited a strong correlation with tech stocks. Thus, on a day when bearish sentiment grips Wall Street, the highly speculative segments of the market, including Bitcoin and other cryptocurrencies, tend to suffer disproportionately.

Wednesday’s red candlestick fully engulfs the bullish candle from the previous day, unless bitcoin manages to close the session above $63,200. In essence, the bearish candle covers the entire price range of the preceding bullish candle.

Since Feb. 9, the Relative Strength Index (RSI) calculated on Bitcoin’s daily chart has consistently indicated overbought levels, with a brief exception from Feb. 22 to Feb. 25.

During the session in which the crypto reached a new all-time high, soaring to $69,324 on the Coinbase exchange at 10:00 a.m. ET Tuesday, the RSI is now exiting the overbought zone, indicating what is technically known as bearish RSI divergence.

Bearish divergence occurs when the price sets a new high in a session, but the strength of its upward movement is waning, signaling that buyers may be exhausted from pushing prices further upwards.

Among traders, the bearish engulfing pattern is considered a robust signal, indicating a shift in market sentiment from bullish to bearish. Traders often interpret this pattern as a signal to sell or take short positions, anticipating further downward movement in the asset’s price.

Rolling good times with sell put

Buy call from reversal play

Buy call from the push

Meanwhile, Treasury yields experienced a modest downturn as investors pondered the increasing likelihood of Federal Reserve interest rate cuts for the first half of 2024. This ignited gains in long-dated Treasuries, with the iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT) up 1.2%.

Gold rallied for the fifth consecutive day, reaching an intraday high of $2,141/oz, effectively flirting with the all-time highs reached last December at $2,146.

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