This was a week of historic moves on many fronts, from blow off tops in metals, to crazy volatility in Forex and nice, anticipated dumps in cryptos. Trump’s nomination of Kevin Warsh for next FED chair was apparently the turning point. On top of this, the US government went once again in shutdown, partial this time. Let’s analyze where we are now on each front and what we can anticipate next week.

In the last report, I noticed that BTC is about to break the 50MA on the 2 weeks chart and asked you if you are ready for fun. The fun came indeed for those who were positioned for the dump. The 2 week candle closes in a few hours and this will confirm the end of the bear market’s first phase. We are about to enter a second, more brutal phase.

Short term, we are approaching an important support between $70k-$74k, which could provide a bounce up to $85k. But, I won’t hold my breadth this support will work as intended. Be prepared for a scenario that this level fails and do your risk management if you plan to bet on the bounce.

But, before any bounce could occur, I would expect the 14/03/2024 high of $73,949 to be taken. Any attempt to long the bounce should happen after an SFP of this level imho. This level is another 4.74% down from here.

This was an amazing week for metals. From a crypto native’s viewpoint, what happened is that the bitcoin of metals, a.k.a. gold, had a significant correction and the altcoins of metals, a.k.a. silver, platinum, palladium and copper, got crashed. As I have written multiple times on the previous reports, I see only one bull run, that of gold, for reasons that I have explained in the past. I disregard all narratives related to all other metals. To me, they go up only because they are seen as leveraged gold plays by a critical mass of traders.

Apparently, the pretext for metals crash was Trump’s decision to nominate Kevin Warsh for next FED chair. In my opinion this is totally irrational. Bessent has told us repeatedly that the government wants FED to cut rates and decrease its balance sheet. Trump nominates someone who has the same views in order to implement his policy. Bessent’s view on monetary policy was publicly available information that the markets decided to not price in. This is another proof that the “efficient market hypothesis” is a meme.

But, enough with the fundamentals mumbo jumbo, let’s look at the technicals.

The SFP of $5,415 paid twice, but you had to be on your pc/phone to exploit this, everything happened very quickly. I see the area between $4,584-$4,650 as a strong support and I would expect a bounce from there.

I am curious to see how this is going to play out. If gold was BTC, we would expect:

With all the crypto bros trading metals in the recent weeks/months, could we see their tendencies dominate this market too? I am intrigued to watch this.

Until now, I have not traded gold throughout its bull run, I was just watching its chart to take trading decisions for the other metals. But, next week I will probably step in.

Similar story with silver, except that it crashed harder than gold, as an altcoin would do, with a -31% move intraday. Look how well the SFP of the 26/01 swing high at $117,70 played out. SFPs of previous highs is the only way to safely play shorts on ATHs, you get a well defined, small risk and a potential big reward.

Silver almost touched the daily 50MA. Let gold dictate our decisions for the next week. My bias is for a gold bounce (as explained above), that would drag the rest of metals in a similar bounce.

I think the platinum and palladium charts have been damaged irreparably and have no interest in them for the next week. Any gold bounce should be played via gold or/and silver.

Copper was the most interesting metal in the previous week. It fall less than gold, probably because it had gone up much less than gold during the previous months, therefore there was less froth. Even this reminds me of altcoins behaviour. Are we watching a “cryptofication” of the metal markets?

In any case, no interest in this chart for the next week. I will concentrate on gold and silver.

Besides metals, last week my interest was on natural gas and coffee

I was monitoring natural gas for a potential news failure this Thursday. The US reserve number was bullish and the price closed the day higher, therefore, I could extract no useful information. On Friday we observed a significant upward move of +12.81%, probably by people expecting the price to gap up again on Monday when the futures open, like it did the last two weeks. But, for no obvious reason. I was inclined to click the short button on the Friday close, but I did not. I think I will regret it.

The weekly US reserve announcement next Thursday would be an interesting point. It is expected to be the highest withdrawal of the year, i.e. most bullish number of the year. If we get a news failure, i.e. bullish number and the daily candle to close negative, I will short it.

I think I have messed up the coffee trade. In the last report, I explained how this could give us either a good long or short trade, depending on if price would break out from the blue bull flag. I took the 27/01 close as a confirmation it broke out to the upside and opened a long position. The next day I closed it with a loss when it was re-accepted within the bull flag. I hoped it could use the bull flag’s upper band as a support and then move upwards. This was a mistake, I should have closed it much higher when it lost the daily 50MA intraday.

Now that it lost the previous low of $339, it is the previous week report’s short trade scenario that is activated, but I have not taken it. I will probably regret it, technically this is the correct thing to do, but I know it will affect me psychologically if I take the short and then it turns out to be an SFP of the $339 level. That’s why I decided to abstain. I will concentrate mostly to cryptos and metals whose trading has been proven lucrative in the recent weeks.

I am out of the CHF long presented in the last week’s report. It was a very good +2.88% trade, which for Forex is considered huge, but I was still not satisfied.

And here is the reason. I decided to close my long on Tuesday evening, because I thought Powell would be hawkish on his speech the day after. Unfortunately, 1 hour after I closed it, Trump made his “Dollar is doing great“ comment that moved the price +0.78% higher within a few minutes.

This left me with a bad feeling, even if my trade was profitable. I have read in one of the “Market Wizards” book series, one of the wizards (I think it was Peter Brandt), who said that at some point he realised his profits would be much higher, if he had let the profitable trades run until the daily close and he implemented this tactic afterwards. I think I should start following this advice.

For the next week, I think the previous swing high of $1.29045 would provide support, if the price was to fall there. Therefore, this could provide a good entry to re-open a long. As always, I don’t like longing a downside move, I would wait for an SFP of this level.

DAX had bearish price action and is now out of my watchlist for the next week.

Still no interest on US stock indices. Nasdaq has gone nowhere since late October and still find the “small cap rotation” narrative toxic.