The Wedges Are Breaking. Here's What Comes Next

[00:00:59][music] [music] Heat. Heat.

[00:02:06][music] CTM. M what's going on everyone? I hope you're well and doing great. Wedges are breaking out everywhere. We're going to take a look across the markets right now. See what's going on. Very important here as we're seeing all of these breakouts firing across markets right now. We've been seeing or you're going to about to see the buildup has been happening now for weeks and we are seeing the coil now springing. However, I want you to just pay attention to one very, very important thing. On Monday, we laid out the three most important factors that were ahead of the market.

[00:03:22]Today, we have, by the way, Tesla, Google coming to earnings. After the bell, we got Google's earnings, and it's going to be very important to see what they forecast for future capex spending for the rest of the year. You're seeing Nvidia today springing out at monthly highs. Nvidia seems to have catched a bid ever since Kimmy K3 came out and said, "Oh, we don't have enough compute.

[00:03:48]I'm sorry. We can't take on subscribers right now at the moment." And yes, that was signaling there is actually an insatiable need for compute. Meta had originally sparked a little bit of worry in the markets. Meta sparked that worry when they came out and said, "Well, we're going to be selling our excess compute," which obviously seems like a very smart situation, especially when hyperscalers are beginning to be a little bit demoted for their debt spending and Meta wanted to kind of maybe pacify the market by saying, you know what, well, we're going to we're going to bring in some income at the same time. We saw SpaceX do it to Anthropic. We saw that Elon put out a bunch of compute online in record time and is now renting it out for about $1.2 billion dollars a month. We want some of that. We think that's a good idea and it is a great idea especially if you were to see me Meta become like an AWS of compute into the future.

[00:04:50]That does not mean that Meta is pulling back on their capex spending. Maybe, maybe not. And we don't know what happens if they do pull back or any hyperscaler pulls back on their spending. their share price might be rewarded initially for that as well.

[00:05:02]then you might see further pullbacks especially in the likes of the memory sector of the of the semis but right now that doesn't seem to be what is well that's why we laid out on Monday how important this earning season is and it is over the next week starting today following next Wednesday and Thursday we see the likes of Amazon Microsoft Meta Google very very very very important now normally when you have these types of wedges breaking out. It is a very positive sign. But ahead of not only the earnings and ahead of also we got the 29th what next we got Wednesday uh FOMC and market pricing in over 50% chance of a rate hike. I I what would that look like? And by the way keep your eye on this chart over here. Speaking of wedges, this is over here a wedge breaking out in the wrong way. We're seeing yields now at 4.65%.

[00:06:07]It is seemingly trying to see if it could take out the spike that we saw uh in the middle of May.

[00:06:16]And you have to wonder when all of a sudden the market will be forced to pay attention. something to keep watch of over here. Uh I wanted to say something a little controversial and that is well you know you if if they're raising rates usually the economy can handle it and if you're in the m middle of a remember back in in 2021 October we talked about the coming rate shock usually during tightening cycles when they move from easing towards tightening it's a matter of time before that those tight conditions catch up right now. Market conditions are relatively I would say uh loose and the market could probably handle a 25 basis point hike especially with the resilience of the economy. It's when that you start seeing the rapid cuts that's when you have to worry. So look, that might be taken a little controversial. That's fine. We're we're we're big we're we're adults here. We could take it. Um, Ethereum is looking good right now. And what I wanted to say though, as we have the FOMC, we have the earnings coming out, seeing the breakouts ahead of that. Well, you know what? That's a cause to be worried. I mean, not worried, to be a cautious cautious specifically with gold. So, we're going to start this off with gold.

[00:07:46]A lot of people noticing right here uh that we have the date of July the 24th, China trying to let's say dislocate the price of uh the paper market and the physical market and then we see gold here uh in play. Looks like it's breaking out. So, we'll take a a strong look at gold and then we're going to take a look at some other opportunities in the market including Micron, including Bloom Energy and we're going to see with with cautious lens here.

[00:08:18]It's not it's not the time to get excited ahead of such pivotal events that we laid out early in the week. And amongst them is obviously the situation that continues to escalate. uh we're seeing probably, you know, 30-day lows of as far as traffic moving through the straight. We're seeing rising crude prices. However, I guess one surprise could be if you were to see Iran return to the table. That would be probably um very beneficial for risk if if that were to happen. But it seems to be all signs seem to be that things are going the other way.

[00:08:57]Look, we are seeing Ethereum here. Is this a wedge breakout that that occurred? Nah, it doesn't look to me. It looks like a nice nice trend line break though that we saw back over here. And you could see that CTM able to enter right after the breakout. And this trade continues to build out into profit. I'm reminded of what happened in the bare market of 2022.

[00:09:22]Actually, in July of 2022, um we saw Ethereum take an entry very similar to this in the midst of the bare market and it put in a um over a 50% gain by August. So, you never know when you're going to get some type of nice price action. Let me just come over here. And that was right over here. You see that nice boom? This is on now V5, but let's see what V5 took out of that on I mean also 54% just like V2 at the time CTM 2.0 and you never know right and that was a bare market and you can see that after that price came down and then came down all the way and tested where that uh support resistance here then confirmed into support was established. So bare market or not, big moves can be had if you follow the me momentum and stay uh on the right side.

[00:10:28]And that's exactly what we're seeing beginning to build here on Ethereum right now. Bitcoin also into the market and that is our only open positions right now. We see that stocks are all on the sidelines. Let's start off with stocks. And and by the way, check this out over here. Let me put this in. It's uh S&P 500 uh with X technology and why we've seen that pullback occur across specifically in the semiconductors, specifically in the memory stocks. We've seen the S&P 500 minus tech really here performing absolutely really what that's a sign to me that the market rotation that we've been seeing is really really really healthy. A lot of people are concerned about the concentration into a few names and and heavily weighted and rightfully so. That goes bad. It's going to take down the whole market with it. But on the same time, we have to see what's happening neat underneath the hood. And I would say that's a very positive sign that we're seeing. Overnight, the NASDAQ trying to fight off um some some bleed like down over percent. Uh long wick right around break even right now.

[00:11:51]Bitcoin as well looks like it's fighting off some uh pressure after yesterday's massive momentum bounce. And we're seeing again Nvidia here seemingly lead the market. All of this is so fragile in so much as Google's earnings after the bell matter so much. I'm so looking forward to seeing what is laid out as that is a very important piece of the puzzle. Doesn't stop there. Next Wednesday and Thursday as well. major major major um pieces of the puzzle to continue to put together. We remain out on the sidelines on the big six. Out of the new three, we're seeing Tesla holding a short and that short is being held into earnings today. It's got a 10% stop loss on that.

[00:12:49][sighs] And then we're seeing here uh Amazon holding open trade. I'm not in either one of those trades. they were just newly released templates. Something to consider. Uh, one things one of the things that I'm working on right now is we've looked at and I'll start over here our money management that we've used here for our sectors. By the way, we saw three new positions added and then we're seeing one, two, three, I'm counting the light blue over here. 45 enter long pendings for the close of today for tomorrow morning. That is a sign here of potentially resumption of the trend in place. I added this by the way if you want to go ahead and take a look and play around the market pulse and se sector rotation. I added this yesterday over here and you can see uh it has a snapshot of the broader market.

[00:13:48]It's showing the weekly shifts that's occurring uh across the sectors that we are following. It's showing the dominant sectors, the emerging and fading. Here's a list of uh the sector makeups as I have them below. And then you could see over here it has also uh the sector rotation. And you could you right now one month, three months, six months, one year. You could take a look at the sectors. Interesting to see right right now Bitcoin, Ethereum are not only leading gold and silver as per expert expectations this time of cycle, but seeing them right now uh outperforming finally the the the AI hyperscalers.

[00:14:35]Interesting. And um uh something that that Brownie Brown was saying, hey, listen, it might be very helpful for us to have a sector rotation for what it is that we are navigating the markets through our sectors. You could see over here on the watch list our our sector map and um [clears throat] that this money management that we are utilizing here for our sectors and then I've been working on what is the right or the most or the best money management that we could use for our um stocks and and Bitcoin and crypto and even this morning back into it and just verifying uh seeing uh and and anyway so far this seems to be by far uh and what I did is I I went ahead and I I this was last week right I downloaded into the research engine uh Dr. Van Thorp, remember we did that session? Um, every single academic paper I could find on algorithmic trading, uh, money management approaches, hedge funds, dumped them all into, uh, a research basket, and then went ahead and looked at what would be the best way we could utilize money management on our Bitcoin and crypto and stocks aside from our sectors. And this is the leading candidate over here. Uh will be uploaded to the website as a position sizer much the way we have over here. The the um the the sizer for the sectors. By the way, you could download the watch list right over here. This is the template for the CTM uh V5 plus for the universal settings. And interesting and by the way I'm also adding um the one-year the two threeyear and fiveyear kagers of of the back test and then you could see also here for bitcoin and crypto last year was very tough year absolutely no doubt and uh longer term though the keer is significantly higher uh are we going to see that volatility return to the space remains to be seen Um, so that's our positioning coming in right now into the market. And speaking of wedges, that's a that's a wedge developing right here on Bitcoin in the bare market. And it's been the resolution of the wedge in every uh bare market that has led to obviously the bull of all bulls beginning its bull market run. that does line up very well with the way that I've been viewing the um the Bitcoin to gold. And you could see right now that Bitcoin is trying to break out verse gold. Let's take a hard look at gold right now as we're watching wedges. And speaking of wedges and breakouts that are occurring, a lot of people have their eyes on gold. Here's a good chart of a wedge that people are watching right now. We're going to take a look at that. And I'm throwing some caution here for real. Uh listen, if you're if you're trading setups, mechanical, you take them all. If you're trading discretionary, you have a plan in place. And much like a mechanical system, you're also taking every single thing that fits your criteria, right?

[00:18:18]and and likely [clears throat] like a mechanical system your win ratio is probably if it's healthy somewhere between that that 40 and 55%.

[00:18:28]That was actually Dr. Van Thorp who said the most successful trading systems have a win ratio of roughly 45 to 55% and it's a minority of their winners that make up the majority of their games. CTM all day long. Let's take a look at what's going on. I'm going to come back to this chart because there's something here that I want to show you uh that is quite interesting. And first I'm going to start off though just by looking at uh gold on a discretionary level like this. And a lot of people are absolutely rightfully so watching the potential breakout. I mean you for from my view on the daily that's into resistance right now and much like the chart we just saw that people are watching a wedge developing like this 100% it's in play if it triggers it's something that uh you want to be likely participating in.

[00:19:30]Bakanet looked at a twohour uh earlier in the in the week and I don't know if it was Monday or Tuesday session that we looked at it and you could say or I would say well let's I would say that's into resistance. Um yeah I I I would I would say that's into resistance. I would say this is uh probably a uh black diamond entry though that absolutely has occurred down over here and that would be the earliest entry. It's not the one with the highest um percent of working out. Uh but it is the one with the best risk-to-reward.

[00:20:09]And you could see if we are to break out over here against the conservative line break that which is not even conservative by the way because you could see or you should be watching this over here and you that's actually when you are getting the full uh breakout and the most highest potential. But the risk-to-reward off of this trade already into the first resistance you're looking pretty good, pretty solid. So for a low time uh preference trader, uh this is something that that you've like Vanet was already involved in that. That's something where you'd want to be participating in it coming out over there. Now on the daily though, I would say that well, we haven't yet broken out. uh we're on the verge of breaking out and I'm going to throw some caution out there. The main caution is that if there were to be a surprise Fed hike that gold would probably uh his reaction would probably be um very poor coming out of that. And there's nothing wrong with that. You get a breakout, you follow what's on the chart, you trade what's on the chart, and you manage your risk around that. Obviously, you're not looking for every trade to to be that winner. You never know, right? It's just about managing risk. And if you're seeing a breakout and you can see, well, there's good reason for speculation in gold as well right now because a lot of eyes are on uh the 24th as China takes away uh the paper market and rightfully so. That that could be a catalyst that could see some some moves over here. I'm more cautious. I also look at this like this and I'm I'm not certain that's actually a wedge. I see this this is for watch the pattern that's going to develop over here. You ready? So I see this pattern is really what I see and um there might be further time for consolidation. I'm reminded of 2018 on on Bitcoin and you all remember how this ultimately resolved and for you from here it basically went and and then it ultimately had a capitulation down and you know what if that were to happen on gold I think that would be an absolute gift for for everyone. Um so anyway that's I I want to look at both sides and I think that's fair and I think that's good. But I think everyone should be really prepared for what's taking place. Silver as well right now. Silver getting a little bit of love. Is silver putting in much the same pattern? From my eyes it is. But you could definitely see right now silver here breaking out actually a little bit more strongly than gold from what I see over here. And it's an opportunity to take a nibble on the play. Now what's has a greater chance of uh I would say um in in the near term over over the next over the next you know 3 to 5 days being a more successful breakout and you could see that here that uh Bloom Energy also on the verge of a nice trend line break out of a wedge looking here at the two you can see it's right into the resistance right now and much like we've looked at gold and silver on the lower time frame. You say here was the the black diamond and that's already breakout retested. That looks like trading above there an opportunity for a play and it's nothing more than a play an opportunity. But I could easily see uh over the next you know three to five sessions a move here on Bloom Energy that I think if it were to break out and you could see you know a bigger move than I think that you would see in in the near term on gold or silver. I think that it offers an opportunity here if you are to get the the breakout above. Something to be watching for. You could see that also happening on Micron which is actually leading after yesterday's mega gain. And you could see that well here's a nice breakout that failed, right? You never know when you're going to get the love breakout failed. That's fine. You manage your risk around it, right? Then you can see the second breakout over here and this one so far is beginning to to materialize. Uh it's why this is such a big week ahead because Google comes out today and Google gives uh nice earnings beat uh continues uh nice uh guidance ahead and then also shows that they plan on continuing to spend on their capex over the next year. I think the market's reaction is going to be quite positive if that were to happen. Again, we laid it out on Monday. should watch re-watch that video if you haven't seen it because we said well what's more important is what the market's reaction to whatever said either way in that scenario everything positive across the board and then you see Google sell off and taking down the rest of the AI leaders with it well there's that's the biggest telly you could get that's more valuable than anything same thing you see Meta come out and you know what we're pulling back on our capex spending we feel that we have enough uh compute right now and that you might see that the the you might see uh the the capex spenders all of a sudden the hyperscalers you might see them appreciating and you might see a further rotation out of the semis and out of of memory stocks that would be a likely uh scenario that could unfold you have to watch what is said what what the data is and then the market's reaction to it uh There's across the board we're seeing all of these trend line breaks, all of these wedges. Here's another one that that I would say was a failed break.

[00:26:15]Same thing as Micron and and then a second attempt. And the second attempt here is is quite beautiful.

[00:26:24]The second attempt after a failure so far, breakout retest resumeuming up.

[00:26:30]Something to keep an eye on. uh right now in the markets. There's one other thing I didn't tell you. We saw that uh Amazon moved to um right here um uh a stop exit right now pending. Uh so we had the three new entries. We have five new pending long entries and then we also have at the same time Amazon switching to the stop long.

[00:26:57]All right, short and sweet today. That is some uh let's say look at some setups that are right now on the verge of transpiring. I think the important one here is is gold and um I'm I am throwing some caution into the wind right now for gold. Um, I think we should be looking also though at Bitcoin and seeing where we could have a failure of the current um, well, we're we're just long momentum here, right? When we look at Oh, yeah. I wanted to show you this. So, let me pause and then I'll come back to Bitcoin. Um, so this is obviously the cup and handle. This was over here, uh, March 2023.

[00:27:46]We did put out a presentation literally titled gold's uh super cycle and we said in that video it's not going to stop at 2500. I'll see you at 5,000 and then we'll re-evaluate.

[00:28:01]and re-evaluating. It seems to me that the long-term uh trajectory of the debasement trade is very much only going to um become more and more important as government debt is going to continue to to spiral. Uh did it come too far too quick? No. Oh, I think it was an it was amazing to watch such an incredibly high market cap be able to appreciate uh by uh triple digits in in such a short time, right?

[00:28:36]Unbelievable to see anything like that.

[00:28:39]And I think that gave a little bit of let's say uh perspective for for Bitcoiners who are like, "Oh, Bitcoin is a $2 trillion market cap. it's not going to have a big move. Well, gold was a a 20 trillion market cap and put in a massive move. So, I think that's some good perspective to consider going forward. Um, now we've seen uh after this massive massive uh blowoff top uh a draw down on gold that most people didn't expect, but I would say with the with the magnitude of the upside seems to be completely um comp completely with what it what expectations should have been. And then I'm going to also add that you can't look at gold saying, "Oh, gold traded its high as whatever. We'll call it 5,500 and now it's at 4,000." Like, no, no. Gold broke 20,000 after not being able to break that for so long. First flirting in with it back over here in 2011 and then 2020 to 2000, we saw three more touches and it when it blew through 2000, much like silver, right? silver.

[00:29:53]You know, people are like, is it ever going to break above 50 again? I'll see you at 110, 120. Now trading at 60.

[00:30:01]That's obviously some really tremendous moves. The story should be to the upside, not what they've reverted down to the mean so far on the downside. I think this is an interesting look. I go ahead and just throw in off of this line that we've been watching. I'm going to go ahead and just just follow it like that. And I want you to see where we came into. Um, look at the bottom left towards March 2006, 2008. And you could see that that's the touches over here is the resistance that we're in right now.

[00:30:38]No big deal. I come back over to the August 2011 and show you where that one came in. And that one seems to be and I I I would say that probably the angle of this it should be slightly by like one degree sloped upward and to the right. Uh you know but I just I just drew it freehand but it's pretty pretty tremendous. And you could see that that resistance up over there on the downside coming down over here. And I'm going to come down to right there. And then look at the the support that that build over there again. Right. So that if we were to get a move into that opportunity 3500 that would be a place where I personally would be extra I'm laying it out for the future if it were to happen. Now is it possible that we're seeing uh a wedge breakout that's about to uh trigger on gold? I'm not talking about double black diamond but conservative and it is yes that that could very much happen as well. You might not get the opportunity much for like people who didn't think you know uh 60,000 $58,000 Bitcoin was was a good place to buy because I'm going to wait for the uh the the move down in into October and I'm buying Bitcoin 30K you know maybe maybe not. I mean that hey that's a 50% move off if that were to happen but you have to think about expectations going forward and is this the opportunity to take your position much the same thing with gold and and if you're looking to to build a position hey you might want to wait it accordingly and this is probably uh a good time to I think we're going lower but it could be a good time to to definitely take that position. What's interesting about this is you come down right over to here off of the low over there and again it you could see that what build out there the the move up into resistance and then support. This comes all the way down off of the bottom over here and the touches out of the cup and handle that we saw which I find fascinating because ultimately that that would be the gift of the gifts. That would be a massive bare market too for gold if gold were to come off something like 54%.

[00:33:05]I'm just laying out what would be the ultimate like this is the place I think that you need to lead in if anything like that were to happen. Um interesting to see the structure though off of just an eyeball line that we that we've drawn and then seeing it play out everywhere.

[00:33:23]Uh after that, uh Bitcoin, that was a little bit of attention, is in a massively strong downtrend ever since the high in October. Uh we saw a couple of of bare flags that played out. And what was most interesting about this one is this one to me, I thought it was a upside sweep.

[00:33:53]Maybe maybe it could find it on on our structure a little bit better. So, let's see if we can find out.

[00:34:11]I don't have it to show uh because I'm looking at this now and I thought it was like a breakout that swept the upside when we look at our structure. I'm pretty sure. There you go. I think that's pretty good. Um I want to see if there's any parallel though here to the B. Yeah, that's that's pretty strong actually. There you go. I like that a lot. And you could see that you had that sweep to the upside, right? So, let me just do a couple of things here.

[00:34:45]I want you to see maybe command. There we go.

[00:34:57]And then over here, that one didn't sweep it. There you go.

[00:35:05]It's pretty good. And then where we are right now.

[00:35:10]So, here we have a high. Actually, we're coming right into that that touch right there. Right now, I'm looking for upward sloping, though. I'm going to go ahead.

[00:35:19]I'm going to do it like this and then bring this upwards and see.

[00:35:32]I'm trying to give a caution what what to look out for and I think rather than the upside which I'm not able to eyeball of where that could be. It depends on how far we get up. Are we going to get up here and challenge it all the way up into that area? If it were be, that would be something to watch out for uh as far as watching for any type of of uh reversion. But I think it's down here, this line over here.

[00:36:06]Again, you might say that this is early for those that were looking for uh to go ahead and I don't and for whatever reason, they thought that was a good place to to sell. Same thing over here.

[00:36:19]It's on the breakdown that I think is the highest probability on the breakdown on the on the breakdown over here. And same thing on this. It would be the breakdown of this line that would say, "All right, that's the most uh this is the time that you really see that what we're seeing here is failing."

[00:36:37]Obviously, for us, it'll be a lot cleaner and a lot quicker because we'll see that our position has already exited uh much quicker, and we don't have to even worry about that.

[00:36:50]All right, I thought this was going to be short and sweet, but so much fun, everyone. We got a massive week ahead of us all the way until the FOMC earnings right now are beginning to take the forefront. Tomorrow is going to be a nice unraveling after we find out what Google has laid out and the market's reaction to that. Everyone have a beautiful day. God bless you. See you all back here on the inside.