Bitcoin May Be Ready To Melt As It Nears Another Massive Breaking Point

It was another rather boring day, with the S&P 500 finishing basically flat down 8 bps. The Nasdaq 100 had the better day, with the Qs rising by roughly 30 bps.

Breakeven inflation rates fell again today to 2.39%, on the 10-year. The 10-year TIP was up 3.4 bps to -84 bps. So it appears that for now, we continue to see downward pressure on inflation expectations. This may only accelerate depending on how the CPI comes in later this week.

It isn’t so much that rates are falling; nominal rates have flatlined, and TIP rates are steadily increasing. It is, to some degree, taking away some of those artificially high inflation expectations because TIP rates failed to participate with nominal rates for most of the spring.

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Again, I do not think it is by chance that S&P 500 has stalled out in recent weeks, as inflation expectations have not only peaked but appear to be giving back some of their gains.

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I also don’t think it is by chance that the reflation trade is starting to show signs of breaking down, with the PHLX Housing Index falling another 40 bps today. It is getting very close to making a big break lower, as it has not hit oversold levels yet on the RSI, and the MACD is still directionally moving lower as well.

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Lumber is one of those assets that hardly trade, so who knows what is really going on. But prices don’t lie, and they are certainly trending lower. More important, it fell below the 50-day moving average, generally not a great sign. It is now in a zone of support around $1,100 and $1,200. This is a pretty critical zone of support because it could be a long way down if that region breaks.

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Dow Transports

The Dow Transport finished lower by 23 bps and is now within striking distances of its 50-day moving average. The 200-day moving average is about 15% lower. I’m not suggesting it falls that far yet, but it does not look healthy at the moment either. This 15,300 level is significant.

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Disclosure: Michael Kramer And The Clients Of Mott Capital Own ACAD

Disclosure: Mott ...

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