Technical Expectations, 12 Mar 2023
🖼 Daily Technical Picture 📈
➤ Most of you don't come to me for my thoughts on the fundamental aspects of the market environment and I don't usually offer them. There is however one particular aspect I think is worthy of mention.
➤ By now most of you should have read about the fundamental state of affairs in regards to SVB (Silicon Valley Bank). There are huge ramifications in regards to the further potential fall-out.
➤ If the fear or actual contagion takes place with similarly positioned banks or financial institutions then the next "target" would once again entangle the crypto space. Silvergate was the pre-cursor. But the "BIG" one or the "last man standing" is Signature Bank through its "Signet" service.
➤ Signet is as I understand it the basic backbone or gateway of fiat-to-crypto capital flows. It is the infrastructure for capital movement between the two worlds. If Signature Bank gets into trouble, the knock-on effects on crypto might be crippling at least in the short-term. Let's face it, crypto is not yet mature enough to be it's own self sustaining ecosystem.
Anyway that's my take on this matter. I stand corrected.
➤ Back to the technicals, although we saw continued selling in equities on Friday, there was some late buying at end of day and into after-hours trading. I cannot tell you if this was dumb money bargin/dip buying or smart money taking advantage of the sharp drop.
➤ The VIX spiked to 28 before receding. For me, the panic level in equity markets is for a move in the VIX to 30 or beyond. We didn't get there. Of course, any contagion fear or otherwise should move VIX much higher. If it doesn't, it should be an "all clear" sign at least in the short-term.
➤ Conclusion: What will be important is the messenging by the US regulatory authorities and how market participants react to it. I would expect some sort of clarification or official stance taken prior to markets opening in Asia on Monday. Silence or a message that doesn't allay fears may result in a bad outcome in the short-term.
NOTES:
BTC and crypto price is holding well despite the most recent developments.
➤ Most of you don't come to me for my thoughts on the fundamental aspects of the market environment and I don't usually offer them. There is however one particular aspect I think is worthy of mention.
➤ By now most of you should have read about the fundamental state of affairs in regards to SVB (Silicon Valley Bank). There are huge ramifications in regards to the further potential fall-out.
➤ If the fear or actual contagion takes place with similarly positioned banks or financial institutions then the next "target" would once again entangle the crypto space. Silvergate was the pre-cursor. But the "BIG" one or the "last man standing" is Signature Bank through its "Signet" service.
➤ Signet is as I understand it the basic backbone or gateway of fiat-to-crypto capital flows. It is the infrastructure for capital movement between the two worlds. If Signature Bank gets into trouble, the knock-on effects on crypto might be crippling at least in the short-term. Let's face it, crypto is not yet mature enough to be it's own self sustaining ecosystem.
Anyway that's my take on this matter. I stand corrected.
➤ Back to the technicals, although we saw continued selling in equities on Friday, there was some late buying at end of day and into after-hours trading. I cannot tell you if this was dumb money bargin/dip buying or smart money taking advantage of the sharp drop.
➤ The VIX spiked to 28 before receding. For me, the panic level in equity markets is for a move in the VIX to 30 or beyond. We didn't get there. Of course, any contagion fear or otherwise should move VIX much higher. If it doesn't, it should be an "all clear" sign at least in the short-term.
➤ Conclusion: What will be important is the messenging by the US regulatory authorities and how market participants react to it. I would expect some sort of clarification or official stance taken prior to markets opening in Asia on Monday. Silence or a message that doesn't allay fears may result in a bad outcome in the short-term.
NOTES:
BTC and crypto price is holding well despite the most recent developments.
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✅ Copy My Trades @ eToro, etoro.com/people/mrstocky
✅ Verified Track Record 📈
Not Investment Advice
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