Markets continued to sell off to start this weeks trading session. Volatility has been all over the place this year so far and it's evident the investor fear gauge is coming to fruition. Indicators like the "VIX" measure market volatility and have been up over 100% YTD showing a lot of uncertainty in the market right now. When we took a look at the S&P 500 today we saw it slide below critical levels today in our opinion. We still remain Bearish on the overall market right now and see a correction continuing to occur. Below we will explain what we see in the charts.
Like mentioned above, we took some time to analyze current S&P 500 Technical Analysis. The one thing that caught our attention is the 200 day simple moving average (blue line). As you can see from the chart, S&P fell below that level today for the first time in a very long time. This supports our theory on a bearish environment right now. IF we continue to see a $2604 rejection, we could see the S&P testing $2458 levels which could mean about 5.6% more in corrections in our opinion. Along with the moving averages, we also see downward pressure in both MACD and RSI which gives us more evidence of a potential $2458 test.
Despite the overall market in a bear stage today, we saw the overall crypto markets in the green today. As we all know, crypto has been struggling as well. We see Bitcoin as the crypto index in a sense because the overall market tends to react to the direction of Bitcoin on a given day. Bitcoin has fallen from the 20K levels and so the whole crypto market has followed this trend. We still believe the crypto selloff has been exaggerated due to politics and other various reasons. Historically crypto has been uncorrelated to the stock market. There are days where both stock market and crypto is down, but more than not the crypto market tends to be uncorrelated (which you can find through additional research). We still believe in our theory that a lot of stock market money is pouring into crypto. Days like today make that theory stronger. With crypto showing inverse price movements, we still see it as a strong diversification tool in our opinion. With the volatility in the stock market right now, it's not the time to try to "time" the market in our opinion. We will be watching the overall stock market closely and how crypto reacts. We still remain much more bullish on crypto
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