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Magnificent Seven Stocks Lead, while Rest of the Market Lags
Junk Debt Diverges from Stocks
Market Breadth Shows Significant Weakness for Small & Mid Cap Stocks
Bonds Are Oversold & Interest Rates Likely to Ease
Gold Loses Luster as Dollar Approaches 52-Week Highs
Bitcoin’s Officially Enters a New Bull Market



Stocks Covered In Members Only Video:
Market Breadth, SPY, DIA, QQQ, IWM, Magnificent 7, Equal Weight SPX, Real Estate, Communication Services, Financials, Utilities, Semiconductors, Brazil, China, Hong Kong, Australia, Mexico, Germany, Argentina
Amazon, Boeing, Bank of America, Caterpillar, Disney, FedEx, Google, Intel, JPM, Kraft Heinz, 3M, Nvidia, UPS
Beam Tx, James Hardie Industries, Novavax, NovoCure, Newell, Tronox Holdings, Sweetgreen, Sarepta Tx


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$SPY $QQQ $IWM $JNK $HYG $IEF $TNX $DXY $GLD $GDX $BTC $IBIT
#StockMarket #Bitcoin #MarketAnalysis #SP500 #Nasdaq #Investing #Trading #Bonds #TreasuryYields #InterestRates #Gold #Dollar #Crypto #TechnicalAnalysis #MarketBreadth #BullMarket #BearMarket #MasterChartsTrading $SPY $QQQ $IWM $JNK $HYG $IEF $TNX $DXY $GLD $GDX $BTC $IBIT​

There are still quite a few bearish divergences in the markets, and they’re getting worse, if anything. Will the stock market right itself as a result?
We will look at bonds, which I think are definitely oversold, and I think interest rates are likely to ease in the near future. Gold continues to lose its luster as the dollar closes in on 52-week highs. And finally, Bitcoin has officially entered a new bull market, as was predicted recently.
All this and more in today’s edition of the MasterChartsTrading.com Market Recap.
As always, like, share, and comment on this video. Put a thumbs-up or any other comment on the video. This is what keeps this channel going and makes the algorithm offer this video to more viewers. Thank you very much for all the comments I’ve been getting.
If you are a subscriber, stay tuned. We finally have some interesting developments and lots of various oversold stocks, so stay tuned for that. We’ll cover that in the members-only video.
If you are not yet a member, consider signing up by going to MasterChartsTrading.com. Click on Sign Up and sign up for our products. Throughout the presentation, I’ll be using my proprietary trading indicators, which can be seen on all of the charts displayed in this video.
So first of all, let’s look at the S&P 500.
The S&P 500 is basically very close to its records. In fact, some of the biggest stocks in the S&P 500—the Magnificent Seven—have already hit new records. There was a new record on September 21st and yet another one on September 22nd.
So this is showing a clear tendency of market participants to prefer the mega-caps—the huge stocks: Google, Apple, Amazon, Nvidia, Tesla, Microsoft, Facebook/Meta.
On the other hand, we’re seeing small caps, IWM, which are no longer anywhere close to the records. In fact, this is a new low for the past three or four months or so, set on September 24th. So you can notice a huge divergence between the Magnificent Seven and the small caps.
Mid-caps are also doing pretty much the same thing. So this is showing a divergence.
An additional divergence can be seen on the chart of high-yield bonds. High-yield bonds—JNK, ticker symbol JNK, or HYG—are pretty much identical as far as I’m concerned.
JNK made a new record here on August 27th and then pretty much continued lower. In fact, we’re now below the blue support/resistance line.
This is, in my opinion, a good opportunity to consider opening a new long position—to buy bonds yet again. So if we rally back above the blue support/resistance line for ticker symbol JNK, then most likely there’s a very good chance we will at least attempt a new record.
But the way things are going, obviously nothing is set in stone, and the divergences are pretty glaring.
So I just showed you two divergences. One was high-yield bonds. High-yield bonds correlate highly with the general markets. Therefore, we can say that there is a good chance that high-yield bonds are actually leading the S&P 500 to the downside. At the very least, they appear to be doing so for mid-caps and small-cap stocks.
The other divergences I wanted to highlight are in entirely different metrics, and that is market-breadth measures. So let me show them to you on the market-breadth chart.
Some of those glaring divergences are, for example, the percentage of stocks above the 200-day moving average. We topped out at around 75% in mid-August and then just completely collapsed.
And it actually kind of makes sense because smaller-cap stocks, like I just showed you—small-cap and mid-cap stocks—are moving lower, while the large-cap stocks such as QQQ and Nasdaq are moving higher. Nasdaq also, I believe, made a new record, or at least is attempting to make a new record.
So when we see such a divergence in market breadth, it does make sense. For market breadth, it doesn’t matter what size the stock is. A stock could be a little tiny small-cap company or it could be a mega-cap, but they will count the same—as either one or minus one.
In this case, we can see that a whole bunch of stocks just completely collapsed. We went from 75% of stocks above the 200-day moving average to about 47% of stocks above the 200-day moving average.
So that’s one of the measures that we’ll look at for stock-market breadth.
Another breadth measure that’s displaying a pretty obvious bearish divergence is the Bullish Percent Index. Again, you can find out more about the Bullish Percent Index by going to StockCharts.com and searching for it in ChartSchool.
There is a calculation that is done, but nevertheless, it’s a useful measure because you can see that we went from over 70% of stocks being on a buy signal to less than 37% being on a buy signal.
The same levels correspond to the S&P 500 from April of this year, right around where this gap is.
So my previous week’s idea was that perhaps we’re about to see a move lower toward the 2026 levels. Can this happen? Yes. But for that, the Magnificent Seven need to start being sold, because right now they’re at new records, and obviously they’re pulling the weight of the entire stock market.
If the Magnificent Seven also start being sold, then we can easily reach levels that were seen in April of this year.
So there is that gap between April 7th and April 8th. That level is actually very dangerous because it will be almost at the yellow support/resistance line, which would indicate a bear market for the entire S&P 500.
So let’s hope that doesn’t happen, and let’s hope that we see JNK finally find a bottom and buyers come in.
It’s entirely possible. When I get to the bond sector of this presentation, I will also show you that bonds are indeed oversold. High-yield bonds are indeed bonds, although they behave more like stocks, albeit with lower volatility.
So we’re looking at multiple divergences that are still plaguing this stock market. So far, none of them have been resolved. We’re looking at either a potential continuation of the pullback or, finally, a bottom and maybe an attempt to push higher, especially if high-yield bonds find a bottom.
Okay, so now I want to mention the 10-year Treasury note yield.
The 10-year Treasury note yield has pretty much skyrocketed very recently. You can see that as recently as June of this year, it was at 4.4%, and it’s currently around 5.18%. So that’s a significant move for interest rates.
By extension, bonds have basically been routed. Here is the intermediate 7-to-10-year Treasury bond fund. You can see that it really collapsed and actually hit, I believe, a multi-year low—or at least a two-year low.
So, yeah, it hasn’t been this low since July 2025.
Now remember that I’m using adjusted prices. Adjusted means that the coupon or dividend from this fund is added back into the return. If I uncheck “adjusted,” then the bonds are really in the dumpster, at levels going back to 2023.
But I personally prefer to use adjusted prices for anything that pays a dividend or coupon. In this case, yes, it definitely pays a dividend or coupon.
So I think that this is most likely a topping candle. It looks exactly like a shooting-star candlestick. I’m going to zoom in on it.
On Friday, yesterday, prices basically went up, and then the bears said, “No way, we’re going to come down,” and we actually closed near the lows of the day. So it’s a classic-looking shooting-star candlestick.
The opposite is true for the IEF 7-to-10-year Treasury bond fund. We can see it’s more of a hammer-like candlestick—a shadow out of the bottom, a green candlestick, and the close near the top.
So this does look like a potential bottoming candle for bonds and a potential topping candle for the yield.
I think in the next few weeks we will see a rebound in bonds. In fact, we can put in a ghost field. Let me see where it’s at.
I did put in a ghost field before, and it kind of worked out really well, weirdly enough.
Going into probably November—I’m guessing around the November elections—we might see something like that.
This is the red support/resistance line, and assuming we don’t make any new lows, it will just continue sideways, basically.
So I’m predicting that we’re going to see a rise in bonds and, by extension, a fall in yields going into the November election.
But I think this rise will ultimately be a bear-market rally, and we will want to sell it short once it gets to that level. But right this instant, I definitely don’t think we’re going to go much lower. Maybe slightly lower, but not dramatically lower.
We can also put in a ghost field for interest rates. Something of this nature might happen. Maybe we’ll see the yield come down toward the blue support/resistance line, to about 4.75% for the 10-year Treasury yield.
But right this instant, I think that a rebound in bonds is very likely.
The dollar is also surprising many, many people.
We had Treasury intervention back around July 29th and 30th. We made another low, but we never made it all the way back down to the bear-market levels where the red line is.
Then we sort of went back, and now we are back in the bull market, basically.
Not only are we back in the bull market, we’re actually approaching fresh 52-week highs. These are 52-week highs that were set in June of this year.
So if we break out above them, we will actually be at 52-week highs, and we’re going to be at roughly two-year highs by then.
I’m fairly certain this is going to happen. Maybe not necessarily immediately, but I think we are still in a bull market for the dollar.
By extension, gold is really under pressure.
You can see that we made a high back in January of this year, and we pretty much have been making lower lows and lower highs. In fact, the bear market for gold began right there where I’m hovering, on June 10th.
Okay, we made this higher high here, but it’s not that significant. Relative to the high from May 12th, it’s still lower.
Then we have multiple sell signals—those downward-facing arrows—where we are trading first above the red line and then below it.
Right now, we’re pretty much unequivocally in a bear market. In fact, we’re so close to the yellow support/resistance line that if we close below that, that’s a definite bear market.
So what’s happening? Yes, because the dollar is rising, gold is falling.
Gold is traded in U.S. dollars—gold divided by the U.S. dollar. The bottom part of this equation, the U.S. dollar, is getting bigger. It’s getting heavier, so it’s pulling this currency pair lower.
Remember that gold is nothing more than a currency pair. It’s a commodity.
Yes, you can store it under your pillow in case of an emergency and try to buy food when the Mad Max scenario unfolds, although I seriously doubt you’ll be able to do that because most likely you’ll get robbed unless you buy yourself security, in which case you basically become a local gangster.
So yes, gold is a store of value, but in general, in my opinion, it’s nothing more than a currency pair.
Yes, it carries value of some sort, and smart people might use it somehow to survive in very unfortunate scenarios.
And as I kept saying, one of the better ways to store gold would be to have easily divisible gold, such as actual gold chains.
What you could do is cut off a piece of that gold chain and go to a local underground market. Let’s say we’re talking about a pretty far-out scenario where suddenly there are food shortages or other shortages. Cash is basically useless, but you could cut off a piece of gold and go to a market and say, “Okay, I want this much meat or bread for it.”
Then you’re much less likely to get robbed than if you bring your gold coin—a Gold Eagle—which is, what, about $3,000 per Gold Eagle right now? You can’t easily cut it. I mean, you have to use a chisel or a hammer or something to cut it.
So yes, definitely think about that if you are trying to prepare for end-of-the-world scenarios.
But the other thing is: don’t worry about end-of-the-world scenarios.
If you want to prepare for that, you may want to have emergency food, medicine, clothing, transportation, gas, things of that nature, and a place to go out of town.
Maybe if you’re wealthy—or if you’re using my indicators, for example, to trade and you’re actually making money—then yes, definitely invest in safety. Definitely invest in safety for your friends and family. Community also will become important.
Anyway, that’s my aside about gold.
So yes, I think gold is in a downtrend, and should the dollar continue moving higher, gold will absolutely continue moving lower.
The same can be said about gold miners. They actually really rallied, and you can see there were several buy signals here in August. But now we’re back into bear territory, and gold miners are definitely tied to gold. They’re not tied to anything else.
So yes, gold miners are also under pressure.
Finally, Bitcoin.
I’ve been saying things about Bitcoin for a while. I’ve been saying that as early as, I believe, June—or maybe even earlier this year—that we most likely had bottomed.
Then we had this giant rally. Three days basically wiped out tons of losses.
I was saying, “Yeah, we’re pretty much there. We’re almost in a bull market.”
Finally, this week—officially on Monday, September 21st—we broke out above the blue support/resistance line. We’re now officially in a bull market.
We can project my indicators into the future. One of the subscribers actually sent me this picture. I sometimes look at those, but sometimes I forget to look at them.
Whenever the indicators line up like this, in this case you can see that they line up into the future. So this is already October.
The way the indicators are curving down, combined with the fact that the price is already above the blue support/resistance line, makes me think that we’re going to kind of hug the indicator lines to the downside until we probably bottom out sometime in mid-October and then most likely make a new leg higher.
You could potentially buy Bitcoin right away if you have a longer-term horizon—for example, if you don’t really worry about a stop below the previous lows or the yellow support/resistance line.
But if you want to get a better price, there is a good chance we will pull back in the next few weeks toward around $70,000 or so. At that point, that would be a killer buying opportunity for Bitcoin.
And as I mentioned, I think the upside for Bitcoin is actually quite robust.
Bitcoin could easily, just from this pattern—I’m going to highlight this pattern—from the lows, or even from this pattern right here where the breakout began, from the lows of August 16th to the recent highs, we had about a $24,000 move, or 38%.
So if that is purely duplicated on the upside, we’re looking at well over $100,000 for Bitcoin. That is actually very, very likely even in the relatively short term.
But I think if that happens, then these highs are threatened, and most likely we’ll make new records—and I mean all-time-high records.
So I am quite bullish on Bitcoin right this instant.
I was bearish not so long ago. The bear market in Bitcoin started where I’m hovering, in November 2025, and continued unabated until relatively recently, when we made the low here in July 2026.
But like I said, the picture has definitely changed.
I would really consider looking at Bitcoin, either as actual Bitcoin or through Bitcoin-related ETFs. In America, for example, we have IBIT, which is one of the ETFs that holds Bitcoin.
That’s it for this week’s recap.
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That’s the newsletter, and the best deal is to get both the indicators and the newsletter. You get almost 17% off, which is essentially two months free, if you sign up for the yearly subscription versus the monthly subscription.
That’s it for this week’s recap.
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Thank you for watching. Have another great trading week.

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youtu.be/50ewHkODqxQ​

​Dow to Drop 4,500 Points?
Bearish Divergences in Market Breadth & Junk Bonds
Utilities Enter Bear Market
Bull Market for the Dollar Reaffirmed
Gold Reacts Negatively
Bitcoin Could Easily Reach $120,000 

Stocks Covered In Members Only Video:
Crude Oil, SPY, DIA, QQQ, IWM, RSP, Magnificent Seven, Real Estate, Semiconductors, Retail, China
Amgen, Amazon, Intel, Nvidia, UPS, Walmart
Beam Therapeutics, Novavax, Tronox Holdings


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#StockMarket #Stocks #DowJones #SP500 #MarketBreadth #Investing #Trading #TechnicalAnalysis #InterestRates #Bonds #HighYieldBonds #Utilities #RealEstate #USDollar #Gold #GoldMiners #Bitcoin #BTC #Crypto #MarketAnalysis #MarketOutlook #MasterChartsTrading

Is the Dow Jones Industrial Average about to drop 4,500 points? We will look at relatively significant divergences in market breadth, as well as in junk debt, that are pointing to a potentially deeper correction.
Utilities have entered a bear market, and that is also not a great sign for stocks.
The bull market for the dollar has been reaffirmed, and gold has reacted negatively to it, so we could see further downside for gold.
And Bitcoin seems to be on the verge of a breakout and could easily reach $120,000 or higher.
All this and more in today’s edition of the MasterChartsTrading.com Market Recap for Saturday, September 19, 2026.
As always, like, share, and comment on this video. Put a thumbs-up in the comment section, or make any comment you like—hopefully positive. This is what keeps this channel going and makes this video available to more viewers. Again, thank you for all the comments that I’ve been getting. I truly appreciate it.
If you’re a subscriber, stay tuned. We’ll be having a very short members-only video because there really isn’t much going on in the market except for the issues above, which are actually not great.
If you’re not yet a subscriber, consider signing up by going to the link in the description and following it to MasterChartsTrading.com. I have trading indicators, newsletters, as well as a bundle of both trading indicators and newsletters.
So today we will look at a slightly different perspective. I don’t normally look at this chart. This is a chart of the Dow Jones Industrial Average.
Generally speaking, the Dow Jones and S&P 500 are very, very similar. This is the S&P 500, and this is the Dow Jones.
On this chart, again, you can see my trading indicators. You can see these green, blue, red, and yellow lines. They’re available, as I just mentioned. But let’s look at the Dow Jones first because of the dramatic picture that I’m trying to show.
First of all, this level here from April 2026 still has an unfilled gap. As they say, the market hates a vacuum. Gaps usually do get filled; we just don’t know at what point. This gap is around 46,600 for the Dow Jones.
We’re currently at 51,000. So a drop of almost 5,000 points from today’s level would fill this gap, but at the same time, it would most likely put the index into bearish territory because bearish territory is where the yellow line is.
Why am I even considering this at this point after being quite bullish for a long time? You can see that we had a bullish breakout that began in May 2025 and continued unabated until very recently. However, the Dow Jones hasn’t made a new record since August 5.
The S&P 500 made its last record on August 14 and has since traded sideways to slightly lower. The S&P 500 is clearly not as weak as the Dow Jones, but I wanted to show the Dow because people like to look at it. It’s been around for a very long time, so the Dow Jones is important. The S&P 500 is even more important.
But when I say that the Dow Jones could drop another 5,000 points, that is obviously a big drop. So far, the Dow Jones is off its record by about 5% or 6%. If it drops another 10% or so, we will enter a bear market for the Dow Jones.
For the S&P 500, we’re off the record relatively mildly—only about 3% or 4%. For a bear market in the S&P 500 to unfold, we would need to drop another 14% or so. That gap area for the S&P 500 is still around 6,600.
So why am I suddenly talking about a bearish tilt after being so bullish for so long? It has to do with a significant deterioration in market breadth.
What is market breadth? Let me show you on these market breadth charts.
Market breadth, in essence, shows how many stocks are participating in the rally. In this case, you can see that the percentage of stocks above the 200-day moving average within the S&P 500 had been steadily rising since around April.
But this gap area, as I just pointed out, around 6,600 is still unfilled. We had been rising steadily until very recently, and then suddenly we saw this very significant deterioration in market breadth while the S&P 500 barely budged.
So where is this deterioration coming from? I believe it is coming from smaller caps and perhaps medium caps. You can see small caps under pretty significant pressure, as well as mid caps under significant pressure compared with larger-cap stocks such as the Magnificent Seven.
The Magnificent Seven are actually about to make a new record. So that’s a very clear sign of a divergence. In other words, we have giant mega-cap stocks moving higher and keeping the market afloat, while smaller-cap stocks are moving lower.
What does this mean in terms of market breadth? We’re seeing exactly what I just described on the market breadth measure because the sheer number of stocks moving lower is outpacing the number of stocks moving higher. That’s why the percentage of stocks above the 200-day moving average has deteriorated very significantly. We went from 75% of stocks above the 200-day moving average to only 52%.
If we trace back that same level, we can see that it was last seen right around the April 2026 gap area, when we gapped up.
I’m going to show it to you on this chart. There’s the gap up between April 7 and April 8, and we continued higher pretty much nonstop.
Again, the deterioration is pretty significant. This is showing that a large number of smaller-cap stocks and, as I just showed, mid-cap stocks are really not participating in this rally. We’re only seeing new highs from mega caps such as Google, Amazon, and Meta.
So this is one measure of market breadth, and it’s clearly showing a bearish divergence.
Another bearish divergence, which is even stronger, is this Bullish Percent Index. What is a Bullish Percent Index? If you’re interested, you can go to StockCharts.com and find out how it’s calculated. Go to ChartSchool and search for the Bullish Percent Index, and it will tell you how the index is calculated. I don’t want to spend time on it. It’s a very archaic kind of system.
Nevertheless, it is showing deterioration. You can see that in April we peaked at over 72%. We’re now down to 38%. So only 38% of the stocks within the S&P 500 are on a buy signal according to the Bullish Percent Index.
Again, that level has not been seen since April of this year, right around where the gap area is near 6,600. So I am definitely seeing this divergence, and I am now wondering whether this is the beginning of a significant pullback for stocks.
An alternative explanation is that we are now oversold.
And yes, indeed, we are oversold on both of these measures. The Bullish Percent Index is well below 50% and almost below 40%. Technically speaking, oversold would be somewhere around 30%, as it bottomed out, for example, in April. But during deeper corrections, it can go even lower.
For example, in a bear market, how low does it go?
In April 2025, we dropped below the 30% mark for the Bullish Percent Index. At that point, it was deeply oversold, and we could have bought almost blindly because at such deeply oversold levels, usually at least a small bounce occurs. In this case, it was a significant bounce, and we eventually rose to new all-time highs.
Going back to this chart, we can see that the level around 6,600 is not out of the ordinary. We could see this drop materialize.
Why is that happening? Obviously, we’re seeing a lot of bearish events around the world, such as wars breaking out in various parts of the world, as well as continued instability in the Middle East. Today, for example, I saw that there was an attack on a fuel storage facility by the Houthis, and that is obviously not helping with stability.
So we’re seeing markets finally beginning to price in the reality of this new world, with not only high interest rates—we’ve hit multi-decade highs worldwide—but now stocks beginning to falter as well.
This is something to be taken seriously. As I said, the Bullish Percent Index and the percentage of stocks above the 200-day moving average are good measures of market participation, and you can see that participation collapsed in literally one month, from mid-August until mid-September.
That’s a very big drop in market participation, and it’s another reason why there are very few stocks to even consider buying right now. The Magnificent Seven are still doing quite well, but for some reason, the remainder of the market is not doing well at all.
So where does that leave us as far as the near term? I think, at the very least, we will see a continuation of this drop toward the blue support/resistance line. It’s quite possible that we will at least recheck or retest the levels around the blue line.
Again, the blue line is a good place to consider buying. For example, there was a breakout back here in May 2025, and we could easily see those levels again. So another 6% drop is very possible at this point.
Unless something happens and suddenly we see a turnaround in the market breadth measures. But nothing is guaranteed in this market, so we need to be quite nimble with trading and potentially protect our open positions, especially the profitable ones.
That’s what I’ve been doing. I’ve been protecting my profitable positions with tighter stops, considering taking profits, and potentially even closing some longer-term positions as well.
Another divergence can be seen in high-yield bonds. As I have pointed out repeatedly, high-yield bonds and the S&P 500 are highly correlated. High-yield bonds topped out on August 27 and then dropped pretty sharply into September.
Notice that right now high-yield bonds are well below the green support/resistance line, while the S&P 500 is still above it. So again, we have another bearish divergence.
We’re now seeing various divergences in market breadth and in the high-yield bond universe, so this needs to be taken into consideration.
Another part of the market that has seen very strong damage is utilities.
We saw the 10-year Treasury note yield rise from around 4.3% to currently over 5%. So this is, again, a very significant rise in yields, and these are multi-decade highs.
We’re seeing the same scenario play out worldwide. In other words, investors are very concerned about lending money to governments at this point.
Utilities borrow money to finance their infrastructure projects, and you can see that utilities are suffering greatly. They’re currently in an Avoid phase. In other words, they’re in a bear market. Utilities officially entered a bear market on September 14.
Some people will say utilities don’t really matter. They’re only about 2% to 3% of the total U.S. stock market. Indeed, it is a small percentage of the market. However, it is an important sector because it is interest-rate sensitive.
Just like real estate. Real estate is also under severe pressure, but mortgage real estate investment trusts in particular have also entered a new bear market for that sector. So mortgage REITs and utilities are under strong pressure, most likely due to interest rates.
There isn’t a 100% correlation between interest rates and the performance of the stock market. However, we’re definitely seeing deterioration in the market’s posture.
Not only utilities, but many stocks—as I just pointed out, especially in the mid-cap and small-cap categories—are losing steam. So we’re not firing on all four cylinders, as we like to say about the stock market.
Utilities and market breadth are all red flags for the current stock market posture, and that’s why I’m somewhat reluctant to open any new long positions at this point.
We’re basically waiting for either market breadth to bottom and turn higher or perhaps for interest rates to calm down a little bit.
Let’s switch gears. We’re looking at the U.S. dollar currently. The U.S. dollar has reaffirmed its bull market.
As I was saying for a while, yes, we did indeed see a pullback for the dollar, especially during the intervention involving the Japanese yen. The Japanese yen intervention was around July 30 and 31. This currency pair, the U.S. dollar versus the Japanese yen, did indeed drop, but it bottomed right around the red support/resistance line.
As I keep pointing out, this line is extremely important. You can find out more about these lines at my site.
We then saw a rally. Right now, we saw an attempt on Friday to rally back above the blue support/resistance line, which so far has failed.
But that doesn’t mean we’re done with this move higher for the dollar. The dollar seems to be breaking higher, and by extension, we’re seeing gold move in the opposite direction.
So let’s look at gold.
I think gold has entered at least the doldrums, but possibly an outright bear market. The downward-facing arrows show where I would consider selling. I would be thinking about either doing nothing or selling it short if you like to play the market in both directions.
The reason for gold being in a downward bear market is that gold is traded in U.S. dollars. We’re seeing exactly that: a move lower for gold, and we’re seeing gold miners stall as well.
That’s the state of the stock market and the gold market right now.
Where is the bright spot? I think the bright spot right now is Bitcoin.
As I have pointed out, I started saying that Bitcoin had most likely bottomed somewhere around the beginning of July this year. Notice the indicator lines and the way they came closer and closer together. This is what happens when a trend change is in the making, and we could potentially see a move higher from oversold levels.
Indeed, we saw that move in August. I believe this may have been around the same time as the intervention—actually, no. The intervention was at the end of July, while Bitcoin began moving in mid-August, so it was a different catalyst.
I forget exactly what happened during those three days around August 18, 19, and 20. If you remember what happened during those days, please make a comment and we’ll look at it.
But right now, we’re seeing an attempt by Bitcoin to break out. See how close we are to the blue support/resistance line? The blue support/resistance line is at about $82,800.
We could easily see a new breakout, which would mean a new bull market for Bitcoin. Bull markets are characterized by higher highs and higher lows.
Let me show you what a bull market and bullish breakout look like. There was a bullish breakout back in February 2023, and you can see that we then continued moving higher, with opportunities to buy around the blue support/resistance line, until relatively recently when we turned around and entered a new bear market in November 2025.
We then made lower lows and lower highs, and that continued until very recently. But right now, we’re extremely close to a new bull market in Bitcoin.
I think this breakout could happen as soon as next week.
So I would strongly consider watching Bitcoin at this point as one of the few bright spots on the long side.
I am definitely going to be buying Bitcoin once it breaks out above the blue support/resistance line, although these breakouts can sometimes be so violent that you don’t have enough time to buy because pretty much everybody and their grandma is going to buy it.
On this chart, especially, this high from September 3 is around $82,000. If that high is taken out, we could see a jump higher with all the short covering in Bitcoin.
I mentioned that we could easily go to about $120,000, and it’s not that far away.
From the lows in July, this move is already about 42%, or approximately $24,000. If we move another $24,000 just to duplicate this move on the upside, we’re already over $107,000.
So $120,000 is reachable for Bitcoin. If I am correct and we break above this blue support/resistance line, which is currently at around $82,800—so basically around $83,000—we could see a substantial move higher in Bitcoin.
That’s it for this week’s recap.
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That’s it for this week’s recap. Again, please don’t forget to hit the Like button and make a comment in the comment section.
Thank you for watching. Have another great trading week.