Wall Street’s buzzing over Microsoft’s breakout and Bitcoin’s surge — but the party’s about to end.
Don’t blame the messenger for raining on your parade, but my technical system was not the least bit impressed by the recent, lunatic leaps in Microsoft and Bitcoin. The former has since relapsed to generate a sell signal that projects to as low as 432 — a 123-point drop from the record 535 achieved on July 31.
As for Bitcoin, it would need to fall a further 200 points from Wednesday’s spasmodic high at 124,533 to trip a sell signal at 115,798 on the daily chart. The low projection thereupon would be 89,595, a nearly 30% haircut.
That Time of Year
In either case, the implication is that these erstwhile world-beaters may have seen their bull-market highs. Or perhaps not. I am agnostic about this, although more than a little skeptical toward the stock market’s waft into such rarefied heights without a corresponding rise in corporate earnings.
Trump deserves a victory lap, especially if he ends the war in Ukraine. However, his ability to affect PE multiples is not unlimited, and seasonality is not on his side.
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