By J.C. Parets & All Star Charts
Monday, 12th June, 2023
1/ Tesla Registers Record Winning Streak
2/ Greece Emerges Higher
3/ A Rock-Solid Correlation
4/ Altcoins Tank
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1/ Tesla Registers Record Winning Streak
With a 2.22% gain today, Tesla (TSLA) just registered its longest daily win streak since the stock came public almost 13 years ago. In a run that began back on May 25, Tesla stock booked its 12th consecutive up-day today. The stock has returned more than 35% in this two-and-a-half-week period.
Green closes and higher prices have been standard operating behavior for Tesla and its mega-cap growth peers this year. The stock is up more than 130% from its year-to-date lows, putting it on the same leaderboard lists as other top stocks like Nvidia (NVDA) and Meta (META).
Here is the chart for Tesla, zoomed all the way out to its initial public offering (IPO) date, with the consecutive up-day indicator in the lower pane:
As you can see, the previous record streak was in January 2021 after most of the gains of the post-COVID rally had been realized.
However, when we look back through history, there were a number of consecutive up-day extremes achieved in the early innings of new bull markets. This was the case in January 2013, October 2019, and April 2020.
Long story short, this kind of behavior is more consistent with the early stages of uptrends rather than the later ones.
2/ Greece Emerges Higher
We’ve been vocal about the recent strength from international equities, as evidence suggests that participation is expanding outside of the U.S.
This is particularly true for European countries such as Greece, as represented the MSCI Greece ETF (GREK), which is resolving higher and completing a structural rounding bottom reversal pattern.
After eight years without any progress, buyers appear to have absorbed all the overhead supply at the upper bounds of this structural base. If this breakout sticks, the bias would be higher for Greece, and we could see a change in trend that favors the bulls.
This is another strong data point that supports the strength we’re seeing overseas. Greece could represent an excellent vehicle to exercise a bullish thesis outside the U.S.
3/ A Rock-Solid Correlation
Correlations come and go as market regimes shift. Over the past year, we’ve witnessed many intermarket relationships break down and decouple.
But one historical correlation remains as strong as ever—the negative correlation between the U.S. Dollar Index (DXY) and gold (GLD):
We’ve inverted the DXY chart to show how closely these two markets move in tandem. However, the lower pane highlights the strong inverse relationship with a rolling 21-day correlation study (DXY down, GLD up).
A weaker dollar would likely fuel the next leg higher for gold and other precious metals. On the other hand, gold bugs might have to wait to celebrate new all-time highs if the dollar begins to gain upside momentum.
4/ Altcoins Tank
When it comes to cryptocurrencies, altcoins have come under severe pressure since last week following the suits by the Securities and Exchange Commission (SEC) against the two largest crypto brokers and exchanges.
To illustrate this theme, we’ve created an equal-weighted altcoin index that includes the 10 largest cryptocurrencies excluding Bitcoin (BTC/USD):
As you can see, these coins have really been struggling. The index recently failed to break through the upper end of its range. Fast forward a few weeks, and price is approaching last year’s lows, retracing just about all year-to-date gains.
Notice that momentum, as measured by the 14-period relative strength index (RSI), is reaching its lowest reading in roughly a year. This means sellers are getting increasingly aggressive as they push prices lower.
As long as altcoins remain under pressure, it speaks to the vulnerability of the entire crypto space.
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Originally posted 12th June 2023
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