I've been saying it for months.

SPX is overvalued. BTC hasn't formed the higher low above 97k needed to invalidate the macro downtrend. The real bottom isn't in. The intermediate rally from the lows was real but it wasn't the recovery.

This week the charts are starting to confirm that view.

BTC pulled back from 81k to 77k. ETH broke below 2,200 and is testing the measured move target I laid out three weeks ago. SPX printed its first significant pullback from the 7,521 blow-off high.

None of this is a surprise if you've been reading these issues. Let me walk through each chart.

BTC peaked near 83k, pulled back, bounced weakly, and then made a lower high. That lower high was the confirmation.

BTC is now at 77k, below both the 78.3k and 79.5k support levels that formed during the intermediate rally. The ascending channel from the February lows is being tested.

The most important level on the BTC chart right now is 75k.

If 75k holds as support on daily closes, the channel structure is intact and the pullback is healthy.

If BTC loses 75k on a daily close, the box breakout has failed. The old consolidation zone from 65k to 75k comes back into play. And the second lower low scenario I've been warning about gets a significant amount of structural confirmation.

I said from the beginning that a move to 80k to 84k was an intermediate rally within a macro downtrend. Not a recovery. This pullback is consistent with that view. The question is how deep it goes.

80k, 79.5k, 78.3k have all broken as support. 76k and 75k are the next lines.

Three weeks ago I identified a head and shoulders pattern on ETH with the neckline at 2,270. I said a confirmed close below 2,270 would produce a measured move target of approximately 2,073.

ETH is at 2,112.

The pattern has played out almost exactly as projected. ETH broke below 2,270, broke below 2,200, and is now sitting in the channel lower rail zone between 2,100 and 2,150. The measured move target at 2,073 is right below current price.

This is not a coincidence. Pattern targets are where they are because they reflect the structural imbalance of supply and demand that created the pattern in the first place.

The 2,073 to 2,100 zone is where I said I'd watch for a potential recovery setup. Specifically a high-volume rejection candle at or near 2,073 with a confirmed hold the following day.

Below 2,073: 1,899 is the next meaningful support. Below that 1,742 and then the deep support at 1,405.

Above current price: 2,200 is now resistance. The level that used to be support flips to resistance when price falls through it. For ETH to begin healing the structure, it needs to reclaim 2,200 on a daily close. Until that happens, bounces are relief bounces within a downtrend.

SPX peaked at 7,521 last week. It's now at 7,396. That's a 125 point pullback from the top.

For seven consecutive weeks SPX made new highs while volume didn't expand proportionally. I flagged that divergence every single week. The blow-off move from 6,354 to 7,521 was extraordinary by any measure.

This pullback is the first meaningful crack in that structure.

7,043 is still the critical support level. We're 353 points above it. The pullback has room to develop further before that level is tested.

But here's the question I keep asking. If SPX is pulling back from a blow-off top that was driven by euphoria about US-China trade developments and geopolitical de-escalation, what happens when the reality of an overvalued market meets Q2 earnings with oil still elevated and margins compressed?

I covered the Buffett Indicator, the CAPE ratio, and the broader overvaluation case in prior issues. Those structural readings haven't changed. A market priced for perfection at 7,500 faces a higher hurdle than a market priced conservatively. The pullback this week is the beginning of the market reassessing those expectations.

7,043 is still the floor I'm watching. A close below it would be a significant structural development.

My stance hasn't changed since the beginning of this cycle.

Cash on spot. No spot longs until the macro bottom is confirmed.

What is working: the short call strategy.

I entered two ETH short call positions on May 18. The 2,400 strike June 26 call is at +28.64%. The 2,500 strike June 26 call is at +37.97%.

ETH is at 2,112. Both strikes are more than 280 to 380 points above current price with over a month to expiry. The premium is decaying in my favour because ETH cannot rally to those levels without significant structural change that the charts don't support.

That's the approach. Sell premium at resistance. Collect income while the macro picture plays out. The charts are doing exactly what my thesis said they would do.

and I just closed my 2450 call.

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Victor