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200401 Silver & Gold Update



I’ve been intentionally avoiding updating this page because I am a Gold and Silver bull. Clearly for the last 8 years, that has been an unpopular space to own & didn’t want current panic/ emotion of my readers to get over-blown by action based on that bullish sentiment. In the short term, Gold, and especially Silver has been moving as if they were stock investments. I.E., mostly down! I don’t consider them that. I consider them the essential survivalists flight to safety asset.

That said, I am not going to pump them up right now. I have got more silver whenever it hits anywhere below $13/ oz. I buy. Told you that before. Below $13, it costs more to pull from the ground than it is to own! That condition is unsustainable. A Silver shortage is pending. The current Gold/Silver ratio is 114! That’s insane! Back when Jesus walked the earth, it was about 1:15. For most of the 20th Century is was less than 1:50. Silver has far more value now than when Jesus or JFK were walking about! It has investor AND industrial value. HUGE industrial value! If you own silver- don’t lose faith! If you want to own silver- get some!

Buying 18K gold chain makes as much sense or more than 24k coins. Probably more. The US Govt can confiscate coinage, but not jewelry. And, if you’ve read Fernando Aguirres book, “Surviving the economic collapse” based on his experience when Argentina fell into chaos in 2001, you will appreciate the value of chain over coinage.

Keep the faith! President Trump recently said that more bailouts are on the way. To the tune of 2+ Trillion dollars. The US Congress is out of session for the next three weeks. I suspect both the Administration and the Congress underestimate the clamor / outrage / messy situation that closing the vast majority of US businesses is creating for the average Joe and Josephine. Most Americans don’t have savings. Actually, at this point the average $400 savings account is gone. AND its going to take the IRS weeks (since they are on Stay At Home orders) to figure out how to get that $1000+ check to folks.

There will be a second direct payment to taxpayers in the US this spring. They will have to do that. An easy +$1T. The US will in-debt itself even more. The future path of US Debt pre- COVID was manageable in the ten year short term. Now the National credit card is being maxed out & the US debt is skyrocketing. Isn’t ironic that the Republican Party (said conservatives) are always the guys that over- spend?!

We cannot change politicians. We can only position ourselves! So, don’t despair if you are upside down in Gold or Silver. The day of reckoning for US dollar denominated assets has moved (by my estimation) from 2030 to 2022. Or sooner. Buy what you can, when you can. Silver is better than gold at this moment in history.



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200326 Dead Cat Bounce

The last few days have triggered a significant upside rally that in some years would actually be considered a great annual return (+13%). Do not get suckered into it unless you are buying stocks you are willing to hold long term. The initial drop of over 25% in just a few weeks time is indicating that another drop up to that amount may occur in the ST future. The market has rallied on the news that the US is willing to run the national credit card to max levels. That isn’t something to rally on. It’s modern monetary theory.

Short term, it may offer some relief. Don’t think for a second that this is the last of the ballout bills. Its just the first big one of several. The party will end next week when the news that COVID and the economy remain on grim a trajectory.

Last fall I wrote that the trajectory of the failure of the US dollar had at least 10 years to unfold. That was based on the math of $1T USD in deficit spending per year for 10 years. $10T total. The US Government now appears (with published FED monitization of debt) to be on track to print $7 trillion out of thin air this year. The clear investment winners will emerge later this summer- Gold, Silver and Bitcoin.

Want a great read on what happens when a currency collapses and how it can impact you and your families health, welfare and safety? I recommend this https://www.amazon.com/gp/product/9870563457/ref=ppx_yo_dt_b_asin_image_o00_s00?ie=UTF8&psc=1

Do NOT judge this book by its cover! I was very surprised and impressed with the content. Well worth the time and money. Many might find it invaluable. This site isn’t linked to Amazon Marketplace. I’m not making a penny on the advice it holds.

Sneak Peak: I’ve bought some silver and gold coins over the years. It seemed prudent. What this author describes when he was faced with hyper inflation was that a 18K gold chain was better. When he needed to buy something, he would sell gold links. Owners of gold coins quickly became targeted as “rich” by the desperate. Besides, gold chain is cheaper than trying to buy a coin. Win- win. I had never heard that before I read this book. Probably I wasn’t paying enough attention.

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200324 This isn’t over!

I got some Permi- Bull friends that keep calling a bottom and keep trying to catch this falling knife. I know and understand the temptation. Fell for it in 2000 to my regret. My notes to them:

But anything will be short lived. The Fed announcement today that they are buying bond ETFs lead to a rally.

Until people had some coffee  and said “I didn’t know the bond market was that f-ed the Fed has to get involved!” We are, as Koreans say, in deep kimchi. The credit market is failing and its massive compared to the stock market.

I think we are into this correction about where we were in Oct 2008. People seem to believe a bailout will create a V shaped rally. V’s happen in bull markets. Not in  Bears.  Bear markets last 4-9 months. This is month #1.

Last 12 years has been marked by a lot of V’s (Chart below) A decent Bull Market trains people into almost robot like programming “to buy the dip”. The last Bull we had was one for the ages! ITS OVER!

After all the destruction in recent weeks, seemingly people cannot wrap their noggins around that truth. The situation is fundamentally changed since last month. The Fed cannot save this. Neither can Congress nor Trump. Collectively we are in a rough patch and it’s portfolio  suicide to do what TV pundits suggest… “Buy the Dip!” They are paid to say that! Yes, from my perspective its OK for ME to buy a bit on AMZN, NFLX, ZM, RNG. Nibble only! Its not the apocalypse. But its not the end of the Bear, either!

The uptrend that happen in Bear Markets are called either Dead Cat bounces or Bull Traps. They often last 4-7 days. Sometimes longer. Suddenly, people are more afraid of missing out on the rally then they are of follow on losses.

Inevitably, a final fall happens that crushes their hopes and dreams. I suspect we won’t see a final bottom until after they remove the 10% penalty for early withdrawal from retirement funds.  The unemployed will demand that.  The day after that happens, hundreds of billions will head for the exit and never return. Terrified Boomers will bolt too. Then the market will make its final move down. 

That said- I’m nibbling a bit on some Amazon, NFLX, and Ring (RNG). Crime will rise. Ring is a good deterrent . Also the Gold Bugs are starting to make noise. They drove prices higher off the “Dollar is dead” argument.  They were right in 2009. They are more right now.

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200317 Position update

Based on a belief there is at least another -20% downside, holding EDZ, SQQQ and TECS. On days where market is up +5% or more, buying short term (14-21 day) calls on SQQQ and TECS to escalate gains. No longer trading from TECS to TECL on a hard down day to catch the next days rally attempt- at this point, the bulls have got to be getting tired of getting caught in a bull trap. At this point they are 4 times burned in 10 trading days. Have reduced Puts on Disney and others once they hit 75-100% up so those positions are now house money.

Sold YANG and FNGD. The inverse FAANG ETF has got to diverge at some point- there is a bullish case for NFLX and AMZN. Apple is the one in the FAANG most susceptible to out sized draw-down.

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200315 Mondays action:

If market moves down more than 5% on 3/16, will sell YANG and reduce shorts. While there is still $$ to be made in YANG, on a global basis it’s the US stock market that is the most highly over-valued and has the most room to fall if / when draconian measures are put into place to try to get a handle on COVID-19.

Goal will be to get long TQQQ and TECL in anticipation of a sharp move higher ( probably due to Congressional action) on Tuesday.

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200313 Relief Rally!!!!!

Relief rally? That is a suckers bet. A Bull Trap. Stay in cash or stable coin OR be dumb enough to follow my cynic trades. Markets today rallied on the news that President Trump finally declared a National Emergency. The lines at Costco two weeks ago would have told any dummy that something nation wide was amiss! Any American could have told you last week we have hit a crisis.

The US Government is actually going to get serious, but its far too late to stop this from pushing the US into recession. When China closed Wuhan, it gave the world weeks of time to react. To plan. To prepare. The US wasted the advantage it was given.

Federal inaction has allowed this to spread and its impact on the economy will be harsh. For all the people that will die, ten times more will lose their jobs, their houses. Student loans, car loans and personal loans will go into default. The entire debt ridden system is under threat. Bailouts are coming next. Bailouts of under performing debt @ the expense of the US taxpayer for out of control corporate debt.

Don’t buy into today’s Bull Trap where people who perpetually believe that ‘everything is awesome’ lose their money to those that are more grounded. I believe COVID-19 is the Bull Killer & we are at risk of losing another 15-25% of market capitalization. Below in a previous post are my holdings. Lost a lot on paper today. Not worried. This Bubble has found its Pin.

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200313 Position changes

PositionTargetCurrent Stop LossComment
Cash$1.00$1.00NAAll retirement plan accounts
TECS- 3x short Tech$12.00$7.82$6.50Today I’ve adjusted SL higher than purchase price.
EDZ- 3x Short Emerging Markets$90.00$50.74$35.90Emerging markets are in more jeopardy than US is at this point
SQQQ- Ultrashort QQQ$45.00$25.20$17.90 
FNGD- Inverse Fang$15.00$8.90$7.50Play on the overvaluation of Facebook, Amazon, Google & Netflix
YANG- 3x short China$95.00$50.64$38.90China may have COVID contained- but economic shock may just be getting felt
Carnival Cruise Line Put $8.00$6.40$3.50SOLD 3/13  Percentage wise, its run itself down to diminishing return. Redeploying cash during todays Bull Trap
Carnival Cruise Line Put $20.00$11.50$6.50SOLD 3/13 Percentage wise, its run itself down to diminishing return. Redeploying cash during todays Bull Trap
SW Air Put$24.00$8.50$6.24SOLD 3/13: US Govt says its preparing to intervene financially
Disney Puts$28.00$14.10$10.50Oct 16 $105 put. Holding. Earnings losses in movie theaters is next to impact this
Microsoft Puts$11.25$19.00$9.50May 15@$140 Bought 3/13 Held up pretty well. Capitulation doesn’t happen until firms like MSFT get crushed.
Visa Puts$21.80$15.25$11.80May 15 @$160 Bought 3/13 Play on slowing economy- defaults will rise
Cracker Barrel Puts$24.00$15.40$12.00Jun 19 $90  Bought 3/13 Fast casual food on primary travel routes. 
Apple Puts$22.00$12.85$11.25May 15 @$250. AAPL may be reopening in China, but US market in jeopardy as new purchases placed on hold due to uncertainty. 
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200311 Newsletter holdings

This is a birthday present, of sorts! These are subject to change in the event the market turns markedly bullish. On Monday, with the market down a notable 7%, some didnt realize that a +3% bounce the next day was almost a certainty. Bull markets die quickly, but not easily. Expect more downside moves with rally attempts along the way by the perma- bulls. Drunks are the last one to accept the party is over. Once they do realize its over, expect a significant culmination draw down.

PositionTargetCurrent Stop LossComment
Cash$1.00$1.00NAAll retirement plan accounts
TECS- 3x short Tech$12.00$7.82$6.50Today I’ve adjusted SL higher than purchase price.
EDZ- 3x Short Emerging Markets$90.00$50.74$35.90Emerging markets are in more jeopardy than US is at this point
SQQQ- Ultrashort QQQ$45.00$25.20$17.90 
FNGD- Inverse Fang$15.00$8.90$7.50Play on the overvaluation of Facebook, Amazon, Google & Netflix
YANG- 3x short China$95.00$50.64$38.90China may have COVID contained- but economic shock may just be getting felt
Carnival Cruise Line Put $8.00$6.40$3.50April 3 $26 puts. If hits $8, will move to a Jun/Jul timeframe in money put
Carnival Cruise Line Put $20.00$11.50$6.50Jan 15 2021 $27.5 put. Holding until bleeding stops in travel
SW Air Put$24.00$8.50$6.24Jan 15 2021 $42.50 puts. Holding.
Disney Puts$28.00$14.10$10.50Oct 16 $105 put. Holding

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200310 Crypto Chart hold

Cryptocurrencies are behaving like equities & reasonable conclusions as to price direction has been impossible for me to determine with any accuracy for the past few weeks. For now, just HODLing my core and rest is in stable coin.

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200301 Rethinking Equity position (Fearing Fear Post)

After doing a lot of charting over the past day, the possibility of a short term counter downtrend rally has become more likely. Things don’t fall straight down without even mild attempts of a rally and this fall off has been spectacular. Assuming the financial services folks have spend far more of their weekend trying to engineer a stabilization strategy for the market, it makes sense to expect one- however short or long lived.

The riskiest way to play a bounce is with Leveraged ETFs (3x). UPRO and TECL are candidates I’m considering. If markets in the US open with a significant bounce higher, I am going to wait until closer to 1200 to get a sense of its strength. If markets resume a downtrend, I am going to closely watch levels at 1030 to await a turn of events.

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20200229 BTC Update

While Bitcoin remains in an uptrend, it is under severe pressure and has violated its trend and the expected counter trend consolidation. So, its bias is bullish, but with its well documented ability to lose huge percentages of its value very quickly, its currently a dangerous short term play to go long.

Full disclosure: I have a position in BTC in cold storage that I never consider trading. HODLers hold. Its what we do. Posts on this site are focused on shorter horizon trading aspects that may or may not get confirmed by future price action. God knows, not me. I was very surprised $9150 was violated, for example.

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20200229 Fearing Fear itself

My thesis is that COVID-19 is an awful flu that is feared more for its unknown impact to the economy and everyday life than the actual disease impact itself. My approach to investing in this chaotic period is towards the bottom of post.

Markets hate uncertainty, and there is no historical model available to attempt to model the potential impact of this form of Coronavirus. Latest data suggests that container ships arriving in China was down 30% compared to same month last year. China is the worlds builder of “stuff”, and the US its best customer. The movement of that ‘stuff’ is clearly dwindling rapidly- which portends a significant global slowdown.

Lets look at rough numbers:

MarketChange from latest high:Why?
Dow Jones Industrial Average-13.80%Fear of unknown
Nasdaq Composite-12.50%Fear of unknown
Asia DOW Index-10%Fear of unknown
Nasdaq Europe-12.80%Fear of unknown
   
Gold-5.30%I don’t know
Silver-12.20%Fear of industrial demand drop
   
Bitcoin-19%Declines started before COVID Panic hit full force. Unknown why it hasn’t reversed. Seems to be a “sell anything with a Ask/Bid mentality”
Ethereum-23%
XRP-36%
LINK-15%

In theory, as the global markets turned south, Precious Metals and ‘Digital Gold’ should have appreciated in value. What we are seeing in all markets currently is a flight to liquid fiat. Concurrently, markets are expecting a Central Bank global intervention reducing interest rates. The world is already awash in paper money and its derivatives! No form of currency has ever cured a disease! This is a nonsensical, “lets do something to look like we are doing something” self distructive trap.

As indicated in Para 2, the world might be facing a Supply Shock of goods. Last one I remember was the 1973 Oil Embargo, the 1979 Oil Crisis and then the impacts of the Hunt Brothers trying to corner the Silver market in the late 1970s. Supply shock brings panic and reckless behaviors out in the most rationale of people. A supply shock in tandem with a flood of paper money is a recipe for an inflationary spiral. If inflation gets out of hand, most of the governments of the world to include the US will face an existential crisis. A huge portion of the US debt is in short term notes, so inflation will significantly alter its ‘refinancing rates’. A spike in inflation may become an existential crisis to fiat currencies on a global basis.

My ST investment Equity Market Strategy is to maintain my SQQQ and TECS (inverse ETF) positions. The market should bounce up before falling further and setting a bottom. This is not a time to be hoping for a “V” shaped bottom. It won’t happen. If you are not currently Inverse, its prudent to wait for a move up before betting on further drops. Assume that this weekend that all the global financiers and bankers are trying to plan a market intervention intent on pushing indexes up in order to soothe fears. I expect a move higher in equities starting Monday. Due to the never ending stream of bad news / COVID-19 Panic, that may not work.

My ST Precious Metals Strategy: (not physical here- market related assets like SLV, GLD, PAAS, JNUG, NUGT). I was stopped out of all of my PM positions in last 2 trading days. Gold: Anticipate continued weakness. Silver: Expect heavy short selling. Remember that in 2008, $SILVER futures were pushed down to $8. If silver gets anywhere near that level, I am backing up the truck & going all in.

Crypto: Wait and see from the sidelines. Will do a BTC, ETH and LINK update this weekend. Crypto is a hopeful asset, in that these assets are not fully established as legit and for the average Joe to put hard earned money in this seems a gamble. Since average Joe is getting more fearful by the day- lets assume that new money will be unlikely to enter this space in the short term and what we will be seeing is mostly current participants trading in and out of fiat in a zero sum game against each other.

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20200227 Trump Presser fails to impress

The reaction to the Trump COVID-19 press conference was immediate & came before the bad news of a case in Cali where the manner of virus acquisition was unknown. The US Futures fell sharply and the Asian markets opened, down again. A decent article on the cause of continued market weakness is here: https://on.mktw.net/2VmiizX

An un- synchronized Federal response with the VP ostensibly in charge, but without a mandate and more importantly without power of the purse to fight the COVID-19 issue was not what the market wanted to hear. The VP is knee deep in re-election efforts. To lead a task force, one must be free from other competing distractions. Trumps primary thesis was we should hope this virus just passes us over. Family’s can hope. Sometimes that is all they can do but pray. Governments on a macro scale need to act, not hope.

Bottom line: COVID-19 isn’t going to kill you. It is prudent to assume a Supply Side shock is coming & way of life changes will happen. Why? Public fear and government inaction. Increase acquisition of larder, masks, gloves and non / semi perishable OTC products that will probably become in short supply if / when a panic sets in.

Investment vehicles to consider: Netflix and Amazon are a good start. They are extremely successful already and virus fears should further spur ‘stay-at- home” lifestyle choices.

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20200225 $COMPQ (Nasdaq)

The Nasdaq Composite Index closed today near session lows at 8965. While it may bump higher ST next significant support is at 8494 and then at 8069. Those would be drops of -13% and -18% from all time high. $COMPQ has already lost 9.2 % from ATH, so neither of these are a stretch.

If this was a normal correction, I would be looking for upside from current levels. The index has fallen hard and fast and usually one can expect a bounce. COVID-19 has too much of an X factor to potential news at this point that the sidelines are a decent place to sit, rather than anticipate a rapid “V” shaped turn around now.

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200224 BTC price channel

BTC in last few hours has fallen sharply on light volume. In January, Bitcoin went up and it was partly credited by pundits to the coronavirus and a demonstration that bitcoin has become digital gold. Based on the relatively low volume in recent hours, that argument remains a question mark. The drawdown will probably reverse near the established price channel.

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200223 BTC negative short term bias intact

<< This chart is a day old, but the pop over 10K in last few hours remains meaningless short of a real move over 10,190.>>

BTC chart is displaying a complex Head and Shoulders pattern that has yet to confirm by a violation of the neckline by -5%. If it does fall below that point, it may free fall even lower.

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20200219 Chainlink (LINK) shows strength in adversity.

It is very common during drawdowns for investors to miss opportunities. Especially the Hodlers. To avoid pain caused by falling account balances, they tend to ignore the market until good times roll.

Drawdowns are the time when one should actually focus more on the markets. When things go on sale- the ones with relative strength (RS) become more obvious. Those with great RS perform much better than the average ones in the next uptrend. While doing that, LINK has peaked my interest and will dig deeper . The current price action is reminiscent of ETH in the early spring of 2018.

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BTC price projection 2/10-2/16

Bitcoin is executing an orderly uptrend. In the near term there are few red flags indicating a downtrend might emerge. Also, there is no evidence that a “moonshot” or parabolic spike is in the making anytime soon. That is good news. There are an increasing number of BTC bulls that are convinced that the next spike is imminent- at least according to a scan of YouTube click-bait.

The case for it not spiking and continuing to stair-step is that this is sustainable. The longer it is sustained, the better a launch pad it is for the next spike. In the last few weeks of the 2019 rally, BTC shot up 65% from $8k to over $13k. Not a parabolic spike, but a huge move. Problem was, it started from $8k and ran out of steam. If BTC had a 65% move from its current price ($9857 (02/10/20 UTC:1700)) it would reach $16k, which is a major resistance zone. Again, it would probably run out of steam and fall. Ideally it climbs past $13k before having a large gap- up. That would likely be sustainable rally to a new ATH.

I suspect BTC will again suffer a parabolic spike, probably in the next 12 months. It will happen probably like the last time- driven by FOMO once it rises significantly above its last ATH. Be aware- based on historical pattern its likely to hit a new ATH at least 20% above previous and then trend sideways / sightly lower for 3-9 weeks while it consolidates gains.

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Fibonacci retracement analysis of BTC, LINK, ETH, EOS, TRX, LTC, XRP

Bottom Line: Chainlink (LINK) is most bullish, relative to Fibonacci Retracement. The reason is that is has moved significantly above the 61.8% level. From the perspective of this indicator- there the Jul 19 high is the next major resistance level.

Bullishness in order: Chainlink, Bitcoin, Ethereum, EOS, Tron (TRX), LiteCoin (LTC), Ripple Labs XRP (not shown).

Bitcoin moving over its 50% level is a sign of strength. The remainder are struggling at the 38.2% level. Ranked EOS ahead of TRX simply because it hasn’t lost value since hitting the level. The fact is the last four are laggards in terms of Golden Ratio ( https://preview.tinyurl.com/7vkpugr ).

Sympathy for the laggards: Since crypto price is symbiotic, particularly relative to Bitcoin price, a solid argument can be made for shifting some towards the laggards since they do tend to price appreciate later in a bullish bitcoin cycle.

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200206 GBTC Update

Greyscale Bitcoin Investment Trust (GBTC) is a U.S. exchange based trust that represents a fractional amount of Bitcoin. For details, see: https://grayscale.co/bitcoin-trust/

GBTC has many downsides to just outright owning Bitcoin, but it has convenience and also can be placed in retirement accounts. GBTC is a derivative investment- so charting it has risks not inherent to the underlying. Because GBTC trades at a premium (that shifts constantly) to the price of bitcoin, it is a great indicator of the opinions of stock market investors.

200319 Position Update

PositionTargetCurrent Stop LossComment
Cash$1.00$1.00NAAll retirement plan accounts
TECS- 3x short Tech   3/19 Sold. Tech is stabilizing.
EDZ- 3x Short Emerging Markets$90.00$50.74$35.90Emerging markets are in more jeopardy than US is at this point. 3/19 added to position
SQQQ- Ultrashort QQQ$45.00$25.20$17.903/19- holding
FNGD- Inverse Fang$15.00$8.90$7.50Sold 3/18 for profit. Expect AMZN and NFLX to diverge and move higher
YANG- 3x short China$95.00$50.64$38.90Sold 3/18 for profit
Carnival Cruise Line Put $8.00$6.40$3.50SOLD 3/13  Percentage wise, its run itself down to diminishing return. Redeploying cash during todays Bull Trap
Carnival Cruise Line Put $20.00$11.50$6.50SOLD 3/13 Percentage wise, its run itself down to diminishing return. Redeploying cash during todays Bull Trap
SW Air Put$24.00$8.50$6.24SOLD 3/13: US Govt says its preparing to intervene financially
Disney Puts$28.00$14.10$10.50Sold 3/18 for profit
Microsoft Puts   Sold 3/19 for 22% profit. 
Visa Puts   Sold 3/19 for 87% profit
Cracker Barrel Puts$24.00$15.40$12.00Jun 19 $90  Bought 3/13 Fast casual food on primary travel routes.  This rallied on 3/19 and missed chance to buy more. Cracker Barrel is in trouble. Looking to add to position
Apple Puts$22.00$12.85$11.25Sold 3/18 for profit

200319 Buy Netflix (NFLX)

Will spare you the chart. Fundamentally, the EU is asking Netflix to slow its streaming lest it drop the entire internet architecture to its knees. NFLX has to be scoring huge customer adds in many countries.