200510 BTC Crash!

The recent run up in front of the “Halvening” has been notable. That said, I am not a big believer in these events. Bitcoin has inherent value. There are cheerleaders that over emphasize this. There are Eeyore’s that want to ignore the obvious. My take? Anyone that doesn’t own one half or more of a Bitcoin is making a major mistake! Stop looking at the news and the charts! Live life! Do your thing. Let BTC do its thing. Look at it in 2022. Don’t sell unless you are desperate and need some Fiat.

200430 Way ahead

No charts or quips today. IF there was ever a time to be glad you are not a Mayor or a Governor of a US city or State- today is the day. Imagine for a moment we are just that. Since our Egos are large- lets be Governors. Choose your State!

First, we fellow Govs are facing a healthcare crisis of rather epic proportion. We have some decision making authority- but we all know that our Constituents have no savings. So, while closing everything makes sense- the fact is that our citizens cannot afford that. They have rent, car, tax, grocery, healthcare, cell phone, cable, gas, electric and a myriad of other bills to pay. As Governors, we cannot afford that either- since we never planned on paying unemployment benefits to 20% of our population in 2020.

Remember so very long ago (3 months) when the economy was rolling, tax receipts were excellent and it was the best economy, ever! Today, we know that the US Federal Government has no plan to help & wants to pin all the blame on our rosy expectations for tax receipts on us. Well, wasn’t our models for tax receipt based on USG projection? How/ when did we become the stupid ones? To pay what we owe- we now need to fire our State Police, teachers and other first responders. Oh, bills versus public safety- that’s not a choice anyone should have to make!

What to do? The absolute truth is we all want to keep each and every one of our Registered Voters and their kids safe and sound. Not just for the cynical reason that they are Registered Voters. But, that’s a part of the equation. Keeping the State economy shut down is (for lack of USG support) becoming untenable. The State has interest on Bonds to pay. Salarys to pay. And, landlords & mortgage companies have to get paid. Landlords must get paid simply so they can pay the banks that hold the liens on the property.

If you are a renter, be thankful! You can walk away from this mess and buy an RV or a tiny home!

There is no person more delusional (IMO) than a person with a mortgage who calls him/ herself a “homeowner”. A homeowner with a mortgage owns absolutely nothing. Zilch. They own a dream. The bank owns the home. They are nothing but a glorified renter with far more net worth… skin-in-the-game …than a renter. No one can wave a wand and wish away the pandemic. And more to the point of the post- no one can wave away the feeding of the credit (Ie, Loan / debit machine) that underpins modern monetary constructs.

The machine will hunt down and evict / foreclose on those that cannot pay the bills. Far too many “Homeowners” are about to find themselves homeless than I am willing to admit to myself. What is coming for them is awful. It is not safe to be a State or municipality, either. Bankrupcy is hunting you- relentlessly. Particularly in the Red States where the majority of taxes that fund those governments are from Property and not Sales tax. Yes, I know publicly many Republican State leaders are laughing at the fix that New York and NJ are in- but if we could waterboard them, they would admit the truth that they know the axe is about to fall on them.

Since we now know, as Governors, that the Federal Government is going to 1) Not help in the COVID fight and 2) let our States go bankrupt- we need income & Sales taxes! We are clearly all alone in the fight… so all of us Govs MUST now concede and send people back to work- many in unsafe conditions. We can pin hope on scientists and pharmaceutical companies that they will develop a miracle cure soon. Hope. It was beaten into me in Ranger School that hope is never a planning factor. That said- I hope they pull it off.

Ok- down to basic “Squad Level Tactics.” What should you do to protect you and yours?

  1. If forced back to work- demand safety.
  2. Make hard choices. Sell stuff. Get out of debt. For the love of God- do it- now! If you do nothing else! Get out of debt and do NOT invest in debt instruments, or REITs, real estate or crazy high PE companies like Tesla. Debit is a trap that is about to shut. If you own Real Estate, seriously consider deleveraging!
  3. Start a garden. Raise veggies. Its not just a huge $$ saver- its fun for you and the kids!
  4. Observe Denial. You will see it in friends and family who believe this Pandemic is not a game changer. They will truly and honestly believe their idea of “normal” will return. Bet on it, not returning. Not due to COVID directly. It won’t return because the credit markets are going to collapse under the weight of bad loans and nothing in the future will resemble the old normal.
  5. Do not fall into old bad habits. Save every penny. IF the only thing you learned by sitting at home for a month was that 20% of your spending was wasteful- you have learned a life lesson that you shouldn’t soon forget!
  6. Get a tiny bit of Bitcoin and maybe some Alt Coin ( ETH, LINK). Whatever suits your budget, your risk tolerance. There are a lot of downsides to Crypto- but at least most of them are free of inflation risk. The US Govt is printing money right now like crazy men. Simple law- supply and demand. The US Dollar is becoming, every day, more worthless. Soon STUFF will be currency.
  7. Sell dumb stuff you own to people that still think that times are soon returning to normal. All the crap you got lying around. NOT stuff you might really need. Just the ancillary things. Your heart will tell you what is needed and what is expendable
  8. Buy some silver coins. Silver is insanely cheap right now. Go to a local coin dealer and do not believe the fraudsters on TV. There are some legit internet dealers but a local guy is a resource to cultivate. At about $15.50 an OZ, you should be able to get some silver dollars at about $21 per coin.
  9. Demand on silver coins is high & it is pushing the premium (Delta between Physical silver and retail coin price higher- go with god! Remember that modern silver US dollars are 99% silver. The older stuff before the 1970s was ~75% silver. Thats because they actually were in circulation and needed to be harder. I am NOT a coin guy- so before you go off half cocked- do your own Due Dill.
  10. When Jewelry stores open in your area- buy 18K gold chain and high quality silver chain. If they are strapped for cash, the premium mentioned in #9 will be much less.
  11. ANTICIPATE an October resurgence of COVID. It will be the stake in the heart of the credit market. The 2008 crash began in March. We limped along until September. Most folks remember Sept 08. They ignored March 08. That was the warning shot. Do you remember March/ April 2020? What more of a warning shot across your bow do you need, dumbass!
  12. Every action you take, every penny you spend should be done with forethought. What is best for you? Your family? Plan, plan, plan.
  13. POST LOCKDOWN PARTY: Let all your friends and family get as stupid as they want in the coming weeks. We are either approaching Half Time or the First Period Break.
  14. Pandemics generally resemble NFL Football (2 halves w/ a halftime) or, like the Black Death… Hockey That is 3 ‘game on’ periods and two breaks. We are either at Half Time, or end of the 1st Period.
  15. If there was ever a time TO GET STUPID (forgive the Caps) this is not it! Let others do stupid. This is the time to find stuff on the shelves ( Flour, yeast, TP) that were in short supply, and may be again. Did you learn that there are times in life where stuff, and not cash, was king??
  16. Time to buy a freezer and fill it with protein. The more people party- the more opportunity exists for you to plot and plan your way ahead! When the party is over they will swap really, really, good stuff for a pound of hamburger. Read stories of the Great Depression. Men sold cars worth $1000 for a weeks worth of meat and potatoes to feed their families. A thousand back then is over 100K now. The citizens of the US have 80 years of proof they can waste anything and everything without consequence. That “proof” is about to be proven false.
  17. Buy Mason Jars and food storage systems. Buy as many as you can afford. More than you need. It will be the TP of 2021. Mason Jars are cheap now. They will be gold as families across the nation take all they have learned from the last 6 weeks of social distancing and decide to declare their own food storage independence. For 2 generations, food storage was a power held by grocery stores. Their is a shift in that cycle of dependency coming. In fact, there is no reason why anyone with access to a 10th of an acre of land ever had to be or ever should be dependent on a grocery store. See #3. See YouTube. You can do this! It will taste better and be far more fun!

Don’t waste halftime by going to the beer stand like a fan. You are not some old fat fan! You are a Player! This is your life. You pretended pre-COVID you were a fan of some game. In Post COVID world, you are either a Player or a Victim. There are no ‘fans’ of COVID-19. Take that from a guy who lost some dear friends in the past month.

Use this coming half time to make adjustments against the opponent you face. Be your own Governor. Or, choose to lose. Your choice. Either way, my best to you!

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.

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.

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.

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.

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.

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.

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.

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.

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.