Financial topics

[Higgenbotham]

I might short into any rally in the next 2 days. 4200 and 3500 seem to me to be the important numbers the past 2 months. I'm not too interested in any levels besides those and their fibs. I'd be really surprised if the market could get over 4200 the rest of this year but wouldn't be surprised to see something over 4000. 3767 is the 38.2% retrace of the trip from 4200 to 3500. After hitting 3500, the market tried to overcome 3767, came close, and failed. I sold some up there yesterday (as posted) and was lucky enough to get out with a profit. The odds the second time up usually aren't as good but the clock is ticking on expiration week.

I'm shorting this morning. Have done some and won't be doing hardly any more today if the market goes higher. I would rather not see the market come any closer to 3767 than it already has this morning. If it does, I will stay with the position I have but get prepared for a move over 3767.

This S&P has dropped about 35 points and I covered shorts with the S&P up about 2. The market may make another attempt on this morning's high before expiration week is over.

I'm starting to short again. If the market drops next week, I will probably try to get more out of it and perhaps even be able to hold on through a crash.

[Phong Tran]

Max pain for options expiry was at 375 for SPX. I didn't think they'd be able to pull it off, but just goes to show how manipulated the markets really are, they just slammed the dollar down to get the squeeze they needed. Still trying to figure out the elliott wave count, but the action doesn't really feel bullish, not even enough for a bear market rally, guess we'll see.

[Higgenbotham]

Max pain for options expiry was at 375 for SPX. I didn't think they'd be able to pull it off, but just goes to show how manipulated the markets really are, they just slammed the dollar down to get the squeeze they needed. Still trying to figure out the elliott wave count, but the action doesn't really feel bullish, not even enough for a bear market rally, guess we'll see.

They pulled it off better than I thought they could, and timed it in such a way that it was deceptive on top of it. I'm short from average 3746 with about 1/4 the position I put on at 4100 awhile back. My feeling is they can drive it higher.

The best short term traders I follow are all long whereas the best intermediate term traders I follow are all VERY bearish, but not indicating they are short yet. My plan is to scale in slowly if the market continues to rise with the idea it won't get over 4200 but could get close to that. If the market turns down I may add with a stop at whatever the high is. My preliminary plan would be to try to ride it down to somewhere around 2800.

I think the action in interest rates today might be good for a bounce in the market but indicates trouble ahead sooner rather than later.

I can't read this but the headline is interesting: ""The Treasury Market Is One Shock Away From Breaking": Fed Market Guru Has A Final Warning For Powell" https://www.zerohedge.com/markets/treas ... ing-powell

[richard5za]

Max pain for options expiry was at 375 for SPX. I didn't think they'd be able to pull it off, but just goes to show how manipulated the markets really are, they just slammed the dollar down to get the squeeze they needed. Still trying to figure out the elliott wave count, but the action doesn't really feel bullish, not even enough for a bear market rally, guess we'll see.

I don't have a clear view of where this market is going in short to medium term; I simply play the short term price action. I made good money on Thursday in about 20 minutes and have been out since then. I agree with Higg that I will be surprised if S&P500 closes above 4200 but could easily tagg 3200 (Higg's call was 3500)

Longer term I am seeing 1300 as easily possible (PE = 8; Earnings = $160) Just have a look at the last 100 yeats of stock market history

I have lost interest in the longer term investments until the PE is below 10. Mm money is in cash. Once PE below 10 you can start bargain hunting.

[richard5za]

If you agree with this it is confusing to me why you have been so anti-BTC for the time we've been on the board. It is already a major help and safety for most other citizens in inflation economies (all way worse than the US), and as confidence in everything continues to plummet, you have it as the best use case by far.

If Vince and I agree, and we've explained what's going on, why would others look into what we say more, if not trust us? It's a rather strange phenomenon similar to what I've posted on other threads in the forum.
[/quote]
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The discussion was mostly about whether BTC was in a bubble and due for a serious correction, which is what happened. One of your responses was that you were using an averaging system and that this didn't matter to you. Some, including me, expressed doubtful prospects about BTC long term

This forum is not about agreeing with each other but sharing views that can be explored and perhaps adapted into one's own thinking. Also opinions expressed are as of the time of writing and perhaps not applicable at a later date

So the next question is the future of BTC? Well, in my view there are some negatives to consider:

History shows us that investments that have a severe correction usually take a long time to recover, if at all, and maybe it goes down further? Take gold for instance dropped from circa $800 in 1980 to a bit below $ 300 some 20 years later. Since then gold has been increasing consistently. But gold has a 5000 year history of trust and is held by reserve banks globally. Bitcoin does not have this.

Secondly BTC will become regulated! For security, criminal, terrorist and tax reasons the democratic world wants this. This takes away a portion of the appeal

Thirdly over time technology will update and maybe that leaves BTC out in the cold? BTC might have a 50% share of crypto now, but what will its market share be in 10 years time? And will something else replace crypto

Fourthly, and this applies to all investments, its always a bad idea to get married to them. e.g. you buy say XYZ believing that this is your retirement ticket, and then it goes down. Many people then irrationally believe it will still make them a lot of money and it usuallly doesn't work that way. I know a person who at reirement in 2003 turned $ 3 million into $ 340 million by 2008 on the uptrend and using highly geared cfd's and some very intelligent investing. He then lost the whole lot through refusing to sell - couldn't psychologically handle selling and realising say $ 200 million instead of the 340

So these are some points to consider

[richard5za]

Looks like a double bottom has formed on gold and is now rising, albeit early days? Perhaps the technical guys (Phong and Higg) could have a look and see if this is actually a double bottom? Roughly a month apart and coinciding with the option expiry
If gold is forming a double bottom and this results in a trend change, what else is going to change? Dollar index?

[Higgenbotham]

We've all seen Exter's Pyramid. What's really at the base of the pyramid, though, is surpluses. Not surpluses that last a long time, but surpluses like grains, cattle, and oil which decay with time, must be sold within a narrow time window, or cost a lot to store. Those are what give base money its reason to exist and determine how much base money needs to exist. As surpluses go, so goes base money and everything derived from it above the bottom of the pyramid. Disappearing surpluses mean disappearing base money and asset values except for gold and silver, which go into hibernation. Surpluses are in the process of disappearing and prospects for the future don't look good, even this Winter. Winter is coming.


Exter's Pyramid

[Cool Breeze]

We've all seen Exter's Pyramid. What's really at the base of the pyramid, though, is surpluses. Not surpluses that last a long time, but surpluses like grains, cattle, and oil which decay with time, must be sold within a narrow time window, or cost a lot to store. Those are what give base money its reason to exist and determine how much base money needs to exist. As surpluses go, so goes base money and everything derived from it above the bottom of the pyramid. Disappearing surpluses mean disappearing base money and asset values except for gold and silver, which go into hibernation. Surpluses are in the process of disappearing and prospects for the future don't look good, even this Winter. Winter is coming.


Exter's Pyramid

Good reminder. Thanks for the post. Of course, I believe BTC is an improved gold (obvious as to why, I've stated it many times) but doesn't have the legacy, as it is in its nascent stage. This is even more relevant in the digital age/CBDC age.

Richard, your points are a good reminder too. I'm not married to anything, but again, many of the reasons you guys apply to BTC being a bubble are just flat out wrong - it's volatile. If it were a bubble it wouldn't be as high as it is right now, nor would it hold status as the best investment over its short history. Now we see people changing the idea of bubble, which is you in this case. We heard about all the other bubbles, and they didn't last as long as BTC already has, and now bonds are even more volatile than BTC, which is amusing. BTC doesn't take a long time to recover, though it could this time - but there is no reason to believe it. It has gone up and down like this many times before, another point I've made that others conveniently disregard.

Technology changing or updating is the best of your criticisms or reasons to be wary. While it is possible, I see no change in its big boy status for at least 3-5 years, and likely to the end of the decade.

[Higgenbotham]

I met a local organic farmer 5 years ago who said he would like to be paid in silver. I simply asked him how he wanted to be paid without offering suggestions.

When there are surpluses anybody can go to the producers and pay them in the standard fiat and they will take it. Nobody thinks much about it. When I asked the question above it was in recognition of the fact that in a world where 100 people may be lined up to buy enough beef for 7 people, the producer is in charge, may not want to take the standard fiat, and doesn't have to. This brings to mind 2 things aeden has said in the past. One is he buys food locally even if it costs more than the cheap stuff they are bringing in from Australia. The second is about being "over the target". Vince has been over the target lately when he talks about what the producers will take in exchange for their oil or what have you. In a potential coming world of scarcity, I believe the producers will ultimately decide. Whatever they do decide is what the buyer will have to find and deliver. If they want silver, it will be up the buyer to deliver it. Whatever they want and it doesn't have to be some form of money. I make it a practice to ask local producers how like they would like to be paid and deliver their preference right now.

[Phong Tran]

Looks like a double bottom has formed on gold and is now rising, albeit early days? Perhaps the technical guys (Phong and Higg) could have a look and see if this is actually a double bottom? Roughly a month apart and coinciding with the option expiry
If gold is forming a double bottom and this results in a trend change, what else is going to change? Dollar index?

Everything depends on the dollar at the moment. It would need to break below its 50 dma and sustain under it for a bit before Gold will rally. Gold has not decoupled from the dollar index sufficiently enough for it to be worth it for many people except for the die hard gold bugs. That will change once people realize that the central bank currency exchange fiasco has just started and there is no clear solution to the whole thing. When the general public starts to realize that it's not a matter of the dow jones at 15000 or 60000 and that it's all just a currency shell game, then Gold (and maybe Bitcoin) will become a separate store of value once again.