Daily Archives: December 19, 2013

The Bitcoin Crash

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When I finished writing my history book (which is coming out in February), I had a much deeper perspective on some of the great manias in financial history. In the modern age, Bitcoin has provided us a new South Seas, Dutch Tulip, and John Law all wrapped into one, and I’ve been stunned at the doe-eyed innocence that the press has given the “currency.” Its recent loss of about 55% of its value in the span of a few weeks is no huge surprise. My guess is that, within a year, this will be $100 or so once more. People. Never. Learn. (more…)

A Close Look at Utilities

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As boring as the Dow Jones Utility Average might sound, it’s actually a fascinating little beast. It provided the most gorgeous topping pattern imaginable back in 2007-2008, and it behaves itself quite well with respect to its trendlines and Fibonaccis. Observe the chart below and take note of the Fibonacci fan lines, which date back for many years. This particular line has acted like a magnet for the entire recovery, and recently it has been banging against it, respecting it as support each time. (more…)

The Santa Rally Begins

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I was saying yesterday morning that coming into Fed day just under clear pattern resistance augured badly for bears, and so it turned out. After a test break above SPX falling channel resistance SPX pulled back, made a new RTH low immediately after the Fed announced tapering to start in January, and then broke up for a massive short covering rally as people realized at last that cutting bond purchases from $85bn to $75bn per month wasn’t really much of a change after all. The move from the post Fed low into the high just before the close was an impressive 45 handles as a lot of traders were forced to eat their shorts. (more…)