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I honestly have zilch and zip to say about stocks right now. Wednesday was a nothing day, and the laughable news that the U.S. is going to give China until 2025 to comply with any kind of trade “deal” is apparently a non-event (the ES and NQ are actually both slightly up as I am typing this). So let me just say a word or two about a couple of crypto charts, since those are in the news.
Bitcoin Cash has been on a crazy tear, but I’d like to point out the descending trendline. It might wind up in two or three weeks for another run to smash through it, but at the moment it seems plausible to me BCH will have some sellers taking profits at these levels.
It looks like the crypto-crowd saw what equities did yesterday and decided to join the party. More precisely, about three weeks ago I pointed out that Bitcoin has seemed to stabilize and was in the process of completely an exceptionally clean saucer pattern. Having bottomed at about $3100, it kept slowly creeping higher, but it seemed to stall just about $4000. The buying pressure was finally released, and BTC has ripped almost 20% higher.
We haven’t looked at cryptos in a while. My general point is a simple one: they seem to have found (or “discovered”, as the economists would say) their price. Funny how that works, when a government isn’t trying to manipulate prices.
But the fact is that the entire crypto experiment seems to have sort of wheezed and gasped to a natural price point. Just look at these formerly dynamic charts and how they’ve all snoozed their way to a steady price point.
I’ve never been shy about bad-mouthing the entire crypto-space, but as a chartist, I’ve got to say that it looks like a rally is getting ready. To be clear, I think the days of $20,000 bitcoin will never been see again – – not even close – – but in the weeks ahead, I think the HODL crowd will get some renewed hope.
I don’t mention cryptos here much, but I saw a headline that LiteCoin was up 30%. There’s an entire subculture of crypto journalism, and I am certain without even looking that there’s a whole raft of “Crypto is BACK!” articles being cranked out at this very moment. My view is that this is a “one and done” kind of move. I continue to be impressed at how chart-compliant cryptos are, and the red horizontal and blue descending trendline should, I think, cap prices right about here.
This is a tale of how greed and lack of risk management can blow up in a big way. Brace yourselves.
Allow me to introduce you to one Matt Todorovski, a resident of Australia who wanted to become a trillionaire – – yes, a trillionaire – – by sitting in front of his computer trading the FOREX markets.
Now there is absolutely nothing wrong with being ambitious, setting goals, and trying to beat the markets. Millions of people around the world do it, and the vast majority of them fail. It’s a tough business. That’s why the handful of winners make so much money. Because almost everyone else loses.