0.0 MARKET OUTLOOK:
TS: 2:30pm pst
Didn't update the last few days as little had changed. Pretty quiet market as is typical this time of year.
Choppy risk on sentiment apparent in broader markets post Christmas-volume is middling so strong conviction is absent.
My liquidation call was dead on (again), this is a cut and paste:
- Nearly 80% of long positions were liquidated over 24 hours after spot market drop >> coindesk
Got Long Be-Gone? This Ditch Warned About That Consistently!
Take a look at LUNA, the story is all right there-that is why I have been duck hunting it....as everyone thinks I am a contrarian lunatic and missed the memo! :)
I am still wary, but see a slow grind up from here. Same reason: bargains galore with huge cash hordes on sidelines seeking a place to go....and FOMO is almost as strong a "thing" as gravity.
Ms. Market may have bottomed here===>largest caps back up to bullish trend (see chart at item 5.5 below), and wee wee hour fire sales have ended. We'll see, but the case for this is strengthening, not weakening. I am wary of whale toilet flushing before strong swims, and will be until January 2 is here.
1.0 MARKET UP FACTORS:
Bubble "Gone" (stuff is on relative sale-so 'price up!' probability is de facto higher)
Huge amount of cash on sidelines seeking a "go to"-and crypto has gained a "go-to" badge in 2021.
The 8000lb Gorilla Event In The Room (the Fed Speaky), is O-V-E-R.....markets are still adjusting.
Broader Markets Stable To Up-relevant correlations (SPX & VIX) increasing (\see chart at item 5.1)*
VIX Bottomed Out, absolutely nothing scary in view
VIX of VIX-ditto, absolutely nothing scary in view
Wee Wee Hour Fire Sales Gone (=market stabilized)
Seasonality (markets usually grind up on avg into year end-so far this pattern has not shown here)
Delayed Seasonality point to post Christmas snap higher (think of it as a tightly coiled spring)
DOW THEORY Signal 100% Positive (general 'risk on' orientation ok)-but w/secondary reaction warning
Covid Fears Stable-Lockdown Damage Potential Stable (low political will here in the world landscape)
Hedge Fund Positioning Trend Reversal Just Emerging (=slight market up signal, see item 5.2 chart)
The Fun-O-Meter (see item 5.3 below), is moving back to Hopium.
2.0 MARKET DOWN FACTORS:
1hr Trends In Many Staple Industrial Coins Remain Negative (this is the tide-respect the tide!)
Media Hype Darling LUNA just got its ATH hair cut about 20%-what goes around may come around!
FED Taper to be more aggressive than thought & interest rates to rise (this is a "surprise black swan")
Tax Loss Selling Wary (section 475 trader big money=market down and nervous)
Hedge Funds Are Heavy Short (=market down/nervous, see item 5.2 chart)
Holidays Reduce Liquidity (aids market manipulation by pumper/dumpers & whales, BS Liqs, etc)
Covid Fear Based Volatility Potential = High, and now increasing (yields 'risk off' anti FOMO sentiment)
Broader Market Sentiment recently very 'risk off' per this piece: https://www.reddit.com/r/DorothysDirtyDitch/comments/rk719b/the_80000_lb_gorilla_ever_in_any_market_room/
Santa Rally narrative faded. Negative "surprises" have stacked up....sleeper rally may kick in 12/26-12/31, but looks as though the FED "surprise" has knocked the Santa Sentiment right out of the room here. That is a fairly rare event in broader markets.
This and that:
- Ethereum whales dumping ETH as price slides below $4K >> cointelegraph
3.0 MY SCALP TRADE POSITIONING: (unchanged-and working very well)
Long Bias, few to no reversal shorts on long exits.
Shorts; "duck hunt"* shorts sought actively, (*ie: "over priced" shorts on wild pumper action).
No Meme Coin Longs (hopium has flagged and may stay weak/risk off in this sector)
Small Range/Shorter Parry Advisable (tight market not likely to run far here, more drop pops in cards)
4.0 TARGETS I PREFER: (unchanged & working well-may need to switch out some horses in 2022)
4.1) Solid Industrial FAAMNG type value stuff that has not run way up recently, (or if it has, dips huge\*);*
ADA, ALGO, AVAX**, ATOM, BNB, DOT, FIL, LUNA**, SOL, UNI===>(all long, shorts ok on range bounds)
4.2) Solid project small cap stuff that has been beaten down;
AKT, AUDIO, DVPN, CAKE, KCS, CELO**, CTK, FTM, HBAR, SRM, VGX, ===>(all long)
4.3) META & Exchange Buzz small cap stuff with some cap mojo that is being FOMO bid and "influenced";
CRO, MANA, SAND....(long & short, TA signal dependent)
4.4) Duck Hunts (short targets)
AAVE, AVAX, CELO, LUNA, YFI
5.0 RANDOM CHARTS OF INTEREST TO NOTE
None of this stuff is a reason to do anything on its own, its value is in synergism with other signals.
The Price Chart is ALWAYS Queen of the trade realm.
5.1 Broader Market Correlations
Abra Cadabra-Strongest Correlations We've Had In A While!
5.2 Fast $ vs Slow $ Positioning
Minor Change-Extreme Disagreement Continues
5.3 The "Are We Having Fun"-O-Meter
Ho Ho Hopium Is Moving Back Into The Cryptoverse
Takeaway: fear is abating from last week's gloom in bunches. But do note this:
- More than half of Bitcoin's current investors got in over the last 12 months >> bloomberg
- IE: Lotta newbs out for trick or treats! Take this crap with many new vintage grains......
5.4 Volume
Big Surge In Volume-Dip Buyers At The Trough Here!
Volume way up-dip buyers are shouting risk on! See the Fun-O-Meter for correlation.....
5.5 Largest Cap Trend
Trends Move Bear to Bull In No time....uh huh!
Trends Continue To YoYo Change Each Day? (um, no....see the note***)
***If you follow these posts you know that the Trends (Bullish-Neutral-Bearish), have been flipping about all of a sudden. Why? Can a "Trend" change 180 degrees in a day? No. It can be challenged, it can diverge, it can do nothing....but Trend doesn't flip about like a dying fish. See extensive notes here:
https://www.reddit.com/r/DorothysDirtyDitch/comments/rjhsru/12182021_market_update/
5.6 Things That HODLrs Need To Understand
Welcome To BTC-No Reliable Store Of Value Here!
Now THAT is on tradeable asset! I see two great easily predicted buy/sells there.
HODLR 2021: ~$30k max gain.
TRADER 2021: >$150k max gain. Five times the potential. Why is this so hard to explain to people?
https://www.reddit.com/r/DorothysDirtyDitch/comments/rql8dr/technical_analysis_works_247365/
Read some of the ignorant commentary....oh my! I guess verifiable data just doesn't matter to the reddit masses.....narrative remains king.
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