0.0 MARKET OUTLOOK:
TS: 3:10pm pst (will update as time permits)
Holiday related concerns are history.
Crypto Market has dipped again, wee wee hour fire sales back. Market stable, but volatility increasing.
Am I surprised? No. We got some black swan FED speak out of Skynet Central, and that has been preflagged in these Outlooks for quite a while. It happened. It can happen again. So episodic non trending volatility occurs, and my guess is it will dissipate quickly as it most often does. Rinse and Repeat. That FED speak is narrative (buy the rumor)....we'll see if it ends up getting delivered (sell the news).
Looking for slow grind up trend (not to be confused with "day"), from here. Reason: relative bargains abound with huge cash hordes on sidelines seeking a place to go, (FOMO is almost as strong as gravity).
Interest rates headed up, going to kill a market that runs crazy gains like Crypto?
Um: NO.
Do the math! What does single digit interest have to do with potential triple digit gains? (Very little.)
They laughed at Saylor when he borrowed $ at 6.5% interest in Q1 2021 to buy more bitcoin. Had he sold at any 2021 ATH (3 total), he would have killed that! And yet they laugh-and yet he buys more on the dips.
6.5% meant nothing, and FED interest is going nowhere near there!
How do the geniuses that posit such nonsensical narrative, pencil that one out different? (You got me!)
Can higher interest rates hurt the performance of something like the S&P that might on average rise <15%/year? Yes! Why? Look at how closely related the numbers are: single digit interest rates are a very material portion of a very low double digit average gain. But THAT meager gain is not the environ of the cryptoverse, where ~9%/yr is available on stable coin irregardless.
The play today is the same: short scalp longs near supports, dump them at resistances, and short the wild extension breakout ducks-cover as they test old resistance/new support. Rinse and repeat.
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 the sidelines seeking a place to go to work.
The 8000lb Gorilla Event In The Room (the Fed Speaky), is O-V-E-R.....markets are still adjusting!
Broader Markets slammed to running sideways-relevant correlations all absent, (\see chart at item 5.1)*
VIX Still Semi Sideways With Some Chop, still nothing scary in view*
VIX of VIX doing ditto, nothing scary in view (*but as noted that will change this week, and indeed has)
Wee Wee Hour Fire Sales Back But Reasonable In Range-for now (=markets stable)
Seasonality (January Pattern for General Purchasing is in tact)-see chart in item 5.9.
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 Now Sideways (=slight market up signal, see item 5.2 chart)
2.0 MARKET DOWN FACTORS:
FED Taper said to be more aggressive than thought & interest rates to rise ( a "surprise black swan")
Hedge Funds Are Heavy Short, Institutionals Turning Down (=market down/nervous, see item 5.2 chart)
Covid Fear Based Volatility Potential = High, and now increasing (yields 'risk off' anti FOMO sentiment)
Broader Market Sentiment Trend is 'risk off', see cutesy chart at item 5.3, and this piece: https://www.reddit.com/r/DorothysDirtyDitch/comments/rk719b/the_80000_lb_gorilla_ever_in_any_market_room/
3.0 MY SCALP TRADE POSITIONING: (unchanged-and working very well)
Long Bias.
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 choppy market not likely to run far here)
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**, ONE, SOL, UNI, ===>(all long)
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
5.1 Broader Market Correlations
Little Change, Little Correlation
5.2 Fast $ vs Slow $ Positioning
5.3 The "Are We Having Fun"-O-Meter
Big Change In Fear Here! (lions and tigers and bears-oh my)
Everything just got way scarier-like Freddie Kruger is now renting our basement room......
5.4 Volume
Dip buyers no longer snoozing this market "correction"......
5.5 Largest Cap Trend:
No Change: Full Bear "Trends" Remain
5.6 BTC Futures Hopium Falling:
5.7 Volatility:
Increasing Mildly-IVOL Trend Reversal!
Volatility Up = Prices Down......that is a solid correlation.
5.8 Liquidations:
The Liquidation Cash Generator is huge! Next time one posits prices are falling due to "fundamentals" (pure rubbish), one might reflect on who owns the exchanges, and how those owners make $. See:
https://www.reddit.com/r/DorothysDirtyDitch/comments/rumrjt/crypto_exchange_practices_getting/
5.9 Cash Inflow Seasonality
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