Is Bitcoin a Good Investment? • Pros & Cons in 2020 • Benzinga
Is Bitcoin a Good Investment? • Pros & Cons in 2020 • Benzinga
Should You Buy Bitcoin Right Now? | The Motley Fool
Buying Bitcoin? Here are the investment risks you should
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Tap Tap Trillionaire by PIXIO
Welcome to /taptaptrillionaire ! This is the Official Subreddit for the mobile game Tap Tap Trillionaire by PIXIO. Please be nice to each other and keep tapping! You can also download the game here: iOS: https://itunes.apple.com/us/app/tap-tap-trillionaire/id1090276143?mt=8 Android: https://play.google.com/store/apps/details?id=com.pixio.google.ttb
MoneyWeek - Why I’m buying bitcoins..."you should treat bitcoin as a cheap growth stock. At $450, the “network value” of bitcoin is around $7bn. If it goes mainstream, it’ll give the FANGs (Facebook, Amazon, Netflix and Google) a run for their money."
Weve been brainwashed for 70 years to be "American" now we face the end and it seems like the good majority is only rubbing the sleep from their eyes. The current state of the world is horrible, I don't see this just "passing" over.
Our families and friends have been being brainwashed in America for almost 70 years now. This collapse of this country has been happening for generations. It started with the police force in the sixties, and then the dumbing down of our education, demoralizing our views with the ads on TV to be consumed by sex, drugs, and consumerism. Our Healthcare system is flawed, and our justice system is absolutely flawed. The banks are literally playing The game of monopoly with the government, they can't seem to print money fast enough to buy out corporations. They must make the stock market pretty to obtain the machismo stigma of "great america". The dollar bill is also nearly as useless as the amount of inflation occurring, yet we steadily keep pushing these paper ious around. Wait until staple items like bread and milk are nearly impossible to affordin five years if we are lucky. If you believe this is fake news, then America has successfully brainwashed you into to believing that way of living is correct. America is one of the planets biggest enemies (in my eyes) and I pray that our civilization wakes up soon. To be honest it appears we are far too late. I believe that if the worst case scenario happens, (and at these times it seems there are several realistic downfalls) then almost all Americans will be in shock coming to the realization to late that they too have been a pawn and a slave in a broken system for too long. Statistically, Americans are the least happiest they have ever been in this country. The world is watching our government scam and create fraud. The world is feeling the impact of the inflation of the dollar as their own economic systems cannot handle the current level of inflation. Currently, there is so much USD floating around outside of America that it is even beyond belief it still holds any value at all. We are talking since 1971, when Nixon ended the Bretton Woods agreement to take the USD off of the gold standard which helped the FEDs and banks play monopoly and flood the world. They've backed this fraud with immense amounts of military technology and power to imply the thuggish effect of American government. America is home of a scamming government that loves flaunting its big guns and ego to the world. They do this to hold the value of their monopoly. As the world opens their eyes to the bullshit of America, the USD will undoubtedly collapse. Items such as bitcoin, precious metals, and bartering will become of greater value than the USD. This has got to stop, we the people need to become more aware. It is disgusting the amount of ignorance in this country. 99% have been lied to by the 1% of the wealthy and that is our real enemy here. If we remove the blinders from our eyes, and the bananas from our ears it would become easier to be present in the life around you, because life exists outside of America, and it is greater than America. We are not grandiose, we are not better than or more entitled to anything more than any other living life. I am not proud to be an American today because the government has made it an ignorant country to be easily manipulated for them to destroy the world. We will always be chasing the lifestyle they live because it has been advertised to us as a kid, and the game is rigged in their favor. The government wants you here to collect your tax and use you for your slave labor. If you don't work you lose life, but if you work 60+ hours a week in a sweatshop or crammed in an office cubicle trying to struggle to survive, my question is, is your life of value at this point? We will always be the hamster on a wheel as society if we don't stand up and revolt. Our voice is heavier than any constitutional "right" weve been granted. Im not trying to promote anything more than awareness to fellow peers who feel closely to me with the current state of the world. It is our duty to perform civic duties, and if that includes providing information to those suffering from the propaganda, than we should. There is also the possibility that I am 100% paranoid and a controversial minded person, but truthfully the proof is in the pudding and I really feel several of us are starting to realize...we need to do more for each other. The government is on their own team, we need to be on our team. If the country is divided then we should form our loyalties with whom we love and trust. This life is yours, dont let it go because you were lied to and misinformed. Make your life better, it just takes a little effort and will power. The great American govt cannot take away our soul, or our will, but they can and will keep encouraging us to live lives with little moral value, little real world educational knowledge, and instead continue to be encouraged in consumerism and sheep like living.
Someone posted on here a few days ago asking about forex and forex trading in Kenya, I have gone through the responses and clearly, most people don’t have an idea. It is 3am in the morning and am in a good mood so let me make this post. This will be a comprehensive and lengthy post so grab a pen and paper and sit down. We’ll be here a while. FIRST OF ALL, who am I..? I am a forex trader, in Nairobi, Kenya..i have been actively involved in forex since I found out about it in Feb 2016 when I somehow ended up in a wealth creation seminar (lol) in pride inn Westlands, the one close to Mpaka Rd. Luckily for me, it was not one of those AIM global meetings or I’d be on Facebook selling God knows what those guys sell. I did not take it seriously till August of the same year and I have been active ever since. I don’t teach, mentor or sell a course or signals, I trade my own money. I am also posting from a throwaway account because I don’t want KRA on my ass. What the fuck is forex and forex trading. In simple plain English, forex is like the stock market but for currencies. Stock Market = Shares, forex = currencies. If you want more in-depth explanation, google is your friend. These currencies are pegged on specific countries, united states- dollar, UK- pound, euro zone- euro, Switzerland- Swiss franc, Kenya- Kenya shilling.. you get the point. Now, there are specific events and happenings between these economies that affect the movement and values of the currencies, driving their value (purchasing power up and down). Forex trading exploits these movements to make money. When the value is going up, we buy and vice versa (down –sell) Is forex trading illegal in Kenya? Is it a scam? Illegal, no. scam, no. All the banks in the world do it (KCB made about 4 billion from trading forex in 2019) Have there been scams involving forex in Kenya? Yes. Here is one that happened recently. This one is the most infamous one yet. Best believe that this is not the end of these type of scams because the stupidity, greed and gullibility of human beings is unfathomable. However, by the end of this post, I hope you won’t fall for such silliness. What next how do I make it work..? Am glad you asked. Generally, there are two ways to go about it. One, you teach yourself. This is the equivalent of stealing our dad’s car and hoping that the pedal you hit is the brake and not the accelerator. It is the route I took, it is the most rewarding and a huge ego boost when you finally make it on your own. Typically, this involves scouring the internet for hours upon hours going down rabbit holes, thinking you have made it telling all your friends how you will be a millionaire then losing all your money. Some people do not have the stomach for that. The second route is more practical, structured and smarter. First Learn the basics. There is a free online forex course at www.babypips.com/learn/forex this is merely an introductory course. Basically it is learning the parts of a car before they let you inside the car. Second, start building your strategy. By the time you are done with the babypips, you will have a feel of what the forex market is, what interests you, etc. Tip..Babypips has a lot of garbage. It is good for introductory purposes but not good for much else, pick whatever stick to you or jumps at you the first time. Nonsense like indicators should be ignored. The next step is now the most important. Developing the skill and building your strategy. As a beginner, you want to exhaust your naivety before jumping into the more advanced stuff. Eg can you identify a trend, what is a pair, what is position sizing, what is metatrader 4 and how to operate it, what news is good for a currency, when can I trade, what are the different trading sessions, what is technical analysis, what is market sentiment, what are bullish conditions what is emotion management, how does my psychology affect my trading (more on this later) an I a swing, scalper or day trader etc Mentors and forex courses.. you have probably seen people advertising how they can teach and mentor you on how to trade forex and charging so much money for it. Somehow it seems that these people are focused on the teaching than the trading. Weird, right..? Truth is trading is hard, teaching not quite. A common saying in the industry is “Those who can’t trade, teach” you want to avoid all these gurus on Facebook and Instagram, some are legit but most are not. Sifting the wheat from the chaff is hard but I did that for you. The info is available online on YouTube, telegram channels etc. am not saying not to spend money on a course, if you find a mentor whose style resonates with you and the course is reasonably priced, please, go ahead and buy..it will cut your learning curve in half. People are different. What worked for me might not work for you. Here are some nice YouTube channels to watch. These guys are legit..
After a short period of time, you will be able to sniff out bs teachers with relative ease. You will also discover some of your own and expand the list. Two tips, start with the oldest videos first and whichever of these resonates with you, stick with till the wheels fall off. How long will it take until things start making sense Give yourself time to grow and learn. This is all new to you and you are allowed to make mistakes, to fail and discover yourself. Realistically, depending on the effort you put in, you will not start seeing results until after 6 months. Could take longeshorter so there is no guarantee. Social media, Mentality, Psychology and Books Online, forex trading might not have the best reputation online because it takes hard work and scammers and gurus give it a bad name. However, try to not get sucked into the Instagram trader lifestyle as it is nowhere close to what the reality is. You will not make millions tomorrow or the day after, you might never even make it in this market. But that is the reality of life. Nothing is promised, nothing is guaranteed. Your mentality, beliefs and ego will be challenged in this market. You will learn things that will make you blood boil, you will ask yourself daily, how is this possible, why don’t they teach this in school..bla bla bla..it will be hard but growth is painful, if it wasn’t we’d all be billionaires. Take a break, take a walk, drink a glass of whatever you like or roll one..detox. Chill with your girl (or man) Gradually you will develop mental toughness that will set you up for life. Personally, I sorta ditched religion and picked up stoicism. Whatever works for you. Psychology, this is unfortunately one of the most neglected aspects of your personal development in this journey. Do you believe in yourself? Can you stand by your convictions when everyone is against you? Can you get up every day uncertain of the future? There will be moments where you will question yourself, am I even doing the right thing? the right way? It is normal and essential for your growth. People who played competitive sports have a natural advantage here. Remember the game is first won in your head then on the pitch. Books: ironically, books that helped me the most were the mindset books, Think and grow rich, trading for a living, 4 hour work week, the monk who sold his Ferrari..just google mindset and psychology books, most trading books are garbage. Watch and listen to people who have made it in the investing business. Ray Dalio, warren, Bill Ackman and Carl Icahn. This is turning out to be lengthier than I anticipated so I’ll try to be brief for the remaining parts. Brokers You will need to open up an account with a broker. Get a broker who is regulated. Australian ones (IC Market and Pepperstone) are both legit, reliable and regulated. Do your research. I’d avoid local ones because I’ve heard stories of wide spreads and liquidity problems. International brokers have never failed me. There are plenty brokers, there is no one size fits all recommendation. If it ain’t broke..don’t fix it. Money transfer. All brokers accept wire transfers, you might need to call your bank to authorize that, avoid Equity bank. Stanchart and Stanbic are alright. Large withdrawals $10k+ you will have to call them prior. Get Skrill and Neteller if you don’t like banks like me, set up a Bitcoin wallet for faster withdrawals, (Payoneer and Paypal are accepted by some brokers, just check with them.) How much money can I make..? I hate this question because people have perceived ceilings of income in their minds, eg 1 million ksh is too much to make per month or 10,000ksh is too little. Instead, work backwards. What % return did I make this month/ on this trade. Safaricom made 19.5% last year, if you make 20% you have outperformed them. If you reach of consistency where you can make x% per month on whatever money you have, then there are no limits to how much you can make. How much money do I need to start with..? Zero. You have all the resources above, go forth. There are brokers who provide free bonuses and withdraw-able profits. However, to make a fulltime income you will need some serious cash. Generally, 50,000 kes. You can start lower or higher but if you need say 20k to live comfortably and that is a 10% return per month, then you can do the math on how big your account should be. Of course things like compound interest come into play but that is dependent on your skill level. I have seen people do spectacular things with very little funds. Taxes..? Talk to a lawyer or an accountant. I am neither. Family? Friends? Unfortunately, people will not understand why you spend hundreds of hours watching strangers on the internet so it is best to keep it from them. Eventually you will make it work and they will come to your corner talking about how they always knew you’d make it. The journey will be lonely, make some trading buddies along the way. You’d be surprised at how easy it is when people are united by their circumstances (and stupidity) I have guys who are my bros from South Africa and Lebanon who I have never met but we came up together and are now homies. Join forums, ask questions and grow. That is the only way to learn. Ideally, a group of 5-10 friends committed to learning and growth is the best model. Pushing each other to grow and discovering together. Forex is real and you can do amazing things with it. It is not a get rich quick scheme. If you want a quick guaranteed income, get a job. And now it is 5am, fuck. This is oversimplified and leaves out many many aspects. Happy to answer any questions.
How I plan to identify and sell the top of the next market cycle.
In this post I will share with you some of the strategies I will use to identify the next market cycle top so I can sell for maximum profits (and of course buy back in later in the subsequent bear market!) In the first part of this post I will discuss the resources I will use and in the second part I will discuss tactics in selling and risk management.
As the bull run begins to drag on and the price of ETH starts getting closer and closer to $10k I will begin to start watching many of the data science charts over at Look into Bitcoin. This will not be the only source I will use since there are great custom tools on TradingView too as well as more subjective indicators such as friends and family talking crypto and hearing about crypto again in the mainstream media. I’d also like to note that many of the indicators I will be looking at will be Bitcoin focused despite my ETH centred portfolio. Like it or not, this market is still Bitcoin dominated and despite the many proponents of an ETH flippening (myself included), it is quite likely that we will not see it this cycle due to the macro investing environment favouring assets which are good stores of value to weather the uncertainty. Ultimately, Bitcoin has the best store of value meme in crypto and that will be very powerful in the coming years. I think it is likely that the time for Ethereum or a network like Ethereum with a yielding asset (ETH under ETH 2.0) and a native economy of DeFi, DApps, NFTs and much more will be once all of the stock market uncertainty is over and investors are ready to take on more risk again. I am of course still expecting Ethereum and altcoins to outperform Bitcoin this cycle. However, I think that Bitcoin losing the number 1 spot will be more likely to happen between 2023 and 2030 rather than in the next 2-3 years. I hope I am wrong though. While most of the indicators on Looking into Bitcoin are useful, I will list the ones I’ll be focusing on the most here:
And finally my favourite, the Golden Ratio Multiplier. This indicator has been remarkably accurate at predicting tops using the golden ratio (1.6) and the fibonacci sequence (0, 1, 1, 2, 3, 5, 8, 13, 21) multiplied by the 350 day moving average. With each market cycle, the 350 day moving average is multiplied by the next number down in the fibonacci sequence. For example, the 2013 peak only just passed above the 350 day moving average multiplied by 8 and the 2017 bull market just touched the 350 day moving average multiplied by 5. So if this indicator is to work in the next cycle, we can expect the price to slightly exceed 3 times the value of the 350 day moving average. This indicator also worked for Ethereum in the 2017 bull run. While there is no graph for it, on the 13th of January, when ETH hit a peak of $1,419, the 350 day moving average was at $270. $270 multiplied by 5 is $1,350. If you sold at $1,350 you sold incredibly close to the top and I don’t think that any macro traders/long term traders would complain about that timing. I’d like to note that while indicators like the Golden Ratio Multiplier factors in for less explosive growth each cycle, not all of the above indicators do. So be cautious of this when you think the peak is near as it may be closer than you think. In saying that, there is a lot of luck involved so I should also point out that it also might not be closer than you think. However, it would be better to sell before the peak at say $10,000/BTC as of 2017 than to be left holding all of your crypto when the bear market begins since Bitcoin didn’t spend much time above $10,000/BTC after the $20K peak. Ultimately it is up to you to decide your risk appetite and how well you want to try and time the market. For me, I will definitely be on the conservative side so that I don’t miss the boat completely and hopefully I will be able to sell most of my crypto just before we peak rather than afterwards.
Since timing the top requires a lot of luck, a good method of mitigating the risk is to spread out when you sell. I’m going to share with you my personal strategy but I recommend that you create your own strategy or use this as a basis from which you can use to adjust and tweak it to optimally suit your situation. If you have a large stack, you will probably want to sell early since you might not need such spectacular gains to lock in some life changing money. On the other hand, if you have a smaller stack or if you are younger, you can afford to take more risk and might want to try and time the absolute peak a bit better to get that much closer to making some life changing money. Personally, while my stack isn’t very big in dollar terms, it is a significant % of my net worth and so I don’t have a high risk tolerance with it (at least relative to other people in crypto!) For this reason I will be selling a little bit on the early side. My plan has three pots of crypto. 20% of my crypto I will hold indefinitely since I very strongly believe in the long term prospect of ETH and BTC as investments. This way if I time the markets terribly, I will always have some skin in the crypto game. The second pot of crypto is 40% which I will sell on the way up to take some profits and I don’t intend on putting this money back into crypto. Initially I will be selling very small amounts of this 40% and as the indicators listed above get closer and closer to calling a top, I will sell larger proportions of this crypto. I haven’t set specific target numbers since things change fast in this space and I feel like the best decisions in this case are made in the moment. For example, estimating a market top is hard when it is 2-3 years away, but it is much easier when it is just months or weeks away. Once again, this is just personal preference. Many of you will find that setting targets now makes it easier for you to pull the trigger and take some profits when everyone else is calling $1M BTC while it is at $100K or calling for $100K ETH when the current price might be $10K. Finally, the last 40% I will sell all at once when I feel like we are at the top and I am confident that the price will be lower a year on from that point in time. With this 40% I will try and buy back during the bear market with the help of many of the same indicators I listed above from Look into Bitcoin. I will also use some indicators which I didn’t mention above since some are better designed at identifying market bottoms. My goal is to be able to buy back the number of BTC and ETH I held before I sold anything with this 40% (plus the 20% I didn’t sell). This is a big ask but it is better in life to set hard goals that seem unattainable or unrealistic than it is to set easy goals. To summarise my portfolio strategy, 20% of my portfolio is an indefinite hold, 40% I will sell on the way up and I do not intend on buying back into crypto with this money so I can avoid being over-exposed to crypto. The last 40% I will use to try and sell the top and buy the bottom.
As a closing note I would like to say that it will be important to be aware of the power of greed and FOMO. Do not under-estimate these emotions and try to remain a grounded and rational investor. Don’t be scared to take profits. I know from experience trading altcoins that it is better to exit a position early and miss out on another 100% price increase than it is to hold through a bear market and take >90% losses. If you go into this bullrun telling yourself you will take profits on the way up, you will have no reason to regret any early sales since you will know that you made a rational trade and not an emotional trade.
My Provisional List of COVID Anomalies, Red/ False Flags & Clear Indications of Scumbaggery And Scambuggery. LIHOP, MIHOP Or HOAX/SCAM? Def Not As Described. Very Much Updated Since 1st Posting. Please Let Me Know What I’ve Missed Or Add Links. Repost, Due To Strange Disappearance of 90% Of My Post.
Not going to add to my existing paranoia by speculating, but here it is updated... Here’s my Top 22 list of suspicious shenanigans and red flags surrounding the COVID narrative:
The Imperial College Death data - Neil Ferguson and Gates-funded Imperial College, London Model that ‘persuaded’ Johnson and Trump to lockdown. Projected 500K deaths in UK and 2.2m deaths in US, EVEN WITH LOCKDOWN. Less than 10% accuracy but 110% alarmist, and evidence that the coding was deliberately flawed and designed to inflate numbers. Gates funding everyone involved in the staged 'debacle'.
DDDD - The Rise of “Buy the Dip” Retail Investors and Why Another Crash Is Imminent
In this week's edition of DDDD (Data-driven DD), I'll be going over the real reason why we have been seeing a rally for the past few weeks, defying all logic and fundamentals - retail investors. We'll look into several data sets to see how retail interest in stock markets have reached record levels in the past few weeks, how this affected stock prices, and why we've most likely seen the top at this point, unless we see one of the "positive catalysts" that I mentioned in my previous post, which is unlikely (except for more news about Remdesivir). Disclaimer - This is not financial advice, and a lot of the content below is my personal opinion. In fact, the numbers, facts, or explanations presented below could be wrong and be made up. Don't buy random options because some person on the internet says so; look at what happened to all the SPY 220p 4/17 bag holders. Do your own research and come to your own conclusions on what you should do with your own money, and how levered you want to be based on your personal risk tolerance. Inspiration Most people who know me personally know that I spend an unhealthy amount of my free time in finance and trading as a hobby, even competing in paper options trading competitions when I was in high school. A few weeks ago, I had a friend ask if he could call me because he just installed Robinhood and wanted to buy SPY puts after seeing everyone on wallstreetbets post gains posts from all the tendies they’ve made from their SPY puts. The problem was, he actually didn’t understand how options worked at all, and needed a thorough explanation about how options are priced, what strike prices and expiration dates mean, and what the right strategy to buying options are. That’s how I knew we were at the euphoria stage of buying SPY puts - it’s when dumb money starts to pour in, and people start buying securities because they see everyone else making money and they want in, even if they have no idea what they’re buying, and price becomes dislocated from fundementals. Sure enough, less than a week later, we started the bull rally that we are currently in. Bubbles are formed when people buy something not because of logic or even gut feeling, but when people who previously weren’t involved see their dumb neighbors make tons of money from it, and they don’t want to miss out. A few days ago, I started getting questions from other friends about what stocks they should buy and if I thought something was a good investment. That inspired me to dig a bit deeper to see how many other people are thinking the same thing. Data Ever since March, we’ve seen an unprecedented amount of money pour into the stock market from retail investors. Google Search Trends \"what stock should I buy\" Google Trends 2004 - 2020 \"what stock should I buy\" Google Trends 12 months \"stocks\" Google Trends 2004 - 2020 \"stocks\" Google Trends 12 months Brokerage data Robinhood SPY holders \"Robinhood\" Google Trends 12 months wallstreetbets' favorite broker Google Trends 12 months Excerpt from E*Trade earnings statement Excerpt from Schwab earnings statement TD Ameritrade Excerpt Media cnbc.com Alexa rank CNBC viewership & rankings wallstreetbets comments / day investing comments / day Analysis What we can see from Reddit numbers, Google Trends, and CNBC stats is that in between the first week of March and first week of April, we see a massive inflow of retail interest in the stock market. Not only that, but this inflow of interest is coming from all age cohorts, from internet-using Zoomers to TV-watching Boomers. Robinhood SPY holdings and earnings reports from E*Trade, TD Ameritrade, and Schwab have also all confirmed record numbers of new clients, number of trades, and assets. There’s something interesting going on if you look closer at the numbers. The numbers growth in brokers for designed for “less sophisticated” investors (i.e. Robinhood and E*Trade) are much larger than for real brokers (i.e. Schwab and Ameritrade). This implies that the record number of new users and trade volume is coming from dumb money. The numbers shown here only really apply to the US and Canada, but there’s also data to suggest that there’s also record numbers of foreign investors pouring money into the US stock market as well. However, after the third week of March, we see the interest start to slowly decline and plateau, indicating that we probably have seen most of those new investors who wanted to have a long position in the market do so. SPX daily Rationale Pretty much everything past this point is purely speculation, and isn’t really backed up by any solid data so take whatever I say here with a cup of salt. We could see from the graph that new investor interest started with the first bull trap we saw in the initial decline from early March, and peaking right after the end of the crash in March. So it would be fair to guess that we’re seeing a record amount of interest in the stock market from a “buy the dip” mentality, especially from Robinhood-using Millennials. Here’s a few points on my rationalization of this behavior, based on very weak anecdotal evidence
They missed out of their chance of getting in the stock market at the start of the bull market that happened at the end of 2009
They’ve all seen the stock market make record gains throughout their adult lives, but believing that the market might be overheated, they were waiting for a crash
Most of them have gotten towards the stage of their lives where they actually have some savings and can finally put some money aside for investments
This stock market crash seems like their once-in-a-decade opportunity that they’ve been waiting for, so everyone jumped in
Everyone’s stuck at their homes with vast amounts of unexpected free time on their hands
Most of these new investors got their first taste in the market near the bottom, and probably made some nice returns. Of course, since they didn’t know what they were doing, they probably put a very small amount of money at first, but after seeing a 10% return over one week, validating that maybe they do know something, they decide to slowly pour in more and more of their life savings. That’s what’s been fueling this bull market. Sentiment & Magic Crayons As I mentioned previously, this bull rally will keep going until enough bears convert to bulls. Markets go up when the amount of new bullish positions outnumber the amount of new bearish positions, and vice versa. Record amounts of new investors, who previously never held a position in the market before, fueled the bullish side of this equation, despite all the negative data that has come out and dislocating the price from fundamentals. All the smart money that was shorting the markets saw this happening, and flipped to become bulls because you don’t fight the trend, even if the trend doesn’t reflect reality. From the data shown above, we can see new investor interest growth has started declining since mid March and started stagnating in early April. The declining volume in SPY since mid-March confirms this. That means, once the sentiment of the new retail investors starts to turn bearish, and everyone figures out how much the stocks they’re holding are really worth, another sell-off will begin. I’ve seen something very similar to this a few years ago with Bitcoin. Near the end of 2017, Bitcoin started to become mainstream and saw a flood of retail investors suddenly signing up for Coinbase (i.e. Robinhood) accounts and buying Bitcoin without actually understanding what it is and how it works. Suddenly everyone, from co-workers to grandparents, starts talking about Bitcoin and might have thrown a few thousand dollars into it. This appears to be a very similar parallel to what’s going on right now. Of course there’s differences here in that equities have an intrinsic value, although many of them have gone way above what they should be intrinsically worth, and the vast majority of retail investors don’t understand how to value companies. Then, during December, when people started thinking that the market was getting a bit overheated, some started taking their profits, and that’s when the prices crashed violently. This flip in sentiment now look like it has started with equities. SPY daily Technical Analysis, or magic crayons, is a discipline in finance that uses statistical analysis to predict market trends based on market sentiment. Of course, a lot of this is hand-wavy and is very subjective; two people doing TA on the same price history can end up getting opposite results, so TA should always be taken with a grain of salt and ideally be backed with underlying justification and not be blindly followed. In fact, I’ve since corrected the ascending wedge I had on SPY since my last post since this new wedge is a better fit for the new trading data. There’s a few things going on in this chart. The entire bull rally we’ve had since the lows can be modelled using a rising wedge. This is a pattern where there is a convergence of a rising support and resistance trendline, along with falling volume. This indicates a slow decline in net bullish sentiment with investors, with smaller and smaller upside after each bounce off the support until it hits a resistance. The smaller the bounces, the less bullish investors are. When the bearish sentiment takes over across investors, the price breaks below this wedge - a breakdown, and indicates a start of another downtrend. This happened when the wedge hit resistance at around 293, which is around the same price as the 200 day moving average, the 62% retracement (considered to be the upper bound of a bull trap), and a price level that acted as a support and resistance throughout 2019. The fact that it gapped down to break this wedge is also a strong signal, indicating a sudden swing in investor sentiment overnight. The volume of the break down also broke the downwards trend of volume we’ve had since the beginning of the bull rally, indicating a sudden surge of people selling their shares. This doesn’t necessarily mean that we will go straight from here, and I personally think that we will see the completion of a heads-and-shoulders pattern complete before SPY goes below 274, which in itself is a strong support level. In other words, SPY might go from 282 -> 274 -> 284 -> 274 before breaking the 274 support level. VIX Daily Doing TA is already sketchy, and doing TA on something like VIX is even more sketchy, but I found this interesting so I’ll mention it. Since the start of the bull rally, we’ve had VIX inside a descending channel. With the breakdown we had in SPY yesterday, VIX has also gapped up to have a breakout from this channel, indicating that we may see future volatility in the next week or so. Putting Everything Together Finally, we get to my thesis. This entire bull rally has been fueled by new retail investors buying the dip, bringing the stock price to euphoric levels. Over the past few weeks, we’ve been seeing the people waiting at the sidelines for years to get into the stock market slowly FOMO into the rally in smaller and smaller volumes, while the smart money have been locking in their profits at an even slower rate - hence an ascending wedge. As the amount of new retail interest in the stock market started slowed down, the amount of new bulls started to decline. It looks like Friday might have been the start of the bearish sentiment taking over, meaning it’s likely that 293 was the top, unless any significant bullish events happen in the next two weeks like a fourth round of stimulus, in which case we might see 300. This doesn’t mean we’ll instantly go back to circuit breakers on Monday, and we might see 282 -> 274 -> 284 -> 274 happen before panic, this time by the first-time investors, eventually bringing us down towards SPY 180. tldr; we've reached the top EDIT - I'll keep a my live thoughts here as we move throughout this week in case anyone's still reading this and interested. 5/4 8PM - /ES was red last night but steadily climbed, which was expected since 1h RSI was borderline oversold, leaving us to a slightly green day. /ES looks like it has momentum going up, but is approaching towards overbought territory now. Expecting it to go towards 284 (possibly where we'll open tomorrow) and bouncing back down from that price level 5/5 Market Open - Well there goes my price target. I guess at this point it might go up to 293 again, but will need a lot of momentum to push back there to 300. Seems like this is being driven by oil prices skyrocketing. 5/5 3:50PM - Volume for the upwards price action had very little volume behind it. Seeing a selloff EOD today, could go either way although I have a bearish bias. Going to hold cash until it goes towards one end of the 274-293 channel (see last week's thesis). Still believe that we will see it drop below 274 next week, but we might be moving sideways in the channel this week and a bit of next week before that happens. Plan for tomorrow is buy short dated puts if open < 285. Otherwise, wait till it goes to 293 before buying those puts 5/5 6PM - What we saw today could be a false breakout above 284. Need tomorrow to open below 285 for that to be confirmed. If so, my original thesis of it going back down to 274 before bouncing back up will still be in play. 5/6 EOD - Wasn't a false breakout. Looks like it's still forming the head-and-shoulders pattern mentioned before, but 288 instead of 284 as the level. Still not sure yet so I'm personally going to be holding cash and waiting this out for the next few days. Will enter into short positions if we either go near 293 again or drop below 270. Might look into VIX calls if VIX goes down near 30. 5/7 Market Open - Still waiting. If we break 289 we're probably heading to 293. I'll make my entry to short positions when we hit that a second time. There's very little bullish momentum left (see MACD 1D), so if we hit 293 and then drop back down, we'll have a MACD crossover event which many traders and algos use as a sell signal. Oil is doing some weird shit. 5/7 Noon - Looks like we're headed to 293. Picked up VIX 32.5c 5/27 since VIX is near 30. 5/7 11PM - /ES is hovering right above 2910, with 4h and 1h charts are bullish from MACD and 1h is almost overbought in RSI. Unless something dramatic happens we'll probably hit near 293 tomorrow, which is where I'll get some SPY puts. We might drop down before ever touching it, or go all the way to 295 (like last time) during the day, but expecting it to close at or below 293. After that I'm expecting a gap down Monday as we start the final leg down next week towards 274. Expecting 1D MACD to crossover in the final leg down, which will be a signal for bears to take over and institutions / day traders will start selling again 5/8 Market Open - Plan is to wait till a good entry today, either when technicals looks good or we hit 293, and then buy some SPY June 285p and July 275p 5/8 Noon - Everything still going according to plan. Most likely going to slowly inch towards 293 by EOD. Will probably pick up SPY puts and more VIX calls at power hour (3 - 4PM). Monday will probably gap down, although there's a small chance of one more green / sideways day before that happens if we have bullish catalysts on the weekend. 5/8 3:55PM - SPY at 292.60. This is probably going to be the closest we get to 293. Bought SPY 290-260 6/19 debit spreads and 292-272 5/15 debit spreads, as well as doubling down on VIX calls from yesterday, decreasing my cost basis. Still looks like there's room for one more green day on Monday, so I left some money on the side to double down if that's the case, although i