I have been off-sick for over a week now, nursing my lower back injury. Inasmuch as I love my job and my colleagues, I have reached to a point that I would now need physiotherapy, increased pain killer dose, rotational hot and cold compresses, and anti-pain patches; I had no choice but to throw in the white towel and look after myself.
Whilst I'm sitting here comfortably in a near-perfect sitting position, with my electric masseuse grinding and pressing on worse areas, I'm also catching up with my reading and learning about the markets, investments and crypto.
Markets
The markets recovered after the the Inflation FUD shake-out the week prior enabling its uptrend intact. There has been follow-up on breakouts and good bounces on previous market leaders that found support on the moving averages.
On the weekly chart, IWM has the best technical set-up, flagging nicely and surfing on the 20SMA. However, it is unclear whether this goes up or down so I'm keeping my eyes peeled on this one. IWM is the iShares Russel 2000 ETF that tracks the investment results of an index composed of small-cap US equities.
EEM (Emerging Markets) and Europe Markets rallied, the latter, especially the FTSE Developed Europe UCITS ETF (VEUR) hitting an all-time high 🚀. On the other hand, the monthly chart of EEM is perfectly poised for a massive run should it confirm a break-out. I increased my allocation to the Emerging markets starting last month as anticipation but not aggressive enough that it would skew my portfolio should it dip hard towards the moving averages. My investment time-frame for this is decades so I wouldn't sweat.
The Technology sector (1.62%) recovered but Utilities (-1.51%) continue its downtrend. XOP continue its run with a whopping (+52.26%) YTD performance. In retrospect, this was a a very obvious medium term trade idea since the Pfizer-Biontech vaccine announcement in November. This is where inexperience will bite you from behind and miss-out on massive runs like this. We learn and move on.
Meme Stocks 3.0
$GME ($222), a Wallstreetbets meme-stonk hall-of-famer started moving again on May 24th which predicated a third run-up, this time, from $174 to $267. Other meme-stocks made massive strides as well like $AMC and $BB. I traded $BB at +20% in 3 trading days. $AMC on the other hand was a squeezer. I was looking at the first supply areas at $35-$36 for a short but I was too afraid to pull the trigger 😂. Could pretty much wipe out my trading account if halts to the upside like $KODK. Not for me.
@EricBalchunas tweeted last Friday that for the second day in a row, $AMC was the most traded stock in the world. I was looking at it real-time on IBKR at >500M and that was amazing to watch. From +54% t0 -4% on that insane volume was a different kind of high even as an observer.
Here's the $AMC 3-min chart.
Crypto FUD Bath - staying familiar
Glassnode released an insight newsletter last Friday, "Surveying the May 2021 Sell-off" which explained the reasons of the crash and the on-chain indicators and metrics behind the scenes.
My takeaways from this newsletter are as follows:
Institutional Demand - Through GBTC metric, demand sank starting late February. A crypto ETF that showed similar pattern is the Canadian Purpose BTC ETF. Outflows intensified starting May 3.
Exchange Dynamics - Large deposits of Bitcoin to exchanges were noted months before the sell-off i.e. illiquid coins (held on institutional custody or wallets migrated back to exchanges as liquid supply). However, this is not trued for all exchanges. Massive deleveraging of derivatives was also noted which created a cascade selling, margin calls and liquidations.
HODLers Behaviour Pattern- "Old Coins swell during bear markets as accumulation recommences and wealth transfers from speculators to long term hodlers. Young Coins swell during bull markets as holders distribute expensive coins to new, weaker handed speculators."
I found this on reddit and it looks pretty accurate.
De-Fi
Glassnode released a separate newsletter on Decentralised Finance exploring its health and stability amidst broad crypto market selling.
Concluding Remarks:
Strong revenue from trading fees and peak volume on DEXs
Healthy lending markets with high collateral, relatively low volatility interest rates, and high utilization among stablecoins
Stablecoins maintaining their peg and continuing to grow in usage
Blue chip resilience vs ETH and ETH's resilience vs BTC
A tweet thread from Raoul Pal, a macroeconomist could give some perspective.
Downtime Reads 📖
Cardano and Stellar now tradable at Boerse Stuttgart
One of the largest Swiss banks fears that if it does not offer investments in crypto, it will lose its clients
Trader’s Brain: How To Re-Wire It for the Better
US banks could cut 200,000 jobs over next decade, top analyst says
Bank of America Joins Paxos Network Eyeing Same-Day Stock Trade Settlement
Most Long-Term Profitable Traders are Under Water Most of the Time – (Trading Drawdowns)
An Interview With Chainlink’s Sergey Nazarov
Proposed Legislation in Germany Could Allow $425B to Flow Into Crypto: Report
Deutsche Bank Quietly Plans to Offer Crypto Custody, Prime Brokerage
Bitcoin is officially a new asset class: Goldman Sachs
Ray Dalio: ‘I Have Some Bitcoin’
Dig more coal -- the PCs are coming
Every fifth hedge fund already invests in cryptocurrencies, reports PwC
Chainlink Has the Potential to Disrupt Traditional Finance
What is A Bearish Divergence?
The Week On-Chain (Week 21, 2021)
Stochastics: An Accurate Buy and Sell Indicator
Nothing New Under the Sun
Stanley Druckenmiller: “The greatest investors make large concentrated bets where they have a lot of conviction”
DeFi Uncovered: Navigating the Crash
Pods 🎧
How to Exit Your Winning Trades Properly
The Wall St. Jesus Flow Show: May 11th, 2021
Talking To The King of The Degens I Sam Cassatt I Pomp Podcast #555
SotN #46 - The ETH Trade with Su Zhu & Kyle Davies of Three Arrows Capital
The Complete Flow Trader Series: Using Flow With Different Styles of Trading (Episode 1)
Raoul Pal: Holding All Your Money in Crypto | Irresponsibly Long Bitcoin
360% in 19 Months | Google Stock Analysis + IPO Bases | America's Greatest Companies
Decentralized Finance (DeFi) Explained | A 10x Return Opportunity?
Risk Management
65 - Crypto, Legacy, and Value | Mark Yusko
Bitcoin Crashed! Who Was Buying And Selling?!
Are Growth Stocks Back in Favor? | RBLX Breaks out Out! | Stock Market Outlook
66 - Crypto’s Existential Threat | MEV Panel: Phil Daian, Georgios Konstanopolus, Charlie Noyes
Kevin O'Leary Buys Bitcoin And Starts Yield Farming | Pomp Podcast #563
FO256: A Digital Assets Conference For Sophisticated Investors
Real Vision Finance Daily Briefing May 29
Enjoy the rest of the weekend!
/END.TBP