Week in Review (Feb.9 – Feb.15)
Equities – Continued Fed Repos and testimony from Fed Chair J. Powell indicating that QE would get more aggressive and interest rates would go to zero or negative. With no volume or buyers, and CoV fears high as death tolls rise from the pandemic, the SP500 saw new all time highs although incrementally. New testing methods saw the infected rate double in a day, with markets not reacting. China pumped $10B+ in a day to prop up markets. It appears this is the new norm.
This price action across most of the major cap weighted tickers indicates that while there are not really any buyers, there are no sellers either. Recently Charlie Munger, the right hand of Warren Buffet at Berkshire Hathaway, said that he would not buy at current levels or short the market. This is the position I was feeling during this week.
Looking forward we will try to seek insulated trades from CoV in credit, banking, and technology sectors.
Crypto – BTC broke $10,500 this week with GBTC breaking $13.
By the weekend, BTC breaking below $10K but looking to hold.
Sell Signal on Daily 2/15.
On a Weekly basis, BTC is still looking very strong. Bullish EMA cross and price above EMA’s signal 50%-100% gain over the next 3 months.
Level to watch for BTC is still $10,883 (1.618 Fib Level Retracement).
Level to watch for GBTC is $14.26 (higher gap fill). Or $10.70 for lower gap fill at pullback to add, or enter.
Looking Forward to (Feb.16 – Feb. 22)
Equities – CoV deaths and news is continued to be suppressed. China is set to pump even more liquidity into markets to stop selloff. We will continue to watch FANG as it gets suppressed to enter a possible short term bullish trade.
Crypto – Still watching $10,900 as exit for GBTC trade (1.618 Fib Extension). If we see price slowing and trend turn bearish on daily, we look to reduce GBTC position by half possibly and rebuy on 20-50 cent dip (or greater).
Next high after $10,900 is $13K.
Pullback level - watching $9,200 as BTC level for 0.618 Fib Level extension from possible $10,900 high. If we see a selloff or pullback at $10.9K, the $9200 level will be our possible re-entry.