1/25/22: My Market Position Right Now
If I had to make a bet, I bet we see a short-term downturn in the stock market and risk assets in the next 60 days.
Note This Data:
1. Inflation at 7.1%
2. Growth at 3.0%
3. Manchin not allowing Fiscal spending in the House
4. The Fed is now a political body
5. The Fed getting Administration push to do QT and interest rate hikes
Interpretation:
Economies can expand two ways: credit or productivity. The current game state is that the Fed is forcing economic expansion. How we know this is that rare wine/art/cars have outperformed the S&P500 for the last decade. So, the best risk/reward investment is to invest in scarcity, not productivity. Make sense?
1. We could very well have to have a crash in risk assets (stock market, crypto, commodities)
2. All altcoins and NFTs may have a correction
3. NFT mania bubble bursting
4. The correction in my POV will happen in the next 60 days
5. BTC has spent some time trading like a safe-haven asset, which means: VIX up, SPY down and BTC still up
6. BTC is the major/only crypto asset in bulk I'd have right now
7. This is a short-term correction that may happen over the next 30 days
8. I'm not certain, but this is possible—just short-term
9. The Fed will fold and abandon this correction policy, stop the QT and stop the interest rate hikes (just like they've done the past two times)
My Position:
Altcoins are mostly some form of speculation on productivity. Bitcoin provides provable scarcity. At present, Bitcoin will do better than altcoins until the Fed backs off on their position to hike rates & QT.
However, realize in the SHORT-TERM (today), RSI is in the teens and so is the Fear/Greed Indicator. So, I'd expect a pop back this week, just because we're so oversold.
Key Terms:
* QT – Quantitative Tightening, when the Fed stops their juicing of the money system (with their current buying $120B in USTs/securities per month, then reducing the purchases to $80B or so, then trying to reduce that again)—each time will have extremely negative reactions in the capital markets because price is set at the edges
* RSI – Relative Strength Indicator, a technical analysis term in charting, to mean whether something is overbought or oversold
* VIX – Volatility Index, which is a gauge of volatility (fear) in the stock market
* SPY – S&P500 Index, which is the index of the top 500 market capitalized (biggest in equity value terms) US companies
Special Thanks:
Some of this is provided by interpretation from people like Luke Gromen and the MacroVoices podcast, Grant Williams and James Rickards. They have all helped me inform my research, so hat tip to them on their great work.
Disclaimer: This information should not be construed as a recommendation, investment or tax advice, or an offer or solicitation to buy or sell any security.
