The Wolf Den #46 - Protection from SIM Swaps, BTC, Alts, Stock Trades
Bitcoin Thoughts And Analysis
I closed all of my long trades in the past few days on Bitcoin, which made for another awesome and profitable set of moves. I have actually flipped short on Phemex, but only a small hedge against my investment holdings. As you know, I am ALWAYS net long Bitcoin. My entry was $7,720, so I am a bit underwater as I am writing this.
There really is very little to say about Bitcoin since I updated it last. It has not changed much.
MONTHLY CHART
$7,777. The magic number. I have been discussing this since before the newsletter was even launched. I dug up this article from October, discussing the same monthly level.
Price has topped out 3 times in the past few days within a few dollars of that level. A monthly close above that line would be very bullish, in my opinion. Regardless, price continues to trade between $7,777 and $6,540 on the monthly chart.
DAILY CHART
Same chart, different day. Price still has not reached the supply zone above and it certainly does not have to. Holding support at $7,671 keeps this looking generally bullish at the moment. Like the stock market, volume has generally decreased on the way up. The lower volume in general is understandable - it would be impossible to eclipse the volume of the selloff. Also, volume each day is higher than volume on almost any of the days before the drop. So that's good. But we want to see volume increasing on the way up, which has not been happening thus far.
4-HOUR CHART
Price is still above all ranges and below the key supply zone from the March 12th dump. As long as price remains above the blue zone, this remains quite bullish. That area around $7,400 is the target of my shorts.
The clear bear divs (there have been a few) are the reason that I took a short. The line chart is clear, based only on closes. My target is the black line shown.
This is an interesting example of why patterns can be confusing. Price was in a clear bull pennant, broke out and retested as support. It then created a potential ascending wedge. It's up to a trader to choose their bias. I was favoring the pennant, but have not seen much movement above it and the bear divs make me question that assessment. I guess we will see!
SIM Swapping, Privacy & Security - Switch To Efani
As you know, I was recently the victim of a SIM Hack by known hackers in Europe. Despite all of the security instructions from my carrier, criminals were still able to get into my account and make my life a living hell for a number of weeks. You can read the entire story in an old newsletter here, with a ton of practical tips to protect yourself.
My friend, Charlie Shrem was SIM hacked (for the second time) on a Friday at midnight a couple of weeks ago, and had no way to reach out to the phone company at that time. He had every possible measure in place to protect his account, but cybercriminals were still able to take control of his number.
He reached out to a mutual friend, Haseeb Awan, around 3 AM who was able to take his number back from the hacker within minutes, saving Charlie. Charlie and I talked about it in our last podcast.
Vice did a documentary which I recommend you should all watch. After the Charlie incident, I got more concerned that I was still susceptible to another hack, so decided to run a test to SIM Hack myself. I asked Haseeb to try to SIM hack me and was shocked when he was able to bypass every protection the carrier had set in place - in less than 90 seconds. Mind you, I had been through easily 10 hours of phone calls with T-Mobile securing my account, adding pins and extra protections, asking that their fraud team and a dedicated agent watch my account, which they assured was happening.
Having a false sense of security is worse than having no security at all. We are all targets, and it's almost guaranteed that you will eventually be targeted, no matter who you are. I immediately switched from T-Mobile to EFANI which was founded by Haseeb, crypto OG who created the 1st Bitcoin ATM back in 2013. He’s a Y-Combinator Alumni & Telecommunication Engineer who started this company after being SIM swapped himself multiple times.
With Covid19, criminals are also in quarantine so they’re now more active than ever. During my recent test SIM Swap experience, I tried to reach my carrier who took hours & were absolutely useless. When I finally got through to them, they did not even know that my number was out of their control and switched to Verizon! I'm glad it wasn’t an actual criminal - otherwise, I would’ve been in lot of pain. The entire test experience gave me a small feeling of PTSD as a result of the original experience. Even knowing that it was an intentional hack, seeing my service go out brought back awful memories.
I just did a podcast with Haseeb, which is live here . He breaks down all of the terrifying facts about the accessibility of our private information and the ease with which criminals can hack us. It's mind blowing how easily accessible our most sensitive data is.
Since switching, I’ve been extremely impressed and I strongly discourage you from procrastinating on your security like I did, since criminals are doing everything to drain your finances & destroy your reputation. EFANI comes with:
Guaranteed Protection Against SIM Hacking
Personal Information Encryption
Individual Insurance Protection of $5M
24/7 American Based Customer Support
60 Days 100% Money Back Guarantee
EFANI enforces 11-Layers of Client-Side Integrity & authentication protection to guarantee any unauthorized access into your accounts. Criminals are trading your personal information such as live location, call logs etc. which is very dangerous for all of us.
Not only did Haseeb personally switch me over, but he ran a scan across the internet, removing my phone number and personal information everywhere possible - even though I thought I had successfully done this before.
The only slight downside to EFANI is that they don’t offer family plans so it is a bit more expensive if you want to protect your entire family - $99 a person. They also don’t offer any perks such as Netflix subscriptions or cellphones, but those are tools used to lure you into crappy carriers that have zero interest in protecting you. That said, it's marginally more expensive than a normal plan and you get concierge service from Haseeb and his team 24/7 and the security of knowing you are protected and insured. It's honestly like having a private security guard on your phone.
If you’re looking for the best solution to protect you and your family, switch to EFANI as I did - especially if you hold any crypto. I cannot endorse this service enough.
The Wolf Of All Street Podcast Ft. Haseeb Awan
Haseeb Awan is the CEO of Efani (I wrote an article about him above) and the inventor of the Bitcoin ATM. This interview kept me up at night, thinking about all of the places that my personal information is available and how easy it is for hackers to exploit me. We discussed what SIM Hacking is, how the dark web functions, how hackers get your information (it's easy) and, most importantly, the best ways to protect yourself. Hint - the best way is to sign up with his phone company, Efani.
We also discussed his long history in crypto and the invention and proliferation of the Bitcoin ATM. There are some crazy stories here!
Charles Schwab Active Trader Pulse Survey
Charles Schwab periodically conducts surveys of Active Traders (>36 trades per year) in order to gauge how the current geopolitical climate, economic data and market conditions may be impacting trading. The results of their most recent survey were just published. This is a really good way to track sentiment among professional traders in the stock market.
59% of traders are expecting market volatility in Q2 to exceed the market volatility experienced in Q1, while 24% are expecting less volatility. (For comparison purposes, after spending most of the month of January at levels below 16, the VIX index averaged about 31 for Q1 as a whole. Less than one third of the way through Q2, the VIX is averaging about 44. It’s too soon to tell).
60% said they expect the bear market to continue through the end of this calendar year; the other 40% expect it to end this year. (Based on the traditional +20%/-20% close-to-close measures that have typically defined bull and bear markets, in the absence of a new downturn that takes the SPX to a close below 2,237, it is possible that the bear market ended on 3/23. It’s too soon to tell).
More than three quarters of traders (79%) are expecting the economy to recover fully in less than 3 years; the rest think it will take longer than that. (Economic data indicate that the economy hasn’t even bottomed yet, so it’s way too soon to tell).
Slightly more than half (54%) said that the Fed’s rate cuts have been effective in bolstering the economy and about the same number (58%) believe the Fed has the tools it needs to get the economy back on track. In fact, more than three quarters (77%) believe the Fed is likely to add further stimulus this year. (Futures markets indicate virtually no possibility of interest rate increases for the foreseeable future).
Finally, slightly less than half (47%) said they intend to trade more than they have been trading recently; the rest are planning to trade about the same or less.
Position Sizing Is Everything
As I have said countless times, risk management is everything. The most basic aspect of good risk management is proper position size based on how much you are willing to lose on a trade. This can be determined by setting a stop loss and working backwards to calculate appropriate size.
I was preparing to write a guide on position sizing and stop losses - and then found a very comprehensive piece online, written by my friend CryptoCred. You should absolutely be following him in general - he shares a ton of great information for free.
This is the summary, from the article above. You should read the ENTIRE thing.
Position Size is NOT the same as Risk Amount, but it is derived from your Risk
You only neeed to know your Risk Amount, Entry, and Stop Loss to calculate your Position Size
Position Size = Risk Amount/Distance to Stop Loss
The closer your Stop Loss to your Entry, the bigger your Position Size (and the inverse is true also)
Leverage does NOT affect your Position Size and Leverage does NOT alter the Position Size calculation equation — the only way to make more money is by trading bigger Position Sizes (and the added risk that comes with doing so), not by moving a Leverage slider
Use the Liquidation Price calculator prior to opening a position to ensure that your Stop Loss kicks in before you get Liquidated
Asking/caring about what Leverage other traders use is pointless without knowing more information — it’s mostly used as a marketing gimmick
Altcoins
Altcoins were amazing this weekend, and basically every trade I shared on Friday moved into solid profit by Sunday night. Of course, alts dropped a bit across the board on Monday, but most have recovered and are still in profit from those trades. Now the alt market is at another cross roads, seemingly waiting for Bitcoin to make a move in either direction. You can revisit Friday's charts with any question, although I will provide quick updates here. You can always go back to ANY chart I have published and push the play button to see how it has advanced. I'm not seeing anything that's screaming "buy now" or tremendous bullishness in the alt market today, but it's worth keeping an eye on what's happening.
Let's look at a few things I am watching.
AION/BTC
I missed this amazing trade on Friday because I was busy writing the newsletter. That said, price quick retrace the move. I am actually in this now from roughly 107 on the retest of that blue trading range as support. It seems likely to hold based on the past few candles, so I am expecting another move up to test those highs. Stop loss is below the EQ of that blue channel (dashed line). My only concern is that it will come back down to test the descending line and stop me out while still remaining bullish. But no trade is a sure thing.
ALGO/BTC
Hard not to like what ALGO is doing. The only thing I am a bit weary of is it looks like it COULD be making a small head and shoulders, but that's not a major issue to be concerned with for now. It has flipped and tested levels successfully on the way up and has clearly broken the major downtrend. At this point, I would like to see it flip 2885 to support before entering, as it was rejected at that key level. After that, it should be clear sailing to 339.
BAND/BTC
This was a chart request on Thursday that I endorsed when I charted it. It was looking super bullish in the flag shown. It made a beautiful move up and has consolidated once again in a bull flag and broken out. It's hard to buy something that has already pumped, but the signals are all there for further upside. If it drops, I would look to enter a retest of the local flag or of 9676. That would be a sweet entry if this is going to continue to rise.
BAT/BTC
Nothing has changed. I have just added the ascending blue local support. A breakdown of that line may change the short term bias a bit.
CELR/BTC
There's no clear trade here yet, but I am watching for a flip of the descending resistance (if it breaks) and a flip of 27 sats for a signal that it's safe to enter. This has a ton of potential if this criteria are met. This is an advance idea, no reason to enter right now. Set your alarms.
ETC/BTC
ETC did exactly what I hoped - it broke out of the channel and made a nice move up. On the retrace it bounced from the local 4 hour demand zone. Textbook stuff here, still feeling good.
ETH/BTC
I adjusted the bottom support line to line up better on the first two touches. As you can see, price has bounced off of support and made the move I said was likely to the top half of the trading range. Still looks good here. Looking for a move to the top of the range at least. Hopefully then a move up and above!
FTM/BTC
BOOM. Price was at 45 when I posted this. The bounce off the bottom of the range was a clear signal of likely price appreciation, which happened in spectacular fashion. This went up 40% to the top from when I shared the chart. Even better? It has retested the range top as support, which "should" lead to another move up.
XRP/BTC
This was the only one that I posted Friday that did not move up over the weekend. But it made up for it today. Price retested the descending channel and horizontal support in exactly the same spot - beautiful TA. Hopefully you were watching from the setup on Friday. I caught a long there.
Legacy Market
The money printer is working over time to keep the stock market afloat, once again proving the point (which I have not fully learned) that it's dangerous to "fade the fed." If you don't know what the means, it means that betting against the market is betting against their ability to raise the floor by printing endless money. My shorts are still open, SPY is underwater a bit. I have also added Tesla and Boeing shorts today, discussed below.
This may be the most poignant yet simple tweet that I have seen on the subject. Unemployment is reaching historic levels in record time, interest rates are likely to go negative this week, GDP is contracting, PMI is dumping, Oil is worth less than a 3 oz shot of Evian... and the stock market is flat from a year ago. I will once again remind you that Markets can stay irrational longer than you can stay solvent.
It is "earnings season" now, when companies report their quarterly earnings. This is usually when stocks independently rise and fall based on their fundamental performance and outlook. It seems that most company will not even be reporting earnings! Crazy.
I feel like a broken record, reminding you all that technical analysis on the stock market in unprecedented times like this is somewhat useless, but looking at charts is our lot in life. Let's take a quick look at the the Dow Jones.
Price broke every level of support on the way down as if they were nonexistent. That's because they were! Technical analysis does not work in a global meltdown. Since then, price has made a "V-Shaped Recovery" of sorts (although not complete). That said, it did so in an ascending wedge which recently broke down. That "should" have signaled a drop back down to test the lows. Instead we have gotten more stimulus, more money printing and a continued rise. Price even closed above the 50 MA yesterday. You could even argue that this is a renewed bull market since the lows were printed, but that feels... absurd. Either way, if you define a bull/bear market by the metric of being up or down 20%, this could qualify.
The Dow is approaching another key level of resistance, the June 2019 lows. It is also yet to fully retrace to the "golden pocket" between 61.8% and 65% of the recent drop. This is still "normal" retracement of the move down, but it's hard to bet against the Fed when you see what is happening.
Also, to reiterate... the key element here that makes me remain exceptionally skeptical is the decreasing daily volume on the entire move up. This could be a result of the sheer insanity of the selling and compared to before the dump, volume is high. But it still continues to drop instead of rise, indicating weak buying. This may be an indication that real people are not actually buying - it's just stimulus.
The weekly looks even better, honestly. Look how the 200 MA has held as support on this time frame for the last 3 candles. The previous 2 weeks have wicks below, while this week appears (for now) to be bouncing up from support. Lots of time left to see how this closes.
AMAZON
I automatically invest in Amazon using dollar cost averaging, regardless of price, every month. That said, I have not been trading it of late and still will not here because the stock market is confounding me. I don't trade when I am uncertain of market conditions.
That said, Amazon remains an essential cog in keeping the economy going and servicing the needs of our citizens. They are hiring more people and earnings are likely rising. If you are interesting in entering, the logical spots on the chart are shown as black lines... and also at current price, because it is retesting the top of a very clear ascending channel, although it does not presently look likely to hold.
I view any stock purchase as a trader as risky right now, so do your own research.
BA (BOEING)
I posted this idea in a previous newsletter. The bear pennant appears to be breaking down. I opened a short on the rest of the bottom line this morning at $134.
TESLA
I shorted Tesla this morning at $800. The rally looks to be running out of steam, with slightly decreasing volume. It has also retraced 70.5%, the optimal trade entry (OTE) for institutional traders. This is in confluence with the pink line, a VERY clear resistance being retested for the first time. First target is around the 50% fib in the $650s. This also would fill that large gap that you can see on the way up.
American Companies Are Testing China's Digital Yuan
A few American companies have chosen to take part in China's trial run of the digital yuan. 19 companies in total are a part of the experiment - McDonald’s, Starbucks and Subway are the three U.S. firms that will be participating in the digital currency trial in Xiong’an, China.
It's hard to read too deeply into this, but it is interesting to note that American companies are open to digital currency. We are already aware that Starbucks is at least superficially interested, since they have been a part of the Bakkt experiment for quite a while. That said. if this goes well and American regulators start to loosen their grasp, this could easily open the door to cryptocurrencies being accepted at major retailers and restaurant chains in the United States - although that requires a lot of change and is something to keep in our pocket for way down the road.
Phemex
This newsletter is sponsored by Phemex, the only leverage exchange where I now trade.
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USD settled contracts, less risky and simple PnL (Different from BitMEX and Bybit)
Proprietary Cold Wallet System
3 Withdrawals per day (Different from BitMEX)
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The Best Bitcoin Threads
This is a great list of some of the best Twitter threads on Bitcoin ever. Enjoy!
The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor.