Welcome to The Wolf Den! This is where I share the news, my ideas about the market, technical analysis, education and my random musings. The newsletter is released every weekday and is completely FREE. Subscribe!
Sign up for my other newsletter, THE DAILY CLOSE!
I built The Daily Close to give you the same institutional-grade indicators and signals that I use to trade the market on a daily basis. It's automatically generated and delivered to your inbox at the daily close everyday.
1 Week FREE for all subscribers
17% discount if you subscribe for a year
$25 a month, or $250 a year
In This Issue:
Even A Broken Clock Is Right Twice A Day
Bitcoin Thoughts And Analysis
Legacy Markets
The Downfall Of Dollar Dominance…
Elizabeth Warren Doesn’t Want Your Vote
Cramer And Burry Continue To Be Counter Signals
Ledger Raises $100M As People Move To Self Custody
Binance Is Under Attack: Why Bitcoin Is Rising | Panel W/ Alex Tapscott, Dan Roberts & Ajit Tripathi
Even A Broken Clock Is Right Twice A Day
If you were to summarize 2021 in a single phrase, it would be 'the year of the broken clock.' This is because of how irrationally the market behaved that year, with even inexperienced investors winning big. The phrase 'broken clock' refers to the idea that even a broken clock is right twice a day, just like how some investors were lucky in 2021. However, this does not mean that their strategy will work consistently.
Take the hypothetical character Ross, for example. Ross is an Uber driver in his mid-30s who likes to take big investment risks. He invested 95% of his income in the market and scrolled through TikTokInvestors and listened to financial podcasts to build up his investment knowledge. In 2021, his net worth increased tenfold. Ross's strategy involved investing in Gamestop, Dogecoin, and NFTs, and it worked out for him.
Ross's success can be attributed to luck, as his strategy only worked when the market favored his bad habits. He failed to understand that good investors play the game every year, not just when the market is in their favor. Good investors are patient, doubt their ideas, and take care of their winnings. They know that they are likely to be wrong often and play cautiously.
Ross's luck was like a second, minute, and hour hand being in just the right spot even when there are no batteries in the clock. By nature of how a clock works, this is bound to happen just twice every 24 hours. The odds of Ross's luck were 2/86,400. There are 86,400 unique outcomes on a clock with three hands, and there are 86,400 seconds in a day.
In the end, being a good investor means playing the game every year, not just when the market favors your bad habits. The same rules apply to athletes, politicians, and musicians, who have to perform day in and day our, year in and year out. It means being patient, doubting your ideas, and taking care of your winnings. It means understanding that a rare win or success wears off quickly and that a career is made by consistently playing the game well. While we may all be broken clocks to some extent, we can minimize our shortcomings and maximize our winnings when it's our time. So let's be thankful for the Ross's of the world who keep the market a game to be played, but let's not be like Ross.
Trade on Bitget!
Bitget is the best crypto exchange for both spot and leverage, world’s largest crypto copy trading platform, the official partner of Juventus Football Club and a top 5 exchange by volume as listed on CoinMarketCap!
Sign up using my link to Bitget and you will get:
Up to an $8000 sign-up bonus 🔥
15% discount on ALL futures trading fees 🔥
Bitcoin Thoughts And Analysis
Another day, another rejection at $28,600. As you can see, the daily candle once again wicked through resistance, only to be smacked back down below. I will start to consider higher prices if we see a close above this line. I would still love to see a retest of $25,212 as support.
Legacy Markets
European stocks and US equity futures were steady on the last day of Q1 as global shares head for a second consecutive quarterly gain. The upbeat sentiment is in spite of banking turmoil and elevated interest rates. Consumer-related stocks outperformed and banks retreated as the Stoxx Europe 600 Index edged higher, while contracts on the S&P 500 were little changed as were those on the tech-heavy Nasdaq 100. The Fed's preferred gauge of underlying price pressures, the PCE Core Deflator, is expected to show high inflation persisted last month. A round of Fed speakers on Thursday suggested more monetary tightening was necessary. The dollar strengthened Friday, trimming some of its declines this month.
Key events this week:
Eurozone CPI, unemployment, Friday
US consumer income, PCE deflator, University of Michigan consumer sentiment, Friday
ECB President Christine Lagarde speaks, Friday
New York Fed President John Williams speaks, Friday
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 rose 0.2% as of 10:09 a.m. London time
S&P 500 futures rose 0.1%
Nasdaq 100 futures were little changed
Futures on the Dow Jones Industrial Average rose 0.1%
The MSCI Asia Pacific Index rose 0.6%
The MSCI Emerging Markets Index rose 0.5%
Currencies
The Bloomberg Dollar Spot Index rose 0.2%
The euro fell 0.2% to $1.0880
The Japanese yen fell 0.4% to 133.25 per dollar
The offshore yuan was little changed at 6.8771 per dollar
The British pound fell 0.2% to $1.2365
Cryptocurrencies
Bitcoin fell 1.2% to $27,804.81
Ether fell 0.3% to $1,790.5
Bonds
The yield on 10-year Treasuries was little changed at 3.55%
Germany’s 10-year yield declined four basis points to 2.34%
Britain’s 10-year yield was little changed at 3.51%
Commodities
Brent crude fell 0.8% to $78.61 a barrel
Spot gold fell 0.1% to $1,977.69 an ounce
The Downfall Of Dollar Dominance…
I won't pretend to be an expert on dollar dominance, but because this has recently become a major point of discussion, I want to reiterate what some experts have said on the topic. The two articles I am pulling my information from are this Bitcoin.com article and this Spectator article.
It is widely recognized that the US dollar is the global reserve currency. However, some believe that its status is currently in question, which is a cause for concern. Both internal and external issues have contributed to this uncertainty.
Internally, the US is facing inflation, weak monetary policy, and collapsing banks. Externally, there is the ongoing Ukraine war, growing rivals such as China, and Saudi Arabia announcing that it is open to trading oil in other currencies.
The consequences of a weakened US dollar could be severe. The dollar's reserve status has allowed the US to borrow more cheaply than other countries, sustaining public debt of more than 100 percent of GDP for the past decade. If this were to change, it would increase the cost of servicing US debt.
As one commentator puts it, "the US dollar having the world's reserve currency status has been a real privilege. We've abused the privilege by wholly reckless monetary and fiscal policy for so many years, certainly over the last couple of years, which has really devalued the dollar."
However, not everyone is concerned. Some argue that the US would not worry too much if central banks reduce their holdings of dollars in the future. By reducing the value of the dollar, it would make US exports more attractive.
In summary, the status of the US dollar as the global reserve currency is in question, and there are valid reasons to be concerned. However, some also argue that a weakened dollar could have benefits. The global community will need to monitor this situation closely to see how it evolves.
As for a more technical breakdown of this issue, I suggest this thread here.
Elizabeth Warren Doesn’t Want Your Vote
In the past, I have been skeptical of politicians who jump on the crypto wave solely to win votes. However, the recent anti-crypto stance taken by Elizabeth Warren is concerning, and it seems like a questionable move for her political career.
Warren's stance on crypto seems to have successfully alienated the pro-crypto crowd. The question is, does she hope to win over the anti-crypto crowd? While there are still people who are skeptical of crypto or don't understand it, the number of people who are explicitly anti-crypto is shrinking by the day. This raises the question of whether Warren's anti-crypto stance is really the best political move.
Taking an anti-crypto stance may not be advantageous for Warren's political career. The crypto industry is growing rapidly, and it has the potential to become a major player in the global economy. By taking a hardline stance against crypto, Warren may be alienating a significant portion of her base and hurting her chances of re-election.
Furthermore, Warren's stance seems to ignore the potential benefits of crypto, such as its potential to democratize finance and provide greater financial inclusion for underserved communities. While there are certainly risks associated with crypto, it is important for politicians to consider the potential benefits as well. Progressives should love what crypto can do for the very people they purportedly seek to help.
While skepticism of crypto is understandable, taking an anti-crypto stance may not be the best political move. Warren's stance risks alienating a significant portion of her base and may ignore the potential benefits of crypto. It remains to be seen whether this will be a successful political move for her. I doubt it.
Cramer And Burry Continue To Be Counter Signals
I have to give credit to Crypto Twitter for noticing the timing of this, but the joke is worth sharing. Two individuals had a similar bullish idea, and within 5 minutes of each other, they shared it. Unfortunately, it seems their bullishness jinxed the market, causing it to go lower.
As a result, I'll be spending my weekend hoping that Cramer and Burry go bearish again so that we can resume the upward trend. It's always fascinating to see how the market can be influenced by even the slightest comment or action.
Regardless of the market's behavior, I hope everyone has a great weekend.
Ledger Raises $100M As People Move To Self Custody
Ledger, the cryptocurrency hardware wallet maker, has raised €100 million ($109 million) from investors to expand distribution, production, and research and development. The funding comes at a time when crypto companies have been going insolvent and laying off significant portions of their workers. Ledger CEO Pascal Gauthier noted that in 2022, people became very aware that leaving money on centralized crypto platforms can be risky. The financing follows the company’s announcement of a new crypto hardware wallet called the Ledger Stax, which was designed by iPod creator Tony Fadell.
Binance Is Under Attack: Why Bitcoin Is Rising | Panel W/ Alex Tapscott, Dan Roberts & Ajit Tripathi
Sponsored by NORD VPN!
Privacy and security are essential for everyone, but especially for crypto investors. I use NORD VPN to protect my privacy and help keep my crypto safe!
Sign up HERE & enjoy the benefits of NORD VPN, for just $4 a month.
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. Nothing contained in this e-mail constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.