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In This Issue:
We Are All A Little Crazy
Bitcoin Thoughts And Analysis
China Unexpectedly Cuts Rates
Bollinger Band Basics
“The Coinbase App Is Broken”
Coca-Cola Is Based
Argentina May Elect A Pro-Bitcoin President
Europe Gets First Spot ETF, US Continues To Lag
Bitcoin Pump Ahead, Stock & Bonds Are Overvalued | Macro Monday
We Are All A Little Crazy
In the acclaimed film “One Flew Over The Cuckoo's Nest,” the character Randle P. McMurphy, portrayed with brilliance by Jack Nicholson, pretends to be mentally ill to evade prison work. Set within the confining walls of a mental institution, the narrative meticulously explores the fine and often indistinct line between sanity and insanity, unfolding through a cast of memorable characters and their comically intricate dynamics.
At a glance, the mental institution appears to be nothing more than a ‘loony bin.’ But as the story progresses, the film deftly challenges this belief, asserting that sanity is frequently just a matter of perspective. This theme may resonate with many in the crypto community, drawing parallels with our own experience.
Crypto enthusiasts, like McMurphy, often find themselves having escaped what they perceive to be a broken fiat system, only to arrive in a close-knit community where everything initially seems ‘crazy.’ However, the true beauty of this new world becomes apparent as ‘insanity’ gradually transforms into ‘sanity’ the longer one remains immersed in it.
What if the perceived ‘craziness’ faced by an investor has nothing to do with charts, numbers, or market trends, but rather emanates from the depths of their own psyche? The only thing that would seem ‘crazy’ is if a seasoned crypto investor never felt a bit mad at some point. But this is where the journey becomes fascinating.
Let's delve into some of the specific ways that a seemingly sane crypto investor or trader might actually feel or become ‘crazy.’
The Addiction of Extreme Positions: Investors and traders who become consumed by their craft face the risk of becoming addicted to taking extreme positions. An extreme position, much like an addiction, can occupy one's thoughts, disrupt sleep, obscure judgment, and put a significant part of finances in jeopardy. Markets aren't simply black and white; they demand patience, equilibrium, and a judicious dose of moderation. In the film, McMurphy's daring excursion with the patients for a fishing trip illustrates the calculated risks and potential dangers of extreme actions.
Timing The Market Requires Two Correct Decisions: Decisions, whether made by patients in a mental ward or by investors and traders, are an essential part of daily life. However, in the world of investment, fewer decisions often prove to be more prudent. Obsession with timing the market usually demands two back-to-back ‘perfect’ decisions. As rare as timing the bottom is, the temptation to also ‘sell the top’ can lead to disaster. The film's portrayal of Billy Bibbit's obsession and subsequent tragic end serves as a cautionary tale against such fixations.
Waiting Is Extremely Tough: It's not always chaos that can drive investors to distraction; sometimes, it's the monotony of waiting. Prepared investors understand that the market can be dull and uneventful, which can be as challenging as its volatility. Boredom, anchoring to specific outcomes, and the anguish of watching the market drift away from expectations can be tormenting. Chief Bromden's intricate model building in the film offers a poignant metaphor for finding meaning in the seemingly mundane.
Like McMurphy, each of us in the crypto world is a patient of a sort of mental ward, whether we acknowledge it or not. Yet beneath our quirks and idiosyncrasies lies the distinctive spark that liberated us from a fiat-dominated existence into the thrilling ‘madness’ of crypto. It's essential to fully embrace this new world but also to periodically step back and reconnect with the real world.
Live your crypto dreams to the fullest, but always remember to maintain balance and perspective. If you've come this far, your potential is vast and promising. The journey may seem crazy at times, but perhaps that's what makes it all the more captivating and rewarding.
"You have to laugh at the things that hurt you just to keep yourself in balance, just to keep the world from running you plumb crazy." - Chief Bromden
Bitcoin Thoughts And Analysis
I wrote a quick primer on Bollinger Bands in the education section below. As you can see, the B Bands are the tightest they have EVER BEEN on the WEEKLY chart, which is really saying something. This indicates the lowest volatility in Bitcoin history, which we can see both anecdotally and through data.
The indicator on the bottom is called BBW or Bollinger Bands Width. This shows how tight or wide the bands are. As you can see, it is at an all-time low.
I have no idea what the catalyst will be or when it will happen, but the next move will be explosive.
China Unexpectedly Cuts Rates
Stocks and bonds fell amid growing concerns that China's struggling recovery and debt issues could impact the global economy. China's unexpected rate cut, instead of calming investors, increased anxiety about attempts to rejuvenate growth, leading to a 0.7% decline in Europe's Stoxx 600. In the U.S., equity futures signaled a drop at the opening, and Treasury yields climbed to 4.22%. China's sluggish emergence from pandemic lockdowns and the potential default of developer Country Garden Holdings Co. added to worries. The situation has been further complicated by economic news from Argentina and Russia, contributing to a global fear of economic slowdown or recession. Meanwhile, gold remained near its lowest close since March, and oil was little changed as traders adjusted expectations regarding future Fed rate cuts.
Corporate Highlights:
Hawaiian Electric Industries Inc. plunged by a record 34% on concern that its power lines may be linked to the deadly Maui wildfires
US Steel Corp. surged 37% after the company got a rival $7.8 billion takeover offer from Esmark Inc. following peer Cleveland-Cliffs Inc.’s unsolicited bid
Tesla Inc. slipped 1.2%, triggering a selloff for other producers of electric vehicles, after it rolled out a new round of price cuts in China
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 fell 0.7% as of 10:36 a.m. London time
S&P 500 futures fell 0.4%
Nasdaq 100 futures fell 0.3%
Futures on the Dow Jones Industrial Average fell 0.4%
The MSCI Asia Pacific Index fell 0.2%
The MSCI Emerging Markets Index fell 0.5%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro rose 0.2% to $1.0929
The Japanese yen was little changed at 145.59 per dollar
The offshore yuan fell 0.5% to 7.3134 per dollar
The British pound rose 0.2% to $1.2713
Cryptocurrencies
Bitcoin rose 0.1% to $29,398
Ether was little changed at $1,841.88
Bonds
The yield on 10-year Treasuries advanced three basis points to 4.22%
Germany’s 10-year yield advanced five basis points to 2.69%
Britain’s 10-year yield advanced four basis points to 4.61%
Commodities
Brent crude was little changed
Spot gold fell 0.2% to $1,903.55 an ounce
Bollinger Band Basics
Bollinger Bands are a technical analysis tool that was invented by John Bollinger in the 1980s. They are used to measure a market's volatility and identify "overbought" or "oversold" conditions in trading securities, including stocks, bonds, commodities, and forex.
Here's how Bollinger Bands work:
Middle Band: This is a simple moving average (usually set to a 20-day period) of the closing prices of a security.
Upper Band: This is calculated by adding a certain number of standard deviations (usually two) to the middle band.
Lower Band: This is calculated by subtracting the same number of standard deviations from the middle band.
The resulting bands act as dynamic levels of support and resistance, adjusting to the market's volatility. When the price is closer to the upper band, it might be considered overbought, and when it's closer to the lower band, it might be considered oversold.
Here's why traders use Bollinger Bands:
Volatility Indicator: The wider the bands, the more volatile the market is. The narrower the bands, the less volatile the market is.
Trend Identification: Some traders believe that when the price is riding the upper band, the asset is in an uptrend, and when it's riding the lower band, it's in a downtrend.
Overbought/Oversold Conditions: As mentioned, prices near the upper band may be overbought, and prices near the lower band may be oversold. This could signal potential reversals or pullbacks.
Squeeze and Breakout Identification: When the bands are very close together (a "squeeze"), it may indicate that a breakout is about to happen.
Bollinger Bands are a popular tool but should be used in conjunction with other indicators and analysis methods to make more informed trading decisions. Like all technical indicators, they don't work all the time and can provide false signals. It's essential to understand the underlying principles and practice sound risk management when using Bollinger Bands in trading.
“The Coinbase App Is Broken”
User experience, a vital facet of technology that is often undervalued, tends to be overshadowed among innovative companies, particularly in the crypto sector. The persistent neglect of this critical area is a significant concern. Even platforms like Coinbase, lauded as "the most user-friendly crypto app," are plagued by numerous bugs, glitches, and DeFi-related issues that demand attention.
The image above, shared by Brian Armstrong, speaks volumes about the imminent changes. It seems the tide is turning, and the focus is finally shifting towards improving the user experience in the crypto space. This shift is a welcome development, as the current state of user experience in crypto is far from reaching its full potential. It's refreshing to see that user-centric considerations are beginning to take precedence, signifying a promising step forward for the industry.
Coca-Cola Is Based
Coca-Cola, one of the most recognized brands globally, is making its inaugural debut into the NFT space through Base with a collection dubbed "MasterPiece." The NFT collection "unites iconic artworks such as 'The Scream' by Edvard Munch and 'Girl with a Pearl Earring' by Johannes Vermeer with new works from emerging talents, all intertwined with the iconic Coca-Cola® bottle." The interest in big brands entering the DeFi and NFT arenas has been mixed, and only time will tell if this move will be successful. However, I am more optimistic about this venture compared to previous ones. Strategic entrances, coupled with genuine art and utility, are likely to be the determining factors for future success in this evolving space.
Argentina May Elect A Pro-Bitcoin President
In the midst of a pivotal election in Argentina, focused on a fractured monetary system, a pro-bitcoin candidate, Javier Milei, has emerged victorious in the primary. What sets this development apart is that Milei, the winning candidate, is independent and has garnered more votes than traditional opposing parties. Considering that Argentina is currently grappling with rampant inflation of over 100% this year, the rise of a candidate who is anti-Central Banker and in favor of private sector money is an interesting development, to say the least. This win could signal a significant shift in the country's approach to monetary policy, reflecting a growing discontent with the current system.
Europe Gets First Spot ETF, US Continues To Lag
London-based Jacobi Asset Management has listed Europe's first spot bitcoin exchange-traded fund (ETF) on Euronext Amsterdam, regulated by the Guernsey Financial Services Commission (GFSC) and trading under the ticker "BCOIN." The custody for the fund is provided by Fidelity Digital Assets, with Flow Traders acting as the market maker. This listing marks the first spot bitcoin ETF in Europe and comes ahead of the U.S., where the Securities and Exchange Commission (SEC) has rejected dozens of similar applications. The Jacobi ETF differs from exchange-traded notes (ETNs) as shareholders own a portion of the underlying shares, and the ETF cannot be leveraged or use derivatives. The listing revives hope for similar products, especially following new applications with "surveillance-sharing" agreements to prevent market manipulation.
Bitcoin Pump Ahead, Stock & Bonds Are Overvalued | Macro Monday
It's not just Monday, it's Macro Monday with James Lavish, Dave Weisberger, and Mike McGlone. We are talking about recent news in macro, why stocks and bonds are overvalued, why we can expect Bitcoin to pump in the coming weeks, and more!
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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.