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In This Issue:
Buy the Dip or Embrace Early Entry?
Bitcoin Thoughts And Analysis
Altcoin Charts
Legacy Markets
ChatGPT Predicts Bitcoin’s Price For January
Google Is Ready For ETF Advertising
Elizabeth Warren Is Desperate To Stay Relevant
This Parody Is Hilarious
Politician LIES, Bitcoin FLIES l Macro Monday
Buy the Dip or Embrace Early Entry?
Decisions… decisions...
Should we buy the dip or embrace early entry? What should we do?
Crypto wisdom 101 dictates that downturns in bull markets present buying opportunities. This straightforward strategy theoretically removes emotion and timing. When the market dips, you buy, it’s as simple as that.
But what if we dared to take the opposite path? Let's introduce two fictional characters, Mip and Sherly, and evaluate their decisions.
Mip and Shirley share common traits; both are investors with a recent fondness for Bitcoin, yet they employ distinct strategies. Mip specializes in buying dips and seizing opportunities during market downturns. On the other hand, Shirly is consistently early, demonstrating a proactive approach to market entry, aiming to capitalize on the earliest signs of potential growth.
Mip, a busy individual, faces time constraints in pinpointing the ideal moment to buy Bitcoin. Recognizing his occasional susceptibility to emotional decision-making, Mip is determined to avoid allowing intrusive thoughts to sway him out of the Bitcoin market. To simplify his approach, Mip finds contentment in adding Bitcoin to his portfolio specifically during market dips.
Mip deploys SOME capital, buying Bitcoin today, at $40,800.
Shirley, on the other hand, lacks the patience to wait for the market to present 'opportunities.' Embracing risk, she desires to establish her Bitcoin position immediately. Unfazed by Bitcoin's volatility, Shirley remains resolute in her conviction. Without waiting another moment, Shirley deems it's still early and takes the plunge for it all.
Shirley deploys ALL capital, buying Bitcoin today, at $40,800.
At this point, as the creator of Mip and Shirley, I have the creative freedom to shape their fate according to any specific agenda. Just as I could choose Mip to successfully buy the dips and Shirley to successfully enter early, I could equally decide that both end up 'rekt' for any reason whatsoever. Nevertheless, such decisions would only serve my own interests.
So, what objective conclusions can we draw about Mip and Shirley without manipulating the narrative to promote arbitrary priorities? Firstly, Mip and Shirley each can find success in their strategies IF they don't waiver.
Mip’s strategy works because of either a) his contentment with an already accumulated position that he is adding to, b) his occasional availability of new cash to deploy, or c) his fear of taking a full position.
Shirley’s strategy works because either a) she is prepared for a sizable position, b) possesses a sum of cash ready for deployment, and c) views downward volatility as inconsequential in a bull market.
Below are two well-known investors who, based on their known practices, could be associated with the described strategies:
Warren Buffett is known for his patient and value-oriented investment approach. Buffett has often emphasized the importance of long-term investing, acquiring assets when they are undervalued. He tends to accumulate positions in companies he believes have enduring value.
Paul Tudor Jones is often described as an aggressive and opportunistic investor, particularly when it comes to early market moves. He is known for his macroeconomic approach, which involves making bold, sometimes contrarian, investment decisions based on his assessments.
So, where do we stand today? Personally, I find myself in the buyer's seat during dips while also being generally satisfied with my current position. I suppose that puts me more in line with the Mip approach to things, but should a substantial sum of cash come my way, I might lean towards adopting Shirley's strategy.
Essentially, bull markets are destined to face dips, and how we handle them is a personal decision. That being said, the window for what's deemed 'early' is quickly closing. Luckily, dips possess the ability to reset the clock, even if only temporarily. Don't overanalyze it; after all, Bitcoin remains the hardest asset on the planet, whether acquired gradually or in bulk, today or tomorrow. Just buy Bitcoin, it’s that simple.
Bitcoin Thoughts And Analysis
You know the drill, because you have been with me for years, right?
My favorite signal of at least a temporary bottom is bullish divergence with oversold RSI - price makes a lower low, RSI makes a higher low.
We do NOT HAVE IT YET. It is likely not to happen. But the idea drawn above is what I would LIKE to see to give me confidence that the bottom of this move is in.
That would require price to close a candle with a lower low below the $40,700 area.
Altcoin Charts
For those who are new here, I share SETUPS and not SIGNALS. These are ideas that I am watching - if a certain thing happens, then the trade triggers. I am not telling you what to buy or when. I am showing you how I am watching certain charts and what has to happen for me to take a trade.
Here are a few weekly charts, with key levels that I will be using to determine likely support, resistance and targets. Remember, levels are not exact, they are areas.
Legacy Markets
Treasury yields and the dollar have declined in anticipation of a key US inflation report, while France’s CAC 40 index is approaching a record close. Equity markets are showing moderate movements as investors await this week’s economic data and interest-rate decisions, with European stocks and US equity futures seeing little change. Oracle Corp. experienced a significant drop in premarket trading following a disappointing revenue report due to slowing cloud sales.
The upcoming consumer price index (CPI) will provide insights into the ongoing disinflation trend, just before the Federal Reserve's final decision of 2023. The Fed is expected to hold rates steady, with a focus on whether it will attempt to moderate policy easing expectations after investors' dovish repricing.
Central banks are projected to maintain a data-dependent approach, with a need for more evidence of decreasing inflation. Paris stocks are pushing towards their highest-ever close, reflecting European market optimism about the nearing of central bank policy easing. Citigroup Inc. predicts the Stoxx 600 benchmark will reach an all-time high by the end of 2024, driven by peaking rates and stable corporate earnings.
UK wage growth has slowed, indicating a cooling labor market in response to a weakening economy. This comes ahead of the Bank of England’s rates decision. Monetary policy announcements are also expected from the European Central Bank, Switzerland, and Norway.
US CPI for November is anticipated to decrease to 3.1%, the lowest since June, with core inflation expected to cool to just below 3% in the first half of next year. This could signal a shift in the Fed's stance towards easing.
The dollar index has fallen slightly, and bonds have risen in the US, UK, and Germany. Asian markets, particularly in Hong Kong, are responding positively to potential Chinese economic policy decisions that might indicate increased stimulus for the next year.
The yen has recovered after a significant decline, as Japan’s government bond sale showed robust demand, reducing speculation about the Bank of Japan exiting its negative interest rate policy.
Oil prices have edged higher due to concerns over disruptions in the Red Sea following an attack on a tanker. Bitcoin has risen after a significant drop, as traders secure profits following a substantial rally this year, leading to large liquidations of bullish bets.
Key events this week:
Germany ZEW survey expectations, Tuesday
US CPI, Tuesday
Eurozone industrial production, Wednesday
US PPI, Wednesday
Federal Reserve policy meeting and news conference with Chair Jerome Powell, Wednesday
European Central Bank policy meeting followed by news conference with ECB President Christine Lagarde, Thursday
Bank of England policy meeting, Thursday
Swiss National Bank policy meeting, Thursday
US initial jobless claims, retail sales, business inventories, Thursday
China 1-yr MLF rate and volume, property prices, retail sales, industrial production, jobless rate, Friday
Eurozone S&P Global Manufacturing PMI, S&P Global Services PMI, Friday
US industrial production, Empire manufacturing, cross-border investment, Friday
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 rose 0.1% as of 10:05 a.m. London time
S&P 500 futures were little changed
Nasdaq 100 futures rose 0.1%
Futures on the Dow Jones Industrial Average rose 0.2%
The MSCI Asia Pacific Index rose 0.5%
The MSCI Emerging Markets Index rose 0.4%
Currencies
The Bloomberg Dollar Spot Index fell 0.2%
The euro rose 0.3% to $1.0794
The Japanese yen rose 0.5% to 145.38 per dollar
The offshore yuan was little changed at 7.1908 per dollar
The British pound was little changed at $1.2565
Cryptocurrencies
Bitcoin rose 1.5% to $41,820.06
Ether rose 0.4% to $2,226.8
Bonds
The yield on 10-year Treasuries declined four basis points to 4.20%
Germany’s 10-year yield declined four basis points to 2.23%
Britain’s 10-year yield declined 10 basis points to 3.98%
Commodities
Brent crude rose 0.4% to $76.37 a barrel
Spot gold rose 0.2% to $1,986.24 an ounce
ChatGPT Predicts Bitcoin’s Price For January
I came across a post on Twitter where someone inserted Bitcoin's prices from each of the past 13 Januarys and asked ChatGPT to predict the next number in the sequence. Intrigued, I decided to try the same trick. Here's what happened.
Me: I want you to try and guess the next number in the sequence. I don't care if you are confident, don't overthink it.
ChatGPT: Sure, I'll give it a try! Please provide the sequence, and I'll do my best to guess the next number.
Me: [Inserts numbers]
ChatGPT: The next number in the sequence is 244,084.6.
Me: (Thinking the number is far too high) Can you give me a few more guesses, and then take the average of your 5 best guesses?
ChatGPT: Certainly! Here are five more guesses:
112,345.3
52,096.8
78,932.6
160,278.9
294,567.2
Now, let me calculate the average of these five guesses:
(112,345.3 + 52,096.8 + 78,932.6 + 160,278.9 + 294,567.2) / 5 ≈ 139,844.16
So, the average of the five guesses is approximately 139,844.16.
Me: (I tried again with different wording and got this answer…)
ChatGPT: Based on the given sequence, I'll propose the next number as: 45,623.75
Clearly, ChatGPT has a mind of its own, and often, it's challenging to extract answers related to financial advice, as the AI is programmed to avoid providing such guidance.
Google Is Ready For ETF Advertising
Last week, it came to Crypto Twitter’s attention that Google intended to revise its advertising policy, and recent developments reveal a direct correlation with advertisements concerning crypto trusts. The language employed in the image above subtly references spot Bitcoin ETFs. This timing aligns seamlessly with the potential approval of ETFs in early January and the writing couldn't be clearer the ETF is close. Gary, it's time to make the right move.
Elizabeth Warren Is Desperate To Stay Relevant
While I remain unconvinced that we can entirely dismiss Elizabeth Warren's contentious crypto bills, it's worth noting that we can certainly critique her attempts to establish what might be perceived as a totalitarian financial surveillance state. Did you know that, over her career as a senator, Warren has proposed 305 bills, and none have been passed? Although she remains a powerful figure in politics, her challenges in garnering support suggest she has too many adversaries to dictate the rules. The Digital Asset Anti-Money Laundering Act, in particular, stands as a direct assault on crypto, encroaching on our personal privacy and autonomy. Interestingly, the more attention this bill receives, the more inclined I am to consider buying. I can only wonder at what point Warren will recognize that her crusade against crypto may be generating more enemies than allies.
This Parody Is Hilarious
Bitcoin Magazine killed it with this parody blog, please go read the article if you have the time.
Bitcoin mines aren’t just thirsty, it turns out they’re starving for air, too. The air consumption tied to a single Bitcoin transaction, on average, could be enough for a DINK couple to breathe for an entire year, according to a new analysis by Andrew de Breeze.
Bitcoin mining’s rising air consumption has the potential to stress air resources and is prompting anger and questions from concerned environmental organizations, politicians and parents alike.
That means every single minute the amount of air used in Bitcoin mining is equivalent to the amount of air breathed by 3.4 million people every day. That’s the same amount of air breathed by entire countries or cities!
Right now Bitcoin mining’s air consumption is equivalent with the average amount of air breathed in one day by the entire population of Uruguay, every single minute of the day!
Politician LIES, Bitcoin FLIES l Macro Monday
It's Macro Monday with Dave Weisberger, James Lavish and Mike McGlone.
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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.