Digging Out Of This Drawdown
After a complete battering of some speculative-tech names, most unskilled traders are still piling into stocks via hefty premium call options. This is happening while the economy is heading into a serious fed tightening cycle. Big money still has some juice to squeeze from them. The trend in SPX is still intact. Here is what we are watching:
Brazil (EWZ),
China Tech (KWEB)
Silver (SLV)
Rare earth metals (REMX)
Communication Services (Activision, Twitter)
Block Inc (SQ),
Last week, CEO Jamie Dimon forecasted “6-8 rate hikes”, which caused rates to jump higher. Understand that this is basically indirectly assiting the fed with raising rates by just talking them up. Never forget, 4 years ago Dimon stated that bitcoin is worthless and now has a dedicated crypto desk at the firm.
One addition thing to mention is that investors are fearful of the Fed’s balance sheet drawdown, yet forget that 79 banks have literally handed $1.5 trillion in excess liquidity back to the Fed via daily reverse repurchase operations (more on reverse repos here). Essentially the Federal Reserve can drain $1.5 trillion with zero impact on net flows.
It has been jam into banks
Energy has been ripping to the sky & at multiple-year relative highs. FADE IT
Quick pitch on Block Inc:
A pure bet on Bitcoin for Jack Dorsey, right after he left Twitter (for the better)
Building a physical Bitcoin wallet
Block wants it to be possible for anyone to mine Bitcoin from home.
3.84B in revs, $343M in free-cash-flow (free money)
Down almost 60% from highs
Now that Activision demolished half of its workforce… it can’t get worse.
USD on support.
Zoom in.
Brazil (EWZ) is a great risk/reward near $28.
Bitcoin on the brink.
