Today we have post of charts! I created a video with a summary of this post , watch here.
I have a bunch of charts below, all with my own view, I am not a professional trader or financial advisor.
This is just a way to share what I am looking at with those who ask me 'what are you looking at'?
Bitcoin / GTBC - Its the new digital gold, to learn more about excitement in crypto read article on Defi . I want to buy and sell GBTC based on bitcoin action, and also to sell GBTC when the premium is high and buy when the premium is negative or very low.
S&P 500 / Nasdaq - Stock market indexes that represent USA stocks and technology.
IBB - Index for Biotech, a growth sector in the decade ahead.
INDA - I am a huge fan of India growth in the 20 years ahead, perfect for my retirement account.
- It is also a play outside of USD valuation.
Gold/GDX - Gold and gold miners, I am bullish only due to the money printing in 2020, Europe changing gold reserve requirements for European banks, plus India will be buying more gold.
updated Ethereum 1/24/21
Asset SMA reading Level to watch 4 year reading
Bitcoin negative Stop loss 29K, buy 35k+ very positive
Ethereum positive Stop loss 1280, negative (for value)
S&P500 / Nasdaq Positive SPX stop loss 3150 negative 20%+
IBB Positive Stop-loss at 129 neutral
INDA positive Stop loss at 36 very positive
Gold (barrick) low negative Stop loss at 21 positive, 40+
GDX low negative Stop loss at 33 positive, 80+
Bitcoin
Bitcoin over the 4 years ahead I believe will hit 100K, and may hit up to 1 million a coin in the decade ahead. However, my opinion isn't a certainty, but in my head its likely. Perspectives can change with new information. Bitcoin this past week had news of a 'flaw' called double spend. it was not true. Janet Yellen made comments about regulating bitcoin. this is actually a plus providing the US Government doesn't view bitcoin as a threat to itself. Better regulation equals higher trust, equals higher investment.
Since it is a great long term buy, the first area is short-term view for direction.
Bitcoin punching below 28974 is of a concern, next levels of support are 26,000 and 21,000.
We need bitcoin to go above 35000 to get optimistic, and above 40k to aim for moving to new highs.
For this reason, I put sell orders for most of my bitcoin in at 34500, if I had did this charting yesterday I'd probably had my sell in at 33k. This chart does not look good, I may sell my GBTC on Monday and wait for Bitcoin to have the 24/48 hour SMA cross in a positive trend before buying again.
Examples of buy/sell if using 24/48 hour SMA, I want to start using it for buying GBTC.
I'll be late in, and late out, but the trades are favorable.
Ethereum
Why? Ethereum is the basis for all the DeFi innovation that got me into crypto in 2020, to read more, click here. I am not convinced Ethereum will go to 10K or higher. Its purpose isn't a value store, but to enable financial automation. I believe the destiny of Ethereum in some future revision to sell an Ethereum token for a price, when the contract is executed, the coin is burned. This will enable users to pay upfront for 'gas cost' at a known price. It is the ONLY way to enable Ethereum to take over global finance. In the near term, the attention to Ethereum is causing price variance.
One opensource effort to fix this 'gas cost' can be found here. To see how pervasive this problem is, check out this open insurance project switching to xDai. This is unsustainable, and therefore I am not a believer in Ethereum as a value proposition over the 5 year horizon. Ethereum is controlled by a non-profit trying to maximize its utility value, therefore high Ethereum prices and unpredictable gas costs are not wanted by those who control it. There is no limit to Ethereum coins, unlike bitcoin. They could issue 5x more coins per month starting tomorrow if they wanted.
Now, to the charts! Below is a pulled back view of a Fibonacci fan since late 2020, and then a close up of recent price action.
Summary: When the 48 hour SMA crosses above the 24 hour SMA, Ethereum is a buy and hold until it flips. It has been a very good indicator. As of this chart, it is still in a down trend. (1/23 @10 am est)
Crossing above 1320 indicates a target of 1500 for Ethereum. Crossing below 1080 will likely bring a target of 880. Right now the key line is about its current value , ~1200. It need to push up to have the 48/24 hour SMA cross or risk another downturn to test 1080. My gut says more pain before it gets better. I put a stop loss in at 1210-1200 to sell 5 of my 7 Ethereum. Two Ethereum is at a sell limit of 1490.
I use the S&P 500 because it better represents a wide array of stocks, not just the top 30 like the DOW.
We are in an upswing that started in November, and it remains intact. The last few downturns have been short and 5-10 %. The downturn in Feb was more extreme.
Until the indicator crosses, the market is smooth sailing ahead. I am concerned with the new administration actual real facts must be stated and 'hard choices' articulated to clean up the economic disaster of the last 4 years.
Critical levels:
Below 3200-3100 range is bad, next stops are 2700 and 2200.
Outlook: Mixed leaning negative.
Upside is infinite , however using historic measures for the market, the ROI should be -2% over the next 10 years. I expect the new Treasury Secretary, Janet Yellin, who headed the Federal Reserve Bank under Obama, is going to mix things up a bit. She is a strong proponent of helping the bottom 90%, and she must realize the trillions of free money to the top 1% has exasperated the financial divide. I expect instead of advocating trillions more to the top, she will advocate 'free money' to the people via government handouts and work in concert with the Fed to minimize the negative distortions. The question is, were will the free money flow to (aside from basic living costs)? It maybe the stock market, cryptos, people actually paying down their debt, or a mix of all of these things. If the top 1% doesn't get their free handout, we will see if the market suffers.
Just to put the S&P 500 into historical perspective.
NASDAQ
I decided to add the NASDAQ index since US based economic growth maybe better represented by this index than S&P 500, since it is comprised of newer technology based companies.
What an explosion since 2016! View for NASDAQ is similar to S&P 500, except there are core companies that are very well positioned for growth ahead. I would like to think the downside is a lower risk.
Critical Levels
10900, 6880-6000, then 4185. At this point 4185 would be an economic destruction, so I have to even list it. But it is the high of the 2000 bubble and now its a floor.
To bring context to the chart above, below is NASDAQ movement since 2000.
IBB
INDA
I am a huge fan of the prospects of India. They are the worlds largest democracy, with a population 4 times larger than America. It is also a good play to diversify outside of USA and produces income. (unlike gold/Bitcoin).
Stop loss levels are 36, 32, and 24.
GOLD - Barrick Gold
I am tracking Barrick gold separate from GDX simply because it is a company that has been getting positive press. Warren Buffet who famously never buys gold miners, recently bought their shares.
This is at a good spot, not great for a buy. Its at 23.4, and we have a stop loss level at 21.80, with additional levels at 20 then 15. On this chart I added stochastics, and indicator for overbought or oversold. GOLD is in oversold territory.
GDX
GDX is an ETF of gold miners. The reasons why I follow gold miners is before Bitcoin became the new gold, gold has been an a way to hedge against financial uncertainty, fiat currency challenges, and countries like India and China as they get wealthier, they historically buy more gold.
Critical levels
GDX is a buy right now, with a stop at 33, and a major stop at 26. The stochastics are favorable for more upside. The upside in 2021 is about 50, with an upside by 2024 of 90-100.
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