Disclaimer: Not investment advice.
The highly anticipated CPI report for the month of May has finally arrived. It recorded 5%, a figure last seen on 2008 and an increase of 0.8% compared to April. As can be seen on the graph, Energy commodities (fuel and gas) saw major increase in prices on a 12-month period at 54.5%. This is followed by used cars and trucks at 29.7%.
In reaction, the US10Y dropped -4.06% on Thursday, although it initially rallied to 1.52 after the report was released.
I searched the word transitory factors from the FED minutes of the meeting last April as it seems investors are convinced about this narrative for now.
Core inflation was expected to ease some later in the year but to remain above 2 percent at the end of 2021, boosted by large increases in import prices, a recovery in prices that had been especially affected by the pandemic, and the temporary effects of supply bottlenecks. Inflation was then projected to dip slightly below 2 percent in 2022 as the influence of these transitory factors diminished, before returning to 2 percent by the end of 2023, supported by sustained tight levels of resource utilisation in labor and product markets.
Memestonks Rockets to the Moon
The meme-stonk mania continue to be unabated this week. This time, $AMC dethroned $GME as the meme-stonk god, up >2000% year-to-date return. Its intraday volatility swing was $35, and the beauty of it all, its float is more than 400million shares!
If we may recall, RoaringKitty aka DFV was the OG of Gamestop, who has been posting his investment thesis on the company since 2019. However, it only gained massive traction after the company restructured its board members. Wallstreetbets redditors banded together to take GME to the moon armed with speculative fundamental reasoning but smart enough to know that the company was shorted to oblivion at an astonishing 120% short interest. Therefore, according to them, hodling could potentially trigger a squeeze similar to Volkswagen in 2008. I was on reddit and discord while all of these were happening. What an experience!
Despite its collapse, the short interest chatter on r/wallstreetbets never died down. Shilled names on the daily discussions were the top most shorted stocks. GME has always been the number 1 mentioned ticker and retail were unabashed in accumulating the stock.
In hindsight, this triggered a round 2 and lately, a round 3. This time around, AMC took the spotlight. I have friends calling themselves apes and sweared to hodl with their dear lives because according to a random post on Twitter, AMC is going to "100K".
If I wasn't trading, I wouldn't bat my eye on outliers like this, and would conclude that it's stupid. My perspective and mindset changed when an elite trader I look up to reasoned that this kind of event is good stupidity. Traders do not care if $AMC will go to Mars at 500/share, traders will make money to the upside and down. For him, market mania like Gamestop, AMC or Dogecoin are opportunities to make money and shouldn't be dismissed. To add, renowned money managers like Ray Dalio and Stanley Druckenmiller changed their minds on Bitcoin. They now own it. Why? They focus on what's in front of them. When the narrative changes so as their minds. It's just another trade.
I have been off-sick for over a week now, nursing my lower back injury. Inasmuch as I love my job and my colleagues, I have reached to a point that I would now need physiotherapy, increased pain killer dose, rotational hot and cold compresses, and anti-pain patches; I had no choice but to throw in the white towel and look after myself.
Whilst I'm sitting here comfortably in a near-perfect sitting position, with my electric masseuse grinding and pressing on worse areas, I'm also catching up with my reading and learning about the markets, investments and crypto.
The markets recovered after the the Inflation FUD shake-out the week prior ensuring its uptrend to remain intact. There has been follow-up on breakouts and good bounces on previous market leaders that found support on the moving averages.
On the weekly chart, IWM has the best technical set-up, flagging nicely and surfing on the 20SMA. However, it is unclear whether this goes up or down so I'm keeping my eyes peeled on this one. IWM is the iShares Russel 2000 ETF that tracks the investment results of an index composed of small-cap US equities.
EEM (Emerging Markets) and Europe Markets rallied, the latter, especially the FTSE Developed Europe UCITS ETF (VEUR) hitting an all-time high ?. On the other hand, the monthly chart of EEM is perfectly poised for a massive run should it confirm a break-out. I increased my allocation to the Emerging markets starting last month as anticipation but not aggressive enough that it would skew my portfolio should it dip hard towards the moving averages. My investment time-frame for this is decades so I wouldn't sweat.
The Technology sector (1.62%) recovered but Utilities (-1.51%) continue its downtrend. XOP continue its run with a whopping (+52.26%) YTD performance. In retrospect, this was a a very obvious medium term trade idea since the Pfizer-Biontech vaccine announcement in November. This is where inexperience will bite you from behind and miss-out on massive runs like this. We learn and move on.
Meme Stocks 3.0
$GME ($222), a Wallstreetbets meme-stonk hall-of-famer started moving again on May 24th which predicated a third run-up, this time, from $174 to $267. Other meme-stocks made massive strides as well like $AMC and $BB. I traded $BB at +20% in 3 trading days. $AMC on the other hand was a squeezer. I was looking at the first supply areas at $35-$36 for a short but I was too afraid to pull the trigger ?. Could pretty much wipe out my trading account if halts to the upside like $KODK. Not for me.
@EricBalchunas tweeted last Friday that for the second day in a row, $AMC was the most traded stock in the world. I was looking at it real-time on IBKR at >500M and that was amazing to watch. From +54% to -4% on that insane volume was a different kind of high even as an observer.
Here's the $AMC 3-min chart.
Crypto FUD Bath - staying familiar
Glassnode released an insight newsletter last Friday, "Surveying the May 2021 Sell-off" which explained the reasons of the crash and the on-chain indicators and metrics behind the scenes.
My takeaways from this newsletter are as follows:
Institutional Demand - Through GBTC metric, demand sank starting late February. A crypto ETF that showed similar pattern is the Canadian Purpose BTC ETF. Outflows intensified starting May 3.
Exchange Dynamics - Large deposits of Bitcoin to exchanges were noted months before the sell-off i.e. illiquid coins (held on institutional custody or wallets migrated back to exchanges as liquid supply). However, this is not trued for all exchanges. Massive deleveraging of derivatives was also noted which created a cascade selling, margin calls and liquidations.
HODLers Behaviour Pattern- "Old Coins swell during bear markets as accumulation recommences and wealth transfers from speculators to long term hodlers. Young Coins swell during bull markets as holders distribute expensive coins to new, weaker handed speculators."
I found this on reddit and it looks pretty accurate.
Glassnode released a separate newsletter on Decentralised Finance exploring its health and stability amidst broad crypto market selling.
A tweet thread from Raoul Pal, a macroeconomist could give some perspective.
Downtime Reads ?
Cardano and Stellar now tradable at Boerse Stuttgart
One of the largest Swiss banks fears that if it does not offer investments in crypto, it will lose its clients
Trader’s Brain: How To Re-Wire It for the Better
US banks could cut 200,000 jobs over next decade, top analyst says
Bank of America Joins Paxos Network Eyeing Same-Day Stock Trade Settlement
Most Long-Term Profitable Traders are Under Water Most of the Time – (Trading Drawdowns)
An Interview With Chainlink’s Sergey Nazarov
Proposed Legislation in Germany Could Allow $425B to Flow Into Crypto: Report
Deutsche Bank Quietly Plans to Offer Crypto Custody, Prime Brokerage
Bitcoin is officially a new asset class: Goldman Sachs
Ray Dalio: ‘I Have Some Bitcoin’
Dig more coal -- the PCs are coming
Every fifth hedge fund already invests in cryptocurrencies, reports PwC
Chainlink Has the Potential to Disrupt Traditional Finance
What is A Bearish Divergence?
The Week On-Chain (Week 21, 2021)
Stochastics: An Accurate Buy and Sell Indicator
Nothing New Under the Sun
Stanley Druckenmiller: “The greatest investors make large concentrated bets where they have a lot of conviction”
DeFi Uncovered: Navigating the Crash
How to Exit Your Winning Trades Properly
The Wall St. Jesus Flow Show: May 11th, 2021
Talking To The King of The Degens I Sam Cassatt I Pomp Podcast #555
SotN #46 - The ETH Trade with Su Zhu & Kyle Davies of Three Arrows Capital
The Complete Flow Trader Series: Using Flow With Different Styles of Trading (Episode 1)
Raoul Pal: Holding All Your Money in Crypto | Irresponsibly Long Bitcoin
360% in 19 Months | Google Stock Analysis + IPO Bases | America's Greatest Companies
Decentralized Finance (DeFi) Explained | A 10x Return Opportunity?
65 - Crypto, Legacy, and Value | Mark Yusko
Bitcoin Crashed! Who Was Buying And Selling?!
Are Growth Stocks Back in Favor? | RBLX Breaks out Out! | Stock Market Outlook
66 - Crypto’s Existential Threat | MEV Panel: Phil Daian, Georgios Konstanopolus, Charlie Noyes
Kevin O'Leary Buys Bitcoin And Starts Yield Farming | Pomp Podcast #563
FO256: A Digital Assets Conference For Sophisticated Investors
Real Vision Finance Daily Briefing May 29
Enjoy the rest of the weekend!
Weekly Highlights 10: S&P ATH, Growth Stocks Sell-off, Ethereum to the moon, the Dogefather to host the SNL
SPY at all time high with XLE and XOP leading the surge. Leading Tech stocks got hammered i.e. ETSY, FSLY, TWLO, DKNG, etc. Pops were being sold off; I guess, institutions aren't keen to buy names with high multiples at the moment.
Bitcoin is flagging, whilst Ethereum just keeps making ATH. Doge, a meme coin, ripped thru .70c yesterday but sold off during Saturday Night Lives' air time with Elon, the self-proclaimed Dogefather, awkwardly hosted the show.
My crypto account has been ripping, and I have been taking advantage on interest, staking and auto-market making. I am not trading crypto as of yet as the moves are sorely unpredictable and extremely volatile. But, I am not dismissing this idea, in-fact, I am learning this space as fast as I can as well.
I continue to see improvement on my stocks screening, technical analysis, and ticker recognition, however, I tend to get distracted too easily for the past couple of weeks. I have missed on high R/R entries costing me 20%-25% upside on these trades like NVAX, BNTX, CVNA, X, ALB. The lack fo sleep didn't help that much either. The overall sentiment amongst fintwit traders is that this has been a difficult market to trade at least for the past couple of months - the market is making ATH but the pops just craps underneath. I am making money in this market, so I guess I am doing something right then.
On the productive side, I have added signals to my arsenal like PCCE and Flow. And has been adding mulitple chart samples on my database.
Markets Thursday 29042021Dupont Trading
Bitcoin Maxis versus Ledger & CobieUpOnly
Abra: The Future of Crypto Banking (w/ Bill Barhydt and Raoul Pal)Real Vision Finance
Cardano: The Smart Contract War Heats Up (w/ Ash Bennington & Charles Hoskinson)Real Vision Finance
Portfolio Construction: Beyond BTC & ETH (w/Jeff Dorman, Joey Krug, Ari Paul, and Raoul Pal)Real Vision Finance
600% Increase in 9 Months | Pinterest Stock (PINS) | In-Depth Technical AnalysisRichard Moglen
Balaji Srinivasan - Bitcoin and Ethereum, Crypto Oracles, and MoreThe Tim Ferriss Show
Crypto Billionaire Who Bought $69 Million NFT “Everydays”Valuetainment
Trading Mindset and Mental Toughness | Interview with Veteran Trader Joe FahmyRichard Moglen
The Wall St. Jesus Flow Show: May 4th, 2021Sang Lucci
SotN #45 - Chainlink 2.0 with Chainlink GodBankless
What Is Ethereum? - An Investigation (w/ Raoul Pal, Vitalik Buterin, Joe Lubin, and more)Real Vision Finance
How smart contracts will change the world | Sergey Nazarov and Lex FridmanLex Clips
The Stock Market Shakes off Huge Jobs Report Miss | SPX at All Time HighsRichard Moglen
Have a great weekend.
Quite a busy week rebalancing my portfolio. I withdrew funds from my Trading212 account following a dispute from them. It is true, as you continue to compound your knowledge of the market, investing and trading, in general, you begin to demand more from the services you get from the platforms you use. I moved 50% of that to Interactive Brokers and the other half to my crypto account. I also received my salary yesterday and all of my SR were deposited straight to my Vanguard ISA account.
I did 3 trades last week - Long ALB +5%, Short ALB +3%, Long TIGR +2% (intraday, wrong exit, accidentally used Limit instead of Trail Limit, could have secured 5% on this trade). I could not execute trades yesterday (Friday) as I got stuck at work until 9PM. Been having a hard time fishing on my scanners as well, I used to capture 15-20 names, but on this type of market, 4-5 is a miracle. I am not changing my scanning rules. I would rather sit in cash than force trades I don't normally execute.
The market is still on an uptrend but the breakouts on momentum stocks do not sustain and retraced back to the breakout point mostly.
Bitcoin has been underperforming since it broke 60K, coincidentally, right after $COIN IPO. Is this the top in this cycle? Nevertheless, I have been buying ETH, LINK and DOT on this pullback and wishes that these coins drop back to 100/200MA where my Limit Orders are. I also learned Liquidity/Market Making in Crypto and has added more on my Binance Earn. I will be publishing my weekly crypto earnings on Publish0x and LeoFinance. I am still unsure if I have to add that crypto kind of content on this blog. Maybe add a page for it? Not sure. But I really want to share the potential of generating alpha in the crypto universe to the FIRE community - boom or bust. As far as the UK FIRE bloggers are concerned, it is only Early Retirement In UK who is actively participating in Crypto but I couldn't find an email to contact the author to ask for their strategy. Another 7 bloggers own Bitcoin and or Ethereum.
Sector: Technology > Computer Hardware
Ideas: Bitcoin play; flat with little attention from investors/traders since BTC broke its ATH, Broke downtrend on MACD bullish signal on another BTC break. Nothing fancy about the BTC plays when BTC ripped, the miners were dumping shares via offering but the demand was too much, bulls won.
Retro Entry: Aggressive entry was the MACD bull signal, another entry was the resistance breakout. I was looking into this ticker but did not buy it as I was considering its float and concluded I would be better trading other crypto play tickers. I guess, the market doesn't care much about the float when the trend is moving at a bullet train speed. Also marked in yellow circle is the set up I have been studying - multiple MAs convergence, MACD Bull signal, tight flag, increasing volume. For now, I am dependent on the MACD bull crossover on my scan, I don't know how to program a script to capture the set up using MAs and chart pattern yet.
NFTs are unstoppable, email@example.com
Saudi Arabia, UAE poised to launch digital currency
The Celsius Business Model Explained
Crypto Flash Crash Wiped Out $300 Billion In Less Than 24 Hours, Spurring Massive Bitcoin Liquidations
Biden's Stimulus Plan - Stock Market & Economic Impact, PensionCraft
E28: Current state of public & private markets, Archegos debacle, US debt issues, wealth tax & more, All-In Podcast
Podcast #7 - The Broker, Traders4ACause
Markets Thursday 15042021 - Dupont Trading
How Oliver Kell Returned 941% in 2020 | Interview with Oliver Kell | The 2020 US Investing Champion, Rewatch
The Exponential Age: Crypto’s Fast and Furious Rise, Real Vision Finance
Interview with 2019 US Investing Champion Leif Soreide | Key Swing Trading Setups and Methods, Richard Moglen
Thorchain: Decentralized Liquidity Network, Real Vision Finance
QQQ +3.82% and is back to its trend-line support which means that XLK led the rally last week.
My Vanguard account hit an all-time-high last Friday - this is insane considering I DCA monthly. Also, reinvested Q1 dividends. I just realised that my yearly dividend could now pay for my yearly gym membership and NMC annual fee. I don't even care about these dividends but it's free money, so I'll take it.
Closed trades - BIDU (Breakeven) - tried to give this a room to bounce and fill the waterfall to 260 but failed on Friday. It's also the first time for me to see a red bar and a MACD bullish cross (lol). TWTR (+3%) - a really stupid fat finger mistake. I was trying to set up a break even stop to let this run but the limit stop I was trying to set did not update. Whatever. It happens.
New Trade: UBER (10MA rejection); convergence of MAs.
Bitcoin is really setting up to the upside - Higher Lows, Testing resistance, Contraction. SI is the strongest BTC play but no set up to my liking; miners made pullbacks last Friday. I hesitated on my RIOT entry and will re-evaluate. Coinbase will IPO next week.
Sector: Internet Software Services
Pinterest made an Episodic Pivot after Q2 2020 beats that came with a 39% Y/Y growth in global monthly active users to $416M, a growth fuelled by the pandemic. Accumulated for 6 weeks then BO'd on Sept 2. Gained almost 200% since Pivot. Note that this company is not yet profitable but released strong guidance for 2021.
Retro Entry: The EP was the best entry with stop at Low of the Day, took a while for this to work.
Or alert on BO was the best 2nd entry.
Bought this at the BO in Feb 2 and was one of my best trades as I start learning Qullamaggie's strategy.
📖 Downtime Reads
Actionable Steps to Building 7 Income Streams Like a Millionaire
The Containerization of the World - Sahil Bloom [Substack Newsletter]
[Blueprint] Create a Simple Trend Following System · Nick Radge
Dan Tapiero: Three Key Crypto Investment Categories (w/Dan Tapiero and Raoul Pal)
Inflation Indicators, Fiscal Policy Changes, The Economy | ITK with Cathie Wood
QCP Capital: A Breakdown Of Asia’s Crypto Markets
INX: The Benefits Of Digital Securities & Regulations
Biden's Stimulus Plan - Stock Market & Economic Impact
E28: Current state of public & private markets, Archegos debacle, US debt issues, wealth tax & more
"This is one of the most urgent problems for the civilised man. He has created civilisation to give himself security. Security for what? For boredom? His chief problem seems to be that most human beings need a certain amount of challenge, of external stimulus, to stop them from sinking in to the blank stare and blank consciousness of the idiot."
Finally, done with my Visa application, and senior post interview and assessment. I was too busy with these that I forgot to place orders on my scans i.e. SOXL relative strength. Anyway, I initiated a position on $PBF and $BIDU last Thursday following OPEC oil production cut news for the former and price action (high volume 200SMA bounce) of the latter.
S&P 500 ripped thru 4K this week despite weakness in February.
The market chatter for last week was the blow-up of Bill Hwang's Archegos Capital (here's the link to the story). The forced liquidation of Bill Hwang's position reminded me of Melvin Capital back in January.
Crypto is strong - ETH 2k (again), BTC 60K (again)- my polkadot hit +35%. Two blocks still staked at 12% APY. ATH for my crypto account.
Historically, April is the best month in terms of market return, so looking forward to fully utilise my trading capital.
Lastly, I will add sample historical charts on equities and look for Episodic Pivot (EP), Break-outs (BO) and Parabolic Short/Long set-ups. I am currently trying to force myself to learn these set-ups.
Sample Chart Study
About: Energy/Fitness Drinks
Chart: Gapped up 7 days before Q1 earnings report; gapped again (on volume) after earnings beat, gliding above 10DMA until Q2; Massive gap up (again) Q2 ff earnings beat; formed VCP with strong resistance (red arrows); Gapped on Q3 beat
Entry on Q1 gap up stop on LOH or 10DMA
Nov 3 Pocket Pivot or late stage VCP BO before Q2 announcement (due to risk - starter position only)
Dec 3 tight bullish flag BO
Quallamaggie (one of the best traders I follow) recommends that the first gap up on volume is critical esp. if the company beats earnings (EPS/revenue).
A Tiger Can’t Change Its Stripes
The Two Tiger Cubs at the Center of Friday’s $35 Billion Meltdown
Here’s Why So Many People Intend to Die With Money in the Bank
Piers Kicks: Earning Money in the Metaverse ft Piers Kicks
Crypto and the "Promiscuity" of Technology ft. Chris Tuohy and Raoul Pal
What Traditional Investors Think of Bitcoin with Raoul Pal
Interview with Hedge Fund Manager Jim Roppel | Stock Trading Fundamentals, Strategy, Crypto, CANSLIM
I made 2 overnight trades this week. $TIGR entry on 20DMA (+6%), was up (+15%) premarket but I refused to sell (greed much?) then it just collapsed from opening to end of trading day Thursday; and $AAL on Bullish Flag and overall JETS strength (+3%) Friday.
I staked 2 more lots on DOT at >12%APY and has been collecting interest on my first lot since 19 days ago. For me, crypto staking is a cheat code to earn passive income but it has risks i.e. the value of the asset itself can go to (technically) zero overnight. But, what's the average bank interest rate again? 0.5%, 0.75%? Hilarious!
SPY and DIA on record highs as Biden finally signed the 1.9T stimulus bill. BTC rips through 60K and briefly 61K for the first time. Will it have another '18 crash? Time will tell. I am bullish on BTC and its value proposition but I am not a BTC maximalist. Hence, I continue to explore the crypto universe and will add more assets moving forward. In fact as of today, crypto is now 5% of my portfolio, hitting my target and is the best performing asset at that. For me, I think it is a bigger risk having ZERO exposure in crypto.
Fascinatingly, I found this chart on Twitter.
Weekly Highlights 5 [QQQ continues to the downside, Oil & Gas rips, 1.9M trillion stimmy passed on Senate]
What an exciting week! I panicked a bit when I suddenly had an open position in eToro when I couldn't remember initiating one. Until it dawned on me that I had a limit buy on PENN on a trendline support. I managed to close this immediately at a gain, only to give it all back misreading dip buy on SKT.
In Twitterverse, the pumpers and momentum bulls are even quieter than previous weeks; on the contrary, the traders and bears take the center stage. I could care less about what is happening with the market, my trading account is still up 17% for the year. I am currently sitting on cash with the exception on my regular Index Fund buys and just recently, regular crypto adds.
For the week, Oil & Gas, and Financials are the leaders whilst Tech continues to be the laggard. Many names with stellar earnings report in the Tech sector were not spared e.g. PINS, ZM, APPS. I have scanned the best stocks holding on to this sell-off in the MOMO (Momentum) category with more or less triple digits revenue growth YOY and will only focus on those.
Why central banks want to get into digital currencies
Citi and Ruffer predict breakout moment for bitcoin
Google announces major shift away from precision-targeting of ads based on everything you do on the internet
Deliveroo chooses London for stock market listing in boosts for Britain and Rishi Sunak
Senate passes $1.9 trillion Covid relief bill, including $1,400 stimulus checks, with no Republican support
Volatility, Skepticism, Retail vs. Institutional Investors | ITK with Cathie Wood
Warren Buffett Market View 2021
What is Polkadot? | A Polkadot for Beginners Guide and Intro to Blockchain
I have been slacking off lately with my weekly posts. This is owing to the fact that I have been really pushing on my trading learning curve by spending most of my time watching videos from the pros, backtesting strategies and studying charts. Due to this, I will be changing my weekly highlights to focus more on market performance i.e. major indices and sectors, and anything market related to align my activities with my goals. I will still include podcasts and my usual weekly reads.
I am looking for a Trend Line undercut and a challenge on the 20D EMA. I have been kicked out on my trail stop losses in my trading accounts from this market pull-back and that's fine with me. Pretty much sitting on cash whilst looking for strong market performers resisting this sell-off.
Leaders and Laggers
Rotation to cyclicals was the theme for the last few weeks. Oil and Gas, and Energy are the strongest sectors but these are the industries I don't normally trade. I am okay to miss out on this. The worst asset performer is Bitcoin; and Nasdaq Composite as the over-extended Tech movers retreats.
11 Secrets to Financial Success - Anton Kreil
Simple Way of Measuring and Tracking Your FI/RE Progress by 10KDriver
Super Trade Tactic - 3 Keys to Superperformance, Mark Minervini
How to Become Rich, Mark Minervini
Rule of 72 by @10KDiver
Savings Rate of a Nurse in Central London
Bitcoin - All Time High!
Nick Huber's Twitter thread on business and life in general. The longest thread I've ever come across with on Twitter.
There is more to life than COVID - 2021 Intentions.
To the Moon - 2020 Investment Gains!
Year 2020 Budget Review. COVID Edition.
Investing sucks? Lost -£1473.84.
Invest 20,000 before December 20, 2020 Challenge - An Update.
Invest £21,000 - progress.