Arete Thursday Newsletter

Stocks rally only to sell off. 📈🏃📉

Apr 22, 2021

Stocks rally up today only to sell off on Biden’s comment a 43% capital gain tax. To add to the sell-off Yellen decided to issue a statement that she would like to see cryptocurrency trades taxed at up to 80%. Let’s not make this about politics but simply review the facts. First, this will add to the selling pressure of stocks. Right or wrong people will think they are getting ahead of something. Whether or not that is accurate I will not comment as I am not a tax lawyer. In regard to the crypto statement, This is how they are going to regulate it. They are going to punish people that own it or trade it. Who will trade something if it has twice the capital gains of a stock? Not many people. While I think this is simple showmanship it does show a flaw in companies that are buying Bitcoin as a reserve for cash. People are assuming the profit of it moving up to drive stock prices such as $MSTR. What if their gains are taxed at a much higher rate than anticipated? This becomes problematic. There will be fewer miners needed $RIOT $MARA $CAN. The margins will implode. Therefore less demand. I am making a case not that 80% is going to happen but the case that they clearly view crypto as a special asset class and are looking to tax it at twice what they say they are going to tax stocks. As this starts to permeate the crypto trade can get a lot worse. First, it takes more energy for $BTC than $ETH. So due to lower margins, this might affect $BTC faster than first anticipated. I do not want to make this a crypto newsletter but this is something that can way heavily on the whole class of stocks, so we need to take note.

The $QQQ closed down right to the open of yesterday erasing all the gains made. The $335 close is not terrible but the reversal is not great news. $SOXL is holding right on support and looks good. I do see signs of the $IBB bottoming and a possible $LABU trade set up. $SPY continues to look great closing at $412.27 only a couple of points away from an all-time high. The $IWM was least affected today and looks like it is setting up for a move shortly. We closed above support of $218.18 which is solid considering the circumstances. We will keep an eye on $TNA. I continue to be bullish on the whole.

Let’s look at our Indexes!

Let’s Look at our Stocks!

Subscribe to YouTube! 👈Subscribe and turn on notifications. Below is a video of Thursday’s stock market movers and a game plan for the next couple of days. At the 37:00 minute mark, I go over the crypto trade esp $BTC, and miners. Also, what the consequences of today’s statement are. Consider making these videos part of your routine. I go over the lessons from the trading of the pro series during them and point them out in real-time situations.

As always all investment decisions need to be made by the individual. We all have different risk profiles.No two people trade the same. Understand the buy points, stop losses, trims are suggestions. For example on stops. I want to see it close there at the end of the day.

You need to develop your own process. I am willing to help and offer feedback.

Please make sure you Subscribe to Twitter! 👈and turn on notifications. There are times my updates are timely in regard to the Newsletter. I called buy level on $FUBO and a trim level on $SKLZ

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The Chasing Alpha Newsletter

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