Bitcoin and CPI data crack the indexes. All three major indexes broke previous major support levels today. Bitcoin has seen weakness for sometime but with the unwinding of the inflation trade and the blow up of a stable coin has caused a minor run on the crypto space. The issue is two fold. First the larger funds that bought bitcoin for the inflation hedge are selling. That has been obvious for sometime. What is adding to their selling pressure is the recent breaking of a stable coin. Think of a stable coin like a money market account. It pays a yield and should never break $1 NAV. When it does it causes massive panic. This is exactly what happened. This sends reverberations through out the entire sector and once again the viability of the whole space is called into question. Whether this asset class holds up in the same format remains to be seen. What has been shown is between stock market losses and higher rates, funds have less appetite for crypto. Therefore selling will continue. The CPI is the inflation gauge. We were looking for a lower increase of .3% instead it came in double .6% This caused massive selling in the equites markets across all sectors except Energy. Energy continues to be be the only bright spot in the equity market right now. As far as sentiment , we are due for some kind of bounce but we don’t know when. Shorting stocks has gotten too easy and stocks are at historical levels for a bounce. For example, the percent of stocks over the 40 day moving average is 12.5% This is historically low. That said we can always go lower before we bounce so its best to be cautious and wait. Understanding where we are in the cycle is just as important as stock selection long and short. To understand the percent 40 day moving average reading watch the video below. I also cover bitcoin extensively in the video as well as several new trading ideas. Key Levels on the charts. Let’s get to it!
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Subscribe and turn on notifications. There is a new daily video after the market Monday through Thursday! It’s called the Top 5 in 5. It consists of the best five ideas for the next day and I condense it into 5 minutes. It’s loaded with actionable ideas. It’s worth your time. It is hyper specific and actionable with entries and exits marked off. Tonight’s includes several Longs and Shorts When you subscribe turn on ALL notifications so you are notified of the daily Premarket live shows ,Top 10 Weekly Buy List and educational videos. Also, Once subscribed you will receive private content on YouTube make sure all notifications are turned on so you receive it. The video below is the Top 5 from tonight and focused on actionable ideas based upon the CPI and BITCOIN move today. Pay close attention to what is said at the end about the macro metric charts and how that will affect stocks.
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. You need to develop your own process. I am willing to help. If you have questions email me Arete@Aretetrading.net. For example, to stop losses, I like to see them close. That does not mean that fits everyone’s risk profile.
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