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Cryptonite is the Future 5/12/22

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Crypto is giving us a glimpse of what's ahead for traditional investment classes. 

And to think that back on January 3 when Tom Bodrovics posted his interview of me (recorded 12/28), they laughed at me for recommending cash as the least terrible investment. 

Now that I've reposted that, we can rally.  But first, if you want the big picture right now, go here.

Now for today's likely pattern, first let's start with the daily chart of the ES going back a few years to see the extraordinary beauty of this top, and envision its implications. image.png

Again, if you want the big picture technical outlook, "20 of the 23 picks are short sales."

Last night, I mentioned the 3 downtrendrending sport lines and speculated on a possible breakaway gap and island top. Well, as of 5 AM, the ES 24 hour S&P fugutures are only trundling down on those tracks. They haven't broken. If they do, the proximate target when NY opens would be around 3880. My only cycle projection so far is on a 2-3 day cycle basis and it only points to 3890-3900. If they get there by then, then the 5 day cycle projection would be around 3850. 

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The Crypto Nite has seen spectacular losses continuing. Many of the lesser craptos saw losses of 25-30% yesterday alone, and the Terror "stable coin" essentially became worthless. People think I'm joking when I post a price objection of negative numbers on some of this crap, including buttcoin, but yeah, that's what the conventional measured move targets are when you measure the depth of the top pattern. 

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I'll say it again also. The Fed did this. It created the greatest moral hazard bubble in history. These virtual money trading games were a natural outgrowth of the wild west mentality that the Fed created, promoted, and rewarded. Bernanke and Powell are financial war criminals who deserve the opprobrium of history. I cut Yellen a break because she had the Fed on a course of balance sheet shrinkage, which Powell puked and shit on when the 10 year got to 3.25. He doesn't have that luxury today, with real inflation running 15%. 

 Meanwhile, we're having a spectacular rally in the 10 year, with the yield targeting either 2.77 or 2.62. This won't end well either. It's panic driven. And there are simply no short term bills to be had as the Treasury engages in a campaign of massive T-bill paydowns with the giant wad of cash it just took in from record tax collections.

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Finally, while I am personally benefitting from the strength in the dollar particularly vis a vis the euro, I find it disconcerting. I feel uneasy. But it's the natural result of the Fed no longer printing dollars while the ECB continues to print euros. The trend will only accelerate when the Fed begins withdrawing dollars from the market beginning in June with its first installment of QT. 

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Stay tuned for all the exciting action.

 

If you're serious about the underlying forces of supply and demand that drive the markets, join me

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On the way home. Walked down the Neirsche path. Resolved. Never again! And never ever ever walk up! Unless you're 25 years old. 

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3 hours ago, DrStool said:

I shit you not. This is what I'm looking at as I eat lunch at L'Chevre  d'Or.

That is the restaurant where my mom introduced my wife to the simple pleasure of a Kir Royale as an aperitif.

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25 minutes ago, BurntOnce said:

gold/silver is ratio is taking off.

Unfortunately, only because silver is losing value faster than gold....

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1 hour ago, Jimi said:

Unfortunately, only because silver is losing value faster than gold....

Metals and mining sector really taking a hit lately. Is this just large players raising cash? Or is there a more fundamental reason?

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