The move, whether the alleged Whale Mafia or simply market noise, is indicative of an indecisive market. A market that is simply looking for direction. This is much different then a directional market. Directional markets provide trade opportunities. Trading indecisive markets result in portfolio erosion. This is why we remain flat under the current market conditions. Capital preserved is better than a losing trade. We did make a couple defensive cost averaging portfolio adjustments to limit risk. This type of positioning, though minimal at first glance, slowly add up after time.
It is clear from the continual trade posted that many just want to be in the game at all times. Like the poker player that is not concerned about making money and only desires for the thrill of playing they need to be in the game daily. We all know those players. They roll up to the table, throw down a few bones, and play just about every hand. My pops is one of those players, and this is pure gambling, or the thrill and hope of winning.
We are in either an early impulse wave or continuing a 3 leg correction here. In poker terms we are in the middle position.
The 6650 level is still the area in my opinion that needs to be taken out before shorts start covering, so until we see a solid push through this level, we are standing aside. On the other side of the coin, a 3rd leg to the 5800-6000 and reversal would provide a nice position enabling us to play that 56 suited. At 5800-6000 we have position, with an impulse move above 6650 we have a good hand.
There have been at least 5 trade signals on the daily in the past week. 3 long and 2 short. Of these trades 4 resulted in fake-outs and only 1 was a winner. I marked the stop out areas on the chart. These are traditional trade triggers and stops. Of course there are those that attempt to straddle trade these markets. Sounds good, you can make money either way, but this is not stock options, and requires market timing. Twice you would have sold the wrong side initially and then been knocked out of the other trade.
See whales are not manipulating the market, they are simply seeing opportunity to knock out these types of trades during times of low . They use their stack no differently then "Big Tony" who rolls up with 1200 in chips at the 1-3 table. He has the stack to push you off weak to mid hands and uses his chip stack to do it. Same with larger players in these markets, they can push smaller traders off weak or mid hands. Low was your sign to stay clear of these traders.
However the stock market is setting up nicely for some near term trades. Remember last year's Crypto market, well its back in the form of Chronic! Yes the marijuana market is heating up and there is money to be made. This will create the next generation of "expert traders" and there are several trades on our radar especially for some longer term positioning. One I especially like is CannTrust below.
Nothing like a new space to provide opportunity to get in early. Are we too late and missed out? NOPE. There are many opportunities here. From direct plays on growers, to established companies like Constellation Brands that are poised to profit. Just look at how well NVDA did because of crypto mining? I remember 10 years ago, when soybeans were all the rage. Soy milk, edamame, tofu fueled the growth of a new market. My buddy who is younger and three times retired, didn't invest in soybeans directly, he bought fertilizer stocks.
Over the next week we are taking a deeper look at the space and looking to build a portfolio of not only direct plays like Tilray , but companies that will increase revenue and profits from such a new market like Coca Cola .
This does not mean we are giving up on cryptos. Absolutely NOT, this is still in its early stages. However, the goal is to make money, and where there is opportunity, I want exposure. If all your money is in one market, you are setting yourself up for pain. Diversification among a variety of assets in spaces keeps balance, and often prevents preventable losses. Did I mention the gold market is heating up as well?
Until Bitcoin finds direction we are simply staying on the sidelines conserving capital and waiting for a solid hand. Whats in Your Wallet? Hopefully not just an ATM card!