Morning Comment: Bitcoin should be a good indicator for the stock market near-term.



The funny thing about Bitcoin right now is that people either want to read or hear everything they can about the asset...or they’re sick and tired of everybody talking about it. (The latter group tends to be the ones who have never owned it or ever traded it.) However, whether one has owned Bitcoin or traded it...or not...its action over the next week or more should be quite important for the short-term action in the stock market.

First of all, it’s a good bet that a lot of traders own Bitcoin on margin. No, we’re not saying that most people own it on margin...we’re just saying that a lot of people do. (The reason we say that it’s a “good bet” that a lot of Bitcoin holders are leveraged is because Bitcoin rallied over 280% in just 3 months...at a time when margin debt exploded to new all-time highs.)

Second of all, Bitcoin fell 30% from its highs...to its overnight lows last night...before bounce from a level below $29,000 to one above $31,000. If the overnight action was THE wash-out move, then this morning’s bounce in Bitcoin will keep on truck’n...and we’ll see new all-time highs within the next couple of weeks (maybe even the next couple of days)..........At its low last night, Bitcoin had retraced a Fibonacci 38.2% of its rally from the beginning of October (when the “strong rally” started to become a “parabolic” one). Thus the worst of the decline in Bitcoin just might be behind us.

However, IF this morning’s bounce does not last...and rolls back over at any time over the next week or so...and breaks back below the overnight lows (of $28,817)...it’s going to be “Katie bar the door.” If Bitcoin breaks below those overnight lows, the short-term momentum players will throw-in the towel ...

Read More
Comments

Morning Comment: Charts on NFLX, GS, and UPS.


As expected, the market reacted well to Janet Yellen’s confirmation testimony yesterday...and the ensuing bounce led to a 50% retracement of last week’s losses in just one day. The rally came on pretty mediocre “internals”...as the volume was nothing special ...

Read More
Comments

Morning Comment: Chip stocks: Great run, but they're getting very overbought near-term.


We find it comical that some pundits think that since a couple of Fed members have come out to say that the Fed is unlikely to cut back on their QE program any time soon, it means that we should ...

Read More
Comments

Morning Comment: The Next Two Weeks Could Be Key For Bitcoin


The stock market took it on the chin a little bit yesterday, but it came on breadth that was basically flat for the S&P 500, the Nasdaq Composite and the NYSE Composite indexes. It also came low volume of less ...

Read More
Comments

Morning Comment: What if the dollar actually rallies for a while?


There is no question in our minds that what those people did when they took over the capital building this week was appalling...and disgraceful. However, what in the world would have happened if they had been terrorists? Sure the Capital ...

Read More
Comments

Morning Comment: One Day Does Not Make a Trend....S. Korea....Gold.



The S&P 500 Index fell 1.48% yesterday...and in the 21st century, there have only been three other years where the first day of trading gave us a decline of more than 1%. Those years were 2001, 2008, 2015. The average ...

Read More
Comments

Morning Comment: Bring on the trivia!


Welcome to January...which is “trivia month.” That’s right, after the first day of trading...the third day of trading...the first week of trading...and the first month of trading...of every new year, we hear all sorts of trivia about what the action ...

Read More
Comments

THE WEEKLY TOP 10


Since we are constantly getting new readers, we like to start our weekend piece with a quick note every once in a while...and the first piece of the year would seem to be a good time to do this once ...

Read More
Comments

Morning Comment: It's (still) All About Liquidity


We have been out for several days due to the holiday, so although we have certainly kept an eye on the markets over the past week, we don’t have our fingers on the pulse of the markets to the degree ...

Read More
Comments

THE WEEKLY TOP 10.....2021 Preview


Two quick notes: First, due to the holiday, we will not be sending out a weekend piece next weekend. Second, this weekend’s piece deals with our macro outlook at next year. Thus we talk about our view on the broad ...

Read More
Comments

Morning Comment: Chip Stocks Starting to Get Quite Overbought


We have been quite positive on the chip stocks for a while now...and we turned particularly bullish on the group three months ago, in early September. Back then we said that although it was a good idea to pare-back on ...

Read More
Comments

THE WEEKLY TOP 10



THE WEEKLY TOP 10


Table of Contents:

1) The stock market: Bullish near-term, cautious for 2021.

2) Many global stock markets look great near-term as well.

3) One concern is that sentiment is starting to get quite bullish.

4) A ...

Read More
Comments