BTC - Richard Dennis - Gold - 40% chip stack and the US Markets
Over the years of being in the stock market, I can tell you with much certainty that the the majority of traders and investors are terrible at market timing. I always want to be positioned opposite of the market when optimism or pessimism is too high. I have quoted many great traders and investors from Ed Seykota to Warren Buffet and one of the greatest trader of all time Paul Tudor Jones. These guys are legends in trading, and they didn't get there by simply following the herd. So as we enter day 45 of the correction, and quite frankly the market is pretty boring, I have pulled out one of my favorite quotes by Richard Dennis who is a legend of legends!
"Is there a group of trades who will lose money if the market moves in the direction I'm placing my trade?". Wow the hairs on my arm still stand up when I read this! Combine this with another Richard Dennis quote "When you have a position, you put it on for a reason, and you've got to keep it until the reason no longer exists" you have my overall strategy for investing and trading.
I bought bitcoin' in late August as I am a true believer that bitcoin' along with a basket of other crypto currencies are going to change the financial system, the way the world trades and barters, and how people store wealth. Long term the trend is up. These are the reasons I bought Bitcoin', and these reasons have NOT changed. Secondly there are more TA's calling for a correction to $5000-$7000 and the BTC' short market is on fire. So are there are a group of traders that will lose money in the direction of my trades. Yes!
So I have no issue adding at these levels and welcome lower levels to add, just like I had no issue taking money off the top above 17k when this same group of "TA's" were calling for 30k! Remember when 99% of the TA's on TV' were long every freaking coin on the market back in late December with calls for 600%+ returns? That was the time to take some off the top, not now when those same TA's are short!
US Markets
I mentioned yesterday that the tax cut fueled the rally in the U.S. equities market, money rotated out of cryptos, and until the U.S. investors look to rotate back (and most likely sooner than later), we probably trade sideways or choppy for the time being. I understand the U.S. is not the only market, but it is the wealthiest, and by a long shot. 41%+ of the World's wealth is in the U.S. compared to #2 China which is 10%. YES it matters! This is like sitting at a poker table, and telling the player next to you, "see that guy with the big stack? He doesn't make the action I do". Reality check! They guy with the most chips at an aggressive table runs the table NOT you with a small stack! The U.S. market matters and in a big way!
Comparison with Gold
The two charts on the left show bitcoin' at the top and gold' at the bottom and a similar pattern when gold' topped in 2012. On the right is a longer term comparison. If we follow gold's pattern we get another rally, and with sentiment as negative as it is, fundamentals still in tact, I am staying long here and will look to add if we go lower in the short term.
Bottom Line:
"the majority is wrong a lot of the time. The vast majority is wrong even more of the time. I’ve learned that markets, which are often just mad crowds, are often irrational; when emotionally overwrought, they’re almost always wrong" Richard Dennis.
Words to trade and invest by!
"Is there a group of trades who will lose money if the market moves in the direction I'm placing my trade?". Wow the hairs on my arm still stand up when I read this! Combine this with another Richard Dennis quote "When you have a position, you put it on for a reason, and you've got to keep it until the reason no longer exists" you have my overall strategy for investing and trading.
I bought bitcoin' in late August as I am a true believer that bitcoin' along with a basket of other crypto currencies are going to change the financial system, the way the world trades and barters, and how people store wealth. Long term the trend is up. These are the reasons I bought Bitcoin', and these reasons have NOT changed. Secondly there are more TA's calling for a correction to $5000-$7000 and the BTC' short market is on fire. So are there are a group of traders that will lose money in the direction of my trades. Yes!
So I have no issue adding at these levels and welcome lower levels to add, just like I had no issue taking money off the top above 17k when this same group of "TA's" were calling for 30k! Remember when 99% of the TA's on TV' were long every freaking coin on the market back in late December with calls for 600%+ returns? That was the time to take some off the top, not now when those same TA's are short!
US Markets
I mentioned yesterday that the tax cut fueled the rally in the U.S. equities market, money rotated out of cryptos, and until the U.S. investors look to rotate back (and most likely sooner than later), we probably trade sideways or choppy for the time being. I understand the U.S. is not the only market, but it is the wealthiest, and by a long shot. 41%+ of the World's wealth is in the U.S. compared to #2 China which is 10%. YES it matters! This is like sitting at a poker table, and telling the player next to you, "see that guy with the big stack? He doesn't make the action I do". Reality check! They guy with the most chips at an aggressive table runs the table NOT you with a small stack! The U.S. market matters and in a big way!
Comparison with Gold
The two charts on the left show bitcoin' at the top and gold' at the bottom and a similar pattern when gold' topped in 2012. On the right is a longer term comparison. If we follow gold's pattern we get another rally, and with sentiment as negative as it is, fundamentals still in tact, I am staying long here and will look to add if we go lower in the short term.
Bottom Line:
"the majority is wrong a lot of the time. The vast majority is wrong even more of the time. I’ve learned that markets, which are often just mad crowds, are often irrational; when emotionally overwrought, they’re almost always wrong" Richard Dennis.
Words to trade and invest by!
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