Don’t listen to the crypto wars Why the chart will tell you the truth Life happens when you’re away
By Selva Freigedo in Albert Park Is bitcoin dying? It is a much different scene for cryptos this November compared to a year ago. Last year, around this time, bitcoin was rising…and rising. There was a lot of interest as bitcoin increased from US$1,000 to reach almost US$20,000 in 2017. The graph below shows Google search interest for bitcoin over time. As you can see, interest for bitcoin was the greatest in December, coinciding with the price peak. Things have slowed since. Bitcoin’s price dropped in 2018 and interest seems to have quieted down. Bitcoin’s price stayed around the US$6,500 mark from September through to October this year, even as the stock market went through turmoil. Now, after months of uncharacteristic calm, bitcoin prices are on the move again. Last week, bitcoin fell below US$6,000, and at time of writing, bitcoin has plummeted below the US$5,000 mark. Why is bitcoin tumbling? ..............................Advertisement.............................. | Bitcoinist.com says ‘investing in crypto now is [...] as good as an investment in the internet 10 years ago.’ To get the ultimate guide to investing in cryptocurrencies today, I urge you to get a hold of Sam Volkering’s ground-breaking book: CRYPTO REVOLUTION Click here now and have a hard-copy sent to your door ASAP — just $7.95 upfront. | .......................................................................... |
To be honest, no one is really sure. Some are attributing it to the bitcoin cash (BHC) hard fork. Bitcoin cash is currently the fourth largest cryptocurrency by market cap. Bitcoin cash separated from bitcoin last year to become its own currency. Last 15 November, bitcoin cash went through another hard fork, where it divided in two: BHC ABC and BHC Satoshi’s Vision (SV). Now both sides are involved in a war against each other as they fight for their own survival. We are a bit sceptical about this reasoning, we don’t see how the ongoing bitcoin cash war really affects bitcoin. Yet it is creating a lot of doom about bitcoin, and where the price will go next. Bloomberg Intelligence predicts bitcoin’s sell off has long to go, and that could drop as low as US$1,500: ‘After months of tranquility that became the envy of equity investors, the biggest cryptocurrency roared back into the public consciousness this week with the biggest sell-off since August, another fork and a cameo in a major semiconductor earnings report. Some digital asset industry pundits have already begun referring to it as the crypto winter. ‘Bloomberg Intelligence says the drama’s just starting. Analysts predict the price could fall to $1,500, which would indicate another drop of more than 70 percent from current levels. The digital token tumbled 12 percent on Wednesday alone to its lowest level in over a year, and has lost more than 60 percent of its value so far this year. Many of Bitcoin’s closest peers, including XRP, the cryptocurrency also known as Ripple, fell in tandem.’ Yet, as we have written before, if you are dismissing cryptos based solely on bitcoin’s price, you are missing the whole point. Instead, look at what is happening behind the scenes. Bitcoin’s price is volatile. And while bitcoin’s price keeps fluctuating, we are seeing more companies and people flowing into blockchain, the technology behind bitcoin. IBM, for example, has been investing heavily in blockchain technology to develop solutions in finance, payments and shipping. IBM has even been working with Walmart using blockchain to track food as it moves through the supply chain to increase food safety. The Australian ASX stock exchange is looking at replacing its old clearance and settlement system with blockchain. There is a lot of money flowing into blockchain. A recent report by Research and Markets values the global market for blockchain at US$708 million in 2017, and they anticipate it could reach US$60.7 billion by 2024. Coincidentally, as bitcoin’s price is dropping, Switzerland has just approved its first Crypto Exchange Traded Product (ETP) backed by Amun. Switzerland is a blockchain hub with plenty of blockchain start-ups setting up there. With the ticker name HODL — a common crypto term that means to buy and hold — the ETP will begin trading in the Six Swiss exchange rate in the next few days. It will be keeping track of bitcoin and four other coins: bitcoin cash, ripple, ether and litecoin. According to Hany Rashwan, Amun’s top executive, it could allow for institutional investment of bitcoin: ‘The Amun ETP will give institutional investors that are restricted to investing only in securities or do not want to set up custody for digital assets exposure to cryptocurrencies. It will also provide access for retail investors that currently have no access to crypto exchanges due to local regulatory impediments.’ So, when you look at this space, don’t just look at bitcoin’s price, but take a look at what else is going on behind the scenes. Best, Selva Freigedo, Editor, Markets & Money PS: This revolution is just starting. If you are keen to get into the crypto space but are not sure how, editor Sam Volkering has developed a step by step guide. Check out all the details here. ..............................Advertisement.............................. | You won’t find this genius listed amongst the world’s greatest thinkers like Einstein, Newton or Tesla… | …but his 1942 experiment could go down in the history books as the GREATEST clean energy breakthrough of all time. Bigger than solar, bigger than wind and bigger than the lithium battery. Click here now to see how a small $500 stake in each of the three Aussie companies helping make his energy dream reality… | Source: The New York Times | Could net you $16,375 in the next 16 months! |
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Why the Chart Will Tell You the Truth By Terence Duffy in Melbourne, Australia Most people lose money in the stock market. I’m sure you’ve seen the figure that gets bandied about. It goes that roughly 90% lose. My guess is that it’s a little higher than that. But let’s go with that figure. Why is it that most lose money? There’s a multitude of reasons. The first thing to realise is that it’s not easy trading markets. If it were easy, there wouldn’t be any street sweepers. You have to spend a little time in markets. Gain an understanding of how they really work. Spend some time in the market. See what works and what doesn’t. That then gives you a bit of a base to develop a system. Keep in mind, no system you develop will create winners all the time. So big part of being successful in markets is how you manage risk. Think position sizing and stop losses. That’s what keeps you in the game. It’s always about what stock to buy. But little thought is given to the downside. Manage risk. Another cause for losses is not trading with the trend. And you can sort of follow this by looking at short selling. Short sold positions are required to be reported to ASIC. And ASIC makes those short positions available to the public. Trading related websites will often sort them for you. You can easily find a list of the 10 to 30 most shorted stocks on the ASX. Now here’s the thing to note. Often stocks on those lists are trending up. In other words, the share price is already going the wrong way for the short sellers. They’re trading against the trend. Stocks trend for a reason. I’ve found that markets will often move before information becomes public knowledge. Those who know something, very often act on what they know. I’m not suggesting anything illegal. It’s just that somehow the news gets out. It could be a supplier who notices accounts are being paid late. It could be idle conversation on the golf course about a potential new contract, that might totally rerate a company. Whatever it is, somehow the news just gets out. And that inside buying and selling must show up on a chart. This is why you must look at charts and trade the trend. The market is often ahead of the news. Often you’ll read in fundamental analysis, some analyst saying a stock is overvalued. But that high share price may already be factoring in the potential new contract. Or, the big new mineral find which would totally rerate the company. That’s the upside, but it works just the same to the downside. If a stock is going lower on the chart, there is often a reason. You only get to hear the bad news months later. Those who go by fundamentals will often say their method is based on facts. Unlike the voodoo of the charts. The balance sheet simply shows the facts. But that’s not always true. Be aware that in some cases, not everything makes it to the profit and loss statement. Sometimes the fundamentals do lie. But, as you’ll see, the chart never does. Here’s a chart of Enron: Enron was one of the largest corporate frauds in history. Executives disguised the firm’s finances and continued to issue numbers showing growth. See how the chart was telling you the truth. And all the while the profit and loss statements were telling lies. When Enron finally declared bankruptcy, over 4,000 employees lost their jobs and many their life savings. Investors lost billions. As the share price was sinking, the company told workers the company was solid and to buy more stock. And all the way down, the analysts rated the stock a buy. In 2001, and right up to bankruptcy in December that year, analysts rated Enron a buy, some even calling it a strong buy! Even experienced, successful fund managers continued to buy the stock as it went lower. Right to the end, the lower it went, the more they bought. It’s not the first time fund managers and analysts have been wrong about a stock. And it won’t be the last. Why were they buying? Because the stock was cheap at those values. This is a prime example of why you never want to be looking for cheap stocks. Prosecution trials took place in 2006, and here’s a just one brief comment that sticks out for me. In examination, it came up that former vice president Sherron Watkins (who was never charged with insider trading) sold almost $50,000 worth of shares in 2001. By the end of that year those shares were worthless. When prosecutors asked her if her stock sales were proper, she replied, ‘no, I had more information than the marketplace did’. So she did. And this is why the chart will never lie to you. Because when someone knows something and there’s money blowing in the breeze, they act. If you learn nothing else from this affair… When you read what the analysts say about the company, bring up the chart. What’s the trend? If you want to buy a beaten down and unloved stock cheaply. Well that’s your choice. But at least you now know what can and does happen, with that strategy. It’s not a style of investing I subscribe to. But if you want to learn a little bit more about charts and trading with the trend, then go here, to find out more. Terence Duffy, Chartist, Phil Anderson’s Time Trader ..............................Advertisement.............................. | What if there was an ALMANAC for the financial markets? One so accurate, you could set your watch by it? Never again would you have to worry about what could happen next year. Never again would you be caught out in a down move on the stock market...in fact, you’d be able to profit from downturns. If you’re a rational person, you’re probably sceptical about any kind of long-range market prediction. Let alone one pinpointing specific dates. Please reserve judgment until you’ve read this Grand Cycle research report based on the work of Phil Anderson. 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Life Happens When You’re Away By Bill Bonner in Baltimore, Maryland ‘Thy love afar is spite at home.’ Ralph Waldo Emerson Another week. This one should be slow…with many people off for Thanksgiving. But you never know. The old-timers say the days before a holiday are especially indicative of the market’s mood. Traders don’t like leaving themselves in danger while they’re away from their terminals. That is, if they think there is much chance of a crash, they will sell out in advance so they can enjoy the holiday without fear. Life happened Meanwhile, we are back at home after six months abroad. ‘What’s new?’ we ask. ‘The charm of ordinary life,’ answered a familiar voice. On Saturday, we attended a memorial service for a cousin, Joe, who died two weeks ago. On Sunday came a christening for a grandchild. One gone. One arrived. Score = even. ‘People worry about changing Chinese trade policies…or who will win the Ravens game. They spend their time on their iPhones and computers. Real life goes on around them…and they don’t even notice. ‘They may be focused on the wrong things, the wrong places, and the wrong people. ‘A man makes a billion dollars in California. A woman wins an election in Arizona. A transvestite in New York sues a museum over its bathroom policy. ‘And right here at home, their eyes are shut. We never even met your cousin’s wife.’ We had seen little of Joe over the past 50 years. In the early 1960s, we worked together with our cousins in the tobacco fields — dragooned into sweaty service by uncles desperate for cheap labour. But in June 1966, we graduated from high school. By September, we had all dispersed — to join the army…to begin careers and families…to go to college…or simply to disappear. By 1970, at least three of our small circle of friends were already dead. One died of a drug overdose. Another was killed in a barroom brawl. The third died in the war. But most of us just went about trying to meet the challenges of ordinary life — earning a living, getting married, having children, and getting along as best one can. And life happened…a half century of it. Life in photos The reunion on Saturday was the first of what, surely, will be many. Our cousin died in his seventies…of ‘age-related’ disease. That is, he did not die prematurely of a heart attack, in an accident, or by medical fluke. He died as the rest of us will — of something aggravated by something else and set in motion by the wear and tear of time. We are all over 70 now…and all holding a losing hand. Joe cashed in his chips already. But there, pinned to the bulletin boards, was the life we never saw. The photos showed Joe dressed in a tuxedo at his wedding…with his brothers, admiring a motorcycle…at the beach with his two daughters…at a daughter’s graduation…driving a tractor…collecting trash and treasures…at home…on vacation …at weddings and on birthdays… A whole life recalled in photos. We were in none of them. We went off to Europe and South America. Joe stayed home. We studied economics and finance. Joe delivered the mail. ‘So many people spend so much time worrying about elections and the economy,’ continued the familiar voice, looking in our direction. ‘They miss so much of what is really going on around them in their own families, the things that really matter. We miss a lot…simply because we are not here.’ While we were away The christening of our granddaughter on Sunday drew many of the same relatives as the funeral, but it was a happier occasion…the beginning of a life, not the end. We gathered at the church in the morning, splashed water on her head, and then came back to the house for a reception. There, too, we caught up with people we had scarcely seen at all in three decades. Many had grown old since we last saw them — grey hair, slightly bent over…talking of hospital visits. Their children had grown up, too. Now, they spoke of a new generation…with unfamiliar names. Life had happened to them, too. ‘When did that happen?’ we wondered to the familiar voice. ‘While we were away,’ came the answer. ‘Ordinary life doesn’t stand still just because we are off on a lark somewhere else. It goes on. We know what we gain from our travels, but we don’t know what we lose.’ Regards, Bill Bonner ..............................Advertisement.............................. | Revealed today: How you can capitalise on… The ASX’s next 10-bagger bull run Download your free report here and discover 3 Aussie-growth stocks that could ‘10X’ in the next couple of years. | .......................................................................... |
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