It’s been a hell of a week – literally. A fire at my house has caused significant damage, and let’s just say my wife is less than impressed.
As I sit here writing this, I’m still waiting for the insurance guy to turn up, which means I’m currently camping at the in-laws. Not exactly the five-star accommodation I had in mind, but hey, at least the foods decent.
I bring this up because, unsurprisingly, my focus over the past few days hasn’t been entirely on the markets. That said, for many – especially equity traders – the state of the markets remains a major concern.
Readers will know I’ve been bearish on equities for some time. Back on February 12th, I sold DJIA at 44,500 and FTSE at 8,800. Last week, I discussed taking profits on DJIA at 42,000, which I managed to do earlier this week. Meanwhile, I’m still holding onto my FTSE short and might look to buy back around 8,450, having now lowered my protective stop to 8,630.
All in all, I should be feeling pretty pleased with these trades. But, let’s be honest, it’s hard to celebrate market wins when your house looks like a scene from Backdraft.
Of course, not every trade has been a home run. I sold some EUR/USD just above 1.08, and, well… I’m still holding onto it. Looks like I’ll be stuck in this one for a bit longer until the current rally finally runs out of steam – hopefully sooner rather than later.
As I mentioned last week, it’s easy to talk about successful trades, but we also need to own up to the ones that haven’t gone so well. That’s trading for you.
Taking a break from the smoke and soot, I’ve managed to carve out a few hours to scan the markets and put together this update. Honestly, it’s a welcome distraction.
Having had a quick look, I’m not planning to commit to anything new for at least a week, but I do think the current rally in GBP/USD (cable) is corrective. I’d be tempted to look at shorting this cross in the coming week.
But the bigger question is: where do we re-enter and buy Bitcoin (BTC)?
I’d say anything under $70,000 is a decent level, and the closer we get to $60,000, the more attractive it becomes. That said, seeing BTC back at those levels would likely send shockwaves through the industry. Broadly speaking, if BTC does pull back, we should expect strong support to emerge around $73,121. That could be a good level to start scaling into a long position, adding incrementally every 5,000 points – depending on portfolio size.
The problem with this BTC outlook? It’s too positive! And in the back of my mind, I can’t shake the thought that Bitcoin hasn’t exactly lived up to its grand promises. It has drifted far from the vision set out in its white paper.
Hopefully, BTC will hold its own over the coming years. If everything truly hits the fan, maybe Bitcoin will finally fulfil its purpose. But ironically, if the global economy improves, BTC’s value could decline just as rapidly.
Interestingly, BTC has been moving in step with global equity markets lately – so much for being an independent hedge. Given what I said last week, we might actually be better off buying Ethereum (ETH) right now instead of Bitcoin. After shedding 50% of its value, ETH’s risk-reward ratio looks a lot more attractive.
That’s all from me this week. I’m hoping equities ease a bit further – after all, I need to pay the cleaners and cover all the other expenses my insurance company will no doubt try to wriggle out of.
More importantly, I need to go and cheer up the wife… and we all know how much that’s gonna cost!
The post It’s a Fire Sale! first appeared on JP Fund Services.
The post It’s a Fire Sale! appeared first on JP Fund Services.
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