Warning! This is a Bitcoin-free zone

Warning! This is a Bitcoin-free zone

Yes, not a single mention of BTC here (but I am alluding to my main trading crypto – Ether).  Mind you, I must be one of the few not to bring up the dreaded Bitcoin word.  In a recent seekingalpha.com email, I counted six of the top 8 articles with BTC in the title.  There is also an explosion of articles in much of the MSM. This is a massive feeding frenzy in cryptos that has reached fever pitch this week.

It is mostly the Asian retail buyers who are trading it – and we know how much they love gambling. Because at this early stage, betting on cryptos is a pure gamble.  Ask yourself – do you think the vast majority of the buyers would be doing so if the price were stable? Of course not – they are being lured by the sheer momentum of the price rises.  10%, 20%, 50% in one day is the siren call.

They use the arguments that it is the blockchain they are buying that will transform all our lives.  Phooey! I would bet that not 1 in 1,000 buyers truly understand what a blockchain is and how it operates (I certainly don’t).  Would they care two hoots for owning a blockchain if the prices were stable?  Of course not!

Friends, it is a pure speculation built solely on greed.  There is nothing wrong with greed, so long as you acknowledge it when you see it in yourself (we can all see it in others. of course).

I am seeing outrageous ‘forecasts’ for it (or should that be ‘wild guesses’ by rampant bulls?). One I see calls for $140,000 next year and then a crash.  Such click bait headlines are pure biased guesses. I wonder if I will ever see a bearish article show up in the MSM with price targets?  Not yet is the answer – unless BTC collapses by more than 25% in a few days, that is.  Then, they will be coming out of the woodwork with their “I told you so” articles.

Frankly, I only read such guff for entertainment purposes when I need a good laugh after a day’s trading in the real world.  They do tell me a lot about prevailing sentiment, which is of a major benefit.

Incidentally, VIP Traders Club members went long Ether last month following my analysis of the chart

based on the clear breakout of my blue trendline.  My best guess is that we are in Elliott wave 3 of 5 with a wave 4 decline to come and final purple wave 5 up which will possibly be a large wave 1 high.  If so, I expect a sharp decline from there, probably in three waves down.

But with buyers now rampant, please expect the unexpected.


I changed my stance on FTSE last week

I had been working on the basis that FTSE was in a new bear trend since the wave patterns suggested that in November.  But when a key resistance level was broken to the upside last week, I rapidly did an about-turn – and this is why

From the 7 November 7600 high (which I have labelled wave 3) I have a clear A-B-C corrective pattern down to the C wave low at 7280.  I reckoned that the trend was still down – but if market could rally above my mini dark blue trendline in the 7360 area, I would set the wave C of 4 low in and expect a continuation of the bull run into red wave 5 taking the market to new highs.

And the market did manage just that – in spades!  The ascent has been near-vertical in a tremendous show of strength.  The rally has carried to the underside of my tramline and the Fib 78% retrace area.  This is usually an area of strong resistance, but this morning, it seems to be not holding.

Many will be wondering why share indexes (including the US majors) are making new all-time highs into today’s Fed meeting where most expect another rate rise will be a sure thing.  Surely, rising interest charges will hit many indebted companies with added expense items and reduce profits.  That is the obvious conventional economic thinking, all other things being equal.  But of course, they never are.

That is why relying on the ‘obvious’ so often gets you zigging when you should be zagging.


The big boys are bearish the dollar.  Excellent – I’m buying!

I few posts ago, I maintained that the US dollar is in a new bull market – and today’s Bloomberg article “Traders see no end to the Dollar’s Pain in 2018″ gives me added belief.

The Wall Street gurus proclaim that high growth in Europe and Emerging Markets ‘will cause the dollar to sell off again’ and continue the major bear trend seen in 2017.

They are so convinced by their beliefs, they have built up the largest net short dollar futures positions in history!  That’s what I call herding, folks.  And we know what happens when too many bears move to one side of the ship with too few bulls on the other side.  That means I am expecting a huge capitulation with many jumping overboard as the dollar manages a ‘surprise’ rally.

In fact, we are getting very close to such a breakout – here is the daily chart showing its progress this year

I have a very good blue trendline covering several accurate touch points and the market is currently trading up against it once more.  If the Fed’s actions later today can inspire traders to push it above this line, that should set off numerous buy stops – and confirm the new uptrend.

VIP Traders Club members are long the Dollar Index.


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