Newsletter #32 Santa Rally on the cards?
Models sell call on the US Dollar towards the end of October has played out really well. Since then in every week's updates, I have been reiterating the models' bearish call. DXY is down about 7% since. Just to put things in perspective on how good the call has been, it's the biggest fall in USD in the last decade. And the call was made when the sentiment was extremely bullish and the USD looked unstoppable.
Model continues to be bearish on $DXY (USD).
Model also has been bearish on interest rates US10Y for weeks. Previously as I have stated in the previous updates
For those interested in bond markets, the model is bullish on $TLT.
TLT has been up over 7% since.
Model continues to be bullish on $TLT and bearish on US10Y.
Model also has been bullish on Stocks since over a month and that call to has played out well. Again, remember when the call was made sentiments were really bad and expectations were stocks will go on to make new lows.
Both S&P500 and Nasdaq100 indices are up over 8% and 11% respectively.
Model continues to be bullish on Stocks.
Coming to crypto, it really got the short end of the stick. When the macro turned favorable with USD and interest rates falling, ideally it should have benefited all risk assets, while both stocks and crypto broke out initially, the entire crypto space got hammered hard due to FTX fraud and the overhang of potential Genesis bankruptcy, stocks went to make good gains.
But finally, is there light at the end of the tunnel? seems like it. There has been good price action in crypto and there's a good possibility of a Santa rally in the coming weeks.
From a long-term investing perspective I am sticking to the plan I have been writing about for months.
Bitcoin and Ethereum are entering the value zone, if we do get a market-wide sell off then it would be a great time and price to accumulate these assets for those who believe in this space. The above logic applies to ALL cryptos/stocks that you believe will survive the next 5 years.
So I will buy either on a complete NUKE aka BTC in the range of 14k-17k if we get one or on a Long signal by the model. I would be using this opportunity to DCA into long-term holdings. $BTC & $ETH feature in them but I have also laid out a long-term investment thesis on crypto stocks. You can check them out here - HUT8 and Galaxy Digital. I also like Riot Blockchain (similar thesis to HUT8) and Coinbase.
From a trading perspective, until we get the breakout and the model gets into AltUSD positions there are some trading opportunities in the AltBTC pairs.
Model is long LTCBTC, XMRBTC, ASTRBTC, DOGEBTC, LINKBTC, BNDBTC, QNTBTC MATICBTC.
Below are the All Models signals on BTC ETH Solana /USD from 2020 to date. I have been publishing this every week and will continue to do so.
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