Newsletter #19 Sell the Merge was a month ago. Soon time to buy the purge?
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Model signaled to exit ALL positions and get into CASH almost a month ago. That call has worked really well as it has managed to sit out this entire correction.
Model continues to sit on 100% cash.
Models call to exit (find the chart at the bottom) Ethereum around Aug 19, almost a month before the merge was particularly impressive as the merge was a major bullish catalyst.
While everyone was really bullish going into the merge, price action was clearly suggesting otherwise. I tweeted about this a few times too. Below is the ETHBTC chart which is looking really weak. Also, Model is bearish on ETHBTC
Model is designed to go both LONG and SHORT but Shorting requires a lot more sophistication which frankly the majority of the retail traders do NOT have, hence I only focus on Long only signals in the newsletter. FYI Exiting a long is NOT the same as shorting. So don't take models EXIT as the signal to short something.
Below is the example where I published a SHORT on LUNA Classic on Twitter. Model captured a 45% move in a week and then signaled a Sell again from a higher point. Model is up 13% on this trade too. I will update when the model flips to Neutral again.
Last week I had written the below
Model has NOT gone long yet but it's picking up bullish signs underneath the surface across the board in Crypto and Stocks on lower time-frames. Should there be confirmation and follow-through, it would go long.
There was no confirmation nor any follow through. Infact there were massive reversals across the board in Crypto as well as S&P500 and Nasdaq100 indices too. All risk assets are looking vulnerable.
Models bearish call on CrudeOil has continued to do well too. Model has managed to call the top in Oil and it continues to be bearish.
If you read my previous posts Macro looking ominous and Why fight the Fed I have been writing about most critical macro variables showing some ominous signs.
Bullish DXY + US10y + VIX is a very potent combo. It usually doesn't bode well for risk assets.
Model continues to be Bullish on DXY (US Dollar), US10Y (Interest Rates) and VIX (Volatility Index).
There could be a vicious down move in both Stocks and Cryptos if the above macro persists.
But the good news is, 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 way I am playing this is either wait for the Model to signal long or wait for capitulation to allocate some part of the portfolio to buy for long term.
Speaking of long term, in the coming weeks I will be publishing my thesis around 3 Crypto stocks which I believe could be 25x-100x in the making. Watch this space.
Below are the Models signals on BTC, ETH, and Solana from 2020 to date. I update this every week.
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