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Monthly rollup | August 2023

Stocks Mentioned: Ethereum, Gold Futures, Bitcoin, Snowflake (SNOW), NVIDIA (NVDA), Coinbase (COIN), Atlassian (TEAM), New Fortress Energy (NFE), MicroStrategy Incorporated (MSTR)

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Aug 03 2023

I've suspected for a while that it is the trend following CTAs who have been driving this bubble in the Nasdaq. Their approach rests on following price action, i.e. doing what everybody else is doing with no thought for the fundamentals.

My theory will be put to the test if the Nasdaq approaches the 14,865 level. They will have their stops around the last highest low. If the Nasdaq reached this level, there will be a selling cascade as a wave of stop losses get triggered and selling begets selling. Just as they buy higher and higher because others are doing the same, they will sell lower and lower because others are doing the same.

Charts don't predict the future but they can help with risk management. A good risk management move would be to watch for a penetration of the lower Bollinger Band (the lower band on the zone surrounding the candlesticks) and use that as a pre-mature sell signal, ahead of the selling cascade that would be triggered by sell stops getting hit.

Aug 05 2023

Aug 07 2023

Aug 13 2023

Aug 14 2023

There's a high likelihood that gold reverses higher from here. Stop at 1.5 ATR ($20.45), which allows for a spike below the lower Bollinger Band ($1901.2).

Ethereum is setting up for an explosive move. Higher or lower? Not sure. Whichever way it breaks out of this range, I'll position based on that.

US Money Market funds saw a fourth straight week of inflows ($14 billion this past week) to a new record high of $5.53 trillion. The AI bubble is running out of suckers.

Aug 15 2023

I'm seeing a lot of Twitter chatter from technical oriented TradFi traders remarking on the historic low volatility in bitcoin. Watch for a move below the lower Bollinger Band at $28.9k. Bitcoin will come under heavy selling pressure if that level gets taken out. Conversely, we're going to see buy volume come in above $29.7k but my bias is bearish.

Volatility pick up is just getting started. We have a long way higher to go. Hope you loaded up on cheap OTM puts when the market makers were practically giving it away.

Aug 16 2023

Another 50 point fall in the Nasdaq and the trend followers who bought on the way up will start getting stopped out. Look for an ugly flush followed by a weak bounce, and then the bubble should burst for good. If it doesn't play out as expected, it'll be time to re-evaluate my short positioning.

Aug 18 2023

Aug 21 2023

Snowflake (SNOW) chart looks constructive. This is a good entry for a long-term portfolio. Not a trading idea but an investment idea.

Aug 22 2023

Aug 23 2023

Aug 28 2023

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