Google Is Dangerously Overextended…

“Good traders liquidate their positions when they believe they are wrong; great traders reverse their positions when they believe they are wrong.” ~ Jack Schwager

In this week’s Dirty Dozen [CHART PACK]  we look at the Nikkei coiling, GBTC trading at its largest-ever discount to NAV, broader market breadth, hedge funds finally starting to join the party, median income across generations, and pitch a food tech company that’s making frankenfish, plus more…

Let’s dive in.

***click charts to enlarge***

  1. I went long Nikkei futures (NKD) in my World Trading Championship account on Wednesday’s reversal. The index bounced off its Bollinger Band and sideways consolidation low. I think it breaks out to the upside soon and buying at current levels with a tight stop right below the range, gives a pretty good risk/reward entry.

  1. The Nikkei has had a good run since we last pitched the bull case for the index in these pages back in November (link here). Its subsequent vertical run sucked in plenty of longs and made for some pretty crowded positioning. But this has all been wrung out over the last few months of sideways chop.

  1. Last week the Grayscale Bitcoin Trust traded at a 20% discount to its NAV. Its largest discount in history.

  1. I think crypto at large is nearing a top that will lead to a considerable and enduring correction. With that said, BTCUSD is holding critical support for now and it’s likely to go on at least one more run before it rolls over. We still prefer Ethereum (ETH) since it has a better chart and stronger relative performance.

  1. Trend Fragility is high in the broader equity market and we’ll likely enter a corrective phase sometime within the next month or so. But, markets are still in a Buy Climax and these tend to end with FOMO-induced vertical climbs where the market runs 5-10% over the span of 2 to 4 weeks. We’re likely entering one of these periods now. The underlying breadth remains supportive of such a move.
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Disclaimer: All statements are solely opinions and are for educational purposes only.

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