Weekly Newsletter- Week of 10.17.2021
The First Crypto ETF?
The first bitcoin futures ETF is set to begin trading on the stock market this week after receiving approval from the securities and exchange commission (SEC). The proposed date for listing is Monday the 18th, but trading may not begin until later in the week. We’ve extensively reported on the ever-changing landscape when it comes to crypto regulations and acceptance. The launch of the Bitcoin Futures ETF is expected to bring in a new wave of investors to the digital currency as the consensus seems to be more investors may be interested in a regulated alternative to owning the actual asset.
What are Futures
A futures contract will allow investors to make trades on the future price of Bitcoin without needing to actually own Bitcoin. Futures contracts work similarly to the commodities market, where investors can make trades based on whether they believe the price of an asset may go up or down. Trading in futures contracts comes with a high level of regulation which may make Bitcoin appear more attractive to new investors or institutions. In addition to being seen as a potentially ‘less risky’ investment, futures contracts are cash-settled, which means a bitcoin wallet is no longer needed.
Encouraging Signs
Any signs of enhanced legitimacy have always been seen as a positive for Bitcoin. With the first futures contract available for trading this week, Bitcoin is currently trading above $60K for the first time in 6 months. Bitcoin has jumped over 10% this week alone. The SEC has historically rejected numerous attempts and applications to launch a Bitcoin ETF. Their latest moves are seen as encouraging signs for crypto as it makes for another opportunity to bring Bitcoin to mainstream investors. Though, some may argue this is only a partial victory as the fund is based on the future value of Bitcoin. Conversely, many still hope a fund will become available that tracks the spot-market price of bitcoin. We'll be watching to see how the first-ever Bitcoin futures contract reacts to trading on the open markets.
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Previous Market Updates
Weekly Swing Trades
PNRG (Prime Energy)
October 2, 2022
Entry Price:
80.62
Stop Price:
76.85
Target Price:
88.04
Time Frame:
1 Week Hold
Expecting a short-term bump after a recent OPEC+ announcement regarding the a supply constraint to oil. The constraint would result in ~1M less barrels of oil per day, which should cause a price jump. Low RSI and bouncing off our 250 day moving average, both hallmarks of a good swing trade.
DV (Doubleverify)
October 2, 2022
Entry Price:
27.75
Stop Price:
26.75
Target Price:
29.00
Time Frame:
3 Week Hold
Using our moving averages heavily on this swing trade, look for continued strength as we try to notch out a 6-8% gain. Specifically, we are taking advantage of of a recent cross over in the 50 day moving average. Last week closed down, so wait for confirmation of a reversal.
Holiday Christmas Shortage?
It’s only October, but many shoppers are already preparing for their holiday season spending. As supply chain shortages continue to cause elevated prices on just about everything from food, to gas to airfare, consumers are growing more concerned it might be difficult to find the perfect gift this holiday season.
Supply Chain Bottlenecks Continue
This week President Biden once again highlighted plans to deal with supply chain bottlenecks affecting our economy, including plans to turn ports into 24/7 operations. Shipping staples FedEx and UPS are also exploring opportunities to expand their supply chain operations. While Wal-Mart is also expanding its eCommerce operations as well. Electronic devices have been some of the most susceptible products affected by the worldwide supply shortage. Take the Apple iPhone for example, they may receive their computer chips, screens, and glass, each from a different vendor. "It's a complex network of various entities working together to enable consumers to receive their products." It’s believed that electronic devices such as phones, video games and consoles, computers, and even toys have been some of the most affected products hit by the shortage. All items are expected to see inflated demand as we move into the holiday season.
Holiday Shopping
For years, Thanksgiving and Black Friday have been key days for holiday shopping. This year though, experts are predicting if you start your holiday shopping then, it might be too late! As prices continue to rise, the big concern is product availability as we move into holiday shopping. We've received numerous positive reports that show consumers are spending more and more, and a recent survey suggested as much as 37% of the country has already started holiday shopping. Many retailers are also beginning to start their holiday deals much earlier this year. Economists are noting “time and money may be working against consumers this fall”. Experts are encouraging consumers to jump on any early deals they see, regardless of when the sales are. Inventories are expected to be especially tight this year.
Square the Crypto Miners?
Jack Dorsey, outspoken CEO of Square and known crypto enthusiast made headlines on Friday when he sent out his latest tweet noting “We are considering a bitcoin mining system… in collaboration with the community”. Following the tweet, Bitcoin begins to rally over $62,000 as Bitcoin looks to once again push to new all-time highs. Dorsey stated he hopes to make bitcoin mining ‘more accessible.’ Dorsey believes mining needs to be more distributed, and the more decentralized this is, the more resilient the bitcoin network becomes. “Mining isn’t accessible to everyone, and there isn’t enough incentive for individuals to overcome the complexities of running a miner for themselves”. Jack Dorsey has openly stated his support for Bitcoin and crypto on countless occasions. Square is once again looking to become even more intertwined with crypto operations.
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Weekly Review
Market Performance- Week of 09.25.2022
Recent Winners
SBUX (Starbucks)
Entry Price:
85.00
September 11, 2022
Price at High:
89.90
Return for Members:
5.76%
Timeline:
2 Month Hold
Strong momentum over the last few weeks. Watch for a mean reversion, but if moving averages stay consistent look for an early play to open the week.
PNRG (Prime Energy Resources)
Entry Price:
83.20
September 4, 2022
Price at High:
100.00
Return for Members:
20.19%
Timeline:
3 Week Hold
PNRG had a drawdown to historical levels of support (around the 100 day moving average). Looking to make an entry in the coming days as we also have macro tailwinds with the energy crisis in Europe.
PYPL (Paypal)
Entry Price:
87.00
August 28, 2022
Price at High:
103.00
Return for Members:
18.39%
Timeline:
4 Week Hold
Playing off the dip in June, we're starting to see momentum as the 50MA is crossing over the long-term averages. Look to for momentum to continue and an early entry on Monday.
