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Bitcoin And The Sex Pistols
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Bitcoin And The Sex Pistols

by The MoleApril 5, 2019

So I have not mentioned bitcoin or crypto over the past few months and some of you may have wondered why. For an answer look no further than what happened last Tuesday. Unless you’re living in a cave you probably know by now that BTC suddenly and out of nowhere punched higher and effectively ripped the face off an army of over leveraged small players holding speculative short positions.

And what’s wrong with that, you may ask. After all as traders we do enjoy a bit of volatility here and there to help us squeeze out large gains. Well, what’s wrong with the crypto market in particular is that most of its large advances or declines are driven by volatility that cannot be predicted while we as traders attempt to leverage volatility that to a large extend CAN be predicted.

Ergo, when it comes to crypto currencies GARCH is not going to help you, champ!

Yes, I know, I just blew your mind.

Deal with it.

So what happened with BTC is that some whales had gotten together and decided to launch an organized short squeeze at the exact same time. Low liquidity market meet large (non-institutional grass roots vegan hipster) participant – a match made in crypto hell. Hey at least it wasn’t evil Wall Street (for all we know) so it’s all good, I guess.

This of course triggered a chain reaction which blew up a ton of short positions held by small participants in over leveraged shitcoin exchanges like Bitmex. Once the smoke cleared billions of positions had been liquidated and the resulting shock wave made its way into more established exchanges like Coinbase or Bitstamp.

And clearly this is not the first time stuff like this happens. Over the past two years crypto currencies have been alternating between explosive volatility and coma inducing boredom. So when I think of the crypto market as a whole the image that keeps popping into my mind is that of Sid Vicious of the Sex Pistols.

Flash Back Time

For you youngsters who have never heard of him (or good music for that matter) here’s a quick history lesson. Sid was a drug addicted STD riddled foul mouthed son of a bitch who lived to the ripe age of 21 but during his short stint on planet earth played a large part in advancing punk movement from a small British niche phenomenon to a global movement.

To young impressionable kids like me who came to age up during the 1970s Sid and the rest of his crew were Gods and anyone who was cool was listening to the Sex Pistols (if you look carefully you can see a young Mole bouncing around down in the mosh pit).

Sid’s early demise and the fashion of how he died obviously fueled our collective fascination, and if that doesn’t make sense to you then all I can offer is that those were different times and I guess you just had to be there.

The most salient characteristic about Sid was that he was absolutely unpredictable, violent, unapologetic, created a smoking train wreck wherever he showed up, and absolutely did WTF he wanted when he wanted it. And that in turn brings me back to crypto which over the past two years has exhibited about the same level of maturity as Sid and his motley crew.

It’s like this. Good old uncle Bob just died and since he hated you the least he decided to leave you with $5M to do with as you please. After blowing the first few hundred thousand on scantily clad ‘performers’ in Vegas you decide to sober up and invest what’s left of your inheritance more responsibly. You know two people who claim to know what they are doing:

This is the first guy. He goes your through financial statements, sighs and shakes his head a lot, taps away on his computer, asks a bunch of questions you are unable to answer, and then proposes to invest it all into a basket of low risk funds offering a low risk annual payoff that lets you enjoy life with solid monthly income into old age.

This is the other guy. He doesn’t ask any questions, sniffs a lot, looks over his shoulder a few times, and then tells you that he’s a got a ‘shu-in’ that’ll double your money in two weeks – guaranteed.

I guess you get my point. Sid Vicious to me is analogous to the crypto market in its current state. Immature, experimental, unpredictable, angry at the establishment, and driven by a strong motivation to stick it to ‘the man’. Yes the music is bloody awesome and he knows how to party, but unless he checks into detox and gets cleaned up the story will always end in the same fashion. A lot of blood and tears and the only ones coming out on top are the producer and the suits at the record company.

Now I’m the first to admit that I was initially fascinated about the idea of crypto and thus was actively working towards integrating it into my daily trading regime. But once it started going exponential in late 2017 I quickly realized that crypto simply wasn’t ready yet to be taken seriously, at least from a trading perspective.

On a long term basis I maintain that crypto currencies are here to stay, in one form or the other. But whether they will retain any semblance of their initial vision spearheaded by Satoshi Nakamoto is highly questionable.

Okay, back to the future. Equities show no signs of weakening and given what I am seeing in the E-minis we may be heading into all time high territory by next week. In anticipation of the weekend my trail remains at the 4.5R mark unless we see a very big advance higher today in which case I may tighten things down a bit more.

I should point out however that the prospect of a correction is somewhat gaining traction. My realized vol chart is signaling orange at the current time as the previous two LV cycles have not produced any substantial price increases. However as it’s very difficult to time this the only choice I have is to keep trailing as best I can.

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About The Author
The Mole
Mole created Evil Speculator amidst the chaos of the financial crisis in early August of 2008. His vision for Evil Speculator is a refuge of reason, hands-on trading knowledge, and inspiration for traders of all ages and stripes. You can follow him and his nefarious schemes at the usual social media waterholes.
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  • ridingwaves

    Long live Sid……I too got my punk roots from them and all the S. Calif punk bands…..TSOL, Black Flag, Circle Jerks, Dickies….Punk made sense to surfers back in 70’s….got you amped up for the paddle…castaways back then….million dollar sponsorships now…..

    I do have a funny story of a chick hitting me with a beautiful right cross because my hair was too long to be at a black flag concert…..her boyfriend got the return salvo….

  • https://evilspeculator.com Sir Mole III

    LMAO – you f..ing hippy!!

  • http://gerb-reloaded.blogspot.com Gold_Gerb

    Nice explanation.

    I call it the milk bucket pattern. And truly, there is no way to predict it IMHO.
    a bunch of whales decide on day X, and so it goes.

    https://3.imimg.com/data3/NX/HE/MY-9170370/alu-balti-250×250.png

  • ridingwaves

    ran into the 200sma and still consolidating, starting to look like cup and handle, could be coffee overload though
    https://uploads.disquscdn.com/images/410c1f0bedff3f7e2092a4f15df7df6ad17a8078e94e610e56241a9a08bb25bc.png

  • http://gerb-reloaded.blogspot.com Gold_Gerb

    a nice move.
    but I’ve become jaded.

    a setup is much more preferable.

    https://uploads.disquscdn.com/images/706547b4b28112378313b5a0386b06a4c7ac38b6294621b494c2dbd4bec809fb.png

  • ridingwaves

    I liked the original punks “The Who” had hair more like Roger Daltrey in Tommy….
    I probably knew more about punk then she did but surfers had long hair back then, we didn’t cut it for music….I remember it being at the whiskey…..

  • ridingwaves

    going L at 4K is not bad, retouch of 3200 and odds are really good for L….

  • BobbyLow

    It’s funny how every generation has their music genre. For me it’s old classics from the 50’s and 60’s and the only reason I have Sirius Satelite Radio. 🙂

    In the meantime, LABU is still cranking upward. BTW, Oil hasn’t broken 62.99 yet but it seems to be on steroids. Crazy.

  • Ronebadger

    I got your 60s, right here…

    https://www.youtube.com/watch?v=bI1EOxwnpvk

  • http://gerb-reloaded.blogspot.com Gold_Gerb
  • http://gerb-reloaded.blogspot.com Gold_Gerb

    where’s the down vote!? ARGHHH.
    hippie wave.

  • http://gerb-reloaded.blogspot.com Gold_Gerb
  • http://gerb-reloaded.blogspot.com Gold_Gerb

    how does ’65’ look now?

  • ridingwaves

    the 70’s was a music orgy……so many different sounds…..
    but I still pop in my Elvis Gold to burn 2 hours off a long drive…..the King changed a lot of things…

  • https://evilspeculator.com Sir Mole III

    I remember some fun times at the Whiskey myself – two decades later though. The early nineties were awesome in L.A. 🙂

  • ridingwaves

    80’s too…
    70’s S. Calif was probably close to nirvana….damn the water was clear and not one plastic bag floating around……it was heavenly

  • HD
  • http://gerb-reloaded.blogspot.com Gold_Gerb

    High Yield continues it’s morphine drip, everybody’s gonna get high.

    Extra digits on a bank account are an illusion man, seek free love.
    Exit the System.
    Peace Out

    https://uploads.disquscdn.com/images/b54425695f73feba094964844074d34183164ad14ab8d4ded5ec8b78db6ec551.png

  • ridingwaves

    is the trend line determined by first 2 touch points, could the top one second touch start at B?

  • ridingwaves

    pretty packed auction schedule next week with the 3, 10 and 30 in the mix…

  • HD

    both of the TL’s have 4 touches. Some people use 3 touches. More =better

  • http://gerb-reloaded.blogspot.com Gold_Gerb

    yeah, make it 3, otherwise Mole will jump on it.

  • http://gerb-reloaded.blogspot.com Gold_Gerb

    ..with OpX. the week after?

  • HD

    well, the point is an apex often marks time.

  • http://gerb-reloaded.blogspot.com Gold_Gerb
  • BobbyLow

    Looks fine to me. I still have a 1/2 Position long. 🙂

  • https://evilspeculator.com Sir Mole III

    Friday is pizza day at the lair:

    https://uploads.disquscdn.com/images/928027685cc8cb25d7ef6f7c36181fb3148bd8408948a54ff583dcc43dca3b84.png

    It takes time and preparation but it’s very rewarding to make your own dough.

  • BobbyLow

    From 1974 to about 1983 when Volker raised the shit out of interest rates, inflation was unbelievable. It was so bad that if you wanted to buy something, you had better buy it that day because tomorrow the price would be higher. The main difference betwen the inflation back then and the inflation in recent years is that back in the 70’s/early 80’s you had real inflation meaning that prices would inflate and so would wages. But in recent years, prices of most things that you really need (and I’m not talking about flat screen TV’s or Cell phones) increased while wages remained stagnant.

  • HD

    Nobody liked the TSLA pattern I posted yesterday? It wasn’t even EW. +$9

  • HD

    This HH on SPX maintains -D
    Round numbers on deck.

  • HD
  • https://evilspeculator.com Sir Mole III

    Didn’t see it – sorry.

  • BKXtoZERO

    Long TVIX 24.41 for day only…. blasphemy to even try on a Friday

  • Ronebadger

    Curly Howard used to work at a bakery, but he quit and said,
    “I got sick of the dough, and thought I’d go on the loaf “

  • http://gerb-reloaded.blogspot.com Gold_Gerb

    23.57, not a penny more.
    and saints help you if it’s JUNE.

    https://stockcharts.com/h-sc/ui?s=TVIX&p=D&yr=1&mn=0&dy=0&id=p72042888370

  • BobbyLow

    Yep and just about everything else that we absolutely have to have.

  • BobbyLow
  • BKXtoZERO

    No one knows… I just take a carpet bombing approach. Somedays I land one on the old kisser, WHAM! but most days I wind ip buying someone lunch. 7$ to TDA so someone there can have a sandwich and then flat or maybe 100-200$ if I am generous with a stop.

  • BKXtoZERO

    Silver….. no need to even post a chart. Dead money 4.5 years. Wow. If I see it start to do something I will jump but the words Silver and Trading aren’t to be used in the same sentence.

  • Mark Shinnick

    Funny you mention that; I’ve spend most of the morning in study with it….uslv.

  • BKXtoZERO

    QE 4 is being asked for….. metals should be running on that news?? usually silver takes a beating when you think it should rise. Little move off the lows and half retraced….sitting there.

  • HD

    It’s terrible. I have a lot of it too. Those bastardos.

  • Mark Shinnick

    Deterministic / Nutoninan models hardly ever seem to do anything to change mass-market animal spirits trends.

  • BKXtoZERO

    Exactly what I was thinking to the word!

  • Mark Shinnick

    Is there a point you would be thinking/feeling to liquidate?

  • Mark Shinnick

    LOL 🙂

  • https://evilspeculator.com Sir Mole III

    Poor Curly – didn’t end up well…

  • ridingwaves

    gold is about to run, the gray mare will pull in behind it….

  • Julie 35 – 25 – 36

    Guys still short BAC i.e. initial position GLD again 121 make or break I have a target 119 – 120
    JULIE

  • ridingwaves
  • mSquare

    GS – Shorting here. Stops at $206.45 (mid-March hi) or $208.6x teh 200day.

    https://stockcharts.com/h-sc/ui?s=GS&p=D&b=5&g=0&id=p80808271913

    I know BAC is Julie’s favorite (financial) short, but GS has additional downside potential due to 1DB related -ve headlines

  • Julie 35 – 25 – 36

    Hi mSquare Financials IMO looking weak $BKX going up into it’s down trending 233 ema with RSI @ 54 Tough road
    JULIE

  • http://gerb-reloaded.blogspot.com Gold_Gerb

    Agreed.
    if the weekly crosses the median, I’ll speak up;
    but otherwise ZZzzzz.
    [Silver]™
    https://stockcharts.com/h-sc/ui?s=%24SILVER&p=W&st=2007-11-07&id=p4841392236c

  • http://gerb-reloaded.blogspot.com Gold_Gerb
  • Julie 35 – 25 – 36

    Guys The home office is taking everyone to the Boston Red Sox home opener this coming Tuesday Boston versus Toronto Yeah ! Next week will be in Boston also. This is one horse of a different color Definitely not used to it i.e. traffic and people Everyone Have A Great Weekend
    JULIE

  • Ronebadger

    They talk wicked-funny, too…

  • http://gerb-reloaded.blogspot.com Gold_Gerb

    Just stay away from any large crowds and pressure cookers.

  • http://www.captainboom.com/ captainboom

    Do I need to get all physics on you? Of course there’s gravity in space. Silly Gerb.

  • HD

    Yes, Happily trade the lot for a 300 black out with top of the line optics.

  • http://gerb-reloaded.blogspot.com Gold_Gerb

    I might be able to trade that.
    you got a wheelbarrow for the metal?
    ;-D

  • http://www.captainboom.com/ captainboom

    Yes, very rewarding. My wife makes dough from scratch for our home made pizzas. She’s an amazing cook.

  • ridingwaves

    lucky chap….
    did you EDAP

  • http://www.captainboom.com/ captainboom

    I did not, unfortunately. I remember thinking that could be a good one for my Roth, and then promptly forgot about it. Sigh.

    Have you any thoughts on the future of OSIR?

    I’ve been focused on day trading ES with some success. Getting better with practice.

  • http://gerb-reloaded.blogspot.com Gold_Gerb
  • https://evilspeculator.com Sir Mole III

    I made the dough and she handled the rest. The result was rather scrumptious although she insists on using spelt flower which is why it never really comes out fluffy/crusty like you’d get it at a pizzeria.

  • BKXtoZERO

    oh well… another day another ding…. holding small amount in this area. Sandwich on me.

  • ridingwaves

    EDAP should test ath now at 7 in due time, they knocked cover off ball on earnings…selling those machines at higher clip…

    OSIR is one messed up thought, trying to push it out of mind…if the BOD doesn’t approve tender the pps would be in mid 20’s for sure…2 days before blow out earnings…cantor fitzgerald evaluation is really at issue here, they based it on lower growth when they are growing at 20+% with nearest competitor going bk….there are some law suits in play…SNN will steal the company at current tender….I’m still sitting on a nice clip in one account, sold out of another. damn shame…it was going like the SUPN chart…thought it was going to do similar…

  • BobbyLow

    I resemble that remark. LOL

  • BobbyLow

    Sounds like a lot of fun. Just one tip. I’ve gone to a number of opening day games and even though you’re used to the outdoors, dress warm. 🙂

    And yes lots of people. BTW, I think the population of Boston is about 2/3 of the entire state of Montana and in a small fraction of the space.

  • http://www.captainboom.com/ captainboom

    I guess I didn’t realize there was a tender offer being made. That’s what I get for ignoring news.
    I sold half of mine on the way up, I think at 15.45. Still holding the other half.

  • sutluc

    Almost a crypto edge that we could call the April fools ramp, but not enough data yet.
    Elon Musk for ceo of dogecoin. Jesus.

  • https://evilspeculator.com Sir Mole III

    NEW POST!!