It’s Wabbit Season
I’ve been literally in stitches over the past few days marveling over the Shakespearean drama unraveling behind the curtains of the crypto universe. And I’m not even talking about the big sell off which now seems to be reversing. Apparently BitConnect is shutting down exchange operations and a bunch of people found themselves unable to convert their tokens to bitcoin or any other crypto currency. Seems to me a bunch of unhappy folks just learned the difference between (imagined) paper profits and real profits.
At least with regular paper profits incurred on a regulated exchange you can expect to convert into real Dollars whenever you manage to close out your trade. However some of those unregulated shitcoin exchanges seem to be nothing but giant crypto pyramid schemes. It’s gotten so bad that some of the most gullible and thus over extended folks are now on suicide watch and have been advised to seek out help. Quite frankly from an entertainment perspective this beats the entire past season of Game Of Thrones.
However irrational exuberance is not limited only to crypto traders these days as I’m seeing exponential candles all across equities. Shown above is a long term view of the Dow futures. And just to be clear, what you are looking at isn’t a short term chart – it’s a weekly and a monthly panel. Now let me ask you this: where do you think this chart is going to be heading next? Straight up like a rocket blasting past 30k? Caveat emptor has never rung more true, well maybe except for BTC near 20k 😉
Words To The Unwise
Anyway, I’ve been making my concerns clear over the past year or so albeit it always came with a disclaimer that the insanity would most likely continue for quite a bit longer. To that end we’ve simply become a bit more nimble when it comes to equities, it’s great to be long an effervescent market but always keep in mind that large corrections can come out of nowhere and really hit you in the gut if you are over extended. So be careful out there, because as anyone trading crypto right now can assure you, it is most definitely wabbit season…
That said I’m thinking of a quick and nimble long campaign on the ES but only if it gives me a thorough retest of the 2800 mark followed by a recovery. ISL would be near a prior spike high around 2794. If you play along please only deploy petty cash (e.g. 0.25R) as I don’t think this market has too much more upside in store for us. Also my target for the one is at 2R and I’m out.
I posted this Retest Variation Buy setup yesterday on BTC/USD on my twitter feed as well as the comment section, so I hope you caught it. I’ve said it before and I’ll say it again – trading cryptos right now is like shooting fish in a barrel. Anyway, set your trailing stop to slightly below 10,700, which is the previous spike low on the hourly.
A few more goodies below the fold for my intrepid subs:
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