Without a doubt the best opportunities present themselves during times of financial distress. During a bear market asset prices take to the downside as risk gets repriced and fear takes over. I would argue that the exact catalyst is not as particularly important as the archetype psychological response which it induces. Markets change, but the … Continue reading Putting on Risk in a Bear Market
Playing Games with Uncertain Outcomes I think that one of the most unique struggles we face psychologically comes down to how we handle uncertainty, and how we operate in uncertain environments. To a degree, everything in life is uncertain. Tomorrows high temperature, your local grocery stores stock of toilet paper, or the next 10% move … Continue reading On Uncertainty
Human nature is to confirm. Most people look to find evidence (and arguments) that confirm their view/position. The confirmation bias is so prevalent in our fundamental psychology that its quite crippling when it comes to aligning your perspective to reality. This confirmation bias is embedded in our human nature and our thinking, countless studies show … Continue reading Look to falsify
What is money? Dollars, Euros, Pesos; they are all forms of value. Money in its most simple state is just a means of transferring value from one individual to another. For money to be money it needs to be: A unit of account A store of value A medium of exchange We like our money … Continue reading How I View Money
Dollar After breaking out through the Nov-April resistance of 97.70, the Dollar Currency Index (DXY) ticked to ~98.40 on two occasions and is currently selling down for a possible retest of prevailing support. Often we see resistance turned into support after a technical breakout, watching 97.50-97.70 to confirm the up-trend. As for the components of … Continue reading Market update: Dollar, Gold, 10Y, SPX and BTC
Regardless of your fundamental view on Bitcoin, you should still be asking yourself "Can it happen again?". I first started learning about cryptocurrencies and blockchain back in the spring of 2017. I cant quite remember where I first found out about Bitcoin but at that time there was little hype and the price was just … Continue reading Can It Happen Again?
As the S&P and NASDAQ makes new highs, there seems to be less exuberance in the more risk-on small caps. As seen below, the Russell 2000 Index has been mostly trading sideways for 2 months now. There is a significant divergence that has taken place between the large-caps and small-caps, as indicated in the following: … Continue reading Convergence play?
I am 100% Bullish Gold in the long-term but today is not the day to buy. I have maintained the view that the US Dollar strength is not over yet. If we were going to see the Dollar top out it would have been when the Fed flipped Dovish. My view is that its a … Continue reading Gold Breaking Down
The Business Cycle: Simplified Most everyone understands the business cycle; 7-10 year periods of economic expansion followed by recessionary contraction in GDP. A technical recession is two consecutive quarters of declining GDP, characterized typically by tightening credit and a flight from risk assets. Recessions are those 'features' within economic law which allow for the repricing of … Continue reading The (short-term) Business Cycle
Watching $1312 to see if Gold is going to break through the declining wedge pattern below. Interestingly the DXY still looks as if its going to continue selling off through to $96. Buy into strength. Sell into weakness.