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STONKS and coins have been mostly annoying for weeks. Watching the bears and bulls fight it out has been like watching ping pong balls hit back and forth with neither player actually trying to win.
The volatility has been great for experienced traders who have been playing the dips and spikes well. But for those of us who require a clear trend so we can feel like little Warren Buffetts, the lack of a direction has been frustrating.
This is another reason why buying or selling stocks with margin can be brutal for both bears and bulls. While the market haggles with itself, margin traders get slowly eaten by borrow costs. In any case, the chop has created what I’m calling The Wedge of Jerome. Behold it’s beauty:
If this pattern continues into the trend convergence point, the break out or break down will commence literally when Jerome Powell is talking on Wednesday. So it all comes down to Jay-Po’s sweet nothings. Will he be hawkish or dovish on rates? Reported CPI in February was 7.9%. For those keeping score at home, that makes it three consecutive months with year over year consumer price inflation above 7%.
A central bank serious about fighting inflation would have raised rates off the floor 8 or 9 months ago instead of spending that time talking about how it’s definitely, totally going to raise interest rates. But I digress. The market is expecting a hike between 25 and 50 basis points. Yeah, that’ll cool the grocery bill…
At a 94.9% probability, it’s safe to say a 50 bps hike has been priced into the market. The only other level the market is even giving any time of day is rates unchanged - that probability sits at the long shot of 5.1%. 75 bps? Forget about it. 75 or higher is out of the question, apparently. And I happen to agree.
Where I’m going with this is the Fed’s “see we really meant it when we said we’d hike” 25-50 bps rate increase has already been priced in. I think the Fed March rate hike is going to be a massive sell the rumor buy the news event. I’m positioned for a break out next week. I think many of the tech names that have been massacred since November are going to get significant relief rallies to close out the week. From a trading standpoint, I’m holding names like FUBO, ROKU, and BKKT. I also have paywalled idea that you can check out here
On the coins
Bitcoin has basically gone nowhere for a month and a half. The all powerful orange coin seems stuck at $39k for now. Everything above $40k has been a rip to sell. Everything below $37k has been a dip to buy.
I still think the BTC level to watch is $46k. A daily close above that and we’re probably good to go. Other coins are finding footing while we wait on BTC though. Check out my personal favorite, Zcash:
That’s a good looking chart and I was watching that trend resistance on STONKtwits last week. The breakout is a good sign. I see basing here in the $145-$155 range to be healthy and a nice setup for the next leg up.
Disclosure: I’m not an investment advisor. I merely share what I do and why I do it. You shouldn’t take anything I say as investment advice and always do your own research when making investment decisions. Cryptocurrencies, tokens, STONKs, and digital trinkets could all go to zero. I have no job and I live in my wife’s basement. I’m the last person on the face of the earth who you should listen to for financial advice or life advice. I’m not featured on trustworthy financial news sources like CNBC or Bloomberg and I don’t wear a necktie when I make my trades. I am long FUBO, ROKU, BKKT, BTC, and ZEC.
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