Weekend Update: January 13th

The Dow was the star of last week, up into the stratosphere above 26K. Meanwhile, market sentiment has reached all time record levels across a dozen different long standing sentiment gauges, many of which have been in play for over 50 years. Every significant market decline, every very scary crash in history has corresponded with like levels of investor optimism.

Our portfolio positions reflect that optimism with a plethora of long positions. The October 5th "too-early to take profits" stop-out of SPY calls is certainly looking like the worst trade of the year, stopped out with a 92% gain. If we had we stayed in our gain-to-date would be around 850%. How does a 92% win feel worse than a loss? I have heard from at least one subscriber who passed on the SPY stop-out and is still long from that September buy signal. Your independent thinking represents that part of trading that is an art as opposed to an algorithm. Kudos...just take care not to overstay your welcome, i.e., bank some gains before they slip away.  

As promised in December, this year I will be expanding the Special Situations portfolio into a wider array of stocks, most of which will be straight stock trades in lieu of the all options main portfolio. Last week's hiatus has put me just bit behind in adding new names to this portfolio, but expect some coming as soon as next week. Meanwhile I am watching GBTC closely for fresh buy signal, and maybe well before the 2335 stop in the table below. Bitcoin trades 24/7, doesn't observe any market holidays and is a truly global market. Stay tuned for a re-entry buy on GBTC, maybe as early as Tuesday. 

One more point about bitcoin before we get too carried away. This quote is from the January 5, 2018 Elliott Wave Financial Forecast (FWIW: It was in 2012 when I first learned of bitcoin, from Robert Prechter of all people.  It was under $1):

If this mania is not over, it should be very soon. History’s most important lesson is that after a mania ends, a crushing bear market follows.

Should a "crushing bear market" be in bitcoin's future, I intend to be a part of it with puts and shorts on an array of bitcoin-o-centric stocks. We will ride this sucker wherever it wants to go.