Housekeeping We are switching exclusively to the ATR charts (courtesy Tradingview) which are especially suited to the Bitcoin trends as well as the expected summer long weakness across the board in stocks and stock indexes. The only downside is the temporary loss of real time option updating, which we are working on getting back as soon as possible. Crypto (GBTC, ETHE, Bitcoin & Alt Coins) Starting off this weekend is the Crypto two-week cycle, where Bitcoin lows are tracking futures options expiration (Friday May 28th) as well as, inexplicably, the full moon (Wednesday May 26th). If either of these two patterns continues then next week should put in lows in Bitcoin (and other Crypto) in advance of a two-week rally. For anyone not yet invested in Crypto, next week is as good as any to dip your toes in the water. Bitcoin can be bought in numerous ways, including a mobile Robinhood account that allows for purchasing stocks, options, and select cryptocurrencies. Their mobile App is impressive for its simplicity and ease of use. I'm not shilling for Robinhood, just throwing it out there for all of the "How do I buy Bitcoin" inquiries. You can also buy Bitcoin through PayPal. Aggressive Option Traders Only A leveraged way to trade this cycle is with options on two volatile miners, MARA and RIOT. The table below is constructed by historical prices based upon the two-week Moon Cycle. The option percentage returns are estimates only since I do not have the historical option prices. In any case, those YTD "Average Returns" are based on near term at-the-money options and are powerful enough to consider a trade in MARA and/or RIOT, with June calls, entering around the middle of next week. Also included in the table are the prices of GBTC as per the same cycle. Note that year-to-date GBTC price is about flat, while trading just the "Full Moon Buy Signals" would have resulted in a triple digit return of +116.36%. Cycles-Trading Caveat The danger in identifying and trading cycles is that as mysteriously as they appear, they can disappear, causing one to question if the cycle was ever real. That this particular cycle will dematerialize the first time we actually trade it is possible, but also a long shot, so maybe at least one more iteration is in the works for next week. In any case, we will take one cycle bottom at a time. Tesla Chart and technical analysis aside for now, TSLA under $600 is a good entry price considering the potential for $1,000 once Cybertruck is in the product mix, and the shares under $500 a downright steal. Keep an eye on the new Austin gigafactory ("terafactory") which will be manufacturing the new Cybertruck, Model Y, and Tesla Semi, all with the new game-changing 4680 battery. The Big Picture The DOW and Market Indices This 240 minute chart of the Dow is consistent with a major top being put in on May 10th with a high of 35,091. There are two competing patterns on this chart; First and preferred is that the top is in and there are several thousand points lower due for the Dow over the next two months. Second, is that the "W" formed over this past week is a base to launch a new leg up to all time highs. (Under this scenario TSLA is a steal right now.) In either case, a drop below this weeks low at 33,721 or a rally above 35,091 will define the next significant intermediate term trend. The Dow, currently at 34,207, is in within about 500-600 points of showing its hand and making our job a lot easier than it has recently been. Bonds and Interest Rates Below is the long-term (weekly prices bars) chart of TLT, the 20-year US Treasury ETF. The reversal down in the price trend from mid-2020 and continuing lower today has finally been enough to break below the 200 period EMA. Interest rates have turned up enough to affect the US Treasury market, but apparently not yet enough to affect the US stock market. Or, maybe that is exactly what we are seeing develop on the Dow chart above. If so, we are as ready to exploit this sea change in financial markets as we have ever been. This is not going to be a summer to go on a vacation from the market, instead, it's shaping up to be a summer to remember in any and/or all of or triple trading themes set out in The Power of Three. More Housekeeping Next week is a pre-holiday week (Memorial Day weekend) so most of the action, and updates, should be early in the week.
