By Nigam Arora & Dr. Natasha Arora
To gain an edge, this is what you need to know today.
Making Money In Bitcoin
Please click here for a chart of bitcoin (BTC.USD).
Note the following:
- On Friday when bitcoin was trading around $38,000, we wrote:
Crypto bulls are hoping that whales will take advantage of low liquidity over the weekend and drive bitcoin above $40,000. A move above $40,000 will suck in more retail investors.
- The Arora Report writing from Friday has now proven prescient. Whales took advantage of the low liquidity over the weekend to push bitcoin over $40,000. When bitcoin crossed $40,000, retail investors jumped in. Whales knew from the past behavior of retail investors that they would jump in after bitcoin crossed $40,000. This is exactly what happened. Retail investors jumped in, driving bitcoin to $42,000.
- The chart shows when speculation about spot bitcoin ETF started. This was a trigger for this leg of the up move in bitcoin.
- The chart shows the first resistance zone.
- Now that whales have pushed bitcoin over $40,000, bitcoin promoters are pushing as hard as they can to bring in more retail investors to move bitcoin to the first resistance zone. Promoters’ pitch to retail investors is that there are trillions of dollars of institutional money waiting to invest in bitcoin. They give this as the reason for retail investors to aggressively buy now.
- Prudent investors need to understand that whales and bitcoin promoters have an agenda. That agenda may not be in your best interest.
- Bitcoin halving is coming early next year and that will also push bitcoin higher.
- While bitcoin is moving higher, there are outflows from bitcoin exchanges worth more than $1B. On the surface, this seems negative, but this is a favorite technique of the whales to push bitcoin higher. Outflows from exchanges are promoted by bitcoin promoters as a commitment from investors to hold bitcoin for the long term.
- Historically, outflows from exchanges have led to a rise in bitcoin.
- There are three keys to making money in bitcoin:
- Understand the behavior of whales
- Understand that bitcoin has none of the benefits on a large scale that promoters have fed to investors
- If a spot bitcoin is approved, it will lessen the ability of whales to run it up because there will be more liquidity.
- To help those who own bitcoin and those who want to make serious money in bitcoin, it is important to understand the three keys given above in-depth. Thank you for all of your requests for a series of podcasts on bitcoin to help you understand the true nature of bitcoin. We are starting work on a series of podcasts on bitcoin. These podcasts will give you insights not available anywhere else. These podcasts will be in Arora Ambassador Club.
- This morning, money is moving out of the stock market into bitcoin and gold.
- The stock market is very overbought and is vulnerable to a pullback at this time.
- As an actionable item, the sum total of the foregoing is in the protection band, which strikes the optimum balance between various crosscurrents. Please scroll down to see the protection band.
Opportunity In India
Prime Minister Modi’s Bharatiya Janata Party (BJP) just had stunning victories in three states in the Hindi heartland. These victories remove some of the overhang on the Indian stock market from the upcoming general election.
As a result of these stunning victories, foreign money is likely to flow into India at a rapid pace. This presents an opportunity in India for investors. Most investors focus on ETF INDA (INDA) to invest in India. However, that is not the best ETF to invest in India. There are two India ETFs that are significantly better than INDA. India has been continuously covered for 16 years by ZYX Emerging. We will be shortly updating the short term, medium term, and long term rating on India and giving a trade around position in ZYX Emerging.
Layoffs among large corporations continue. Spotify (SPOT) is laying off 17% of its workforce. This is about 1500 people. This is also the third round of layoffs.
Magnificent Seven Money Flows
In the early trade, money flows are negative in Amazon (AMZN), Nvidia (NVDA), Microsoft (MSFT), Alphabet (GOOG), Meta (META), Tesla (TSLA), and Apple (AAPL).
In the early trade, money flows are negative in S&P 500 ETF (SPY) and Nasdaq 100 ETF (QQQ).
Momo Crowd And Smart Money In Stocks
The momo crowd is *** (To see the locked content, please take a 30 day free trial) stocks in the early trade. Smart money is *** stocks in the early trade.
The momo crowd is *** gold in the early trade. Smart money is *** gold in the early trade.
For longer-term, please see gold and silver ratings.
The momo crowd is *** in oil in the early trade. Smart money is *** in the early trade.
For longer-term, please see oil ratings.
Bitcoin (BTC.USD) is seeing aggressive buying by retail investors after whales ran it up over $40,000.
Our very, very short-term early stock market indicator is ***. This indicator, with a great track record, is popular among long term investors to stay in tune with the market and among short term traders to independently undertake quick trades.
Interest rates are ticking up, and bonds are ticking down.
The dollar is stronger.
Trading futures is not recommended for most investors. The purpose of providing this information is to give an indication of the premarket activity that usually guides the activity when the market opens.
Gold futures are at $2072, silver futures are at $25.49, and oil futures are at $73.50.
S&P 500 futures are trading at 4572 as of this writing. S&P 500 futures resistance levels are 4600, 4713, and 4770: support levels are 4460, 4400, and 4318.
DJIA futures are down 180 points.
Protection Band And What To Do Now
It is important for investors to look ahead and not in the rearview mirror.
Consider continuing to hold good, very long term, existing positions. Based on individual risk preference, consider holding *** in cash or Treasury bills or allocated to short-term tactical trades; and short to medium-term hedges of ***, and short term hedges of ***. This is a good way to protect yourself and participate in the upside at the same time.
You can determine your protection bands by adding cash to hedges. The high band of the protection is appropriate for those who are older or conservative. The low band of the protection is appropriate for those who are younger or aggressive. If you do not hedge, the total cash level should be more than stated above but significantly less than cash plus hedges.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash. When adjusting hedge levels, consider adjusting partial stop quantities for stock positions (non ETF); consider using wider stops on remaining quantities and also allowing more room for high beta stocks. High beta stocks are the ones that move more than the market.
Traditional 60/40 Portfolio
Probability based risk reward adjusted for inflation does not favor long duration strategic bond allocation at this time.
Those who want to stick to traditional 60% allocation to stocks and 40% to bonds may consider focusing on only high quality bonds and bonds of seven year duration or less. Those willing to bring sophistication to their investing may consider using bond ETFs as tactical positions and not strategic positions at this time.
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