Updated: September 27, 2017
"Pandora can't be put back inside the box"
Stocks & Crypto are not separate. They are merging.
Our next big position announced below: ON WATCH
BotTrigger Trade Update: $MGTI for those who have yet to take that 5th buy alert. We will be having a 6th buy alert on MGT soon here. You can also still enter in anywhere in this area. Congrats to all longs on this one! We're up over 100% since Buy Alert #1. Now at 20% of our entire portfolio, our next weighting will likely be a full 25% allocation on this next alert. Remember, this is not simply about retesting the highs near $6 but this is very much a long term play to $20+ sometime in 2018. https://goo.gl/9ASfBS
Also, now notice where $NEO is. If you recall on our post from September 18 (highlighted below) we showed the chart on $NEO that was showing you the bottom was about to be put in on the NEO was ripe to take off. NEO hit it's bottom low area around $14 and just today hit a high of $35 and change. More than a 100% move in less than 15 days! Incredible. That's crypto for you. Take a look here and then cross compare that to the image we posted below on $NEO:
FUNDAMENTAL BACKDROP ON STOCKS & CRYPTO. THEY ARE NOT SEPARATE. THEY ARE MERGING
From a fundamental perspective, hope for tax reform has been a key driver of the 2017 bull market. An initial framework was released this morning that includes lowering the corporate tax rate from 35% to 20% and simplifies the number of individual tax brackets from seven to three at a 12%, 25% and 35% rate. Merits of this framework will be debated for months to come, although the likelihood of getting a tax reform bill passed is not as high as it would have been if healthcare reform would have passed first. Not getting the $1 trillion in healthcare savings is a major blow to republicans who are trying to figure out how to pay for these tax cuts. In terms of portfolio management, we have long considered tax reform to be a bullish variable although today’s intraday drop on the news from Dow +80 to flat is not very reassuring. A similar intraday drop happened yesterday. Since closing at Dow 22,412 on September 20th Fed Wednesday, the broad market has not been able to build any momentum. If it can’t do it with tax reform, where will the next bullish force come from?
There’s some major news to digest in the world of digital currency. $OSTK Overstock subsidiary tZero announced that it is ready to launch the first SEC compliant digital token exchange in Q4. CEO Patrick Byrne believes that blockchain-based digital tokens from major companies such as McDonalds and GM will make their way onto this exchange that was built according to SEC guidelines. Byrne’s long term bet is that all securities will eventually be tokenized and trade using more this secure, decentralized blockchain technology. The total cryptocurrency market currently sits at a $130 billion market cap including bitcoin. If this market can capture even a small percentage of the global currency market it will balloon into the tens of trillions. OSTK is trading +$4.75 +20% on the news. Similar to MGT, it’s market cap is still below $1 billion at $700 million. We are adding $OSTK to the portfolio watch list with a momentum purchase point of $29.50. This is an interesting dynamic because it opens the door to regulate the industry, something hard core techies don’t necessarily want. There’s also a tug of war developing between the SEC and the Federal Reserve. The SEC realizes it has no choice but to jump on board whereas central banks are fighting to protect their fiat system. We think there is no stopping it. China’s attempt to ban digital currency is just the latest example that central banks will fail in their efforts to halt digital innovation. We live in a digital world. Digital currency is inevitable.
Here is from John McAfee as he notes that the Fed & world governments can try all they want to stop Bitcoin & blockchain party...."Pandora can't be put back inside the box." - BotTrigger
Beyond the Overstock/SEC breaking news, there is other positive commentary for the digital currency space. Mario Draghi of the ECB indicated his central bank does not have the authority to regulate cryptocurrencies. There are no laws yet. There is no jurisdiction. And Morgan Stanley CEO James Gorman has taken a different approach to bitcoin than JP Morgan’s Jaime Dimon. Gorman said, ‘Bitcoin is certainly something more than just a fad. The concept of anonymous currency is a very interesting concept — interesting for the privacy protections it gives people, interesting because what is says to the central banking system about controlling that…it’s a natural consequence of the whole blockchain technology.’ Bitcoin is +270 on the day, back above $4,000.
Original post: September 18, 2017
BotTrigger Trade Update: $MGTI our largest stock/common position in the portfolio is behaving strong like bull, with MGTI being up more than 20% today alone. Shown here is a 2 day candle bar chart where we can now see that MGTI has printed a very large "Bullish Engulfing"candle bar here. As each bar represents the data worth of 2 days, you can see that MGTI has reversed downside pullback of 4 total days in just 2 days (Friday & this Monday). This is not just a bounce, but rather a signal that the uptrend is indeed in tact and very much alive. As we've mentioned before, $MGTI is a hyper proxy vehicle that will track the relative performance of Bitcoin's price fluctuations, largely due to Bitcoin mining being one of MGTI's core value points. However, we believe that eventually that will change and MGTI will enter a new growth phrase that's associated with both Cyber security & an eventual mobile player with the advent of the Sentinel phone. Today's big jump is largely due to a few things. which we'll discuss below.
Backing up, this could be a historic week for the markets in both stocks & crypto. Ahead of its policy announcement on September 20th, the Federal Reserve has positioned the market perfectly here with highs on the Dow at 22,340 and lows in volatility with the VIX at 10. This particular policy announcement is expected to articulate the first reduction to the Fed’s balance sheet since monetary expansion entered its bull market nine years ago. Over time, analysts expect the balance sheet will decline from $4.5 trillion to somewhere between $2-$3 trillion. It’s difficult to imagine this era of coordinated central bank buying of stocks and bonds coming to an end, but it could happen. Central bank intervention into free markets has especially dominated market action since oil was rescued on February 11, 2016. Janet Yellen’s policy of dropping helicopter money has single handedly provided President Trump with a booming stock market during his first eight months in office…will this go on indefinitely or are we finally at a Fed-induced peak? If the Dow drops and volatility rises in October, you’ll know why.
Beyond Fed policy, the second most important news item of the week is Bitcoin. As we saw recently saw, Bitcoin reached a peak top near $4980 per bitcoin, and then as began to correct like it always does along it's massive uptrend. This pullback brought Bitcoin down to our downside target move which was just around the $3,000 area. As we have been saying for months now, there is not one instance in Bitcoin's entire trading history where Bitcoin has not revisited a former high at least once. NOT ONCE!! Every pivot high on BTC was always revisited with a 100% success rate so far. That could change one day, but for now, Bitcoin has a perfect track record of revisiting each of those highs. Here is a glance.
Bitcoin & Ethereum both reached our downside targets, Bitcoin specifically to a T. Ethereum on the other hand went further below our $230 estimate and tagged the $198 level before launching higher. After selling 50% of our ETH at around $335, and issuing a formal buy alert back around the $230 area, we're more than grateful.
As we all saw make headlines, after railing against digital currency as a fraud in last week’s interview, Jaime Dimon’s JP Morgan disclosed significant purchases of bitcoin over the weekend:
This sort of hypocrisy is to be expected after JP Morgan has filed for 175 blockchain patents over the last three years. Dimon understands the potential of digital currency in a digital world. His attempt to stifle the innovation (while buying the dip) is likely to meet the same fate as those status quo institutions that failed to stop the Internet, Apple, Uber or Airbnb. Pandora's box has been opened and it's not going away: Bitcoin is now +$1,000 from its China low of last week. More important than the Chinese ban is news that the World Wide Web Consortium that includes Google, Microsoft, Apple, Facebook and Mozilla is releasing a developer API payment system that includes digital currency. This is a huge development in bitcoin’s evolution towards critical mass adoption as Google Chrome, Apple Safari and Mozilla Firefox browsers legitimize and enable the new currencies. And so we have MGTI bouncing in tandem with Bitcoins price surge off the $3k lows. Also, as bitcoin dropped last week, MGT announced an equity purchase agreement of up to $35 million that can be used to expand bitcoin mining operations. Today MGTI was up-listed to trade on the OTCQB Venture Market. CEO Robert Ladd commented, 'We are pleased to be recognized with this move up to the OTCQB tier and will continue our high standards of transparency and financial reporting disclosure.' These pro-growth moves by MGT should compress the time horizon for its potential rally from a $100 million market cap to a $1 billion market cap due to the bitcoin catalyst. This is part of the reason why we have MGTI leading the highest allocation weighting in the BotTrigger portfolio.
Lastly, for those who have yet to take a position long on $NEO, this is a good area to start nibbling some long. We're getting very close to a bullish crossover on the daily MACD momentum oscillator. Take notice what that has meant for NEO whenever we get this setup. What's more, we're also getting a slight formation of bullish divergence on RSI which is when we get deeper lows on price action that occur on increasing RSI values. That's bullish as it shows that selling aggression is waning. That's what we want to see. It's only until the sellers dry up and have had their fill in transacting their sell orders, that any stock/crypto can finally begin to move higher above thinner supply levels. If supply is too thick, then that's always a hindrance to any uptrend. Right now on NEO we have the sell book chilling out as orders start to dry up. We're already weighted about 20% on NEO but will look to add to this on a clear breakout above the $24 area on strong volume, OR if we get lower prices that occur on a very accentuated picture of RSI bullish divergence. For now, we're still waiting for more data to come in. But for those that have yet to stake a position long, we think this is a fine area to do so.
If i was a betting man, which I am ...I'd bet that Da HongFei is working very closely with Chinese gov to see to it that all the rogue exchanges disallow rogue icos for 2 main reasons: 1) he & china gov legtimately dont' want rogue exchanges creating a platform for rouge/pirate icos to flourish and steal investor money and tarnish their reputation any more than it has aleady as there is this global reputation that China steals IP more often than create their own IP. they want to clean that reputation up 2) i wouldn't be surprised of Da HongFei is especially having that conversation to monopolize the ICO market to be ushered in exclusively through NEO's door. NEO is playing the Angel card right now with the Chinese gov. They are the most respected of outfits when it comes to Chinese blockchain tech.
source & further conversation happening here: https://www.reddit.com/r/NEO/comments/706gba/da_hongfei_interview/?st=J7L9UOV8&sh=847bda81