Bitcoin, as an investment?!
7/25/24 Prospero.Ai Investing (140th) Edition (Mid-week)
Anyone that’s watched my livestreams knows I don’t reccomend Bitcoin for a specific reason. No one, not even the large crypto hedge funds, know where or how much leverage/options are in the market. You don’t know where the people that can move the price of the asset are making higher profit bets. And that is what we do with Options Sentiment, Upside and Downside that gives us edge. We don’t have that in Crypto. So why have I been loading up on COIN and CLSK more than any other positions ever?
I’ll tell you, but first I’ll tell you something about this letter and our picks. Recently, I’ve gotten some questions about if I’m “investing” or if this really is an “investing letter” if I’m taking on bets like this and increasing the frequency of my moves for paid users.
We’re sorry for any confusion, but the easy answer is that this letter and our app was built for you to take what works for you; which is the only right way to invest. We’re going to make real- time/fluid picks throughout the day based on the ever changing data. Consume whatever information you have time for and make the best choices for you and your family. If a long term strategy works best for you, you can see the best long-holds at any given time on the front page of our app:
But is it that simple? Sometimes our long term list may be in sectors that overall aren’t performing well, so buying all 10 at that particular moment may not be the right move.
Our goal is for you to approach this letter in such a way, that we are teaching you to think for yourself about how to form a portfolio. But damn, sometimes it is so confusing, because we switch things around. Again, our purpose is primarily to demonstrate a process of how we make decisions. Sometimes short pressure goes up, so we switch to manage risk or net options sentiment goes down and we react accordingly. If we weren’t willing to make changes to show what the very best stock prices are at any given moment, we wouldn’t be properly embodying our principles, which is process first, second and third. As you see our changes and moves, you learn along with us, and slowly but surely you become a better and better “investor” yourself!
Which brings us to recently. We’ve had the start of a rotation. Following Trump’s comments on the chips industry the market moved fast and a Crowdstrike outage added to the volatility.
For example, this Monday was good for big tech and small caps, but then it reversed Tuesday.
What point am I making? Investing is about patterns and there aren’t any good ones around right now! Things are changing so rapidly in this current market. Part of what we’re doing is testing different strategies to see what works. Testing requires more moves and sometimes reversing those moves quickly.
All of this is a menu for you to choose to participate or not to participate. But, for those that don’t want to go in and out of moves, at the bottom of our paid investing letter we always give a screener and then our suggested SQQQ hedge for long holders. That is our recommended risk management approach for everyone who does not want to make daily or even weekly trades and just buy and hold.
The free version people can just simple grab the stocks they like that we recommend.
Back to where we started, why are we loading up on Bitcoin? Well we are finding patterns wherever we can and investing on conviction. We have seen Trump move the markets. Harris may too. They are courting voters! Why wouldn’t they tell them what they want to hear?
So we are upholding our investing principles. COIN has been near 100 Net Options Sentiment for a bit, much like NVDA before it. CLSK is looking great in our signals too. Our strategies always have to unify logic and our signals. We start with the signals, and this strategy was formed because both these stocks ranked near the top in Large Cap and Mid Cap respectively.
We’ve done some entries and exits on the same day because we have a lot of positions in this strategy. Some of the moves we’ve made have been taking gains, which is always a good strategy if you have the time. But you could have just as easily bought our first entry and held. At the end of the day, we value your questions and feedback! We’re on this journey together and we want to continue to do everything we can to help you succeed in this market.
Net Options Sentiment Analysis
We are including these even though that are normally a paid feature as an apology, our time series graphs are down right now so hopefully these help! As an important note because some people get confused. The time series graphs update exactly 3 times a day to give you an easy way to compare like times of day (Open, Midday, Close) so people often say the app isn’t updating when they see an old time series data point, that isn’t the case. The most current value is always going to be on the picks / search screens, in the Screener or on the 5 point spider graphs. The time series graphs are there mainly to give you a perspective of where the numbers were.
SPY - SPDR S&P 500 ETF Trust
The recent market activity has shown considerable fluctuations in the SPY Net Options Sentiment, indicating prevailing uncertainty and volatility. The steep decline in both sentiment and price, primarily driven by disappointing earnings reports from major companies such as Tesla, resulted in the worst trading day since 2022 (yesterday). This sharp reaction underscores the market's high sensitivity to corporate earnings and economic developments. Looking ahead, the market's response to upcoming economic reports and geopolitical events will be critical in shaping future trends.
QQQ - Invesco QQQ Trust
The QQQ Net Options Sentiment has exhibited notable volatility, particularly in response to recent earnings announcements. The severe drop, including a major decline on July 22, suggests that we overlooked early warning signs of forthcoming downturns. But these things can be hard to read, even with a lot of experience!
Efforts to recover have been minimal, with sentiment persistently below the Bear Line. This ongoing bearish sentiment in the Technology sector is worrisome and will remain a concern unless there is a significant shift that pushes the QQQ Net Options Sentiment above the Bear Line.