2020 Global forecast BTC-S&P-Oil 23 March

2020 Global forecast BTC-S&P-Oil 23 March

BTC Bitcoin Price, Weekly Bitcoin Price Risk Analysis Forecast

(Previous week in brackets)

BITCOIN BTC/USD LT-M MT-W ST-D
6300 (5300)
Trend ↓ (↓) ↓ (↓) ↑ (↑)
% Risk
Weight
45 (43) 32 (45) 48 (25)
Allocation 0% (0%)


19:00 Central European time on 23 March 2020. Incredible volatility is hitting markets which does mean opportunity and also very high risk. Strength in BTC over the past few days did not come unexpected and one can also find market reason for the strength as it is a potential safehaven for ‘funny money’. Until it lasts, hence we stay away from this market, but we could easily see the 9100 gap filled with a few days. Looking at Daily weight risk the market could easily tumble again, Looking at weekly the market is ready for bullish divergence as you see in the chart above. The much lowewr price botton 3 weeks ago than back in December, yet the trend is still down. So this not is still not obvious and will be very hard to trade opportunistically. You can be long but must reverse if Daily turns down and this could be at a 10% lower price because risk weight is neutral. As a common rule, daily gaps are usually filled and as there are no clear overbought or oversold risk weight conditions this is anyone’s call. Many are saying that Crypto is the only alternative and some even better than Gold. We would argue the latter of course and we would favor not participating in BTC until this market becomes properly regulated. No Change.

Last week: Daily time frame shows bullish divergence and is a speculative buy at this point. Our theory is that the gap down opening from March 8 at 9100 will be filled, as still must the only gap up opening left at just under 2900. Given that the latter did not fill within a few days as is more usual, one has to wonder which one comes first. Is it the 9100 gap now $3800 away, or is it the 2017 2900 gap which is ‘just’ $2400 away at current level. The only driver speaking for the 9100 being the earlier fill is a large demand for crypto where other asset classes suffer badly from massive investor distribution and in particular equities but also real estate for every fundamental reason on the table. True speculative investors seeking an opportunity could dabble their feet on the long side as both gaps will be filled at some point and as long as the position is not leveraged to an extend that a loss of 4000 dollars on BTC means losing it all. This situation hasn’t arisen for a long time due to the 24/7 trading facility of crypto currencies. We will for now stay away from this market for the reasons mentioned in previous blogs, but it is one we will continue to follow with interest


S&P 500 Weekly Standard & Poor’s 500 Price Risk Analysis Forecast

(Previous week in brackets)

Standard & Poor 500 LT-M MT-W ST-D
2972 (2970)
Trend ↓ (↓) ↓ (↓) ↓ (↑)
% Risk
Weight
60 (65) 15 (35) 8 (14)
Allocation 0% (0%)


Technically the S&P looks extremely vulnerable and this time it has little chance of turning strongly against the downtrend as there is simply too much uncertainty about the economic impact of these worldwide lockdowns. In Europe it has become clear that medical experts say that we will probably need at least until June before any reliable statistics are available that allow the removal of the minimum restrictions relating to group gatherings. Impact on the economies worldwide will keep a lid on equity markets. Mining stocks may do fairly well if they are organized to maintain net exploration stock in their balance sheets. Making predictions about time and price is irrelevant. This market should NOT be owned even though some ‘experts investors’ in main stream financial media try to convince us that nibbling at certain sectors and then building a new portfolio on the way down is probably a good strategy. One can bet that most of these ‘expert investors’ are consumers of a siginificant loss for their clients and very likely their own account. As many own the FAANG space there is still fat on their bones, but for how long? Our outlook is to reach the 800-1200 range which may be adjusted nearer that level. Stay out!

Last week: We have been out of this market for over 18 months and explained the continued high risk weight hanging over this market. We simply do not understand why equities have been so strong throughout January and February whilst the risk was so prominently portrayed. BTFD is over folks. Covid-19 is THE Black Swan event of the past several hundred years. Why on earth do investors continue to buy equities and why on earth are they bottom picking with S&P500 still at a massive 2500. Is it lack of experience and sheer greed or what? There may be a lot of cash in the bank but that cash will become worthless and so will equities across international exchanges. A big reset is underway and one could expect to see an economic slowdown taking the S&P down into a 800-1200 range. Equally Dow Jones into the 10000 to 12000 range and a similar 50% drop across international exchanges, possibly more after the first big shock has been absorbed. That is a realistic scenario based on histroc human behavior. These markets will first need to get seriously oversold one day. The ultimate bottom may not come until several years from now. Consumers worldwide are going to be held back from wasting money on stuff they don’t really need and things that impair healthy. Funny that the biggest hoard today Match 14 is unhealthy crisps in the wake of store closure fears. Empty shelves. Wordlwide, trillions of currency will be printed to compensate businesses for this Black Swan lquidity trap.. And because the remedy is so uncharted, the final outcome will remain highly uncertain and unpredictable yet unlikely to be positive and it just doesn’t feel right. We therefor do not see fresh investment in equities as a solution for wealth enhancement or wealth preservation. Some sectors or individual stocks excluded of course, but index followers, especially those driven by non-cyclical products should cover if they can still find the liquidity. Central banks and Pension funds are vastly overexposed in equities. we hope not, but it looks like a real bloodbath is on our doorstep right now. If liquidity dries up there is no way to re-allocate some 50 trillion dollars of world equities except into more suspect government securities offering 0.25% return or less. The latter could even be the new Executive order of 2020. That would be a reset of major proportion. Of course we could be wrong but rather Penny foolish and Pound wise. Real money should benefit, but we’ll see. Interesting times for analysts studying market psychology.


Brent Crude oil Weekly Brent Crude Oil Price Risk Analysis Forecast

(Previous week in brackets)

Brent LT-M MT-W ST-D
27.17 (35.10)
Trend ↓ (↓) ↑ (↓) ↑ (↓)
% Risk
Weight
17 (17) 5 (9) 9 (14)
Allocation 50% (50%)


Our position is a 5% allocation of total assets losing 50%. That was a poor call but nothing to worry about. Being unleveraged as a rule of investment strategy is a safehaven in its own right. At this moment we see Daily and Weekly risk weight turning up and we feel confident that the loss will be minimised once we cover the opening gap at $45.27 or even well beyond some time in the future. Rolling this forward is a no brainer at this moment. Oil won’t go to zero and stay there. Even then, our main concern is wealth preservation and the cash position is still too large for comfort. The long position in precious metals should give full protection for the larger part of the current portfolio adjusted for inflation. Future metals prices may even and are expected to provide a substantial cushion and outweigh recent current valuations of the total portfolio. We consider Oil to be fairly low risk in the overall scheme and inflationary pressures from a multi-trillion quantitative easing operation will push prices up again. Technically risk weight is at MT and ST oversold levels. No Change.

Last week: The steep continuation of the downtrend and the size of move looks to put all time frames in an oversold condition. Our nominal small risk trade does show a relatively large loss, but the low risk weight levels may easily drive this market to cover the gap down opening at 45 last week. panicking out of this unleveraged trade is not necessary, nor it is for Aramco interesting to further flood the market at deflated prices due to a significant economic slow down. We’ll just sing this one out or even increase to full size position (10% of assets allocated) if an interesting opportunity presents itself.


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