Take a look at the following charts and tell me, which side is 2017 and which side is 1987?
Are you able to spot the difference?
I haven’t…as the patterns look quite similar to me (as mentioned in my last update on the US Markets: Dow Monthly Target @ 25.800 (Check) – Tag and Reverse, Just Like in 1987?).
Does this mean that we should all change sides of the boat? From overweight long to overweight short? That could be a wise thing to do (with hindsight) but for now, I prefer to hedge my equity exposure that I have (monthly add on to a mutual fund, linked to pay off mortgage in 10 years from now, can’t sell). For the year 2018, I’m very bearish on stocks. So I hedge most of my equity exposure by using short positions at eToro and I bought several put spreads on the Dutch stock market index (AEX). It’s not rewarding yet, in fact, it’s costing me 3.4% total return so far (10% weight in this strategy and a -34% performance = -3.4% contribution to the total portfolio).
The reason I hedge my equity exposure, is due to the massive amount of patterns I see that are close to finishing, cycles that are lining up to change trend in 2018 and retail participation/margin debt at record highs, short interest at record lows.
So far, history rhymes. This does not have to mean that it will also follow the same playbook into the future. So do not bet the farm on 1 idea/strategy. If this idea does not work out, I still have 90% of my other assets that deliver diversification and a possible, positive contribution to my portfolio. Diversify.
CHART 1 – DJI 1987 (left) vs 2017/18 (right)
Let me explain what I see in the daily charts below:
The left side shows the parabolic pattern of the final uptrend of the 1987 period, right before the famous crash –> for a zoomed out version, check this post.
After a sideways pattern during the summer, it broke out to the upside in a 47 degree angle, followed by a sideways pattern, to reconnect with the parabolic pattern (home base).
Once it touched home base, it went up in a 57 degree angle till it didn’t and a sideways pattern emerged, to re-connect with home base again. And then the 3rd and final surge up unfolded into the orange square box.
The 3rd wave up was in a 63 degree angle, first part of the trend was above the 63 trend line, then it went sideways (blue ellipse) and then the 63 trend line worked as a magnet to the upside, re-connecting from below.
Now, let’s switch over to the right side. It shows the DJI today. The period March-June was the sideways starting pattern of the parabolic trend. Then 2x a 47 degree angle trend up, sideways, 56 degree angle up, sideways 63 degree angle, blue ellipse, orange box. So we could be close to topping out, but only, only if this pattern keeps aligning like it did it in the past. No guarantees that I will do so into the future, please keep that in mind. For now, I have hedged my equity risk. If it reaches the Dead Cat Bounce area, then I will consider being overweight short. Not there yet.
Last thing to note: see the RSI of both charts. When in 1987 price reached the orange box, the 14 day RSI made a lower high compared to the 2nd wave up –> Bearish Divergence.
I see the same thing happening now, bearish divergence in progress, not confirmed yet. Confirmation will follow if the RSI < 88 ( = lower high) and then reverses below 70.
Below an overview of my 4 cloud mining contracts
At the moment, I prefer E&E Mining for it’s simplicity to use and 0.5% daily return, the opportunity to exchange mined crypto into power and switch between cryptos that you want to mine.
If you have a better (legit) alternative, then please feel free to share in the comments.
Start JAN 3 – Investment 0.01 BTC ($150), Withdrawals: $ 0.009 BTC (90% paid back, after fees) since 11 days.
So far, I have been able to withdraw the minimum amount for a third time in a row, making my total withdrawals equal 90% of my investment. So I need one more minimum withdrawal to break even + make a profit of 20% on investment. For now, it’s been smooth sailing and easy money, so I wonder…now that I reach break even point, am I in the eye of the storm?
On Monday, I will be able to request the 4th minimum withdrawal, so stay tuned for updates on my blog/homepage.
Feel free to start with the free version, all you need is a BTC address and make up your own 4 digit code as password. If it turns out to be a scam, then I will notify you as soon as possible and the free version did no harm. If it turns out to be legit, then you’ve already started to make some free BTC.
JAN 12 – I have made a request for the 3rd withdrawal limit of 0.0035 BTC, bringing my investment close to break even: a free lunch for the days to come?
And it got paid JAN 14, 2018, 2 days later, not bad at all.
Sign up for a FREE Version (v1.0) by clicking on the image below.
For the latest update of the E&E Mining contract, click here:
Cloud Mining Results – How To Turn A Simple Interest (0.5%/day) Into A Compounded Annual Return of 514%
Total Portfolio Strategy 2018
If you want to read more about my Total Investment Strategy, then please read this update first: 2017 Performance and Total Portfolio.
Or read my latest update on the US Markets: Dow Jones Industrial, Party Like It’s 1987!
This is what I will do over the next couple of weeks/months:
- I will add monthly to a mutual fund (worldwide stocks), as I expect stocks to skyrocket into the year 2030, peak of flight to private assets;
- I will add 2% of my assets to buy put spreads AEX Dec 2018, as a hedge for my equity exposure, medium term trade (12-24 months, 2018-2019);
- I will add 7% of my assets to to my 2018-2019 eToro hedge strategy: – Hedge US Stock Market for a 20%-40% crash
- I will contribute small amounts to interesting ICO’s and tokens that pay out a periodic cash flow;
- I decreased my crypto exposure from 20% of total assets to 4% of total assets;
- I will add to my short sovereign bond strategy (rising interest rates) when rates come down a bit into 2018 or if they break key resistance to the upside.
Crypto Rating Desk and our ICO Portfolio of 100
ps. I started a new project, for and by my international students.
We analyze upcoming ICO’s and when we see a project that we like, we contribute. Our latest contribution is LHCrypto, a token that pays out a monthly cash flow, has a working business model and is active in a growth market.
We now have 15 contributions, and our goal is to build a portfolio of 100 tokens that generates a periodic cash flow (Portfolio of 100).
Feel free to follow our ideas: CryptoRatingDesk.com
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