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August 7, 2022

Volatility Reports 8/8/22 Harbinger of Things to Come

“Markets are constantly in a state of uncertainty and flux and money is made by discounting the obvious and betting on the unexpected.” George Soros

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April 3, 2022

Volatility Reports 4/4/22

Everyone remains bullish, it’s literally in every Twitter Facebook, and LinkedIn post.

Social media post content and full-length articles remain bullish. One out of ten headlines or titles is a “got to buy something” suggestion; even the bears are buying utilities. The notion of having to be invested all of the time has not abated and until it does the pool of late money buying “something is wide and deep for pockets of big profits to sell into.

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March 28, 2022

Volatility Reports 3/28/22 “The Bust”

How can something come from nothing? Or what happens when a one billion dollar industry goes bust?

The Dot.Com Industry did it, 22 1/2 years ago when that industry chased up the advertising cost on the SuperBowl broadcast to make a “brand” for themselves. All of that led to a bust.

The dot-com bubble was a rapid rise in U.S. technology stock equity valuations fueled by investments in Internet-based companies in the late 1990s. The value of equity markets grew exponentially during the dot-com bubble, with the Nasdaq rising from under 1,000 to more than 5,000 between 1995 and 2000. Today the Crypto Industry has done the same thing and worse it has produced an industry with no economic benefit and produce what they call an asset – something with value – out of thin air.

Blockchain technology is not revolutionary and disruptive except in the sense that it has taken to a whole new level the gullibility of just not the public but the professionals that have fallen in behind it. This new industry is nothing more than a meaningless marketing term representing an overhyped concept.

Unlike the smartphone and other high-tech gadgets, the world of crypto is living on a dream on the left-hand side of “the chasm.”  There are many reasons why they will call fall into the chasm. One is volatility which makes it impossible to regard Bitcoin and other cryptocurrencies as useful for anything other than speculation. NOT a replacement for a fiat currency as they have promoted from day one.

Besides being too changeable that the merchant would have to have such a wide bid to offer spread to cover their risk the market will not accept it until it becomes STABLE, which is not going to happen, until after the crash, when markets go flat after a dead cat bounce.

Furthermore, the big tout was limited supply vs the worldwide float of fiat currencies. Two key problems with that are the crypto factories do not have the full faith and taxing power of a government to back up their so-called coins. Plus there is no limited supply as there are opportunists every day making these things out of thin air to the extent that there are more than 10,000 cryptocurrencies in existence, and more coming every day.

All over social media and financial news, they are throwing around the idea of contrarian like it’s so easy to be one, while the bullish following on BTC&Co is cult-like and they are holding on for dear life, either to the pseudo investment or to their opinion.

All the “line drawers” that call themselves analysis in the Tweetershphere are rabid about a breakout they see in this market. Rather, the breakout is a little post triangle break that is finishing a simple correction retracing a Fibonacci 38% of the decline.

What is keen about the advance is the time factor is for a reversal today and for cycles to pull the market lower into a minor low mid to late April. 

It’s a phenomenon I have seen since the gold and oil boom in the early 80s and investors and traders – after they crashed – were still holding on and wanted to buy more twenty years later. At the beginning of the 1980s, inflation was a “way of life” and was never going to go away, never.  How the long cycles impact the markets. Today the crypto cult is even ignoring the downtrend and the underlying facts that they are actions are based on greed, and nothing rational.

The bigger problem is what happens when a billion-dollar industry goes bust?

“…both fiscal and monetary policy has painted America’s economy into a corner, a corner that has no alternatives that are positive to bail out the market and the economy when the next down cycle occurs.”  There will be no soft landing. 

So the cycles from the 2020 crash are now translated out a few years, they kicked the can down the road. But the Fed seems determined to bring things “back to normal.” Yet everyone knows that the market does not care about that. Crammer confirm that on his CNBC

I just watched a 3-minute video of a Crammer rant self-contradicting himself along the way and he’s happy with the bear market being over and what everyone is focused on “greed”.

From Covid19 in China, the Fed’s more hawkish rate policy, the price of oil, and the rate of inflation plus the war in Ukraine. The Russian threat of escalation. But the market since the invasion started on the 24th of February does not care.

So what are we missing? BTC&Co going bust.

Key stocks on the monitor list as leading indicators of the industry getting ready to puke are

The key market players are listed in the report with their revenues, sales, and strategies are Advanced Micro Devices Inc., NVIDIA Corporation,  Intel Corporation, Microsoft Corporation, Coinbase Ltd.

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Great and Many Thanks,

Jack F. Cahn, CMT

Contrary Thinker since 1989,
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