nrd525 Market Tracker

[exstasie]

I am predicting that we'll have a second wave of bad economic and virus news in the next 2-4 weeks.

I'm pretty sure we already entered that bad news cycle a couple days ago. Higher death counts expected, May as the earliest for US back to work expectations, a second wave of infections in China and South Korea. Unemployment numbers are expected to get worse too. So I'm not surprised the stimulus bill novelty wore off and the SPX is back down a couple hundred points.

The dead cat bounce lines up perfectly with the 1987 crash (and strong recovery) model. I'm really curious to see if stocks fail to make new lows.

And this shock could last two years or more (while we wait for vaccine).

They are expecting the daily death toll to hit zero in July. I assume governments will be better prepared for the next wave in fall or winter. The worst market expectations are probably getting priced in now.

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[nrd525]

Or I might have been totally wrong (again).  Bitcoin 7300.  Stock market bouncing nicely.  Coronavirus growth rate in the US (and most other early infected countries like Europe, Canada, etc) is flattening (though 5%/day is still a lot!).

Psychologically the impact of a pandemic is an unknown factor.  So we might all be ready to live through another recession (though we don't know the impact on bitcoin).  And we've seen regular financial crises since perhaps the 1800s.  But I haven't even see any good articles on comparing this with the 1918 flu, perhaps because with globalization and accessible airline travel - it's a different world. Or maybe it's such a different virus.

Unprepared for this, we're likely to make massive mistakes in bullish/bearish directions.

That said, short-term vs long term trends. I'm sticking with my position that we'll probably see 3k-5k in the next 8 months.

And fortunately I didn't short the stock market (thanks to my investment broker/service for a bad UI that hides how I can request options trading and for not responding to my support ticket).

[exstasie]

Or I might have been totally wrong (again).  Bitcoin 7300.  Stock market bouncing nicely.  Coronavirus growth rate in the US (and most other early infected countries like Europe, Canada, etc) is flattening (though 5%/day is still a lot!).

Psychologically the impact of a pandemic is an unknown factor.  So we might all be ready to live through another recession (though we don't know the impact on bitcoin).  And we've seen regular financial crises since perhaps the 1800s.  But I haven't even see any good articles on comparing this with the 1918 flu, perhaps because with globalization and accessible airline travel - it's a different world. Or maybe it's such a different virus.

Unprepared for this, we're likely to make massive mistakes in bullish/bearish directions.

That said, short-term vs long term trends. I'm sticking with my position that we'll probably see 3k-5k in the next 8 months.

And fortunately I didn't short the stock market (thanks to my investment broker/service for a bad UI that hides how I can request options trading and for not responding to my support ticket).

I think it's important to consider that stock markets today are very disconnected from a society's economic health: they don't care about wage stagnation or rising living costs or the fact that average consumers have zero savings. They are propped up by QE, company stock buybacks and now once again, bailouts.

So if the pandemic is not really the end of the world initially feared, then a stock market recovery like 2009 is already being priced in now. If it works out that way, it'll look exactly like the 1987 crash.

The situation is still unpredictable though. There could be another bad news cycle waiting in the wings. The markets are in relief rallying mode now, but even if the bottom is in already, we should get a significant dip eventually. The anticipated second wave of infections in the fall could provide the motivation for that dip.

[nrd525]

You are right about the disconnect. I wonder how long it can be maintained?

Looks like the covid 19 cases are going to peak in the US, and we might be on target for forecast from a week or so ago of 100k-200k US deaths (assuming we don't get a big second wave) instead of the potentially millions that could have happenned if we delayed longer.  For me that is pretty good news.  But the US unemployment numbers of another 6.5 million this week and now 16 million total - on a labor force of 160 million that means a 10% increase in unemployment and we could easily see another 5%-10%+ increase.  Not to mention all the people who have reduced hours.

In Philadelphia we're starting to have small protests with people in cars. If we didn't have social distancing there would be massive social protests in the US that would dwarf the Occupy Wall Street movement.   in Philadelphia we had a hospital shut down that could be reopened and people are also very concerned about the spread of covid 19 in prisons.  And there is a lot of organizing around rent strikes (and more often people just not paying rent). People cannot even apply for unemployment because the phone lines are overloaded (presumably some people are getting it, just hearing that this is hard).

[nrd525]

Hmm, March 12 they only have Bitcoin going down to approximately $5750 on Coinbase.  How about the real bottom (Coinbase) $3858?

https://www.coindesk.com/wp-content/uploads/2020/04/CoindeskQuarterlyReview_Q12020_CoindeskResearch.pdf

[figmentofmyass]

Hmm, March 12 they only have Bitcoin going down to approximately $5750 on Coinbase.  How about the real bottom (Coinbase) $3858?

https://www.coindesk.com/wp-content/uploads/2020/04/CoindeskQuarterlyReview_Q12020_CoindeskResearch.pdf

they're using line charts, which only show the closing price, not the extremes. coinbase closed that day at $5637.

People cannot even apply for unemployment because the phone lines are overloaded (presumably some people are getting it, just hearing that this is hard).

most state agencies are reporting these system overloads, which makes it really hard to gauge how bad the situation is. it's gotta be worse than the official numbers, not to mention self-employed folks who are out of work but don't qualify for benefits. JPMorgan predicting 20% unemployment, unreal! https://www.cnbc.com/2020/04/09/jpmorgan-now-sees-economy-contracting-by-40percent-and-unemployment-reaching-20percent.html

[nrd525]

If the stock markets are going to act uncorrelated with the economy (perhaps stocks are the true safe haven???) expect bitcoin to follow and more shenanigans.

[Stedsm]

If the stock markets are going to act uncorrelated with the economy (perhaps stocks are the true safe haven???) expect bitcoin to follow and more shenanigans.

You truly believe Bitcoin could, and should follow the stock markets? I guess it follows but up to some extent and when at some point, a majority of direction (be it bulls or bears) gets exhausted here, we see a major correction rate compared to what we've seen in other big names (they've not even recovered) but BTC showed a full >100% recovery and more is expected. My question is, while you were a bear in old days, are you still bearish on BTC during this pandemic period or you're expecting it to shoot higher quickly? May we taste some piece of your secrets?

[nrd525]

Still bearish on bitcoin. It's not that it should be highly correlated with the stock market in bear or bull markets as both are unlikely, so much as it shouldn't be increasing when we're going to see a 5%-12% decline in the US GDP and 20% unemployment.

Oil managed to go negative???  A reminder that Bitcoin's floor may not be zero, it might be negative (and there might be no floor at all!).  Of course this is unlikely, but what the heck happenned with oil?
https://finance.yahoo.com/news/stock-market-news-live-april-20-2020-222036152.html

[figmentofmyass]

Still bearish on bitcoin. It's not that it should be highly correlated with the stock market in bear or bull markets as both are unlikely, so much as it shouldn't be increasing when we're going to see a 5%-12% decline in the US GDP and 20% unemployment.

Oil managed to go negative???  A reminder that Bitcoin's floor may not be zero, it might be negative (and there might be no floor at all!).  Of course this is unlikely, but what the heck happenned with oil?
https://finance.yahoo.com/news/stock-market-news-live-april-20-2020-222036152.html

it costs a lot of money to store oil. that's the primary issue.

underground storage capacity must be full to the brim because record amounts are being stored on tankers now: Traders are using giant supertankers to store 160 million barrels of oil as the coronavirus torpedoes demand

ballpark estimates say that costs ~$15-$18 per barrel for long periods. tanker capacity is also running out.

bitcoin doesn't have this market dynamic at all. storing bitcoins costs nothing. in fact, cryptocurrencies are the most portable asset known to humankind. you will never see bitcoin trading at negative prices since there is no rational incentive to pay someone to take them from you. $0 is the technical limit for spot prices. i could see funds with administrative fees (like GBTC) going negative though.

[nrd525]

"Our bottom line: We find no systematic evidence of stable coin issuance driving cryptocurrency prices. We do find, in contrast, evidence of alternative hypotheses for the drivers of issuance. Specifically, (i) stable coin issuance endogenously responds to deviations of the secondary market rate from the pegged rate and (ii) stable coins perform a significant role in the digital-asset economy as a safe haven. This can be seen, for example, in the significant premiums during the COVID-19 panic of March 2020."


https://bitcointalk.org/index.php?topic=671764.1080

I'd like to see these researchers engage with each other's research and data as we are seeing conflicting results.  For instance this report (which is rather short btw) finds that
"Using our more precise measure of Tether flow to the secondary market, we find no significant effect on prices of major non-stable crypto currencies (Figure 3). This result is robust to the choice of sample period – including the late 2017 period in which Bitcoin prices surged – and holds for other major stable coins as well.("

Which is the exact opposite of what a previous study found.

[nrd525]

Instead of shorting the stock market, so far I'm shorting the Republicans by betting on the Democrats winning the presidential 2020 election on PredictIt.  Odds are 50/50 which seems wrong.  The last time an incumbent was elected with over 8% unemployment was FDR.  I'm guessing unemployment is going to peak at 22%-28%, and will probably be 12%-15% going into the fall election.  Incumbency is very powerful in the US electoral system, but it's going to be hard to hold up to the biggest recession / first depression since the Great Depression.

Even if the virus is mostly responsible for the devastation. My guess is the Democrats would have saved more lives by doing a bit stronger of a quarantine, but also hurt the economy a bit more (maybe less if they got lucky with early containment).

[exstasie]

Instead of shorting the stock market, so far I'm shorting the Republicans by betting on the Democrats winning the presidential 2020 election on PredictIt.  Odds are 50/50 which seems wrong.

Be careful. Crises are always good for presidential job approval, and this crisis can easily continue into the election. Earlier this month, Trump's approval numbers hit levels not seen since early 2017 when he took office. https://projects.fivethirtyeight.com/trump-approval-ratings/

Biden is also a terrible candidate. The guy can barely get through an interview coherently. The only things going for him: he's a corporate pandering centrist (much less threatening to the establishment than Bernie Sanders) and he makes people nostalgic for Obama.

The next few months are very unpredictable. We don't know if an effective treatment will be found. We don't know when or in what manner the economy will be reopened. We don't know what stimulus or relief packages will be passed. And remember last election? All the polls said Hilary was going to win, then Donald took it down.

I feel much more comfortable shorting bear markets than political parties.

[nrd525]

The polls said Clinton had an 80% chance of winning and they were right. Margin of error y'all.

Last time someone was re-elected US president with over 8% unemployment was FDR. And we're going to have 10%-12% in November.  Of course this is just one variable.

Biden sucks, is likely guilty of sexual assault (among other crimes - see politicians) and I probably won't vote for him, but he is beating Trump in the early polls including in most swing states.

There is an international "crisis" boost to many governing parties, including Italy, UK, France, Germany, etc.  However they are likely to be short-lived. US examples include Carter 1980 (Iran Crisis), George Bush Sr (Persian Gulf War 1991), and George W Bush (Sept 11, 2001).

https://news.gallup.com/poll/116677/presidential-approval-ratings-gallup-historical-statistics-trends.aspx

https://en.wikipedia.org/wiki/Public_image_of_George_W._Bush

Meanwhile - the Halving / Infinite QE pump continues with Bitcoin at 9400.  Apparently you cannot get the coronavirus from using the blockchain =)

[nrd525]

I like this, probably because it fits my bearish bias:
https://medium.com/exg/the-bitcoin-halving-is-not-a-buy-b55ae9fb0e58

[exstasie]

I like this, probably because it fits my bearish bias:
https://medium.com/exg/the-bitcoin-halving-is-not-a-buy-b55ae9fb0e58

At least you're honest about it.

I don't want to get too comfortable either way. On one hand, bulls look really strong. On the other hand, we've still got a years worth of lower highs and lower lows. Need to break that structure and hold above $10.5K before celebrating. The stock market is also showing weakness, which could weigh BTC down.

We're close to an inflection point. Failure here (or on one more try up) could bring a months-long bearish consolidation. On the other hand, breaking the $10.5K resistance will trigger lots of stops and signify a classical trend break.

[nrd525]

I'm puzzled by the disparity between jobless claims and the unemployment rate. Even after correcting for the way unemployment is counted (which increases it by 3% in April if I recall), it still seems like we should have hit 20%-26% (methodology: add jobless claims above standard amount, divide by total labor force and add previous unemployment rate).  But maybe it was only very briefly and thus didn't appear in the monthly average or maybe there was a TON of job creation as the jobs that were lost came back (employer payment protection plan, etc)?

Bitcoin 9880.  SP500 at 3200. It's a good thing I didn't try to short stocks!  My Democrat long / Republican short is going well on PredictIt, as the Democrats are at a 59%-60% chance of winning the 2020 election (I bought in around 52%). 

Currently still waiting for bitcoin and the stock market to realize we're in a recession.  I guess it's possible that bitcoin investors are more into tech stocks (and less likely to own part or all of a small business) and thus outperforming the rest of the stock market, let alone economy.  Though the real economy ought to have some impact. And the bitcoin economy should take a fair sized hit from the loss of conferences (probably not the conferences themselves so much as the business deals that get made as a result of networking).

Why is Purse.io closing? It seems like someone would buy them up. Unless they were ordered to close down.

[nrd525]

NASDAQ is up 3% on its Feb 2020 peak.

Do we have any good survey data or analysis on demographics of who is buying most of the bitcoins?  I'm guessing this might still elude us as it'd be difficult to get a random sample.  I'm interested in what jobs people have and how much of it is dominated by people whose main job is "investor" - so they aren't directly impacted by the main street economy.

Fed is saying 0% interest rates through end of 2022.  Inflation a modest 1%-2% for the next couple years (I'm kind of surprised that we're aren't going negative this year, but maybe wages and other prices are too sticky).  GDP forecast at -6.5% for 2020.

[exstasie]

I'm puzzled by the disparity between jobless claims and the unemployment rate. Even after correcting for the way unemployment is counted (which increases it by 3% in April if I recall), it still seems like we should have hit 20%-26% (methodology: add jobless claims above standard amount, divide by total labor force and add previous unemployment rate).  But maybe it was only very briefly and thus didn't appear in the monthly average or maybe there was a TON of job creation as the jobs that were lost came back (employer payment protection plan, etc)?

Supposedly a few million jobs were created last month. I assume you're talking about initial jobless claims? Some of those people have gone back to work since they originally filed.

Currently still waiting for bitcoin and the stock market to realize we're in a recession.

I'm with you but I'm also open to the possibilities that the deflation fears were overblown, or that the market can remain irrational for a quite a while based on Fed/Treasury liquidity injections.

Why is Purse.io closing? It seems like someone would buy them up. Unless they were ordered to close down.

I think they got bought and are no longer shutting down.
https://support.purse.io/en/articles/3851246-closing-down
https://twitter.com/PurseIO/status/1267538635810881539

[nrd525]

Ooh that is good news about Purse.  Just after I liquidate my Purse holdings (around $15) and spend 20% of it on the withdrawal fee (I sold the bottom)!  It took support a while to figure out that their claimed 0.0003 mbtc withdrawal fee is actually 0.0003 btc.  They were like "but we don't see any withdrawals from your account in the past x days".  And I'm saying "do you really expect me to believe you are charging 0.3 cents for withdrawal?, ok here is the screenshot".

Some nice correlation between the stock market (down approx 5.5%) and BTC (down 10%, and then up 3%) today.