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Money Monday

Important dates that could effect the markets this week:

  1. The November FOMC Meeting is next Wednesday, November 2
  2. Midterm Elections are Tuesday, November 8

S&P 500 ($SPY)

  • The SPY is on track for a small bear market rally
  • This could be a good entry for a short-term position to exit before the the market prices in Fed Interest Rate Hikes next week
    • Good position to make 3% to 3.5% if the rally plays out
  • Here are some possible scenarios:
    • Depending on how you trade, the peak identified at ~$389 level could be a good exit point to make 3% to 3.5% if you enter now
    • But keep in mind that the market could rally higher and retest the main resistance line from ATH
      • Exiting at ~$389 could mean you’ll miss out on additional gains – you need to assess your risk & greed levels
      • Consult with a financial advisor. Assess your risk tolerances, your time horizon, and goals.
  • NOTE:
    • This scenario assumes the Fed will raise rates at 75bp – anything higher and the markets will take a larger hit than anticipated
    • There’s a possibility next week the Fed will raise rates less than 75bp – or not raise rates at all – to amplify the bear rally ahead of Midterm Elections on November 8
    • Also note that Interest Rates are usually priced into the market about 1 week before the Fed makes its decision
  • 80% of my portfolio is still in cash – I’m waiting for another crash before buying in my next 20%
    • I’m heavy on the $SPY and the following commodities:
      • Copper ($COPX)
      • Lumber ($LPX)
      • Energy ($SWN)
      • Oil ($OXY)

Bitcoin / $BTC

  • Bitcoin is slowly creeping out of the resistance downtrend (on a logarithmic scale)
    • I’m ‘bullish’ here because it’s affirming my thesis that crypto has entered an accumulation phase after capitulation.
  • This is where I’m accumulating on the dips. Here’s what I’m accumulating:
    • Polygon / $MATIC
    • Algorand / $ALGO
    • Cosmos / $ATOM
    • Polkadot / $DOT
  • NOTE:
    • Bitcoin price action has been more stable and sometimes outperforming the S&P 500
      • This leads me to believe that capitulating events are temporarily over for crypto
    • This could be a good range to accumulate Bitcoin and other notable altcoins in preparation for the next bull run
    • I’m of the opinion that we won’t see another bull run till the latter half of 2023 going into 2024
      • So I’m using this opportunity to accumulate coins at cheap prices

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Your investment strategies could differ from mine based on your risk tolerances, research, and time horizon, so I encourage you to do your own research as information provided by The Rebel Economist or Breaking Metrics should never be considered financial advice.

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