Hey guys, welcome to another edition of the Magnelibra Markets. Today’s episode #62 is entitled “December is Here, Markets Stay Bid, UFO Activity Increasing”
Quick Disclaimer: The following podcast is for educational purposes only. This is not a solicitation to buy or sell commodity futures or options. The risk of trading securities, futures and options can be substantial and may not be appropriate for all listeners.
Alright guys I hope everyone had a wonderful Thanksgiving, we hope the conversations were engaging, we hope you were able to visit with family and friends and truly living life as it should be lived! We often get to caught up with our busy lives that we forget to take a minute and enjoy the things that really matter, the things that in the long run, gives us memories to recall and good times spent with our loved ones. At least that is how we view things, we know life can be overwhelming but if we have others around us, to bounce ideas, to share thoughts, to interact with, well that does have an absolute therapeutic effect. We have enough things in life that give us pause, that give us angst and we hope Magnelibra alleviates your market stress at least, we hope that we clarify the moves in the market place and give you an understanding and an insight that you probably won’t find out there in main stream media.
OK we have a lot to get into so let’s get started, first off let’s look at the markets today. In the equity index land the markets have started the week off well bid. The Nasdaq futures are +233.25 and the SP500 is +8.25 points, you guys know our levels in both those markets and the bulls are in control to start the week:
The US Dollar is off to a great start +0.68% today taking back half of last weeks down move thus far:
February Gold is holding above $2663 for today, but we feel a settlement below there may usher in continued selling. I do think the market is still controlled by the sellers but for now $2663 is our early support level in the futures:
Ok so this week we have ADP and ISM Services on Wednesday with Powell speaking in the afternoon as well. Thursday is jobless claims and deficit then Friday is the big employment number where 200k is expected, this will be give us good insight to see if the FOMC cut expectations change for this months meeting. The bond markets and the CME Fed Watch Tool are showing a 64.2% chance of a 25bp cut, so the markets still expect a cut. We have seen a lot of pundits pushing on media that rate cuts aren’t warranted, and yes there is a good argument both ways. Traditionally the thought is you raise rates till something breaks, and most feel nothing has broken. The flip side is why wait for something to break and rather be proactive. Well you guys are long time listeners to our logic and we feel that in today’s current financialized environment higher rates is leading to greater concentrations of wealth and contributing to the inflation. We also know the US govt deficits are adding to the M2 money supply and keeping liquidity flowing. This is the real source of inflation, its basically transferring US Govt directed funds to the private sector and the US govt should not have a $2Tn deficit as its just appropriating future revenues that it may or may not receive and the longer you do this, the higher the debt levels go!
We keep hearing about how the FOMC has reduced its assets from $9T to now $6.9T, yes that is true, but the reality is M2 continues to grow:
So this is what is driving asset prices, and its driving valuations to record levels, price to sales, to book, CAPE you name it all heavily over valued, but that doesn’t mean it can’t keep going. The funny things about markets is they go until they don’t! So don’t fight it, just trade the markets and adjust accordingly based on new incoming movements!
Speaking of markets we know Bitcoin continues to be a big draw and many are getting involved in the alt coins now because the gamblers feel the upside is far greater and yes that is most likely true. What we want you to understand is that if you are trading or investing in these things, then just do that, trade them, do not try to decipher their real worth, because its relatively impossible to do that! Yes some of these things have had big moves, but this is all momentum based trading, not fundamental shifts in the integrity of any of these Alt coins:
When you look at some of these you will see that some of these offer big % based moves, XRP over the last 7 days is +81%, ADA +18%, etc. Please use caution investing in this stuff, I really don’t look at it any other way then just trading.
We keep hearing big talk about XRP and banks using this, but in reality what is it going to replace, what drives its value, what makes it worth more than Tether a stable coin? A lot of questions remain, but that doesn’t mean there isn’t opportunity, so do your research!
Bitcoin continues to press into that $100k area and gets rejected we did see a a decent technical chart with nice parameters that we wanted to share. Take a look at blockchain.com they do have a lot of great resources for data:
Technically Bitcoin needs a daily and weekly close above $98k for the push to overtake $100k, what Bitcoin momentum traders don’t want to see is a close below $93500:
We also know today via the most recent Form 8-K from MicroStrategy, they know have 402,100 BTC and their ratio of bitcoin per share remained the same at .172%
We know a lot of other companies are going to jump on this bandwagon, the problem there is their dollar cost average price will come at all time highs and that will present a whole host of affordability issues. Worse, it presents a future viability issue because if the price should fall, how long can these firms who are using debt and equity structures, how long can they survive in a Bitcoin bear market?
Ok let’s change gears real quick, we wanted touch upon the technical set up in JPMorgan. This is a Doji reversal on the weekly and a confirmation this week should set up a nice roll over, put structures may be warranted here as the technical’s are well overstretched, see what you guys think:
Also we wanted to touch upon the ongoing UAP/UFO phenomenon. We don’t think its any coincidence the uptick in sightings, the ongoing government releases and worse, the potential for nuclear conflict. We believe all of this is intertwined and we believe we will continue to see disclosure, continue to see sightings and perhaps we will eventually gain a better understanding of our system and our world because of this. It is certainly exciting and a great topic to dive into, the prospects of this stuff increasing means we may uncover technologies that we may not have been privy to prior, maybe things like zero point energy, warp drives, etc will offer us a different path for our future, for our understanding of energy and time for that matter. This stuff is really exciting and we suspect there will be much more to come! Here is a recent picture over the Capitol in DC:
Ok that is it for today, here is the MEGA8s from Friday, today saw the hedge activated in the 514C for Friday expiration:
As far as last weeks settlement sheet:
The 5 and 30 day changes the bond markets, Yen and Nat Gas are the 5 day % based winners with the energy sector the losers:
Thank you guys, we appreciate all our subscribers and we continue to reach toward our 500 subs goal. Thank you for all the support and we hope we are adding value to your thought process and keeping you well informed. Till next time.
DISCLAIMER: For educational purposes only. This is not a solicitation to buy or sell commodity futures or options. The risk of trading securities, futures and options can be substantial and is not for everyone. Such investments may not be appropriate for the recipient. The valuation of futures and options may fluctuate, and, as a result, clients may lose more than their original investment. Nothing contained in this message may be construed as an express or an implied promise, guarantee or implication by, of or from Magnelibra Capital Advisors. Magnelibra the Commodity Trading Advisory and its proprietary long/short commodities, futures and options managed accounts may hold long and or short positions in the various futures and markets that Magnelibra covers. We will never claim that you will profit or that losses can or will be limited in any manner whatsoever. Past performance is not necessarily indicative of future results. Although care has been taken to assure the accuracy, completeness and reliability of the information contained herein, we make no warranty, express or implied, or assume any legal liability or responsibility for the accuracy, completeness, reliability or usefulness of any information, product, service or process disclosed. If you are interested in opening an individual managed futures and options account to compliment your overall investment portfolio you can visit our website at https://magnelibra.com for more information. We are implementing a new trading program launching at the start of the new year, which will include access to Bitcoin futures and options. Please contact or make inquires directly to our introducing broker Capital Trading Group, please contact Nell Sloane at nsloane@capitaltradinggroup.com
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