Weekly Market Wrap: UST Depeg, Terra LUNA Token Crashed 99%!

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Last week, the biggest news dominating the headlines is the depegging of UST and the crash of Terra LUNA token, which went from a high of $100+ to almost $0 in a few days.

This caused a lot of funds as well as retail investors to lose significant sums of money, especially since many were staking UST on Anchor protocol for 20% APY, which seemed like a very good deal.

I mentioned during my last Skillsfuture course that the risk of depeg was real, and they should either hedge it (by shorting the UST perp futures), or switch to some better yield farming strategies with much better returns and lower risk. Hence, I managed to dodge this bullet by not having any exposure to UST or LUNA.

Overall, I have the bulk of my portfolio in cash, with a net short position on equities.

For the week ahead, I have posted in my “Daily Trading Signals” some potential buying opportunities in the stock market.

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For our weekly market wrap, we go through some of the trade calls and analysis from last week, which gives us valuable insights for the week ahead.

We cover 3 main markets with a total of 200+ counters, so we will never run out of trading opportunities:

Forex, CFDs, commodities, bonds
US stocks, ETFs, global stock indices
Cryptocurrencies, crypto indices

By covering a broad range of markets, we can focus our attention (and capital) on whichever market currently gives the best returns.

Click here to receive all these signals in real-time for only $67 a month! You will get several signals a day, and even taking just 1 trade the whole month can easily cover the fee, so what are you waiting for?

Table of Contents

Portfolio Highlights

In the past few weeks, we have seen huge declines in various markets, and thankfully the bulk of my portfolio is market neutral (not affected by market movements).

Yield farming continues to generate returns, while crypto losses (which are sometimes hedged) are balanced by gains in the stock market (net short position), so overall my portfolio is still positive.

There are also gains from the appreciation of the USD (against the SGD), since the bulk of my portfolio is in USD assets.

Now, the strategy is to continue to ride on the downtrend (swing trade and hedging), while waiting for the dust to settle so that I can buy more stocks/crypto when the times comes.

Forex Market Highlights

USD remains on top, as it is viewed as a safe haven when everything else is crashing.

Product: Forex
Name: US Dollar / SG Dollar
Ticker: USDSGD
Exchange: N/A

Analysis: Following up from the last analysis, it has resumed the uptrend after pulling back to test the breakout level.

EP: 1.370 to 1.375, or any pullbacks
SL: 1.365
TP: Near 1.400

Stock & Bond Market Highlights

Product: REIT ETF
Name: iShares Global REIT ETF
Ticker: REET
Exchange: NYSE

Analysis: With interest rates heading up, it is no surprise REITs are heading down.

After breaking down from a long consolidation rectangle, prices are expected to reverse to a downtrend.

EP: Current price, or on pullbacks
SL: $27.50
TP: $23.50 to $24.50

Product: US Stock Index
Name: NASDAQ 100
Ticker: US100
Exchange: N/A

Analysis: Following up on this, last night it broke new lows and continued heading down as predicted. Getting pretty close to the first TP.

EP: Current price, or on pullbacks
SL: $13,635
TP: $12,400, $11,000

Product: US Stock Index
Name: NASDAQ 100
Ticker: US100
Exchange: N/A

Analysis: Following up on this, the first TP has been hit! ????

Now, it looks like it can continue heading downwards to get to the 2nd TP.

EP: Current price, or on pullbacks
SL: $13,635
TP: $12,400, $11,000

Crypto Market Highlights

Taking some profits from Ethereum (ETH) hedging short positions! ????

Product: Cryptocurrency
Name: Ethereum
Ticker: ETHUSD
Exchange: N/A

Analysis: Initially I thought that crypto might be able to break free of the correlation with tech stocks, but it seems for now they still move very much in tandem.

Hence, Ethereum has not been spared the recent large drawdown.

The next major support level is the light green rectangle, where prices are currently at, and which might lead to some rebound.

Since the trend is uncertain, I will avoid adding more positions for now, and carefully hedge existing positions.

A few hours ago started hearing that the Luna fundraise had fallen apart.
Difficult to imagine any firm would put their reputation on the line back this dumpster fire.
It's over.
(deleted original tweet about this to not jump the gun, but now it seems clear)
— mhonkasalo (@mhonkasalo) May 11, 2022

Sorry for the multiple articles on UST and Luna, it is currently the biggest news in the Crypto market and has large ramifications. Many retail investors became broke overnight.

Here is one of the best overview explanations: https://newsletter.banklesshq.com/p/ust-luna-meltdown-what-happened?s=r

The Terrablock has officially halted and UST has remained de-pegged from the US Dollar since 9th May 2022.

Click here to receive all these signals in real-time for only $67 a month! You will get 5-10 signals a day, and even taking just 1 trade the whole month can easily cover the fee, so what are you waiting for?

Good luck, and may next week bring more excellent profits!