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As countries around the world roll out their vaccine plans, we can see different industries and different countries recovering at different rates.

However, only a small percentage (about 5%) of the global population is vaccinated, so it might take a while before we start to see the results of the vaccines kick in to reduce new Covid cases.

If you look at the graph of new cases, it is still on the rise.

Given such a scenario, how does this affect the financial markets, and what are some of the investment opportunities we can look at?

 

Stock Market Surge

On 31 March 2021, I shared this important snippet in the public Telegram channel, because I felt that S&P 500 was going to have a breakout.

 

“Following up on the S&P 500, it is still within the range, but now the odds are much higher that it will continue going higher.

If I had to guess, I would estimate 70% bullish and 30% bearish.

This means it’s a good low-risk opportunity to add long positions, with a SL just below the recent swing low (around 3840).

Shared this with my students a few days ago, will tonight be the night the S&P 500 makes a new high?”

 

That very night, stocks broke to a new high, and has been steadily heading up for the past 1-2 weeks.

 

“Following up on our last post, the market is surging up as predicted. Congrats to those who followed! 💰😎🔥

 

As of Friday last night (9 April 2021), the S&P 500 has hit our first price target of 4125, giving us close to 4% gain so far.

 

 

We have taken half profits, and there might be small pullback where we can add positions before gunning for the next price target.

 

Not Much Upside for Oil Markets

On 27 March 2021, I shared a chart on the long-term outlook of the Crude Oil market, and I felt that that most of the post-Covid recovery has been priced into oil, and since it won’t be going up much, I suggested taking a long-term short position on it.

“Looking at the long-term chart of Crude Oil, we saw it bottom around April last year, before recovering all the way to previous highs in a 2-legged move.

Something interesting to note is that the 2 legs of the 2-legged move are exactly the same length.

Now that it has reached the pre-Covid highs, I do not see much more upside for Crude Oil.”

 

“Following up on Crude Oil, it has started turning down as predicted. Possible short entry for the next leg down.”

Since then, prices have started to turn down a little, and I will continue to hold my short positions for another possible leg of price movement downwards.

 

Will USD Become Bullish?

On 27 March 2021, I noticed that the USD was picking up strength, which was surprising, considering how much money the US has been printing.

My guess is that currently, the US is recovering faster from Covid as compared to many of the less developed countries.

 

“Looking at the US Dollar Index (DXY), it seems like after a multi-year downtrend, the USD is picking up strength.

It has broke the long-term bearish trendline, formed a small double bottom, and is now challenging the 200-EMA.”

 

Looking at the larger chart of the US Dollar Index (DXY), you can see that price has formed a double bottom, however the size of this pattern is not that convincing since it is comparatively small.

Price is now fighting in the middle of the EMAs, and we will need to see if it can emerge victorious and stay above all the EMAs.

 

Relative Strength of Forex Pairs

Let’s take a look at the other currencies and their relative strength.

This shows the current ranking of different currencies, from strongest to weakest.

 

“Stocks continue to surge as predicted, and because the JPY is weakening, all pairs of /JPY are very bullish too.”

This shows the trends of the different currency pairs, stocks indices, commodities and bonds.

From these 2 tables, we can see that JPY & GPY are bearish, while USD & CHF are bullish.

 

Crypto: Bitcoin & Ethereum

Cryptocurrencies are really heating up right now, and I’ll be focusing on the 2 major ones – Bitcoin (BTC/USD) and Ethereum (ETH/USD).

 

Looking at the chart of Bitcoin (BTC/USD), it is still staying nicely within the uptrend channel, with a nice ascending triangle building up for more bullish pressure.

It is very likely that it will break new highs this weekend.

 

Looking at the chart of Ethereum (ETH/USD), it is possibly even more bullish than Bitcoin, after a breakout of a ascending triangle, a pullback to test the breakout, which also formed a bull flag.

That is already a confluence of 3 bullish factors.

Needless to say, I will be holding on to this as well.

 

Market Summary

In this post, I have covered many markets, and the key things to note are:

  • Bullishness of the stock market
  • Long-term bearishness of Crude Oil
  • Potential bullish reversal of the USD
  • Bearishness of JPY & GPY
  • Bullishness of USD & CHF
  • Bullishness of cryptocurrencies

Now that I have shared my views on the various markets, what do you think is the best investment at this point of time?

Let me know in the comments below!

After the sharp run-up in stocks from last year’s March lows, some people are starting to wonder if the market has got a bit too bubbly.

In this post, we will compare the different stock indices, as well as some other products, to see if there are any good opportunities.

 

The Meteoric Rise of Bitcoin

When placed on the same scale, the epic 700+% returns on Bitcoin (BTC/USD) dwarfs everything else, and has also provided some of the best returns for my portfolio last year.

Looking at its strong trend, it does look like there are a few more legs for it to go, so I will hold onto it for now.

To see the rest of the products, I will now remove Bitcoin from this comparison.

 

Overview of Various Markets

 

 

The top 3 you see are the 3 indices of the US stock market, and the one in candles is the S&P 500. The other 2 are the Dow Jones Index and the NASDAQ.

The Nasdaq had the sharpest recovery at the start, but the other 2 recently caught up, especially in the last few weeks where the NASDAQ corrected sharply.

So in terms of percentage recovery, all 3 indices are roughly at the same level.

Next if we look at the line in dark purple (2801), which is one of the China Stock ETFs which I invest in, it had a good run, and just earlier this year it was on par with the NASDAQ.

However, in recent weeks, it has corrected sharply and is now below the 3 US stock indices.

The STI Index (Singapore market) was pretty much lackluster last year, but has picked up in recent months, making it one of the top performing stock markets this year.

The last line on the chart is Gold (one of the Gold ETFs to be specific), and it seemed to have hit its recent peak in August last year.

 

Will Rising Rates Kill the Stock Market?

 

 

Historically, rising yields have led to recessions, but the lag time could be years, so it’s not like we won’t be able to see it coming as it happens.

 

 

Looking at the charts of bond prices (which are an inverse of interest rates), we can see that it peaked around the same time the stock market bottomed (March 2020), and in recent weeks has been dropping faster.

This in itself it not necessarily a bearish indication for stocks, because it is more of a sign of potential rising inflation, but as long as inflation remains low, then it may not necessarily be bad for stock prices.

Which means the best way is still to check out the charts of the stock indices.

 

Chart Analysis of S&P 500

 

In summary, the stock indices are currently trading within a sideways range after a long run-up, so it won’t be surprising if there is some medium-term correction before the trend continues.

Stay tuned for more real-time market updates in our Telegram channel:
👉🏻 https://t.me/synapsetrading

As January comes to a close, the main stock indices plod on, Bitcoin starts to correct, and we start seeing extreme action on some lesser-known counters.

We also conducted a market poll to see what our readers think.

Market Poll on S&P 500 & Bitcoin

Last week, we conducted a market poll on our Telegram channel (https://t.me/synapsetrading), and here are the results!

About 2/3 of those polled are bullish on the stock market, expecting the S&P 500 to make new highs.

In a similar vein, about 1/2 of those polled think that Bitcoin will make new highs.

Historically, the crowd is usually wrong, so let’s see how these predictions turn out! 😄

 

Let’s take a look at the general market trends:

The stock indices (NASUSD, SPXUSD, R2000USD) and the Pound (GBP) are all very bullish, whereas the Euro (EUR) and US dollar (USD) are very bearish. 

 

Profit-taking on Bitcoin

In last week’s blog post, I warned people that the parabolic move of Bitcoin to $40,000 was not sustainable, and a correction was due.

Bitcoin has corrected about 30% from its recent highs, and now remains rangebound.

I will monitor for an opportune moment to enter.

 

GameStop (GME) Saga – What Exactly Happened?

As a business, GameStop, which primarily sells video games and gaming consoles, has been on a slow decline for some time.

That is why many large funds have huge short positions on this stock, giving it one of the highest short interest.

 

The r/WallStreetBets community on Reddit, which has more than 2 million subscribers, decided to come together to buy up the stock and push up its price.

 

As the price of the stock increased, this caused more funds to close their short positions (by buying the stock), thus further pushing up prices.

This is called a short squeeze, and it can cause prices to spike up.

 

Here is the daily chart:

 

And here is the 15-minute chart:

 

Elon musk also joined in the fun:

The GameStop stock jumped more than 60% after hours as Elon Musk tweets out the Reddit board that’s the hyping stock. 

I wonder how this will end. 🤡

Stay tuned for next week!

All of a sudden, I’m seeing the word Bitcoin everywhere I go.

It is all over the news.

Bloggers are talking about it.

Everyone is calling a buy for it, even those who have no idea what cryptocurrency is.

So the big question is, is Bitcoin still a good buy at its current price?

 

Here is some background on Bitcoin:

Before answering that, it’s amusing how everyone is getting excited about Bitcoin now, when just a few months ago most people were saying it it’s a scam, or that it is going to crash to zero, that it is worthless, etc.

Seems like it is human nature to jump on the hype train.

If you have been following me on my Telegram channel (https://t.me/synapsetrading), you will know that we have been accumulating it since early last year, when it was around $4000+.

Here are some of the updates I posted last year:

 

Now, let’s look at the current prices.

On the weekly chart, we haven’t seen any correction in months, which shows that the trend and momentum is strong in the long-term, but it also shows that the trend is not moving at a stable sustainable pace.

A stable trend is marked by ups and downs, not just a parabolic one-way move.

If you think in terms of numbers, the potential percentage upside gain is much less compared to the start of the trend, which is why I prefer to get in early on a new trend rather than chase a late-stage trend.

If I am going to add more positions or enter, I will wait for a larger correction first, such as a pullback to the EMAs on the weekly chart.

Trade safe, and stay tuned! 💰😎🔥

As various countries started loosening the lockdown to save the flailing economy, we get news reports of new infections starting to surge.

At the same time, we see multiple asset classes surging in the market, creating a stark contrasting reality.

The big question is, which is leading and which is lagging? (Economy vs. Financial markets)

Join our FREE Telegram channel for daily trading tips:
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5 Bullish Asset Classes

It is quite rare to see so many asset classes perform so strongly, especially when the economy is not doing well, and this is probably due to excess liquidity.

In addition, many of these asset classes usually move in opposite directions from one another, which makes it all the more strange.

Here are the 5 asset classes:

  • NASUSD – Nasdaq stock index
  • XAUUSD – Gold
  • USDIDX – US Dollar index
  • TNOTEUSD – 10-year treasury bond
  • BTCUSD – Bitcoin (not listed above)

 

V-shape Recovery for the Stock Market?

The stock market (especially the Nasdaq) has already recovered almost all its losses for the year, but will it be able to chug ahead and make new highs?

 

According to the Wall Street Journal, here are 5 reasons why the stock market is rallying so strongly despite the economy not doing well.

 

On the other hand, we are also seeing a large outflow of funds from stock markets, so could this be investors starting to take profits after the recent strong rally?

 

Will Lockdowns End Soon to Save the Economy?

Last Friday we also had the NFP (non-farm payroll), and although it was slightly better than expected, the numbers still do not look good, unless they find a way to reopen the economy safely.

 

Several countries have started to loosen the lockdowns and get the economy back to normal, but it seems like a tricky balancing game / whack-a-mole, because any small outbreak can trigger new lockdowns all over again.

Over in Russia, the outbreak seems to be getting worse as well.

Taking My Profits for Bitcoin at $10,000

Recently, Paul Tudor Jones mentioned in an interview that he is bullish on the stock market, and buying Bitcoin to hedge against inflation.

 

If you have been following our Bitcoin trades, we have been accumulating since $4,000+, and we have taken profits at $10,000 last week, so we will be waiting for lower prices to buy again.

This is one of our best trades this month, with a profit of more than 100%. This shows that you do not need to be making many trades a day, but rather be patient and wait for the best opportunities, then strike when the iron is hot. Congrats! 💰😎🔥

 

Start Your Trading Journey Today!

If you are interested to start your journey with our closely-knit community, click here: https://synapsetrading.com/the-synapse-program/

Here is some feedback from our students:

“I signed up for the training course just 2 weeks ago, and i am still quite new to trading. Took some trades on the daily signals that Spencer posts daily, and very happy to have made 17% returns so far and covered back my course fee.” – Sandy

“I followed Spencer and bought Bitcoin, and have made more than 50% returns although I entered a bit late. Very impressed by the accurate timing.” – Kai

“I am very happy to be part of this community because the members are very kind and answer all my newbie questions to help me understand.” – MK

To read feedback form all our past students, click here: https://synapsetrading.com/testimonials/

See you on the inside! 🍻