The theme of the past couple weeks has been all about buying dips while mainstream financial media panics… just like they’re doing in the wake of China’s crypto crackdown. But before we get to that, let me ask…
Did you buy the dip on Monday like I told you to?
If you jumped into Proshares UltraPro QQQ (NYSEArca: TQQQ) at Monday’s open per my suggestion last week, you’re up 4%.
If you did it Tuesday after I — hopefully — convinced you in Monday’s article that Evergrande didn’t matter, then you’re up 5%.
Source: Bloomberg
And if you didn’t?
Well that’s OK too, because our trade on the Consumer Discretionary Select SPDR Fund (NYSEArca: XLY) is up 1% in just a couple days.
Source: Bloomberg
If you didn’t do that either, then I don’t know what to tell you.
Because what I’ve tried to outline over the last few weeks is an approach that, if done correctly, can take all of the emotion out of trading.
On days like Monday, having an approach can give you what you need… confidence.
You need confidence to buy when others are selling.
You need confidence to sell when others are buying.
And it’s that confidence, executed time and time again, that produces profits.
Because it will allow you not to get caught up in the BS involved with financial media, which was calling for a “20% correction” just a few days ago.
Might one happen? Sure… eventually.
But is it happening now?
The S&P 500 says nope.
Source: Bloomberg
No, the SPY is doing exactly what it’s done all year: going up on falling volume immediately after options expiry.
Source: Bloomberg
And when it does it again here, it will take the S&P 500 up to 4,458… a new all-time high.
I’m confident… Are you?
A Bonus Trade From China’s Crypto Crackdown
Friday’s flapping heads are all talking about how crypto trading was made illegal in China, which sent cryptocurrencies reeling.
But when I looked at prices, all I saw were higher lows.
Here’s Bitcoin…
Source: Bloomberg
And Ethereum, complete with the line I used back during the crypto crash in July to show where prices would stop and people should buy the dip.
Source: Bloomberg
That was a pretty good call… and now, I’m making another.
No matter what the media is saying about China’s crypto crackdown… Crypto is fine.
In fact, if China also cracks down on illegal mining activities like it says it’s going to, it means there will be less of it.
When demand gets cut, it hurts prices, sure.
But when supply and demand get hit at once, they often cancel each other out.
In this case, fewer transactions mean companies that depend on transaction fees — like Coinbase Global Inc. (NYSE: COIN) — can get hurt.
But the values of the cryptocurrencies themselves haven’t really changed at all.
They’re just as valuable (or worthless, lol) as they were before the announcement of China’s crypto crackdown.
And I’m willing to bet that although this news may shake out some weak hands, the good ol’ HODLers of the world are out there on the Twitters and the Facebags still posting the memes and being the maxis they are.
So I’ve got something to add to your radar: A stock-driven way to trade Ethereum — the strongest coin, in my opinion — just so nobody reading this has to open a crypto wallet account… you’ve got enough to do already.
The Grayscale Ethereum Trust (OTC: ETHE) is the first publicly traded Ethereum investment vehicle in the U.S. and the second digital currency investment vehicle — following Grayscale Bitcoin Trust.
Source: Bloomberg
Here’s the plan:
If news of China’s crypto crackdown is still dominating headlines and pushing the sector lower over the weekend, hold off and wait for my article Monday evening. I’ll be watching this like a hawk.
But if this news just disappears like every other crypto-driven headline has over the past few months and prices aren’t falling, feel free to grab some.
Either way, I’ll have something to say on the matter, so keep an eye on your inboxes for that alert.
And have a great weekend, folks!
All the best,
Matt Warder
Fortune Research
