SPX | The Big One
Updated
The Big One. The big question. Buy or sell?
A question is easy. An answer can be hard. Most of us here trade because we believe we have a grasp on the answers. And we have several methods on our toolkit to reach a conclusion.
One of these methods is belief. That's what we gamble upon. Belief on indices, stocks, ETFs, currencies is what makes us buy them and sell them.
Belief aka. Psychology/Humanity
Another one is instinct. You know, the thing that we follow when we are completely lost in a mountain path.
Instinct aka. Survival
A final one is persuasion. The well and tested kind of making an answer out of nothing. It's what politicians have to use, lawyers and figures like Elon. Our friend who, in two separate days in 2022, posted about both the next recession, and the next bubble.
Constructive Argument aka. Business
Perhaps we can add to these science. But in the end, science unfortunately tends to get mixed up with all of the above three. But science can be much more than that.
A scientist must admit that they cannot give definite answers to anything. So for me to come out and give you definite explanations would be business.
To answer where SPX can go, we must first orient ourselves.
Remember, we are gambling on a mountain with Musk.
So this is SPX, and I let an algorithm draw a channel around it.
And this is SPX again, but this time I let a monkey draw a line.
Humans tend to stop being humans, and let algorithms draw channels for them like the first one.
And if you look closely at the second chart, It resembles the main chart.
I basically took the SPX price, calculated its trend, and custom plotted the deviation from its trend. It is "safe" to assume that we are below one of the infinite trends.
And here comes the dilemma. So where are we? Above trend like the regression told us, or below trend like the mountain monkey said? Elon, being a gambler, told both.
So there must be a way out of this conundrum. Until Musks satellites can give us reception in the forest, no help can come. We must resolve this situation the hard way.
Even if SPX is going faster than the log-regression tells us, it loses against Bitcoin.
But what can that mean? More questions!
SPX is comprised of the largest 500 companies. And they are LARGE. The Big Questions are for the Big Companies. And these guys are high stakes poker players, they don't mess around. It is safe to assume that besides being participants, they are the masters of investing. And of course they follow current investing methods like the Modern Portfolio Theory (MPT).
So where am I going with all of this?
BlackRock is proposing making the first Bitcoin ETF. So for the first time since its creation, Bitcoin can be a tool of MPT. We can assume that if such a proposal comes to fruition, big players can enjoy the benefits of crypto for the future growth of their companies valuation.
In the end, the answer is a question by itself.
Which came first, the chicken or the egg?
Bitcoin is an instrument of Big Tech. Will the creation consume its creator?
Or will Bitcoin be sacrificed for the greater good?
Tread lightly, for this is hallowed ground.
-Father Grigori
A question is easy. An answer can be hard. Most of us here trade because we believe we have a grasp on the answers. And we have several methods on our toolkit to reach a conclusion.
One of these methods is belief. That's what we gamble upon. Belief on indices, stocks, ETFs, currencies is what makes us buy them and sell them.
Belief aka. Psychology/Humanity
Another one is instinct. You know, the thing that we follow when we are completely lost in a mountain path.
Instinct aka. Survival
A final one is persuasion. The well and tested kind of making an answer out of nothing. It's what politicians have to use, lawyers and figures like Elon. Our friend who, in two separate days in 2022, posted about both the next recession, and the next bubble.
Constructive Argument aka. Business
Perhaps we can add to these science. But in the end, science unfortunately tends to get mixed up with all of the above three. But science can be much more than that.
A scientist must admit that they cannot give definite answers to anything. So for me to come out and give you definite explanations would be business.
To answer where SPX can go, we must first orient ourselves.
Remember, we are gambling on a mountain with Musk.
So this is SPX, and I let an algorithm draw a channel around it.
And this is SPX again, but this time I let a monkey draw a line.
Humans tend to stop being humans, and let algorithms draw channels for them like the first one.
And if you look closely at the second chart, It resembles the main chart.
I basically took the SPX price, calculated its trend, and custom plotted the deviation from its trend. It is "safe" to assume that we are below one of the infinite trends.
And here comes the dilemma. So where are we? Above trend like the regression told us, or below trend like the mountain monkey said? Elon, being a gambler, told both.
So there must be a way out of this conundrum. Until Musks satellites can give us reception in the forest, no help can come. We must resolve this situation the hard way.
Even if SPX is going faster than the log-regression tells us, it loses against Bitcoin.
But what can that mean? More questions!
SPX is comprised of the largest 500 companies. And they are LARGE. The Big Questions are for the Big Companies. And these guys are high stakes poker players, they don't mess around. It is safe to assume that besides being participants, they are the masters of investing. And of course they follow current investing methods like the Modern Portfolio Theory (MPT).
So where am I going with all of this?
BlackRock is proposing making the first Bitcoin ETF. So for the first time since its creation, Bitcoin can be a tool of MPT. We can assume that if such a proposal comes to fruition, big players can enjoy the benefits of crypto for the future growth of their companies valuation.
In the end, the answer is a question by itself.
Which came first, the chicken or the egg?
Bitcoin is an instrument of Big Tech. Will the creation consume its creator?
Or will Bitcoin be sacrificed for the greater good?
Tread lightly, for this is hallowed ground.
-Father Grigori
Note
An alternative to the main chart:The dilemma still exists. Up or down?
Honestly, I am more mixed than ever.
On the one hand the bearish wedge is TOO BIG to ignore.
On the other hand, crypto and derivatives can lead to peculiar results.
Nobody managed to answer the egg and chicken dilemma. I certainly can't.
Note
On the bear defense:First time pink below red.
Note
Maybe the bubble has already burst.Note
Today is similar to 1991Note
Again, like 1990Note
Note
It is now, after more than a decade, that the US has recovered from the GFC.Before the GFC, any reasonable trader would assume that this trendline would hold. Instead there was freefall.
Note
Trend analysis is simply that, trend.Note
Back 2 SchoolNote
Note
The game is set for an upcoming black swan event.Volatility is warning us. More specifically, the VVIX/VIX ratio.
Get ready.
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