There is no mail today. Banks are closed. The U.S. markets are closed…and what the hell am I doing up?
Well, this is another one of those half holidays we talk about. Fine time to introduce non-subscribers (to our Peoplenomics newsletter) to some sharper thinking than appears in the mainstream.
Were it not for the pending winter storm (tonight in Texas) and a few headlines, you’d have been spared this morning’s report. But, such is not the case. You need to be lectured, again.
(Continues below)
Let’s start with macro-econ: there are two interesting things we’re watching.
One is the price of Gold which has quietly moved up into the $1,340 range, and silver has firmed nicely over $17-bucks, too. So that’s one. (Toss in oil prices firming, too…)
The second is the Bitcoin – which is always a source of amusement.
Since people come here mainly for our unorthodox views of the world, let’s not disappoint them. Here’s what we think of Bitcoin right now:
This looks hopelessly confusing to people who don’t bother to try understanding charts – and are then shocked when events come along “out of the blue.”
So a “teaching moment” while we run through the chart lines:
You will see there is a level line off to the right from the tippy-top of the Bitcoin run-up. The reason we extend this line is it becomes (in the world of technical analysis) “overhead resistance.”
One strategy for making money holds that when something breaks above overhead resistance, a good bullish move is unfolding. Often so.
There is a small asterisk to this: That is, if the move above resistance is more than momentary.
Depending on who you talk to, “momentary” can be a few minutes. Others will wait for a daily close over resistance. More will demand a weekly close above. There are even old-timers who (not running on internet time) will hold out for a monthly breakout above resistance. Quarterly? Just how slow do you want to play?
The horizontal line is also copied to the lowest point since the present decline began and is called “support.”
If this line is broken to the downside, and the break is more than momentary (*see previous discussion), then it’s time to unload and either go short or flipped into cash.
Trend Channel Lines
The two downward blue lines represents “trend channel” in technical analysis. Two ways to construct them.
Method One (used by grown-up mathophiles) involves data downloads and calculation of a 2-standard deviation trend channel. This verges on work…which we can’t stand.
The preferred Method Two (because it’s simple, graphical, and fast) is to draw lines with whatever’s handy, eyeballing it. Choice? A ruler, graphics tool (we use CorelDraw), or even putting PostIts on the screen. (I still do this now and then…talk about lazy… )
Here’s the process to draw the lines:
Draw your first line from the tippy-top all-time high to the top of the first significant bounce. Extend this line a good bit to the right. That’s the top of the trend channel if things are going down.
Copy it and paste it. This ensures that the line will have the same angle as the source.
Move it with the object tool to the lowest point between the tippy-top high and the Big Bounce high. Again, it extends down to the right.
As long as Bitcoin is trading in this range, we are in the “academic learning mode.” Since we have no money on the table (in this fool’s techno-folly) we are ONLY interested in seeing how the breakout happens.
This brings us to the two dashed lines. The black one tells us the general direction things could be heading if we get an upside breakout.
SOME traders will buy when the upper trend line is crossed. Even if overhead resistance isn’t eventually crossed, you can still make lunch money, on quick trades. Black dashed line is the bullish dream.
The red dashed line is the bearish case.
This visually looks like the most likely outcome at the moment. The going short or into cash to avoid carnage happens when Bitcoins – while staying in or below the trend channel – bust through the support line.
That’s when our Elliott Wave estimator tool which we have on the Master Index page of Peoplenomics.com gets fired up.
You put in an approximation of the all-time high, and then you put in the bottom of that first significant low.
From there, this lazy person’s thinking tool spits out how bad things could ultimately get. With the Wave 1 down “in the bag” and with our Wave 2 expectations set by the brainamp.xls spreadsheet in the $16,279 range, we would not be surprised to see the Bitcoin breakdown to new lows in short order.
Still, hype springs Eternal in the hearts of men…so no telling what will really happen.
One can go back to the study of Tulip Mania and note that the first real price runs of that Fad Attack were tulips of a particular kind. Just as the only true first crypto was Bitcoin. Lead tulip.
Then, miraculously, just as the ancient Wave 1 down was put in, along came the clones. Whether it was the red & white tulips, or yellow, (fill in any crypto name but not Bitcoin) and you’ll see how these manias work.
Now that you understand how the chart works, consider how Darwin’s Origins of Species is a “template” that explains technological species replacement as new cryptos come out of the woodwork, w
We’ve be content to stand aside and keep a sharp eye out for potential Darwinian predators, not the least of which is governments. These, as an article of faith, won’t give up their lock on “what is money” without a fight – nor without legislation.
We are not alone in our skepticism toward Bitcoin. Forbes seems to have the same technical view we hold as evidenced in Bitcoin Is Headed Lower – For Now.
Laughably, the big Miami Bitcoin Conference had to stop accepting Bitcoin because of fees and congestion.
If this technology is going to take over the world, it will need government behind it.
But wouldn’t it be a great world IF the illegal surveillance of Americans stopped and that big Secret Agencies spy center (the castle and moat) up in Provo, Utah could be repurposed to create crypto transaction?
That’s the level of infrastructure we see as necessary and for now, the trend channel says that a long-shot bet.
It’s the same scaling problem Fortune refers to here.
We hold that if scaling doesn’t kill it, regulators will as Bitcoin Halts Week-Long Slide But Battles With Regulatory Pressure.
Shills are everywhere – and what they have going for them is a virtual country full of politically-correct gullible idiots – so we will continue to hide-out in the Outback of East Texas waiting for an outbreak of reason and common sense.
Could be a long wait, but these sideshows are priceless.
Baked Apple?
House lawmakers demand answers from Apple on throttling older phones.
Social Media Ruination
Australian dictionary picks “Milkshake duck” as word for 2017.
Dreams of Wind Ranchers
Legendary U.S. investor Boone Pickens closes energy hedge fund after setbacks.
Unthunk Zero’s
We’re finally beginning to wrap our arms (belatedly) around grunge and such.
The epiphany came on reading Inside the new ‘anti-gorgeous’ hotel.
Here’s how the young are rolling: They ALL want more money, but they don’t want as many upscale ways to spend it.
Thus, with money piling up, they believe this to be responsible capitalism and a new miracle form mof capitalism.
I’m going to take some pills now and go back to pillow-testing.
Let me know if the planet formerly known as Earth reappears.
There is at least one fatal flaw in Bitcoin. It is based on Block Chain technology. Block Chain can not scale to the level of a national currency, to say nothing of a world currency.
The only solution I have seen is to replace Block Chain with Hash Graph technology. It will scale.
…STeve
The reason Bitcoin at least for the next few years will retain its value and go up is because it’s exclusive and as long as people believe that it will go up yes eventually it will be replaced by something else and as we know there’s so many different coins out there that make it easy to use as an ATM card or coin .
Bitcoin wasn’t made for that intention you have to understand that when you start talking about Bitcoin it was not made for .Bitcoin was made to destroy the Rothschilds fantasy of controlling the world
It’s amazing how few understand the iPhone battery situation. Normally, a phone draws very little power. When a phone (or any) cpu is given an intensive task, it draws much more power. As batteries grow older, their peak power capabilities decline, but the batteries still have long term low level energy available. With a phone, when the power drops to a certain point relative to demand, they shut down. The risk of low level power to a cpu causes undesired effects like a transistor not getting set to the proper state.
Apple was having problems with older phones shutting down during peak power. So to alleviate this shutting down inconvenience, when the phone approached peak power and would normally shut down, they simply slowed the cpu for that task until the power demand went down, until that intensive task finished, which was usually only a few seconds. For 99.9% of the users, this slowdown was imperceptible.
However, when a speed test is run, with an artificial task that runs the system at max speed for three minutes or longer, any phone with an older battery will be slowed down for the duration of that test, or at least when the battery is no longer able to sustain that peak load. Most laptops automatically throttle down like this when on battery power. There are some updates that Apple simply will not install unless the device is plugged in.
Phone users as a general rule don’t care how fast their phone runs, what they do care about is how long the battery life is, and that the phone does not shut down unexpectedly. And they certainly do not want to replace a battery that gives them all day service just to save a couple of seconds on a high demand task.
Bitcoin is simply a proof of concept for block chain technology.
Since it’s value is based on perception, and not anything of value, and because the total amount in circulation is so minimal, it is highly subject to manipulation and wild swings in value.
Bitcoin will be limited for the following reasons. Because of its volatility, it cannot be used for business. If a dealer sells a BMW for bitcoin, he has to get that value out of bitcoin as soon as possible, because tomorrow it could be half its value.
Secondly, if just 2% of all retail transactions in the USA were done with bitcoin, to calculate out all those block chain keys would consume the electricity production for the entire world.
Thirdly, 90% of all bitcoin is held by the Chinese and the Koreans. It is well known what inveterate gamblers they are.
Bitcoin is not a currency. A currency is defined as whatever a government will accept as payment for taxes. Governments only use currencies that they can control, and that they can track.
Block chain does offer a secure way to do transactions without a controlling third party which is pretty important considering how little integrity there is out there. But it will eventually be replaced by a new technology called Hashgraph. Study it a little and you will understand why.
Note that China and S Korea have tight restrictions on currency leaving the country. Hence their leadership in restricting bitcoin. The population’s leadership in using bitcoin is just that it is nearest to working for moving money around, not gambling. Going against the government’s stated regulatory intent in those countries is the real gamble.
I don’t know what other countries only allow currency to come in and not leave, but that’s where the next btc shutdown could happen. Brazil, India??
So you are saying bitcoin is worthless?
Maybe N Korea invented bitcoin to fund their missile program by scamming the rest of the world & also let the Chinese know beforehand to pay them off.
X-Pac as usual you don’t know what you’re talking about when it comes to the changes that are controlling your future.have you went out and bought some Bitcoin even a piece of one.
Anyway how’s the weather doing down there it’s kind of cold up here I guess you can grow crops just about 24/7 can’t you sounds like a put the play a good place to be. Except I ain’t leaving I ain’t coming down to your place but it’s hard to understand why people would move to the South Pole or the North Pole just to get away from society but at the same time they have to rely on what everybody produces around the world so anyway you have a good day thoughts have wings and may all beings be lovingly fulfilled so be it
Today’s bitcoin chart looks like the PN DJIA 1921-36 Chart.
My bank is open.
Keep warm!
Hey George,
Have you noticed an uptick in ads for 15 year fixed mortgage loans? It seems that I am suddenly seeing them a lot, but I don’t remember that in the past. Is this a sign of something? Why would the banks be pushing 15 years instead of 30? Could this be a sign they are smelling higher inflation coming?
Gene Daniels
Bitcoin is an idea,
To replace the sympathetic nervous system of the dollar.
So for the next few years if you invest in it you’re going to make lots of money I don’t care what kind of Elliot chart you say four or five it’s going to go up it’s definitely going to go up for at least 2 years yes it will be replaced but it’s going to replace the Rothschilds dollar Fiat dollar.
After that yes it’ll be clear sailing after a few years will discover we don’t even need taxes why do you need taxes when your government makes the money out of thin air for you so why do you have to pay them part of your check wake up X-Pac.
Money will be used digital money will be used so that we can further expand the universe expand Beyond where we were at well the secret part is we are beyond that but we don’t need a slave system of an IRS or any of that all you need is your countries permission to print and give you x amount of dollars yes that goes against the Republic standard point of view and is more into the Democratic point of view but that’s what the future will be you have two opposing forces Republic and Democrats but you going to have what to call a neutral Force you’ll have a central neutral force that will be able to go beyond the earth and its digital.
Again what I’m saying is no your not right I’m not right you’re half right and I’m half right this going to be met in the future somewhere in between there you’ll see it happen but in the meantime Bitcoin it’s going to go up.? Are you willing to ride the wave as it goes up as many people say it’s the tulip well the fact is it’s never going to crash it’s just going to go sideways like it’s doing now but it’s only doing that temporarily Bitcoin will never crash it will never go out.
Okay I should never say never because you know when I say that oh gosh look out I got to do some things that I say I never do but anyway you get the idea that coins going to be around for a few years and if you want to you can partake in it and make some money or you can partake in all the extra coins that are out there that’s where the big money is Bitcoin will go up 502 a thousand percent over the next two years but the coins and self are going to go up a hundred thousand percent if you can get in and get out you know be like a day trader that’s where the money is that’s what people are doing right now and that’s where the governments are like hey we can’t make this money up out of thin air to pay y’all but that’s what they do for themselves right.
All this gets down to your bone marrow doesn’t it
.
the other part about buying Bitcoin you can do it anonymously or you can do it through an exchange if you do it anonymously it’s harder to do it’s hard to find someone that’s going to sell you enough to control the food Exchange or seller.
That’s why when you think well it’s been 10 20 years Bitcoin still out there you know why you know why it’s going to be viable 10 20 years or more or indefinitely it’s because there’s only 21 million of made I must say that you get online or a young person say 21 years old and they have some assets from the relatives millions of dollars and then you take another participant this call that when be and he has enough to buy one Bitcoin then we take another participant will call C who buys anywhere from 1 to a million Bitcoins now this tulip will never ever die.
Why you say well it’s not organic it’s not a living plant it’s the same thing as the Fiat system dollar except it’s a belief system behind it the belief that this thing if I give this to my son or grandson in years into the future it will be worth something and there will be fights all across the planet for the people against the people who have those last Bitcoins because most of the Bitcoins will be erased another words nobody will know the password to get to them so they can’t be used so as people die and you can’t refer the Bitcoin to another person under those circumstances it’ll become more and more valuable you’ll have people trying to track you down because you own one Bitcoin this is how it elaborate the future scheme of Bitcoin will be that’s why they will relinquish most of the Bitcoin to another medium but those who don’t relinquish their Bitcoin and they pass it on if they’re able to pass it on through genetics because it depends on how you bought your Bitcoin it’s a little problem there you know can you pass it on it maybe you can’t only have to have one photo ID to identify but if there’s a clause upon your death.
So if there’s very few Bitcoins left in the world because most people that own them died and they weren’t able to transfer them to other people Bitcoin becomes a hot commodity another words people will be killing you searching you out for that Bitcoin because that Bitcoin baby will be worth so much if you take and there’s only three Bitcoins left in the world and one person says hey my Bitcoin is worth 50 trillion dollars well you can’t buy his Bitcoin unless you got what he wants another person says well I want to sell mine I got one and what are you offering and that’s just with three Bitcoins but we got millions left from the people who have not died that own them and that are trans hitting them two other people so this is not something that’s going to stop it’s going to keep going.
He said well how’s that going to work I mean the government’s are saying hey we’re going to do away with Bitcoin you have to use something else it’s called the black market the black market will continue the Bitcoin it ain’t going to happen is it well that’s the only way it’s going to happen that’s why it’ll be a covert operation and if you got one you better be in a bunker somewhere in the future because it’s going to take at least that and a force of people to keep the other people from trying to take it from you under any kind of methods because it could be like hey my kingdom has a Bitcoin you’re a king and you have a kingdom you have another one that says.
So you have one Kingdom it says I got a Bitcoin the other one says I got three another one says I got a hundred so now we have a feud going on over a tulip as you say in this digital and it’s not going to end because Bitcoin can be transferred into another coin whichever coin someone makes up as long as someone believes in it enough to invest in it okay have a nice day
Bitcoin is so thinly traded that a dozen investors could crash it overnight. Don’t need to preach to me. I bought at $200 and sold at $18,100. Hpwever, bitcoin is a prototype for the global cashless economy. When the testing is done, “they will trash it and roll out the v2.0, and we won’t have a choice but to adoptadapt. Gold is STILL the best bet going and Asians have been dumping cryptos and going back to basics.
X-Pac you’re in a spiral some say you’re going down some say you’re going up but I see you’re going in a good way the spiral you’re going into is you’re learning more and more and it’s going to get better and better for your mindset