Bitcoin Back to Life
The crypto picks I issued since March 1 were clues bitcoin had bottomed. The names have done decently since then as shown here. This spurred on the piece we wrote on March 18 then another piece written on March 24 of bitcoin having bottomed on December 15, 2018. History rhymes and similar had occurred in the first half of 2015 but of course, there were far fewer cryptocurrencies trading at that time, but there were enough data points to come to similar conclusions.
It will be interesting to see how long it takes for QEInfinity to have an impact on fiat to an extent where bitcoin which holds by far the largest hash rate, privacy, and security thus represents a new store of value where transactions will be made in a heartbeat especially with its Lightning, Liquid, and Rootstock layer 2 technologies coming online. Yes, I have said debt was greater post World War II, and the U.S. was able to grow itself out of that cesspool situation, but blockchain did not exist at that time. You can say what you want about the CEO of Twitter, Timothy Draper of Stanford, and Elon Musk, but a number of such minds have echoed similar sentiments I was to give at the annual WealthTech conference in Geneva, Switzerland in November of last year hosted by my friend Jay Oberai who has been close with the Cambridge University Quantum Computing group since he was a student at Cambridge University. At least now in the year 2019, there are a lot more individuals who have my back than in 2013 and 2014 when the climate was, shall we say, less friendly. But then, this is a 'rhyme' of 1994 when I got involved in the internet with the launch of one of the first 3000 websites. Of course, at the time, the internet was perceived to be nothing but a place of drug dealing, pornography, and credit card fraud. "History doesn't repeat, but often rhymes."- Mark Twain
Global Economy on the Mend?
As for the global economy, last Monday, better-than-expected China manufacturing data calmed some lingering concerns about momentum for the world’s second-biggest economy. China’s manufacturing purchasing managers index rose to 50.8 in March from 49.9 in February. Anything above 50 is expansionary. This was the first time it rose above 50 in 4 months. Then China’s official manufacturing PMI rose to a six-month high of 50.5 in March from 49.2 in February.
Trade talks between the U.S. and China are said to be 90% of the way done but the last 10% is the hardest part as it will require trade-offs on both sides. According to the report, China still wants the U.S. to remove existing tariffs on Chinese goods, while the U.S. wants China to agree to a mechanism guaranteeing enforcement of any deal.
As for the global economy, a batch of purchasing manager indexes showed a rebound in U.S. and Chinese manufacturing. Nevertheless, IMF Managing Director Christine Lagarde said that while the global economy lost some momentum, it should avoid a recession given a more patient Federal Reserve and stimulus from China. In a speech, Lagarde said that while 70% of the global economy will experience a downturn this year, “we do not see a recession in the near term. In fact, we expect some pickup in growth in the second half of 2019 and into 2020.”
But she warned that the expected rebound is “precarious,” and vulnerable to risks such as Brexit, high debt levels, and trade tensions. At the moment, the slowdown is “across the board,” she noted, including wealthy and emerging countries.
Thus expect QE to continue pushing stocks higher even if on a string. The saying “Don’t fight the fed” has never been more true as it is now a conglomerative gang of central banks all enforcing the same easy money policies.
Stocks
Over in stocks, we have put out reports on a number of names so far this year. Some have offered additional entry points. PAYC got support at its 20-dema which offered another lower risk entry point. Both VIAV and EXEL got support at both its 10-dma and 20-dema as the lines converged. AMD gapped higher again as we had sent a report on this name in January when it gapped higher the first time on a strong earnings report. AMD is still in buying range of the low of Wednesday’s gap higher. NVTA was digesting sharp gains as it got support at its 20-dema. PANW broke below the low of its gap higher then retested its 50-dma. This is relatively weak performance so if you bought as it neared its 50-dma, it might be a swing trade at best.