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December 16, 2021
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EllioTrades Daily Roundups

December 16, 2021

With the FOMC Meeting Behind Us – Can the Bull Market Resume?

Oliver Grah
Dec 16, 2021
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December 16, 2021
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Introduction

Well, yesterday was an interesting day in the markets, to say the least: After lots of fear and price declines in stocks and crypto leading up to it, yesterday’s FOMC meeting turned out to be what many expected: A “buy the news” event, where we saw both stocks and crypto popping up from their lows.

Twitter avatar for @lightcrypto
light @lightcrypto
slightly more hawkish than expected fomc statement, and market still ripped up. sell the rumor buy the news indeed.
Twitter avatar for @Zen_Trades1
Zen @Zen_Trades1
Bitfinex laying down bids Retail selling into the lows ahead of FOMC Meeting with funding negative across the board Feels like we're going to get a Buy The News event #Bitcoin $BTC https://t.co/9Z69rJuL0T
7:05 PM ∙ Dec 15, 2021
704Likes61Retweets

Is This the End of “Fed Fear” Dominating the Crypto Market?

  • Can we finally put the fear of the Fed crashing the markets to rest? Well, yes and no. While the Fed signaled a hawkish posture yesterday by accelerating its tapering and rate hike plans, the markets had already expected this. As Darius Dale puts it, this might open up another window for risk assets to do well for a while.

Twitter avatar for @RealVision
Real Vision @RealVision
"I think the Fed opened a window today for risk assets to trade well at least over the next couple of months into the end of QE... Beyond that, it's going to be very hard to make money in our opinion in #crypto..." @42macroDDale
Twitter avatar for @RealVision
Real Vision @RealVision
The Real Vision Daily Briefing📊 Where is Monetary Policy Headed Now? @42macroDDale joins @MacroAlf for a look at everything from the #FOMC & the macro landscape to how investors should be thinking about rebalancing their portfolios before 2022. LIVE 👇 https://t.co/QW19JAB2ix
9:30 PM ∙ Dec 15, 2021
121Likes26Retweets
  • Let’s hope Zhu Su is correct (this time):

Twitter avatar for @zhusu
Zhu Su 🔺 @zhusu
American tradfi/macro + global retail + logwealth cryptonatives have generally capitulated the last week or so to dynastic participants This was the much needed risk transfer required to properly usher in the next wave of the supercycle
10:50 AM ∙ Dec 16, 2021
904Likes89Retweets
  • Chart-wise, there are undoubtedly bullish outcomes in the cards:

Twitter avatar for @CryptoMichNL
Michaël van de Poppe @CryptoMichNL
Pretty much copy/paste of the September bottoming here. Given the low impact of the FED meeting on prices, I assume that we'll see price accelerate too if it cracks crucial resistances.
Image
11:44 AM ∙ Dec 16, 2021
413Likes30Retweets
  • But there are, of course, different possible outcomes:

Twitter avatar for @TXMCtrades
TXMC @TXMCtrades
This is what a max pain December would look like to me. Boredom drives markets insane. A lot of analysts are calling for a Santa Claus #BTC rally, but I don't feel it's the most likely outcome. Would love to be proven wrong.
Image
1:35 PM ∙ Dec 16, 2021
18Likes1Retweet
  • If you’re unsure what to do right now, here is a possible strategy outlined by Will Clemente (as he points out, this strategy only affects his short-term trading stack and not his long-term “HODL-portfolio”).

Twitter avatar for @WClementeIII
Will Clemente @WClementeIII
Keeping it simple. Looking to either buy reclaim or any type of sweep of the wick with invalidation at 40k.
Image
2:45 PM ∙ Dec 16, 2021
48Likes1Retweet
  • When looking through the initial “buy the news” euphoria, however, the reality is that monetary and fiscal conditions will become tighter in the weeks and months ahead. Combined with signs of a slowing economy, this should, in theory, not bode well for risk assets.

  • Even though the equity and crypto markets might have been given another pass for now, it's clear that we can't take our eyes off the macro environment for the foreseeable future. While everyone in the crypto community would love to see a decoupling from traditional markets, the fact is that Bitcoin and co. traded in lockstep with equity markets yesterday – down to the minute candle…

Twitter avatar for @TheStalwart
Joe Weisenthal @TheStalwart
BITCOIN TRADERS HAVE TO BE FED WATCHERS LIKE EVERYONE ELSE NOW It's official. Crypto is just another legacy asset. Might as well be on the floor staring at a screen. bloomberg.com/news/articles/…
Image
7:37 PM ∙ Dec 15, 2021
521Likes51Retweets
Twitter avatar for @0xtuba
tuba 🦈 @0xtuba
need someone to sit down and explain what a “fomc” is to me, slowly
7:23 PM ∙ Dec 15, 2021
129Likes3Retweets
  • It’s just a reality the crypto community has to face: the more institutional money flows into the crypto space, the more correlated crypto becomes with traditional markets overall.

Twitter avatar for @_Checkmatey_
_Checkmate.btc 🔑⚡🦬🌋checkonchain.com🌋 @_Checkmatey_
This is a fascinating chart plotting the correlation between $BTC and $SPX. For years it traded as a largely uncorrelated between +-0.1. Then March 2020 started and fiat debasement on steroids created our new regime where everything is up only forever...Laura...
Image
2:07 AM ∙ Dec 16, 2021
95Likes10Retweets
  • There is a likely scenario, however, where subsectors within the crypto space that are highly demand-driven (like gaming and NFTs, for example) can decouple at least to an extent from the movements of the overall markets. Spotting such opportunities will be a central focus of us since the macro investing climate going forward will not be what it was in 2020!

  • Meanwhile, some of the best “advertisement” for Bitcoin and crypto is coming out of Turkey, where the Turkish central bank cut interest rates today to fight inflation (yes, you heard right: “cut”). It’s no surprise that the Turkish Lira is and has been in free-fall for months, fueling one of the highest crypto adoption rates in the world!

Twitter avatar for @jnordvig
Jens Nordvig @jnordvig
Turkish lira implosion continues as the central bank again cuts rates. End-game seems to be currency pressure feeding into political change.
Image
12:24 PM ∙ Dec 16, 2021
9Likes2Retweets
Twitter avatar for @nytimes
The New York Times @nytimes
Turkey's bakers say they can't afford to keep making bread because of price controls and rising inflation. And their customers can't afford to buy it anyway. nyti.ms/3yCAo2g
Image
10:15 PM ∙ Dec 15, 2021
9,345Likes2,821Retweets
  • To wrap it up, below is some advice for people who try to navigate these crazy markets. The critical thing to know is when to step on the gas and when to step on the brake. Let the macro environment and your conviction be your guides. And most importantly: follow a plan!

Twitter avatar for @AnthonyCrudele
Anthony Crudele @AnthonyCrudele
Everyone always talks about managing risk from the defensive side (which is important), but managing risk is also about understanding when you need to take on more risk. In my experience successful trading is as much about knowing when to be aggressive as it is being defensive.
2:42 AM ∙ Dec 16, 2021
290Likes27Retweets
Twitter avatar for @kpak82
kpak @kpak82
Remember the market does not control you. You set the parameters and decide when you want to trade. Draw up a plan where you have the market cornered into a predictable move. Would a lion chase a gazelle a mile away? He too is waiting for the right setup and moment to strike.
10:39 AM ∙ Dec 16, 2021
101Likes8Retweets
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1 Comment
Legalmastermind
Dec 17, 2021Liked by Oliver Grah

Thanks ! 🙏

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