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December 9, 2021
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EllioTrades Daily Roundups

December 9, 2021

Waiting For Macro Clarity

Oliver Grah
Dec 9, 2021
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December 9, 2021
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Introduction

Yesterday’s surprisingly bullish congressional hearing (more on this in Elliot’s last video) didn’t have much impact on the crypto market. After the strong bounce earlier this week, the market is now consolidating and looking for direction.

With the stock markets shaky ahead of tomorrow’s inflation data release and – even more importantly – the FOMC (Fed) meeting coming up next week, the current choppy price action will likely continue for the time being.

Side note: We know we have been talking a lot about the stock markets recently, while we would prefer to just focus on crypto. However, the impact of the macro climate on crypto has been super strong as of late and the current environment just doesn’t provide fertile ground for risk-on assets (like altcoins). This will change again at some point, of course.

Market Outlook

  • As outlined yesterday, Bitcoin dominance is currently retesting critical support levels. The outcome will determine whether we get an alt season of epic proportions (rather unlikely the way most charts look right now) or a strong Bitcoin move (to either the down- or upside) that mutes altcoins for a while.

  • In the current uncertain climate, the likelier scenario is that altcoins will take the backseat for a while until we reenter a risk-on environment (likely after a Bitcoin breakout and/or when the macro headwinds ease).

Twitter avatar for @BCBacker
Blockchain Backer @BCBacker
The Bitcoin Dominance is sitting right at the 2021 low support level, at 40%. When Bitcoin Dominance breaks down, it means the Altcoins are outperforming Bitcoin.
Image
10:10 PM ∙ Dec 8, 2021
1,740Likes197Retweets
  • Something to keep in the back of your head is the fact that stock (and crypto) markets are hovering below all-time highs after a years-long bull market. While the base case is that this asset party continues for the time being, the risk of a downturn is there – especially given the fact that stock investors seem to overlook slowing economic growth while inflation is still sky-high… Entering a potentially stagflationary environment wouldn’t mean good things for stocks in the months ahead.

  • This doesn’t mean that crypto always has to be correlated with stocks, but generally, we should be aware of the potential headwinds.

Twitter avatar for @Theimmigrant84
Gianluca @Theimmigrant84
The real earnings yield for the SPX hasn’t been this deep into negative territory since 1947. Happened only 4 times before all of which resulted in bear markets. I mean guys, this is what you are buying right now 👇
Image
4:54 PM ∙ Dec 8, 2021
666Likes195Retweets
Twitter avatar for @EconguyRosie
David Rosenberg @EconguyRosie
Initial jobless claims plunged to 184k in the December 4th week from 227k in the November 27th week. This is the lowest level since September 6th, 1969! Bullish statistic? No. A recession came out of the blue exactly three months later.
1:57 PM ∙ Dec 9, 2021
77Likes21Retweets
  • Early signs of the headwinds the global asset rally is facing are well outlined by macro analyst Mohammed El-Erian:

Image
  • One of the charts you should observe closely to spot a potential storm in the stock markets as early as possible is… Apple stock, with the ticker $AAPL. You can see in the chart below that Apple’s stock price has gone absolutely parabolic in the last years.

  • In fact, Apple (and a couple of other tech stocks like Facebook and Google) supported the US indices strongly in the last few years and made them appear “healthy” – while the majority of stocks actually didn’t do so well... Some of the most intelligent macro investors argue that you should better prepare for the worst once these tech names turn around.

Twitter avatar for @charliebilello
Charlie Bilello @charliebilello
Apple has added $618 billion to its market cap this year, which is greater than the market cap of 492 companies in the S&P 500. $AAPL Data via @ycharts
Image
3:23 PM ∙ Dec 8, 2021
1,082Likes250Retweets
  • One could argue that the stock markets would have already been in a bear market for quite some time if it weren’t for the easy “Fed money” flowing into a few “mega-caps”…

Twitter avatar for @MichaelAArouet
Michael A. Arouet @MichaelAArouet
Eye-opening chart 👇 Without 5 biggest stocks Nasdaq is 25% down YTD. Having said that are equities overvalued? Ht @GavinSBaker
Image
2:05 PM ∙ Dec 9, 2021
48Likes11Retweets
  • Another good friend of the markets has again reared his ugly head today: Evergrande. With the official announcement of Evergrande’s default, this is the beginning of the end of this saga... While we still have to wait and see if there will be ripple effects emerging from Evergrande’s downfall, for now, the markets seem to care more about the billions of liquidity the Chinese government has injected into the markets… Definitely, a story to watch in the near term though.

Twitter avatar for @spectatorindex
The Spectator Index @spectatorindex
BREAKING: Chinese property giant Evergrande has defaulted
9:07 AM ∙ Dec 9, 2021
10,235Likes3,308Retweets
Source: Business Insider
Twitter avatar for @realMeetKevin
Meet Kevin Paffrath @realMeetKevin
#Evergrande officially in DEFAULT. But don't worry! The WSJ's lead story says the governor of the People's Bank of China says everything's fine! Nothing to worry about for the "medium/long term." Phew, I'm glad the PBOC says everything's going to be okay
wsj.comMarket Can Weather Evergrande Crisis, China’s Top Central Banker SaysPeople’s Bank of China Gov. Yi Gang also talks up Hong Kong’s role as international financial hub
1:20 PM ∙ Dec 9, 2021
75Likes10Retweets

WhatsApp Integrating Crypto Payments!

  • While we already knew that Facebook has been working on crypto projects for quite some time, it’s nevertheless huge news that Facebook (I just can’t say Meta yet…) is trialing crypto payments through WhatsApp, one of the world’s largest messaging apps with over 2 billion active users worldwide!

  • For now, the feature will be trialed with a limited number of US users but imagine how huge it would be for adoption if 2 billion people get easy access to crypto… 🤯

  • Let’s see if regulators in the US and internationally push back on Facebook’s crypto plans – again.

  • If you think about it: One of the largest tech giants in the world rolling out crypto features, while being a massive step for adoption, inherently also raises critical questions: How strong will Facebook’s grip on crypto become, how about the lingering privacy concerns and is this step really good overall for the decentralized ethos of crypto? Time will tell.

    Twitter avatar for @Blockworks_
    Blockworks @Blockworks_
    WhatsApp is starting to roll out crypto payments to users in the United States 🇺🇸
    Image
    1:07 PM ∙ Dec 9, 2021
    72Likes23Retweets

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Cryptik
Dec 11, 2021

Hoping this meat head can become a citizen tomorrow morning! Cross your fingers for me, I love your content. But more importantly I can feel your vision for this new world ! Kudos on this humanitarian project

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