There's an exciting development stirring in the crypto-sphere. BlackRock, a name you might recognize as the world's largest asset manager (trillions in management), is making a strategic play into Bitcoin. They've filed for a unique beast - the first publicly traded spot Bitcoin ETF in the United States, dubbed the "iShares Bitcoin Trust."


So, let's talk about what a "Spot Bitcoin ETF" is. In essence, a Spot Bitcoin ETF is an Exchange-Traded Fund that mirrors the real-time price, or "spot price," of Bitcoin. What this means is when you invest in such an ETF, you're indirectly purchasing Bitcoin, without the need to manage the nitty-gritty of digital asset ownership (i.e., securing a digital asset exchange and setting up a digital wallet).
This is in contrast to a futures-based Bitcoin ETF, like Grayscales GBTC, which tracks the price of Bitcoin futures contracts rather than the actual asset itself. When investors purchase shares in a spot Bitcoin ETF, they are buying into a fund that directly holds Bitcoin, allowing them to get exposure to the digital asset without having to buy, store, or manage it themselves.


Let's look at why BlackRock's move could be a game-changer. The iShares Bitcoin Trust is designed to address the concerns that have led to the SEC turning down similar ETFs in the past. Their strategy involves a "surveillance-sharing agreement" with exchanges, with the likes of Nasdaq and a spot trading platform for Bitcoin in the mix. The goal is to share information about trading activities, clearing, and customer identities, aiming to tackle the issue of market manipulation.


Now let's answer three burning questions you might have:

1. When will the SEC decide on BlackRock's spot Bitcoin ETF?
Unfortunately, there's no set date for a decision. These processes can take quite some time, even several months, and there could be extensions or delays. So, all we can do is wait and watch.


2. What could be the impact of a spot Bitcoin ETF on the Bitcoin market?
If the ETF gets the green light, it could significantly shake up the Bitcoin market. It offers a seemingly safer and more regulated way for investors to dabble with Bitcoin, which could draw more institutional and individual investors. This could potentially push demand and Bitcoin's price upward. But keep in mind: market movements are unpredictable and influenced by various factors, so proceed with caution.


3. What are the risks associated with a spot Bitcoin ETF?
As with any investment, a spot Bitcoin ETF comes with risks. Its value is tied to Bitcoin's price, which is well-known for being volatile. Regulatory uncertainty around cryptocurrencies adds another layer of risk. Also, the ETF's value depends on the security measures in place by the Bitcoin custodian—in this case, Coinbase Custody Trust Co. Any breach there could have repercussions for the ETF. And of course, there's the usual lineup of risks associated with any ETF, such as liquidity and market risk. As always, it's vital to do your homework and consider your risk tolerance before diving in.


Last thought
At the moment, we're witnessing a high-stakes drama unfolding across the U.S. financial arena. Pivotal events are taking center stage, including the request by BlackRock, the world's leading asset manager, to initiate a spot Bitcoin ETF, and the simmering speculation regarding the proposed U.S. Central Bank Digital Currency (CBDC). Yet, these are merely a piece of the larger picture.


Here's the scenario. BlackRock, a behemoth in the asset management realm, is treading into unexplored waters with its recent appeal for a spot Bitcoin ETF. While this groundbreaking move could alter the future of Bitcoin investment, it sharply contrasts with the stringent approach that the SEC is adopting towards cryptocurrency platforms like Coinbase and Binance.US.


This brings us to the crucial puzzle piece - 'Operation Chokepoint 2.0'. It's a term being whispered across the industry, representing what many view as an intentional effort by federal authorities to isolate the cryptocurrency industry from essential banking services. This crackdown raises significant questions about what the future holds for digital currencies in the U.S.


In the midst of this unfolding narrative, Florida's Governor DeSantis has thrown another twist in the works, choosing to prohibit CBDCs within his state boundaries this year, helping safeguard freedoms. This bold move adds an intriguing twist to the tale, as it creates an additional layer of discord between state and federal stances on digital currencies.


To sum it up, we are at the crossroads of a gripping period for digital currency within the United States. We're witnessing an emerging clash between the embrace of digital assets by traditional financial institutions, stringent regulatory actions, the ominous 'Operation Chokepoint 2.0', and the resistance against a potential CBDC by some states. The outcomes of these power plays could profoundly impact the future of cryptocurrency, not just within the U.S., but worldwide. For now, we wait holding our breath to see how the drama unfolds.


Remember, investing is a journey. Take it one step at a time.
Des Woodruff (aka d-seven)
GrokTrade


*This article is intended for informational purposes only. It is not intended to be financial or investment advice.*

What is a CBDC and why should we care?
You have heard of cryptocurrency (think Bitcoin, Ethereum, etc.). Well, the US Central Bank Digital Currency, or CBDC for short, would be a digital version of the US Dollar (USD). In other words, the USD would become a government issued "cryptocurrency." In this case, the Federal Reserve, the guys who control our money, would issue and control a digital form of the US dollar. It would be sizably different from, say, a decentralized Bitcoin, or other cryptocurrencies since a US CBDC would be backed by our government. The goal would be to get the best of both worlds, the convenience of digital money and the stability of traditional cash.
 
The Good
The concept of a digital US dollar is certainly intriguing. In the era where rapid transactions are the expectation, a digital currency has the potential to transform how we manage our finances. The ability to expedite transactions at a faster rate could be a game-changer for both individuals and businesses, not just domestically but internationally as well. A more rapid, digital form of the US dollar could strengthen its standing on the global stage, maintaining its status as a world reserve currency. As more transactions move online, having a digital dollar keeps the US current and relevant, allowing the currency to adapt to the changing landscape of global finance helping secure its world reserve status.
 
Furthermore, a digital dollar could potentially foster financial inclusivity. It's a currency form that doesn't require a traditional bank, offering financial services to those who are currently unbanked. This could lead to greater economic equality. Moreover, it might make government benefit distribution more efficient and direct, possibly reducing instances of fraud.
 
However, it's important to keep in mind some potential roadblocks. For instance, Federal Reserve Board Governor Michelle Bowman has expressed concerns about the effectiveness of digital currencies in solving issues of financial exclusion. Barriers like limited internet access or lack of mobile devices would be a real problem.
 
The Bad
As promising as a digital dollar may seem, the associated challenges and risks should not be taken lightly.

The idea of a digital US dollar might seem like the logical "next step," but there's one significantly scary downside to consider - a potential hit to our personal freedoms. This is a significant issue. Think about it this way-- the government would have an even bigger microscope on our money. In fact, we've seen something like this already.

Do you remember in early 2022 when Canadian Prime Minister Justin Trudeau made the decision to stop payments to striking truckers? This is an alarming example of government overreach. The move, which disrupted the financial support of individuals exercising their right to strike, led to questions about the limits of governmental authority versus individual rights. This incident sparked fears of a future where personal financial transactions could be controlled or halted by the government under specific circumstances.

So, imagine if something like that happened here in the US, but on an even larger scale. With a digital dollar, the government could keep tabs on our transactions and, technically speaking, have the power to turn off our money tap—for any reason (e.g., political, religious, etc.). That's a serious concern, and it raises big questions about how much control we're willing to hand over in return for the convenience of a digital dollar.
 
Another one of the most pressing concerns is the potential for financial instability. If people all at once converted their savings to digital dollars during a crisis, it could create a similar situation to a bank run, and thereby weaken the banking system.

Privacy and cybersecurity concerns also loom in a big way. Digital systems also come with an increased risk of cyberattacks, and a breach in a digital dollar system could potentially compromise a vast amount of financial data.

And, as mentioned prior, privacy issues arise from the increased visibility of transaction data that digital dollars would enable, as it could potentially allow the government or other entities to track individuals' financial activities more closely than is currently possible. So, striking a balance between leveraging the potential benefits and mitigating the associated risks of a digital US dollar requires careful thought and prudent management.
 
How far are we from a Digital US Dollar?
The short answer? It's hard to say. The creation of a CBDC, or a digital US dollar, is contingent on multiple aspects, encompassing technical viability, policy directives, regulatory frameworks, and the overall societal preparedness for such a transformation. Each of these is a major hurdle to cross.

The big dogs at the US Federal Reserve are teaming up with the brainiacs at MIT to build the tech needed for a possible digital dollar. The Fed's head, Jerome Powell, is big on taking it slow and doing things right, rather than rushing to get it out there, which is music to my ears.
 
At the same time, there's this group called the Digital Dollar Project, backed by Accenture and the Digital Dollar Foundation, that went public in 2021 about running five pilot programs to test out how a US digital currency could work. Plus, President Joe Biden dropped an executive order looking into whether a US digital currency makes sense for our country. The government's adversarial role against crypto banks and exchanges (i.e., ChokePoint 2.0) tell me that the US has already made up its mind and will have a CBDC. It's coming.
 
Now, don't hold your breath for a launch date for this digital buck, because the studies and pilot programs are still in full swing. But one thing's for sure - if a digital currency does happen in a big economy like ours, it's going to take a few years to roll out once we decide to hit the gas.
 
What are the potential implications for the stock market?
The introduction of a digital US dollar could have a significant impact on the stock market and the trading community. Here's a look at some potential effects based on the limited information provided in the resources.

1. Faster and More Efficient Transactions: With the introduction of a digital dollar, transactions could become faster and more efficient. Digital assets presumably will be used at some point to purchase securities. This could enhance trading efficiency and liquidity in the stock market. Faster transactions could lead to higher trading volumes and could change trading strategies as the time required to settle transactions decreases.
   
   
2. Increased Market Access: A digital dollar could provide increased access to the stock market for individuals who currently don't have access to traditional banking services. It may also make it easier for international investors to invest in US stocks, potentially increasing demand and possibly boosting stock prices.
   
   
3. Regulatory Changes: A digital US dollar may necessitate new regulatory measures to govern its use within the financial markets. These regulations could impact how trades are made, potentially affecting trading strategies and the overall operation of the stock market.
   
   
4. Volatility: The introduction of a digital US dollar may initially lead to increased market volatility as traders adjust to the new form of currency. The stock market often reacts to uncertainty with increased volatility, and a significant change like the introduction of a CBDC could certainly generate such uncertainty.
   
   
5. Potential for New Financial Products: The introduction of a digital dollar could lead to the creation of new financial products and trading instruments based on this digital currency. These could provide more opportunities for traders and investors but could also increase complexity within the financial markets.
   
   

             NOTE: These points above are merely theoretical as there's limited concrete information in on the topic.
 
Conclusion
The digital US dollar is a thrilling idea, isn't it? Imagine zippy transactions, greater financial inclusivity, and a stronger global position for our currency - exciting stuff! But let's not forget, there could be a flip side.
 
The big concern is the potential for Big Brother watching our financial transactions even closer. Losing our freedom is a major issue. That level of government control is not good any way you slice it.
 
We've also got concerns about destabilizing the banking system, increased risk of cyberattacks, and privacy issues. While we're moving forward, it's crucial we strike a balance between the exhilarating advancements and potential risks.
 
As for when we'll see a digital dollar, well, there's still a long road ahead. With the Fed, MIT, and others working on it, it seems like we're on track. But let's take it slow and get it right - we're in no rush to give up our freedoms for a faster—more modernized dollar.

​Des Woodruff
​des@groktrade.com

Well, it’s 2023, and it appears we have a lot more market downside to endure.

If you’re keeping a close eye on the stock market, you may have heard the term “yield curve inversion” being tossed around lately. But what exactly does it mean, and why does it matter?

A yield curve is like a line graph that shows how much interest you would earn if you invested in different types of bonds with different maturities. Long-term bonds, such as 10-year bonds, typically pay higher interest rates than short-term bonds, such as 2-year bonds, to compensate investors for tying up their money for a longer period.
​
A yield curve inversion happens when this relationship is flipped, and the interest rates on long-term bonds, such as the 10-year bond, become lower than those on short-term bonds. This means that investors are more worried about the short-term economic outlook and are willing to accept lower returns on longer-term bonds to protect their money from potential losses in the future.

The inversion of the yield curve is seen as a warning sign of a highly potential economic downturn, as it suggests that investors are pessimistic about the future and are seeking safer investments.
This is a significant indicator of a likely economic downturn. In fact, every time this inversion has occurred since 1980, it has been followed by a recession, making it a reliable predictor of an economic downturn.

However, it’s important to note that the timing and duration of these recessions can vary. For example, the recession that followed the 2006 yield curve inversion was not immediate and lasted from December 2007 to June 2009.

IMPORTANT: See the chart below. Each vertical red line indicates the end of a bond-yield inversion. Anytime this occurs, a recession always follows. The effect on the market is severe. Historical data shows the average market drop during the past six inversion crashes was a whopping -28.4% for the S&P and -40.4% for the Nasdaq. This can be a scary prospect for investors, especially those who are new to the stock market or who may not have experienced a major multi-year market dip.

Tradingview chart: The teal line is the SPX (S&P-500) price and the thin blue line is the bond yield curve between the 10-year and 2-year bonds. Anytime the bond yield curve line dips below the thick red horizontal lines, a rare bond yield inversion occurs and should be noted.
 
We’re currently in a historically deep bond yield inversion. The real concern is when the inversion comes to an end. The bond yield curve has turned upward and heading towards ending the inversion. The question is how long it will take for the recession to sink in thereafter and for the markets to take their next leg downward.

Our estimate is that the drop could start as early at Q4 of 2023 or could hold off to Q1 or even Q2 of 2024.

Regardless, another 30-40% market drop, and the expected double-digit unemployment will be a shock to the economic system.

It’s important to remember that there are ways to potentially mitigate risk during times of market turbulence. For example, some investors may choose to diversify their portfolios or invest in sectors that tend to be less affected by economic downturns.

Another strategy is to learn how to trade the markets effectively. While trading the markets carries risk, having a solid understanding of how they work and knowing how to read market trends can potentially help investors make more informed decisions and minimize their risk.

The Tradingview chart above is a monthly chart of the SPY (S&P-500 ETF). It’s in a bearish rising wedge trend reversal pattern and showing a bearish flag set up too. Furthermore, the Grok ROC algorithm, bottom of the chart, is about to plot a SELL signal. The many bearish technical signals confirm what the bond yield inversion is warning. Unfortunately, we’re set up to experience a lot of upcoming economic pain.

We do not have to be fearful. As an owner of an education company that specializes in teaching stock trading, I firmly believe that education is the key to success in the stock market. By teaching our students how to read market trends, identify opportunities, and manage risk, we are equipping them with the tools they need to succeed in any market condition.

By Des W Woodruff (aka d-seven)
 
As a seasoned stock trader (of 25 years) and enthusiastic supporter of cryptocurrencies, I’ve been closely observing the evolving landscape of digital currencies and their impact on the global financial ecosystem. The world is advancing in technology.

Central banks worldwide are increasingly realizing the need to innovate by developing their own digital currencies. This strategic move aims to maintain their competitiveness while also safeguarding their national currencies’ status within the international monetary sphere.

A growing number of countries, including Japan, the European Union, and China, are already forging ahead with their CBDC projects.
 
The significance of innovation in this context is paramount. Embracing cutting-edge technology and evolving with the times is crucial for central banks to stay relevant and adapt to the shifting demands of consumers and businesses alike. By spearheading the development of digital currencies, central banks can create a more efficient, secure, and accessible financial infrastructure that caters to the needs of a progressively digital society. BUT this innovation comes at a cost. A USD digital currency will make our big government—even bigger and with much more control. (Another subject for a different time).
 
Fostering innovation in the realm of digital currencies can spur economic growth by enabling seamless cross-border transactions, reducing transaction costs, and promoting financial inclusion for unbanked and under-banked populations. Ultimately, central banks that champion innovation and adapt to the rapidly changing landscape of digital currencies will be better positioned to maintain their competitiveness and uphold the global standing of their respective currencies.
 
If you haven’t heard about the so-called “Operation Choke Point 2.0,” yet, you likely will soon. Choke Point 2.0 has caught my attention, as it seems to be a coordinated effort by the U.S. government to restrict access to essential financial services for cryptocurrency companies. This move raises concerns that the U.S. administration might be responsible for the recent collapse of crypto-friendly banks such as Silicon Valley Bank, Signature Bank, and Silvergate Bank. By impeding the growth and development of the cryptocurrency sector, the government’s actions may ultimately be counterproductive to their own objectives. The jury is out on this one.
 
A primary concern here is the need to maintain the competitiveness of the U.S. dollar and preserve its status as the world’s reserve currency. The preservation of the USD is critical for the U.S. and all living within its borders. In a rapidly evolving global financial landscape, it is essential for the United States to embrace the digital revolution and adopt a digital dollar to remain competitive. And we better do this right, or the repercussions could be dire. The America losing the world reserve status would be devastating.
 
On this note, it’s technically within the U.S.’s interest to stifle any growth and adoption of digital currencies outside of the digital USD. All crypto are now deemed competitors and the U.S. will fight hard to maintain its global monetary status.
 
Furthermore, the government’s aggressive actions may discourage innovation in the financial sector, which is crucial for the growth and progress of the U.S. economy. By hindering the development of digital currencies, the U.S. administration may inadvertently push businesses and investors toward other jurisdictions that are more welcoming to the growing cryptocurrency industry. Such an exodus would negatively impact the domestic economy, as the country loses valuable talent, expertise, and investment.
 
Concerns surrounding Operation “Choke Point 2.0” are not unfounded, as the government’s actions in restricting access to financial services for cryptocurrency companies may ultimately undermine their goals of ensuring the USD’s competitiveness and preserving its world reserve status. As I stated, it is critical for the U.S. to recognize the importance of innovation and adopt a more progressive stance toward digital currencies to maintain its position as a global economic leader.
 
As a proponent of cryptocurrency, I believe the U.S. risks it’s global monetary status (either today or tomorrow) if a competing country, like China, establishes a digital currency that other countries recognize and trust before the USD becomes properly digitized. I do not want to see America lose its world reserve status. And for this reason, I can’t blame my government for trying to choke out its competitors. Bitcoin and Ethereum are indeed competitors, and formidable competitors at that.
 
In the long run, fostering innovation and collaboration with the cryptocurrency sector could prove beneficial for the U.S. economy and help preserve the USD’s global prominence. By demonstrating a willingness to adapt to the rapidly changing financial landscape, the U.S. could ensure that it remains at the forefront of digital finance and secures its position as a global economic leader.
 
​
Des W Woodruff

Boosting trading profits using technology is real-- very real!

In this blog, we explore the ways in which artificial intelligence (AI) can revolutionize the world of investing and help traders win more profits.

From real-time analysis and insights to automation of manual tasks and democratization of financial markets, AI has the power to transform the trading industry. And it's happening before our eyes. 

Because you're in the Grok ecosystem, you're benefiting by being in the know.

AI truly has the potential to revolutionize the world of investing by providing traders with faster and more accurate analysis, enabling better and faster decision making. In this post, we will explore some of the key ways in which AI can help traders win more profits when investing.

One of the main ways in which AI helps traders is by providing real-time analysis and insights. By analyzing vast amounts of data and identifying patterns and trends that may not be visible to humans, AI can help traders to make more informed and confident decisions. This can lead to better performance and increased profits.

AI can also help to eliminate human bias and error, leading to more objective and fair decision making. This can be especially useful in situations where emotions or personal beliefs may cloud judgment.

Another way in which AI can help traders to win more profits is by automating many manual and time-consuming tasks, freeing up human traders to focus on higher-value work. This can help to increase efficiency and reduce costs, leading to lower fees and more accessible financial products and services for consumers.

In addition, the integration of AI into the trading industry can help to democratize access to financial markets and level the playing field for small and underbanked communities. This can provide more individuals with the opportunity to participate in the financial system and potentially achieve financial success.

AI can also help traders to better understand and anticipate customer needs and preferences, leading to more personalized and effective financial products and services. This can help to increase customer satisfaction and loyalty, leading to increased profits.

While AI has the potential to bring many benefits to the trading industry, it is important to recognize that it also brings challenges and risks. These may include job displacement, ethical considerations, and the need for new regulations and policies. It is important to carefully consider these issues and to use AI responsibly and ethically in order to maximize its benefits and minimize its potential negative impacts.

Overall, AI has the power to transform the trading industry by providing faster and more accurate analysis, automating manual tasks, and democratizing access to financial markets. By leveraging the benefits of AI, traders can increase their chances of winning more profits when investing.

Using the power of AI, we developed our own advanced AI-powered trading algorithms to help our users. With real-time analysis and automation capabilities, our algorithms can help you make more informed and confident decisions, leading to improved performance and increased profits.

Don't hesitate on utilizing this technology. Frankly, it will "revolutionize" your trading strategy. 


Flexing the power of AI,
d7

​PS. If you want to take a peak click here: Grok Algos

​If you have been researching the world of trading, you may have heard about algorithmic trading or trading algos. But what exactly are they and how can they benefit traders like you?

In this article, we delve into the world of artificial intelligence (AI) in trading and how algorithmic trading can benefit us, including better trade setup identification, more efficient trade execution, the ability to remove emotions from the trading process, portfolio diversification, and the potential to reduce transaction costs.

Whether you are a seasoned trader or new to the game, this article is a must-read for anyone looking to improve their trading performance. Savvy traders must consider implementing AI into their trading to stay competitive in the financial markets.

AI in finance is best used in trading algos, also known as automated trading or black box trading, which are sophisticated computer programs that execute trades based on predetermined rules. These rules, referred to as trading algorithms or trading algos, can be based on various factors, such as chart pattern setups, technical indicators, statistical models, and market conditions.

One of the primary benefits of using trading algos is the increased speed and efficiency of trade setup identification. With the processing power of AI, traders can take advantage of buy/sell trading signals derived by trading algos as they arise. This can be especially useful when searching for the best trade setups packed with the greatest odds.

In addition to faster trade setup identification, trading algos can help traders remove those pesky emotions from the trading process. Emotions are the Achilles' heel to traders. It can be difficult to stick to a predetermined trading strategy when emotions are involved in traditional (manual) trading. However, trading algos follow a set of predetermined rules, sidestepping the problems emotions cause to weaken decision making. Trading algos can lead to more rational and informed trading decisions.

Finally, trading algos also offer the advantage of portfolio diversification by allowing traders to execute trades across multiple timeframes, asset classes, and markets. The algorithmic computer program can monitor multiple markets simultaneously, enabling traders to take advantage of opportunities in different markets at the same time. This can help to lessen risk and likely increase returns.
In conclusion, trading algos offer numerous benefits to traders, including faster and more efficient trade setup identification, the ability to remove emotions from the process, and portfolio diversification.

While it is important to carefully consider the risks and limitations of automated trading, trading algos can be a valuable tool for traders looking to improve their trading performance.

Ready to take your trading to the next level? Consider implementing trading algos into your strategy to enjoy the benefits of faster and more efficient trade setup identification, the ability to remove emotions from the process, and portfolio diversification.
​
Don't miss out on the opportunity to improve your trading performance – adopt AI into your trading today!

​d7

PS. See the 2023 best trading algos here: https:groktrade.com/algo

PSS. Extra bonus points for posting your comment below. :) :) :)

Artificial intelligence (AI) has been making waves in the finance industry for quite some time now. From automating routine tasks to improving the accuracy of risk assessment, AI has the potential to revolutionize the way financial institutions operate.

One of the primary ways that AI is being used in finance is through the use of machine learning algorithms. These algorithms are able to analyze vast amounts of data and identify patterns and trends that would be impossible for a human to spot. This allows financial institutions to make more informed decisions, such as identifying fraudulent activity or predicting market trends.

Another area where AI is making a big impact is in the realm of personal finance. Many companies are now offering AI-powered financial management tools that can help individuals better understand and manage their personal finances. For example, some AI systems can analyze a person's spending habits and suggest ways to save money, while others can help individuals create and stick to a budget.

AI is also being used to improve the efficiency of financial transactions. For example, some banks are using AI to automate the process of onboarding new customers, which can be a time-consuming and resource-intensive task. By automating this process, banks can reduce the time and resources required to onboard new customers, allowing them to focus on other areas of the business.

Finally, AI is being used to improve the accuracy of risk assessment in the finance industry. By analyzing historical data and identifying patterns, AI systems can help financial institutions better predict and mitigate risks, such as credit defaults or market fluctuations.
​
Overall, AI is transforming the way financial institutions operate and is poised to have a significant impact on the industry in the coming years. As AI technology continues to advance, we can expect to see even more innovative uses of this technology in the finance sector. So, the use of AI in finance is increasing day by day and it is playing a vital role in the finance industry.

(The above was written 100% by AI. Crazy, right?)

This is now Des (aka d7). I simply asked ChatGPT to write me a blog article on AI in finance and this is what it produced and it did so in 15 seconds.

As an educator in the world of trading using technical analysis, I am shouting from the rooftops for all of us who are active traders in the live markets to start leveraging AI in your trading today. START USING AI IN YOUR TRADING TODAY. Do NOT wait! This technology is moving at lightening speed. The financial world will quickly be divided into those using AI vs those who are not.

By using AI, you will benefit in two ways: 

1. You will position yourself to make significantly more profits using AI than without
2. You will likely NOT get destroyed by other traders using AI who otherwise be better positioned

This is the easy way to put AI in your corner: groktrade.com/algo

​There is no end to the television shows about buying a rundown house, repairing it, and selling it for a profit.  It’s like day trading internet stocks in 1999, everyone is quitting their day jobs to get into the racket. 
 
And just like in 1999, these people do not understand about the risk they are taking, where the trouble might come from, and what reward they should expect for taking these risks.
 
Real estate is doing well, but not all parts of the sector.  In the commercial space, offices and retail are getting hammered while warehouse, distribution and logistics centers are trending higher. 
 
The genuine star of real estate, however, is the residential group, specifically single-family homes.  Large rental divisions are not keeping up because of COVID-19 related moratoriums on rental collection.  It is the American dream to own a home, and that dream is reflecting one of the hottest markets in the global economy today.
 
Possibly from the beginning of human economic activity until recently, real estate went up during inflationary times.  Inflation simply means rising prices, which can take place in specific pockets as well as the big picture. 
 
Internet stocks experienced inflation in 1999 while everything else was deflating.  The last time the US economy saw broad based inflation was the 1970’s as oil prices shot up and everything else from food to real estate pushed up.  Real estate has always been a way to protect and profit during periods of inflation. 
 
Well, not anymore.
 
As long as America avoids a full-scale war with China or seeing it’s dollar crash, we will not likely see another period of rapidly rising prices in the stuff we buy to survive.  I realize this is a shocking statement to some of you, especially if you worked during the 1970s. 
 
But carve my words in stone, bury them in a time capsule, dig it up every 10 years for a century and I will still be proven correct. 
 
If inflation is dead (for the time being), why are residential real estate prices going up so much lately?  Interest rates.  The market is being entirely driven by the all-time low interest rate environment we have been in since March.  I know a lot of people attribute it to COVID. 
 
Work from home is spiking home related projects.  Lower spending on entertainment and other areas is increasing spending power for the house.  None of that matters nearly as much as interest rates. 
 
If 15-year mortgages were five percent instead of half that amount, the residential market wouldn’t be this crazy. 
 
I think it might be all about the low interest rates. 
 
Don’t believe me? Here is the proof.
 
Global interest rates are primarily set by the US government 10-year bond.  The 10-year is the benchmark that everything else pings off.  America was paying just under two percent in January to borrow money for 10 years.  That rate crashed to less than a half a percent in early March as world economies came to a stop. 
 
Interest rates then began to fall in every corner until a few months ago when people could get a 15-year mortgage at less than three percent.  Free money to buy a house, and that is exactly what people have been doing.
 
Housing related stocks have soared since March as the tide has lifted every boat in the group.  Home Depot stock has doubled.  ITB, a basket of home building companies, is up 130%.  PKB, a basket of construction related firms, has advanced 150%, and PFSI, a mortgage service provider, has screamed ahead by 350%!  It has been 15 years since this group did this well.
 
Here is the thing.  The US 10-year plodded along near those low levels from late March to early June, when a spike took it to 95 basis points (just under one percent, or 100 basis points). 
 
All housing related stocks immediately pulled back.  The 10-year receded until the middle of August and guess what?  All housing related stocks went back up.  As the 10-year jumped in August, housing stocks fell again. 
The correlation between interest rates and the housing market will stay in place for quite a while.  It is unlikely that America will ever see a crash in the housing market was like 2008, when prices in some areas like San Diego and Las Vegas dropped by 60% or more. 
 
If interest rates keep rising, however, home prices will stop rising as fast and may even go slightly negative.  That will be enough to put the Two Chicks and a Hammer back in the toolbox for a bit. 
The federal reserve still has enough ammunition and a conducive environment to maintain their agenda of steady, but somewhat low interest rates for a few years at least.  The 10-year is likely locked in a trading range of 65 to 140 basis points for, well, 10 years. 
 
The aforementioned are some of the best tools you need to keep your investing house in tip-top shape.
 
___________________________________________
Bottom Line
 
There are several internal stock market indicators that have exceeded their September 2nd levels, while stock market prices have yet to do so.  The 80-year history of these indicators suggests prices will follow over coming months. 
 
I fully appreciate that many of you are nervous, anxious, and concerned.  I am not.  And when it comes to your investments, I suggest you should not be either.  Besides, the government stimulus packages will continue to be rolled out in 2021.
 
Stocks may continue the recent turbulent behavior for another few weeks, but the best probability outcome between now and February is a resumption of the intermediate uptrend which should take stocks to new highs and beyond.

Continued success,
d-seven

​
What are your thoughts? Comment below.

​Many opportunistic traders/investors are contemplating taking advantage of these low-energy prices.

After all, starting off the week, U.S. oil benchmark crashed to $1 per barrel for its lowest close and biggest one-day fall on record.

This just might be a juicy opportunity for investors willing to ‘buy and hold.’ Needless to say, we are more than likely setting the stage for a significant bottom in oil.

The old adage “don’t catch a falling knife” should generate a healthy dose of fear to any consciously wary trader. And at the very least, it should trigger a responsible flight instinct.
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Nevertheless, the reason investors are eager to place their financial necks on the proverbial chopping block is because oil is down—and by a lot. The price of each barrel is off more than 70% from December 2019.

The shale drilling revolution unleashed a production rush that eventually allowed America to become the number one oil-producing nation on earth—and that includes the U.S. out producing Saudi Arabia and Russia, too.

U.S. oil futures have dropped to their lowest prices since early 2002. Gas prices have hit a 10-year low. The average national price for regular unleaded gas stands around $1.785 per gallon at the time of this publication. Prices throughout the energy sector are down across the board. But, indiscriminate, unfocused buying is not a prudent approach to responsible investing—especially in today’s extreme market environment. Picking bottoms never work.

With a proper technical and fundamental understanding, a spectacular opportunity of gain may await those ready to wade into the bloodied oil fields of today.

But for some, placing hard-earned profits in the energy sector makes a stomach a bit squeamish—and rightfully so. Many analysts are expecting a wave of bankruptcies that will keep the lawyers, courts, and accountants busy for years dealing with the aftermath.
 
Companies were formed, loans were taken, equipment was purchased, and wells were dug. Companies are being murdered in this environment. The question is, who will die on the vine and when will it happen?

Six years ago, a basket of stocks from the oil services group (OIH) peaked at $57 per share—up from $20 in 2008. EOG Resources (EOG) went from $20 to $120 during the same time. Yummy, right? Well, today it hovers around ~$40.


The breakdown of the energy sector was technically obvious to us skilled traders. Longs were closed out when key support levels were violated. The savviest of traders have been short in this sector and now looking to buy-to-cover to lock in some nice profits.
The opportunity we may have before us to buy oil right now is certainly tempting, and crude oil lows may be getting close to being set. When it’s time to buy, we expect gains to deliver significant upside potential.


Entering this market will require a high skill level in technical analysis. Price action will show us a trend reversal pattern to key on. This is critically important.


Here is what we know: oil will not go to zero. Today we crashed below $1, down from $107 only a few years ago. The growing pursuit of alternative energy will not wipe out international demand for oil for decades. And a few select companies, even operating under incredible stress, will thrive and survive for decades (e.g., Anheuser Busch survived prohibition).


Keep in mind that bottom fishing, to this degree, requires more than simply buying a basket of energy stocks and hoping for the best. We must be more intentional and savvier in our investing approach.


Although, XLE and OIH are down an incredible amount from their 2014 highs, over the next several years, large buckets like these are not expected to outperform the stronger sectors such as technology and healthcare. In other words, it might be smarter to target individual equities instead.


Consider the following technique to potentially increase your probability of success:

1. Identify and research fundamentally strong stocks within the energy sector
2. Watch the weekly charts on the baskets, XLE and OIH. Wait until a trend reversal pattern (i.e., double bottom, triple bottom, inverse head and shoulders, or falling wedge) is identified.
3. Buy an equal amount of, say, six stocks. Expect up to four of the six to eventually go bust. But the others, which do not, will probably pay extraordinary gains.

Within three years you will most likely have made a barrel of money.

In short, if you are short term look at the daily charts. If you are more long term, watch the weekly charts and identify a sector bottom, place an equal dollar amount into six stocks, and wait two to three months or roughly three years or so.


This strategy is not a spectator sport. Watch the charts on various timeframes to when to buy, and when to exit to maximize profits. Expect a short-term payoff in as little as two months. But the big play is waiting, say, three years after purchase. And, if Christmas comes early, reallocate your profits into other juicy trading opportunities.
 
To help you, below are six securities for you to research (in no particular order):

• TC Energy--TRP
• Cabot Oil--COG
• Genie Energy--GNE
• Magellan Midstream--MMP
• Matrix Service Company--MTRX
• Drill Quip--DRQ

I have 22 years trading experience using technical analysis. To become a savvy trader, you must stop approaching your investing like a gambler. Most traders are nothing more than gamblers HOPING to make a profit. If you’re in your 20s, more power to you. But if you are in your 30s or older, you do not have the luxury to gamble. That will kill your account faster than going to Vegas. You must get this right or you’ll be (for a lack of better words) “victimized” by the rest of us who are far more savvy and educated.  

You NEED a professional trader to mentor you. That’s the secret. This is precisely what Mark (the Meerkat) and I have found to be true in our own trading development. We both have been mentored. Matter of fact, I had two mentors. Successful traders are developed by other successful traders. Period. You can’t learn to ride a bike in a seminar or ask a book a question. It’s about being mentored. https://www.groktrade.com/tradingmentor.html

​d7

First, please give me the grace to make a brazen comment.
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Well, studies show that you probably should NOT be trading in the live markets.
Your odds of success are as low as being a consistent winner in the casinos. The fact is, you will always have wins, but the odds of consistent net-positive profit gains are just not with you. Those “wins” that you experience keeps you gambling.

I’ll make this notion even worse.

Your mental makeup as a human being is likely to be the biggest sabotage to your success.

As human beings, we are not intrinsically wired to trade well. Our brains are created to assure survival, not to make money. For example, traders run away due to fear and run towards greed. Said another way, it’s hard to buy when everyone else is selling. Likewise, it’s equally difficult to sell your positions when they are making you money.

Intellectually speaking, traders usually understand what to do to make money in trading (ex. buy low; sell high), but they demonstrate the opposite and fail to measure up in their trading.
The odds of you being successful as a trader are sobering low.
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Below are four (4) tips to fix your mental game and increase your profits.

​Most traders act a lot like how a mad scientist would act.

​Chances are this is you. Your crazy decision-making in trading seems like correct-thinking to you. However, your decisions prove to be anything but clearheaded thinking. You demonstrate a chaotic methodology. You try every new trading idea under the sun. You test every new concept that you learn about. You try all the new indicators; you match them together striving for better results; you read all the books and try all the guru systems; you listen, learn, and experiment with anything and everything you can find. Your understanding becomes a boiling pot of chaos and confusion. Your Frankenstein of a trading system cripples your effectiveness in your trading. Losses become a certainty.

These mad scientists always wash out of the market.
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What can you do? Find a trader who you trust/respect—someone with many years trading experience and someone whom actively trades in the markets. Find that person and learn their system—and learn it better than anyone else. Start there. (We highly recommended a mentor. Don’t let this get by you.) Let this step be the beginning of your foundation as a healthy trader.

You will have to mentally divorce yourself from your own trading ideas and beliefs. This will be the hardest obstacle for a mad scientist. Eight out of ten of them will find a way to lose money using a winning system. …let that sink in.

​For clarity, the idea to savvy successful trading is to begin your trading off with a winning trading system. Let’s assume you have been formally educated in your trading and have a great basis to start your trading. Now you want to optimize your trading system to better match who you are as a trader and to make more money.
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To do this, the best thing to do is test one specific change in the system’s plan at any one time to validate whether it is a good change, or bad. Once it’s deemed to be a profitable change, keep it and test the next change.

On the flipside, the worst thing you can do is bastardize your winning trading system by making multiple changes while testing your system. If you do, you quickly become disoriented to what is working and what is not. When this happens, your trading methodology drifts off into the proverbial left field—somewhere near Jupiter. When it does, you find yourself becoming that revolting mad scientist once again. Don’t do this.

​The fastest way to stay grounded in developing as a trader is to map your plan and do so in painful detail. In other words, establish a foundational trading plan that will guide your every step. The problem is that most traders don’t have a trading plan and will barely even give the notion a nod.

​It’s psychologically impossible to optimize and test your trading system without being bound by a written plan. You can only successfully test via a trading plan. If you make an excuse for yourself to NOT create and adhere to a trading plan, the best trading advice that I can give you is to trash the very idea of you being or becoming a trader. This will save you much money and unnecessary heartache. 

This will be the hardest thing for you to do--- and for several reasons.
First, we need to make several assumptions before proceeding on. Let’s assume that you have been formally trained, you do have a proven trading method that you adhere to, you are faithful to trading that method, you do only test changes to that method via a singular tweak (before testing more), and you are a “good” student—one who follows instruction well.

Assuming the aforementioned, the single best thing you can do for your trading (at this juncture) is to allow another trader to review your trades. You need a rock star trader to review your trading.

The reason you need to have your trading judged is because trading in darkness breeds contempt. In other words, people who trade without accountability quickly take on the “island mentality,” and their peril is in the belief that they are self-sufficient due to their intellect. This is mad scientist thinking.

These traders fully believe that they can figure out their trading problems on their own. This is a trap that even the brightest individuals fall victim to.
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Everything you need to know is in the above text. It has been edited down for quick reading consumption.
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Oh, one last thing.

The easy solution to all the problems highlighted in this article is found in the Grok Trade Mentorship program.