The Taylor Report (9/15/20)


Simple Thoughts in Complex Markets

By Bill Taylor, Contributor/Entoro Wealth

The opinions expressed below are my own & do not necessarily represent those of Entoro Wealth or any of its affiliates

We compare the price of Bitcoin, Ethereum, Gold & the S&P500. We use the CME Bitcoin Indexes (BRR & BRTI) and the CME Ethereum Indexes (ETH_RR_USD) & (ETH_RTI_USD) for reference as well as the London Bullion Market afternoon price settlement on the digital assets & gold.

9/15/20 Closing Prices:

Bitcoin:  $10,827.77  (+$181.67)
Ether:   $368.79  (-$5.89)
Gold:    $1,947  (-$4.00)
S&P 500  3,401.20  (+17.66)

Trading Summary Notes for Tuesday, 9/15/20

  • Great to be included as a regular contributor on the new Digital Wealth Newsletter and website. Like old FintekNews times. So, here we are in the middle of a volatile September. Having fun?

So, summer is officially gone and out of the way. Kids back in school (depending where you live), most people back to work (depending where you work) in offices, football back (depending which conference) and……well, the word “NORMAL” just does not exist. That goes for markets too. Last Taylor Report two weeks ago had markets (equities, gold, digital) heading lower and now here we are moving back up. Wheeee!!

So now what?

  • BITCOIN hit our near term price target of $12,500 (OK, just a touch under) we called for in our mid-August Taylor Report.
  • After hitting that $12,000+ level, BITCOIN has backed off (a fair amount) and retrenched in the low $10,000 area…..actually dipping below $10K for a few seconds just as we called for in the last Taylor Report. Once again, congrats Bill (lol)
  • Since BTC did not break below $10,000 for any meaningful time and now has spent some quality time in the lower $10K area, it looks like another run to $12,000+ is under way.
  • Should, NO WHEN, the $12,500 mark is broken the next target is $15,000.
  • Reiterating, the acceptance of digital currencies (BTC, ETH) is constantly gathering steam. Institutional interest is being bolstered by new regulations, regulated custodians and exchanges AND even Fidelity is launching a BITCOIN exposure fund (announced last week).
  • Indeed, MicroStrategy which allocated $250M to BITCOIN for cash reserves (dry powder) announced just today it is even increasing that allocation. Put your cash where it works.
  • Now, on to ETH. After a long time of being BTC’s “little sister” ETH has begun a life of its own. Cheers.
  • ETH has rocketed ahead as more and more central banks have begun steps to create digital currencies mostly based on ETHEREUM blockchain.
  • Expect a little more solidifying in the $330-$370 area for a bit
  • Can ETH keep it up? Yes, probably with the renewed BTC strength. Look for ETH to move to $550 if (when) BTC cracks above the $12,500 level.
  • Once again congrats….ME!  We have been yelling buy GOLD  for going on four (yes 4) years. Indeed, over the past year and a half we have been yelling BUY, BUY and BUY. With the recent rise to over $2,000 (all time highs) what now?
  • BUY the dip. With luck GOLD may back down to the $1,825-$1,850 and that would be a good dip. Of course this dip is near term. Long term? Keep buying.
  • Damn. BIG DAMN! It just doesn’t appear that GOLD is going to dip down to that $1,825-$1,850 area. Looks like the lower $1,900 area is super strong. Let’s move our dip-buying area to $1,925-$1,950.
  • GOLD near upside target is $2,500……yup, $2,500. Longer term? $3,000-$3,500.
  • Ignore the rhetoric. Forward looking, after throwing money (and continuing to print $$$) to ensure a recovery, inflation may soon be on the rise and geopolitical/pandemic risks are only getting stronger. Positive for GOLD;
  • Now on to the equity market, or at least the S&P 500. The last few months have been insane. Nothing…..I repeat NOTHING……..goes up forever. FOMO (fear of missing our) has been in full force. Enough already.
  • This is my quote from the last Taylor Report  in mid-August.    “What is up (literally) with the equity markets? Are we in the midst of a huge “melt up”? Yes, pretty close. Exuberant valuations plus a very crowded bullish investor bias is spelling “WATCH OUT.” Might want to start putting some S&P short positions on. You can’t always pick the exact top, but you can come close;”
  • So, now we know what was behind the straight up rally. SOFTBANK. Or, better not what was behind the rally, but rather who. Seems “The Nasdaq Whale.” which is the nickname for the person at SOFTBANK who bought $4billion worth of options driving up tech stocks…………….but hey, read the article in Digital Wealth News. Explains how market tops are formed.
  • The recent “dip” in the S&P 500 is NOT a buying opportunity. Psychology, or Market Behavior Analysis, has changed. Keep putting some “gentle” shorts out on strength.    
  • S&P500 “dips” to 2,500-2,600?

Current trading positions:  LONG BITCOIN,  LONG ETH,  SHORT S&P 500

Bill Taylor is Managing Director/CIO at Entoro Wealth & is widely published in financial industry media throughout the world