The Taylor Report (1/26/21)

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Simple Thoughts in Complex Markets

By Bill Taylor, Contributor/CIO-Entoro Wealth


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


Bullish for week of 1/26

Bitcoin | Ethereum

Neutral for week of 1/26

Gold

Bearish for week of 1/26

S&P 500

1/26/21 Closing Prices:

Bitcoin:  $31,614.93  (-$2,774.58)
Ether:   $1,280.52 (-$144.18)
Gold:    $1,844  (-$3.00)
S&P 500  3,849.62  (-5.74)

Trading Summary Notes for Tuesday, 1/26/21:

What’s new? First month of 2021 is about finished. New President, new administration and cabinet pretty much in place and it appears the money printing will begin. NORMALLY money printing would be good for gold but not so much anymore. After many years, I am going neutral on GOLD. I truly believe BITCOIN has replaced GOLD as a safe haven.

QUIZ! When and at what price will ETH exceed the price of GOLD? (and it will). Before you get excited, there is no prize but you get bragging rights.

What to do now?

Reduce GOLD positions. Expect GOLD to basically go nowhere and disappoint holders. BITCOIN has paused after a huge run up. Buy the dips……much more upside to come. ETH has emerged as a star of its own. Looks higher and more solid than in the past. Continue short S&P 500. Prepare for 2021 to experience inflation.

But first, after being totally blind-sided last year it appears that almost everyone (pros and amateurs) foresee no problems for this year. THAT IS TROUBLING! What could could possibly go wrong?

Everyone (yes, all of us) can get vaccinated and COVID goes away…..that’s already in the markets and discounted. What if there is a more vicious strain and it looks like there is. That’s NOT in the markets. Another lock down?

Additional stimulus money goes into the stock market? That’s what investors believe will happen. Or not. Consumer pent up demand cause prices to explode….food, travel, clothes. etc….INFLATION exceeds Fed policy maker’s expectation and interest rates ratchet up unexpectedly

Anything geopolitical….China makes a move on Taiwan? No lack of potential here.

Trading Thoughts:

  • BITCOIN A BUBBLE?……………Only to people who have not bought any;
  • Every time BITCOIN takes a breather the “top pickers” and “naysayers” sprout. How’s that worked for ya?
  • There are huge buyers under the BITCOIN market. In fact, new HUGE buyers surface every day. Corporate excess cash reserves, university endowments and even municipalities (Miami) are joining the buyers;
  • BITCOIN short term target $48,000-$50,000;
  • ETH now gaining new followers. In effect, a “cheap” BITCOIN;
  • CME GROUP ETH FUTURES TO BEGIN FEB 8TH. Should add interest, liquidity and a way to hedge. Very bullish;
  • ETH short term target $1,500. Then $2,000;
  • GOLD sold off with uptick in interest rates. Interest in GOLD has waned;
  • GOLD has been replaced by BITCOIN as a safe haven;
  • Be prepared for GOLD to be “dead money” for a while;
  • Expect S&P 500 and equity markets to retreat. Very unexpected decline may start early;
  • 2021 S&P 500 “dips” to 2,500-2,600?

    Current trading positions:  LONG BITCOIN,  LONG ETH & SHORT S&P 500 No GOLD position at this time.

Entoro Wealth offers SMA’s to accredited investors that include Bitcoin, Ethereum, Gold and short S&P 500


We compare the price of Bitcoin, Ethereum, Gold & the S&P 500. 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.


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