Is Bitcoin Really A Hedge Against Inflation?

Short answer...NO...in spite of what those flogging its purchase over the last couple of years have been, and still are, proclaiming (and with a straight face, too).

Take a look at the following weekly chart of Bitcoin and compare its price moves (peaks and valleys) with that of the 20-year 12-month Percentage Change, CPI graphic below (measuring inflation of goods and services).

While CPI has continued to rise since January of 2021 and hit a 12-month percentage increase of 7% in December 2021 (a 20-year high), Bitcoin has lost almost all of its gains made (twice) from January 2021, onward.

So...NO...Bitcoin is not a reliable hedge against inflation...case closed. 

These graphics proved my point.

I've written numerous articles about Bitcoin over the last several years and you can find them at this link.

Source: U.S. Bureau of Labor Statistics

~~~~~~~~~

"If you walk on snow 

you cannot hide your footprints."

-- Anonymous

~~~~~~~~~

Volatility Bites U.S. Markets...But, Should It Bite The Fed?

* See UPDATE below...

The SPX had a wild ride today, with an intraday trading range of 194.7 points, complete with a gap down on the open, followed by a huge drop lower, and finally followed by a massive rally to close the day a bit higher than Friday's close, as shown on the following daily chart.

This volatile action triggered some interesting tweets...

...and has created an "interesting" dilemma for the Federal Reserve to digest as they examine their next moves at their upcoming meeting this Wednesday.

However, I can't see this influencing their dual mandate to maintain a 2.0% inflation target and stable prices (the U.S. inflation rate is already well above at 7.0% with no signs of abating) and to promote maximum employment (the current unemployment rate is 3.9%). 

Their current interest rate is 0.25% and is not a deterrent to curb out-of-control inflation.

If today's intraday volatility does unduly influence them, they're not performing (what should be) their impartial job of properly managing their dual mandate, in my opinion.

Source: TradingEconomics

* UPDATE January 26...

The Fed has failed to carry out their dual mandate, once again...inflation will continue to rage.

Not hiking interest rates now is foolish and signals to investors and the rest of the world that the U.S. economy is too weak to withstand higher rates. 

Therefore, this does NOT justify higher equity prices, in my opinion

They will have to revert to drastic measures soon to make any meaningful dent in out-of-control inflation, because they've waited far too long. They should have stopped their bond-buying spree and begun to raise rates months ago.

Link to FOMC statement

Morning comments made prior to the FOMC statement indicate a growing concern over the Fed's lack of leadership in calming inflation...President Biden has already thrown Chairman Powell under the bus on this issue.

However, the President is not without blame in contributing to inflation. He needs to:

• REVERSE his executive actions when he (1) restricted oil and gas exploration and drilling on federal lands and imposed further regulations on that industry, and (2) withdrew the approval of the Keystone XL pipeline from Canada...those two actions on Day One of his presidency triggered and contributed to the inflation spike.
• STOP paying people to stay home and to get back to work.
• STOP flooding the economy with fiscal stimulus programs and exploding the national debt (now at $29.88 Trillion).
• START implementing policies that tighten national security, rather than continue with those that are weakening it...e.g., resume building the southern border wall and enforce existing immigration laws.

Both men need to start doing their jobs properly...otherwise, a GOP majority win in both the House and Senate is guaranteed in the November mid-term election. 

However, with Biden's overall approval rating already in the 30's because of his reckless actions (Afghanistan), and his radical socialist policies and agenda, a massive GOP win is likely to occur, anyway.

Source: ZeroHedge

Expect the market chaos to continue...

GOLD: Gathering Strength

I last wrote about GOLD in my post of December 21, 2021.

Since then, it's remained caught in a large sideways consolidation zone, as shown on the following charts.

What has happened, however, is that the William's Alligator has begun to curl upward on the daily and weekly timeframes...hinting of building strength.

Major resistance remains at 1,850 and major support at 1,750. Watch for a break and hold above or below those levels to confirm price direction for the coming days/weeks.

SPX: The Blowoff Phase Has Begun

Further to my post of December 6, 2021 on the SPX, the "Blowoff Phase" has begun, as shown on the monthly chart below. 

At the time of writing this post, today's low is 4221.54, which is January's low, so far, and is roughly a 12.4% correction from its all-time high of 4817.88, set during the first week of January.

Please refer to my subsequent posts here, here, here, here, and here for further insights, as well as price targets and support/resistance levels.

By the way, the channel "mean" is just below the S2 pivot level of 3266 mentioned in my January 1, 2022 post...a target/major support level.

ARKK: Bears Still In Control

An inverted cup and handle began to form in November of 2020 on ARK Innovation ETF (ARKK), as shown on the following daily chart.

A bearish moving average Death Cross formed on June 30, 2021 and never reversed after that date.

The bears are still firmly in control of this ETF.

As of last Friday, price is sitting just above the 50-month MA (70.696) and just below the 200-week MA (73.404).

A break and hold below 70.00 could send it down to 40.00, or lower to its IPO price around 20.00.

Bearish Death Cross Forms on Bitcoin

I last wrote about Bitcoin (BTC/USD) in my post of December 29, 2021.

A bearish moving average Death Cross has formed on the daily timeframe, as shown on the chart below.

A break and hold below 30,000 could send price crashing down to 20,000, or lower.

By the way, my above-mentioned post also compared the price action of Virgin Galactic Holdings Inc. (SPCE) with Bitcoin's.

Since that time, SPCE has continued its plunge downward to its close last Friday of 8.47...below its IPO price of 10.50 in September of 2017.

We'll see if Bitcoin's fate is, ultimately, similar to that of SPCE!

TECHNOLOGY SECTOR: Approaching Terminal Velocity

I last wrote about FNGU (an exchange-traded note that tracks 3x the daily price movement on an index of US-listed technology and consumer discretionary companies) in my post of December 20, 2021.

As you can see from the following monthly chart, it failed to recapture and hold above the 33.00 level, mentioned therein, and closed at 25.74 on Friday.

It's approaching a price support zone from 20.00 to 25.00. We may see it attempt to stabilize somewhere within this zone in the coming days.

If not, a drop and hold below 20.00 could be catastrophic for the Technology Sector.

The ten stocks that make up FNGU are shown on the following 1-year daily charts.

Most of them are at or near price support, with the exception of TWTR, which is well below for the year.

The following daily ratio chart of the NDX:VXN ratio shows that a bearish moving average Death Cross formed several days ago, and price has fallen below major support of 500.

I noted in my post of January 21 that a Death Cross had also formed on the SPX:VIX ratio and that the 'sell the rip' traders had overtaken the 'buy the dippers.' The same is true for this ratio.

If the NDX:VXN drops and holds below 400, its next major support level sits at 300, followed by 250 and 200, respectively.

In conclusion, if FNGU falls and holds below 25.00, and if the NDX:VIX ratio falls and holds below 400, and if the ten FNGU stocks fall and hold below their near-term price support levels, I wouldn't be surprised to see FNGU retest the lower edge of its support zone at 20.00.

A drop and hold below 20.00 on FNGU and below 300 on the NDX:VXN ratio could be catastrophic for the Technology Sector.

Keep an eye on the price action and support levels on the SPX and SPX:VIX ratio described in the aforementioned post for possible corroborating clues in this regard.

ZOOM Has Zoomed Out

My previous article on ZOOM (ZM), posted on November 9, 2020, mentioned that it had gone parabolic and had begun to plummet. I also wrote, in a December 30 update, that a drop and hold below 300 would seal its fate.

Since then, it has continued its drop and is well below that level. It's unlikely to reverse anytime soon, inasmuch as Sellers are still firmly in control.

Its next major support is at 100, back where it began its meteoric breakout in March 2020 and ensuing parabolic spike, which peaked eight months later (October) at 588.84.

As the COVID-19 pandemic begins to abate and, instead, become endemic around the world, there will be less reliance on sites like ZOOM on which to conduct business, as people return to their offices.

British Prime Minister Johnson announced this week that he is, in fact, ending most COVID-19 protocols/restrictions and mandates previously in place, due to waning virus outbreaks in his country. 

We may see other leaders follow suit in due course, possibly sooner rather than later, in a bid to stem the massive and unprecedented global economic fallout, caused by the pandemic since January of 2020.

SPX: In For A 50% Correction?

The following article refers...it mentions a possible 50% correction on the SPX.

Source: ZeroHedge

I last wrote about the SPX and the SPX:VIX Ratio in my post of January 17. 

If Jeremy Grantham's call for the SPX to correct by nearly 50% from its top at 4800 to his major support level around 2500 comes to fruition, the last four and a half years of wealth accumulation will be wiped out, as shown on the following monthly chart of the SPX.

That level is well below S3 (2870) mentioned in my 2021 Market Wrap-Up and 2022 Forecast post.

The SPX:VIX Ratio closed below the major support level of 200 in Thursday's trading, as shown on the following daily ratio chart.

This follows the formation of the moving average Death Cross discussed in my January 17 post.

If price holds below 200, this does not bode well for the SPX, inasmuch as it seems that the 'sell the rip' traders have overtaken the 'buy the dippers' at this point.

This will continue, in my opinion, provided that the Fed does NOT interfere, but allows the equity market to self-correct and find its fair value.

I'd keep an eye on whether fair value and market stabilization occur around any of the following ratio levels, namely 150, 100, 80, or 60. 

A drop and hold below 60 would be catastrophic for the SPX and could send it plunging to 2500, or lower.

President Biden's two-hour question and answer session with the press on January 19 did absolutely nothing to stabilize the markets.

I won't bore you with the details. Many others have reported on his disastrous answers and performance...true to form, it wasn't pretty.

If you want to see for yourself, you can view the video link below.

Link to video

Another Joe Biden Gaffe Surfaces...It's a Doozy! 😕

I can't believe President Biden said this (in June 2020)...what a slap in the face to African Americans, especially to Dr. Martin Luther King Jr. and the disrespect/disregard for his many accomplishments! 

I wonder how the King family felt about this undignified and subverted comparison.

Does Biden understand exactly what he says at any given time and the impacts/fallouts created by his clumsy statements and proclamations?

Link to tweet & video

N.B. Today is Martin Luther King Jr. Day in the U.S.

* UPDATE January 23...

What House Speaker Nancy Pelosi said on Martin Luther King Jr. Day was even worse.

Democrats have used African-Americans as their scapegoat for decades to try and get bad (and harmful) legislation passed.

Isn't it about time they stopped their lies and tiresome fear-mongering...which have ramped up to an extreme level and been exposed as such over the past year?

Americans are waking up. 

This will backfire on Democrats in the upcoming mid-term election and they will have no one to blame but themselves, in spite of the fact that President Biden is already proclaiming that a Republican majority win in the House and Senate would be "illegitimate"...something they've been blasting former President Trump for saying that the 2020 Presidential election was "rigged and the results illegitimate."

Source: ZeroHedge

Death Cross Forms On SPX:VIX Ratio

I last wrote about the SPX in my 2021 Market Wrap-Up and 2022 Forecast on January 1.

The SPX closed (around 20 points below the 50-day moving average) at 4662.85 last Friday, as shown on the following daily chart. The 200-day moving average is well below at 4420.84, which is slightly above the yearly Pivot Point for 2022 of 4412.61 (identified in my above-mentioned post). Both moving averages are still in uptrend.

The SPX uptrend is wavering and price is caught in a large and tightly bunched-up consolidation range.

A 50/200-day moving average Death Cross just formed on the SPX:VIX Ratio, as shown on the daily ratio chart below...at variance with the moving averages on the SPX.

It's a warning signal that weakness has crept into the SPX and we may see it pull back or correct soon.

A 10% drop would send it down to 4200, while a 20% drop would take it to 3730.

Alternatively, it may be a bear trap.

These two scenarios should become more clearly defined after the next Fed meeting on January 26.

In the meantime, trading will likely remain volatile and whippy...especially below 4700.

VP Kamala Harris: QOTD... 😏

Yes, she really said that (and more) this week in an NBC "Today" interview...😕

HOW TO CONTROL INFLATION: Once Upon a Time... 😏

More Biden Crises Erupt: COVID-19 😕

* See UPDATES below...

Good question, Ari...and it's one that others are also asking.

I'd also ask why he didn't organize a task force to launch an "Operation Warp Speed" to produce these test kits, as well as develop and produce theraputics, such as the "Operation Warp Speed" program ordered by former President Trump to research and produce vaccines for COVID-19? 

He's had months to do so, but sat on it instead. Why?

Add these to the many crises and failures of President Biden's first year in office...which started on Day One when he signed executive orders banning new oil and gas exploration and drilling on federal lands and cancelled the Keystone XL pipeline already well under construction from Canada, which led to an increase in the price of  WTI Crude Oil from 48.52 (at the December 2020 close) to a high of 85.41 this year. 

Of course, this higher cost ended up negatively affecting the costs of all goods and services and contributed to the inflationary numbers we're seeing today. 

Until Biden reverses these orders, inflation will remain high, with energy shortages becoming the norm...quite the reversal from the energy independence and low oil and gas prices that Americans enjoyed, for the first time, by the end of Trump's presidency, thanks to his policies.

Furthermore, until President Biden reverses his prior executive order which cancelled the completion of the wall which was well under construction (by the Trump administration) along the southern border of the country when he first took office, the U.S. will continue importing new COVID-19 cases and new variants via the thousands of illegal aliens who are entering every day...around 2 million did so already in 2021, and most of them were unvaccinated. There is no requirement by the Biden administration that they be vaccinated before being allowed to remain in the country, unlike the thousands of Americans who wish to work and eat at restaurants, etc...which is also contributing to supply chain shortages, worker and healthcare shortages, and inflation.

No wonder most Americans are suffering under his policies, which are negatively impacting national security, inflation, and the national debt, etc.

With three more years remaining under Biden's presidency, I doubt things will get any better any time soon...rather, quite the opposite, so brace yourselves.

Afghanistan Crisis

* UPDATE January 11...

It looks like it's too late for President Biden to get a grip on the COVID-19 crisis...he failed to act in a timely manner...

Source: ZeroHedge

Meanwhile, his top advisor, Dr. Anthony Fauci, has some serious explaining to do regarding the origins of COVID-19...

Source: ZeroHedge

And, there's this...

Source: ZeroHedge

Americans...and the rest of the world...deserve truthful answers, once and for all...on a number of issues related to the pandemic, not just on the origins. 

I've no doubt they will get them, in due course...as is beginning to be released by the US CDC...

Link to video

Link to video

Source: WSJ

* UPDATE January 12...

Source: National Review

* UPDATE January 13...

* UPDATE January 14...

Good question, Glenn...why are Democrats, including Joe Biden, protecting Russia's energy supply...while hamstringing America's oil and gas supply?

And, why did they use the fillibuster to block this bill on the same day that Biden was criticizing members of his own party for not supporting ending the fillibuster rule so he could get his voting rights agenda passed in the Senate?

It's all very nonsensical and hypocritical.

Source: ZeroHedge

More bad news for Dr. Fauci, and, by extension, President Biden, regarding the origins of COVID-19, its funding, and the early findings on theraputics...

Source: ZeroHedge

ZeroHedge excerpt

~~~~~~~~~