Over the last few weeks, the S&P500 faded from its highs, casting doubt on a year-end “melt-up” or rally. Recent comments out of Nomura Capital however suggest traders are placing bets with 1×2 put spreads, going short vol. In addition, we are watching bitcoin for a well-timed rally.
Summary
S&P500 Year-end Rally
Jeff Hirsch shared this chart with stockcharts.com users. The “seasonal pattern” shows the S&P500 rallied into year-end in weeks that followed Presidential elections as far back as 1949.
No matter who wins, the market finished at highs.
With these thoughts, among others, we haven’t changed our focus on the big picture, namely, what happens in December 2020. That said, we are still anticipating short-term weakness until a stimulus deal passes.
Bitcoin Breakout
We are watching the strength of bitcoin and the elevated interest as writers and commentators in financial media start to focus on this asset again.
“A team of analysts at J.P. Morgan’s Global Markets Strategy group is touting Bitcoin’s emergence as an alternative to gold among millennials, suggesting a “doubling or tripling” in the price of the cryptocurrency if current trends continue.”
– Read more at Fortune
“The older cohorts prefer gold, while the younger cohorts prefer Bitcoin as an ‘alternative’ currency,” says the research note. Boomers vs. Millenials.
PayPal’s President and CEO Dan Schulman:
“The shift to digital forms of currencies is inevitable, bringing with it clear advantages in terms of financial inclusion and access; efficiency, speed and resilience of the payments system; and the ability for governments to disburse funds to citizens quickly”.
We’re are watching for opportunities in the Bitcoin trade, so join us today in the trading room for our LIVESTREAM broadcast during market hours, as we navigate the current environment. Watch, listen, and trade from 9:20 AM to 4:15 PM Monday through Friday.
Happy Trading,
Vinny
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