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(Bull) Market May 2021

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Security issues for BTC.

From here: https://www2.deloitte.com/nl/nl/pag...tum-computers-and-the-bitcoin-blockchain.html




In such an attack, the adversary will first derive your private key from the public key and then initiate a competing transaction to their own address. They will try to get priority over the original transaction by offering a higher mining fee.
Click to expand...


jog on
duc
 
ducati916 said:
Security issues for BTC.

From here: https://www2.deloitte.com/nl/nl/pag...tum-computers-and-the-bitcoin-blockchain.html











jog on
duc
Click to expand...
Not wanting to go technical but there are way to ensure a slow actual check.so however fast your quantum pirate churn keys , it could be made slow to check these, no issue for real transaction or legit error but a killer for a pirate.a digital version of 3 tries and timeout.
But yes not implemented as i know .
And i do not know much.
Just to say i do not believe quantum computer is a thread to the concept of crypto currencies.but yes, a few could get burn initially.
Much easier to hack the cryoto exchanges platform users right now..and this happens..
 
Last edited:
Interesting article. I did post a link to it a few months ago, but here are the lowlights:

The Bit Short: Inside Crypto’s Doomsday Machine - Global Intel Hub

From Medium This is the story of a Bitcoin trade — the most financially impactful trade I’ve ever made in my life. It’s also the story of the deep-yet-frantic investigation of the crypto ecosystem that led me to make that trade. And it’s the story of what’s really going on in crypto — and what...
globalintelhub.com




Takeaway: even if BTC itself is legit, there are frauds out there taking advantage of the complexity and lack of knowledge. The full article is worth the 10 mins it takes to read.


jog on
duc
 

The Bit Short: Inside Crypto’s Doomsday Machine - Global Intel Hub

From Medium This is the story of a Bitcoin trade — the most financially impactful trade I’ve ever made in my life. It’s also the story of the deep-yet-frantic investigation of the crypto ecosystem that led me to make that trade. And it’s the story of what’s really going on in crypto — and what...
globalintelhub.com

What a great article
The article Duc referenced was a real eye-opener as I've failed to understand the enthusiasm of traders wanting to pile into something that is non-existent. There are a few great passages in the article but none more sobering that this one "crypto is a highly liquid market — exactly the kind that attracts crooks, and crooks like to do fraud"

What about Bob
Without giving too much away, there is a phone conversation with Bob & the exchange with him solved the mystery of cryptos. There are millions of Bobs, all around the world. Many of them are leveraged up to their eyeballs & almost all of them are going to lose their money when it all comes crashing down.

How to wrap my head around cryptos
Imagine this scenario. In the palm of my hand, I have a pill (there are only 100 pills ever made) making them very scarce because that's all there will be ever made. So how much are they worth? What does the pill do? you ask - The pill cures childhood cancer. Could you imagine the enthusiasm to buy the pills? Image trading them, the value would skyrocket as bidding would drive the price higher & higher.

The problem with the scenario
The pills never existed but the "value of the pill" was built entirely on the enthusiasm of traders.

Here is a story about a dead horse
The story is about Chuck who moved to Montana & bought a horse from a farmer for $100.00.
The farmer agreed to deliver the horse the next day.

The next day he drove up & said
"Sorry, Son, but I have some bad news, The horse died."
Chuck, "Well, then just give me my money back."
The farmer, "Can't do that. I went and spent it already."
Chuck, "Ok, then, just bring me the dead horse."
The farmer asked, "What are you going to do with him?"
Chuck, "I'm going to raffle him off."
The farmer, "You can't raffle off a dead horse!"
Chuck, "Sure I can. Watch me. I just won't tell anybody he's dead."

A month later, the farmer met up with Chuck & asked
"What happened with that dead horse?"
Chuck, "I raffled him off. I sold 500 tickets at two dollars each & I made a net profit of $898.00."
The farmer, "Didn't anyone complain?"
Chuck, "Just the guy who won, so I gave him his two dollars back."

Skate.
 
Let's still have a sobering view: what's the difference between Bitcoin, the pill and a bit of paper with a dollar sign printed on it?
Just common use and trust, that's absolutely all there is, worse people and fraudsters can print and print more of these at will and no cost, whereas the BTC and pills are number limited.
So let's take that lesson with us.
 
qldfrog said:
Let's still have a sobering view: what's the difference between Bitcoin, the pill and a bit of paper with a dollar sign printed on it?
Click to expand...

A simple answer is the "strength" of the backer, that's the difference
The perceived value of a bitcoin or my magical pill represents very little - as it has no intrinsic value & not guaranteed by another "entity or government".

I still have some pills if anyone is interested
Make me an offer as I'm sure there would be others more gullible who would be willing to buy them from you. There is tremendous profit to be made. Hurry before they are all gone!!

Remember
My pills are as rare as hen's teeth.

Skate.
 
What do you mean the dollar value backed by the government?
What backing exactly do you have since removal of gold Standard?
Anyway, off track but a 2021 AUD or even US dollar is nothing more than an historical black tulip mania.
Good for exchange but not as a store of value
 

Warren Buffett on "intrinsic value"
“Intrinsic value is an all-important concept that offers the only logical approach to evaluating the relative attractiveness of investments.”

Dogbert know the value of cryptos
When the value of a "perceived asset" or as Duc would say "speculative instrument" is valued purely on the enthusiasm of the traders, you have to ask the question is this another mania that will be spoken about in years to come?



Skate.
 
Start of the end of May. Last week.

Start with the 10yr: looks to be falling atm. My model has 1.59%. Current yield 1.62%. So yes, a few basis points to fall. Good for stocks, particularly Tech. Good for Gold. Bad for DXY.



DXY falling slightly. Unless there are some really fundamental changes in both Fiscal and Monetary policy, DXY will continue to decline. At what level it really becomes an issue....low 80's?



Inflation is doing nothing much atm. A false alarm? Rosenberg certainly thinks so. Also calling it transitory. I did have an article somewhere, but seem to have misplaced it.



Whole market moving higher:



Enterprises that hold BTC might (MSTR) find issues next reporting period.



Mr flippe-floppe-flye:



Crypto:





The HODLers will HODL and we shall see how it plays out.


jog on
duc
 
Day's round-up:

Pretty consistent message from blogoland: value/growth rotation is weakening. Risk on is coming (potentially) back into vogue:






Copper running into issues?




BTC:



And"



A new indicator for you:



Closing comments from Mr flippe-floppe-flye:




jog on
duc
 
Pretty meh day.

Flat across all sectors:



The 'this is transitory' meme gaining ground: there is an argument there, inflation while present isn't in runaway or trending mode currently. My interest rate model pins the 10yr lower at 1.56%. The 10yr holding steady or falling will help Tech. and the risk-on trades. Certainly Tech. based stocks have or seem to be making signs of consolidating their recent lows and making breaks to the upside. Obviously this bodes well for the broad market. The more sectors that are moving higher, the better for the Bulls.

We will obviously have the Fed. continue with its inflationary stance. It can do nothing else. The debt load is so high. If inflation stays muted, then the risk of deflation and a big systemic blow-up risk will weigh on traders minds.

This dual wall of worry will allow stocks to rise, at a slower rate than the bounce out of 2020 and there will be the constant wail against the valuation levels...which are totally insane, but what else is there? Your alternative are the crazy coins.



VIX is muted atm.



NYMO: moving higher indicating strength, but safe for the moment, not running too hot. Breadth is about 67%. Could be better, but could be a lot worse.



This is the only 'risk-off' chart I have currently, which is the transition of Junk Bonds back to Treasuries. If, Treasury yields are set to fall, given that 'inflation' is a false fear, then there will be gains in owning the longer dated Bonds for their duration and the fact that you can leverage Treasury paper truly to the moon, which can then be used as collateral for further leverage. So it might actually be a massive risk-on trade.



Mr flippe-floppe-flye:



On the coins:


So currently we sit here:



I would expect to trade higher into the close. There is no vol. or urgency to the move lower. It would seem that May will come to a close with the indices trading back towards their highs.

Seasonality. There is something to it. I have been posting the seasonality chart for a few months now and the market has leaned in the direction of its past behaviour. Sudden unexpected developments would likely break any pattern, but absent that phenomena, I think paying attention to seasonality is worthwhile. June for the S&P500 is a good (100%) month. June is also the start traditionally of the Wall St. summer doldrums...low volume. The big dog traders etc leave for their holidays and junior is in charge with orders not to f**k it up. We'll see how it plays out this year as the US re-opens.

Oil News:

Natural gas-fired power generation averaged 3,394 GWh per day in the first four months of 2021, down nearly 7% from the same period in 2020.

- The decline is mostly the result of higher natural gas prices and increased competition from renewables. The decline is the first year-on-year decline since 2017.

- The drop is even more notable given that overall electricity generation increased by 6.6% over the same period.

Market Movers

- Williams Companies (NYSE: WMB) has an extra two years to build its proposed Northeast Supply Enhancement (NESE), a gas pipeline from Pennsylvania to New York, according to a decision from FERC. The project has run aground due to the lack of permits in New York and New Jersey.

- BP (NYSE: BP) said it will sell its stake in the Shearwater field in the North Sea to Tailwind Energy for an undisclosed sum.

- Royal Dutch Shell (NYSE: RDS.A) won a $2.5 billion 10-year contract to supply New South Wales with battery backup power.

Tuesday May 25, 2021

Oil prices rose by more than 3% on Monday on renewed optimism about global demand as global vaccinations continue. Also, concerns about a rush of new supply from Iran eased.

Hiccups in Iran negotiations. Iran said that gaps remain in negotiations with the U.S., which helped push up crude oil prices.

Cabot and Cimarex to merge. Cabot Oil & Gas (NYSE: COG) has agreed to merge with Cimarex Energy (NYSE: XEC), combining two shale drillers in a deal valued at $7.4 billion. It is the latest sign of consolidation in the shale industry, and the combined company will have a major presence in the Marcellus, Permian, and Anadarko basins.

Investors skeptical of new oil deal. Shares of both Cabot and Cimarex fell by 6% on the announcement, an indication of skepticism from investors. Analysts questioned the logic of combining companies from different geographies rather than creating scale in one basin. “This deal comes as a bit of a surprise and may have a less clear story to tell investors,” Andrew Dittmar, an analyst at Enverus, wrote in a statement. “Some investors may wonder why in-basin opportunities weren’t pursued ahead of a surprising multi-basin deal.”

Goldman: $80 oil this year. Goldman Sachs still expects crude oil to rise to $80 per barrel by the end of the year despite reports about progress on U.S.- Iranian talks about the lifting of sanctions. "The case for higher oil prices therefore remains intact given the large vaccine-driven increase in demand in the face of inelastic supply," Goldman analysts said.

Dakota Access to remain open. A federal judge decided against shutting down the Dakota Access pipeline, even though the same judge vacated a crucial permit last year. Still, the Army Corps of Engineers is conducting an environmental review on a new permit that will be completed in 2022, which will decide the fate of the project. But the court decision lets the pipeline operate until then.

China tamps down commodity prices. China said it will curb “unreasonable” increases in commodity prices, a move intended to deflate soaring prices.

Exxon’s referendum on Darren Woods. On Wednesday, shareholders will vote on one of the most significant investor activist campaigns in years, with Engine No. 1’s proposal to replace a third of ExxonMobil’s (NYSE: XOM) board. The vote is shaping up to be a referendum on CEO Darren Woods’ tenure, and also a symbolic fight in Exxon’s corporate strategy in the context of energy transition.

European oil majors compete with renewables companies. The European oil majors are increasingly expanding their footprints in renewable power generation, and are trying to compete with traditional renewables companies. “We’re actively exposed to different forms of energy in a way that pure-play renewable companies don’t have,” Dev Sanyal, BP’s (NYSE: BP) head of gas and low-carbon energy, told the WSJ. “We’re basically getting our wind from the Nordics, and we’re taking solar from Spain… We’re providing a blended offer.”

OPEC to enforce compensation. OPEC has had to remind once again the laggards in compliance in the OPEC+ oil production deal to submit plans on how they will compensate for pumping above their respective quotas in recent months, sources at OPEC told Energy Intelligence this week.

Oasis exits Permian, switches to Williston. Oasis Petroleum (NASDAQ: OAS) said that it is exiting the Permian basin and is instead doubling down on the Williston Basin as a pure-play driller. Oasis is selling its Permian acreage for $481 million to an undisclosed buyer.

U.S. looks abroad for EV metals. The Biden administration plans on looking abroad for metals needed for batteries, while focusing domestic efforts on processing, according to Reuters.

California begins rulemaking on fracking. California initiated on Friday the pre-rulemaking stage of proposed legislation that would end fracking in the state in 2024.

Shell on trial in the Netherlands. A Dutch court is expected to issue a decision on Wednesday on whether or not Royal Dutch Shell (NYSE: RDS.A) has a legal responsibility for climate change. The decision is only legally binding in the Netherlands but is being closely watched by both industry and environmental groups for its potential impacts elsewhere.

$150 billion in stolen oil money in Iraq. Some $150 billion in oil revenues has been stolen and smuggled out of Iran since the fall of Saddam Hussain in 2003, the president of Iraq said.

Texas requires winterization. A new law has advanced in Texas that would require power plants and some gas facilities to winterize their operations, potentially adding significant costs to utilities and owners of gas infrastructure.

Pemex buys Houston refinery. Pemex will buy Royal Dutch Shell’s (NYSE: RDS.A) stake in a Deer Park, Texas refinery for $596 million.

Top 5 oil firms saw revenues fall 31%. The five largest oil and gas companies in the world saw their combined revenues drop by 30 percent last year, although they still generated more than $1 trillion in total revenues.


jog on
duc
 
Any of the above shares purchased, would see you now in profit so far today.
Now to let the winners run!
 
Mid week and the bull continues:




Pretty much up across the board sector wise.

Breadth: could be better, still a little wobbly.



VIX staying under atm.



Inflation picking up again.



So the key atm. is to differentiate between an inflation, stagflation, disinflation or deflation. We can rule out deflation as occurring currently. It remains THE BIG risk. Disinflation will pick up once supply chains etc pick-up, assuming they do pick-up. Stagflation is inflation without growth, tied to a weak currency. Inflation is a weak currency with growth.

So if inflation, you want to own commodities (agricultural, energy and industrial). If stagflation, gold/silver. Re. Real Estate: when there is growth tied to a (strong) currency, own REITs. When there is growth tied to a weak currency, own farmland.




Mr flippe-floppe-flye:



MaVIS was a top pick of Mr fff some 15yrs ago. It crashed and burned badly. Here it is again, re-invented. I'll add AI to a watch and wait. It looks to be trying to turn the corner. It was also a recent IPO, so it has that cachet. I'll look to see if it was included in ARKK.




Obviously the bulls need to make this one stick into the close. We (the bulls) do not want a late day collapse to give impetus to the bears to give it another go. We want to close out May on a positive note preparing for a rip higher in June. This market is pretty much about confidence. Valuations are nonsense, debt is nonsense, global conditions are dodgy and fluctuating.

Mid caps are meh. Small caps are looking a little more positive. Large caps are essentially leading the train out of the station. Large caps means that growth and tech need to lead and come back to the party. We'll see.


jog on
duc
 
Market round-up from blogoland:





Now this one I found interesting:







Mr flippe-floppe-flye:



The supporting data:



So we are about to enter the summer doldrums. Junior will have strict instructions not to f**k anything up while everyone else holidays in the Hamptons.


jog on
duc
 
Markets are as a whole, going nowhere in particular.

As I start this post, this is where we are.





Some minor 'noise' rotation. This is almost algo. arbitrage: sell yesterday's winners, buy yesterday's laggards. Noise. Means nothing. Chop. If possible, you don't want to trade in and out of this. Sit tight as best you can.

So this appeared on the crypto thread, Mr @moXJO:



I don't disagree. The thing is the 'game' for the moment at least has changed. In the massive bull run that these coins have had up until a couple of weeks ago, almost any half-wit could make money: how? Buy long and Hold On for Dear Life (HODL). The market barring some short lived pullbacks bailed you out.

Then it all changed for many.



Total liquidations to date $46B +/-.



Now those that 'thought' they were clever and knew how to trade got blown-the-f**k-up. Probably just as well, they could have lost in excess of 100% and ended up owing money.

There is a current massive range in BTC: resistance at $47K and support at $30K. The various coins key off of BTC and are all churning. Now the profits are still there and available, but much harder to acquire and more importantly hold onto. One thing most experienced traders that survive learn is: don't trade the chop. Which means, BTC and coins are dead currently. What may happen is that range will compress into a triangle, eventually breaking out in a new trend.

What happens to those still HODLing is that they will become emotionally burned out, up, down relentlessly day after day. Those in the red will simply turn off the trading platform, those still in the green will incur such stress that they may even go PTSD.

More data re. correlations twixt 'Coins' and 'Stocks':



Make up your own mind. Certainly the vol. is quantitatively different.



Now whether Mr Musk has any credibility left or is now a leper, I have no idea. But it was an obvious problem in the run up: news, well hardly news, but that a handful of individuals could influence an entire market across all coins was just such a massive risk. Particularly with a loose cannon like Mr Musk who like Mr Trump, would tweet all manner of nonsense. Your trading account was linked to how he felt on any given day.

Mr flippe-floppe-flye:



Even the 'Space Age Magician' has trouble trading the chop. Recognising these days is easier said than done. That being said, traders would be well advised to tune their methodologies to avoid where possible chop days.

The 'BIG' trends are still in place:

DXY is having a bit of a bounce. This for 'stocks' is perceived as a negative. While possible, it is unlikely that DXY will not resume its downtrend. DXY of course is linked to yield. My model shows 1.62%. Yesterday yields were 1.58%. Today yields are marginally higher. The 10yr is in chop itself, which represents the conflict between the two prevalent theories: inflation or deflation. Polar opposites. The inflation theory is predicated on the massive credit creation that has occurred. Deflation, that that massive credit creation blows-the-f**k-up.

One is happening. One remains a possibility. The one that is happening is posited to be transitory. If the other happens, sh*t will go south at such a rate of knots that getting out intact will be a challenge. No-one actually knows what will happen. Eventually, it will be bad. Until then, unless you take your toys home, cautiously long.

However that being said: Small caps and Mid caps are breaking higher. This will help the big boys carry the load as the Large caps are mired, probably due to their liquidity and ease of entering/exiting, caught in some algo. hell. Also on the bright side, May is almost in the bag.


jog on
duc
 
Today's roundup from blogoland:

Some more 'seasonality' data:



This is definitely noticeable.



Again, mentioned in previous post, both Small & Medium caps seemed to have joined the party.



Probably alluding to the fall in the 10yr yield. Financials love a steep curve.



Certainly the anti-inflation meme (argument) gathering steam.



Crypto:



Told Ya!



The BEST one of the lot...



This provides confidence:



As does this:



This makes me nervous...



Over the w/e I'll be undertaking a detailed analysis of the inflation or lack of thereof arguments.


jog on
duc
 
Indeed mr Duc, i am amazed at how low volatility is.
Not yet out of one of the biggest self imposed economic crisis of the last 50y, open software and commercial war with China in a market with up or down of 1pc a day, or roughly a year of bond interest
And vix so low it is ridiculous.
What am I missing?
 

What are you missing? How about S&P500 earnings coming in at $225/share. Put a x20 multiplier on that and you have a level of 4500. The market isn't overvalued at all. In fact it is a little undervalued.

What has made the 'difference' are the cyclicals hitting the ball out of the park.

Of course cyclicals infers that at some point, earnings will fall. But atm, we are undervalued. Get ready for the summer rip higher.


jog on
duc
 
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