Author: Andrew Packer

Cryptocurrencies

The Pomp Letter: Bitcoin’s Network Poised For the Bull Market

Posted on by Andrew Packer

Since bitcoin’s halving in the spring, the cryptocurrency has traded in a sideways range. Despite some attempts to move higher, it’s yet to near its all-time highs from the spring. However, the fourth quarter of a halving year tends to be a period of strong performance.

What’s more, prices are starting to perk up on a technical level. The past few weeks has seen some moves higher, then met with healthy pullbacks.

What could push prices higher? Halving years reduce new supply to the market. With over 90% of all bitcoin already mined, there isn’t much supply left.

Meanwhile, bitcoin wallets have held steady. Existing owners aren’t ready to sell in the mid-$60,000 range. Data suggests that about 65% of all bitcoin hasn’t moved in 12 months, near the high of 70% set in December 2023.

Over the past two years, half of all bitcoin in circulation hasn’t moved. Prices are clearly trending higher at a time when supply is tight and existing owners aren’t ready to sell.

Even with the sideways performance over the past few months, bitcoin is still up around 50% this year. With bitcoin setting up for a further run higher, it should continue to outperform. And that outperformance should last well into 2025.

And once bitcoin starts to take off again, other cryptocurrencies should rise with it.

 

To read the full analysis, click here.

Stock market strategies

Tastylive: It Took us 15 Years to Uncover this Options Trading Technique

Posted on by Andrew Packer

Investors have a variety of tools for trading in the market. Many of those tools employ options. Most investors think of options as a directional bet. They buy a call option to bet on rising prices, or a put option for falling prices.

However, for shorter-term timeframes, traders can use options to bet simply on declining option values. Since an option has a limited timeframe before expiration, several tools exist to take advantage of this.

One such tool is the vertical spread. This uses two options, expiring on the same date, but with different strike prices. One option is bought, one is sold.

Typically, an investor will look to sell the higher priced option. This results in a credit, or cash added to an investment portfolio. The option that is bought helps hedge the movement of the sold option.

This significantly reduces the risk of selling an option outright, which could require a significant cash outlay.

Plus, traders who use spreads as far as 45 days out can see significant income as option premiums decline. They may be able to hold until expiration, or could roll the trade, as conditions warrant.

This trade can be used to generate small, but consistent, profits across even small investment accounts.

 

To look at the full backtest of this strategy, click here.

Stock market strategies

The Lead-Lag Report: You Can’t Ignore Utilities

Posted on by Andrew Packer

Investors looking for safe income have shifted heavily into U.S Treasury bonds over the past two years. With the 10-year Treasury bond yielding about 4%, it offers about half the historic return of the stock market. But it does so with none of the risk of investing in stocks.

However, yields are on track to trend lower. While the Fed started with a half-point cut, it’s likely to follow up with quarter-point cuts.

Over time, that will still drive yields down. That means investors may have to look elsewhere for income. And utility stocks can fit that niche of safe, relatively high-income right now. Even better, utility stocks also offer some growth potential here.

That’s because utilities are usually slow-growth plays. But the rise of AI technologies means an increased demand for power. And the need for stable base power to ensure that technologies like electric vehicles can function smoothly.

That could mean bigger growth, and also offers the potential for growing dividends.

Investors have plenty of options from individual utility stocks like Next Era Energy (NEE), operating in the fast-growing Florida market, to the Utilities Select SPDR Fund (XLU) to grab the industry as a whole.

Either way, utilities still offer investors a relatively high income, a reasonable value now, and growth potential.

 

To read the full analysis, click here.

Commodities

Heresy Financial: China, the Fed and the Middle East War – ALL Pushing Prices Higher

Posted on by Andrew Packer

The inflation story is dead, even after inching slightly up in this week’s latest data. Yes, inflation isn’t quite down to the Federal Reserve’s 2% target level. But, it’s under 3% compared to a high of over 9%.

The central bank is now shifting gears to prevent the labor market from unwinding. With that shift, interest rates will trend lower. That could help make it easier for businesses to expand and consumers to borrow. In turn, that could mean inflation ticks higher.

That likely won’t mean a return to inflation rates over 5%. But inflation could stubbornly hang out near 3% for a prolonged time.

However, other factors could help push inflation up.

China recently unveiled a stimulus plan to get its slowing economy moving higher again. That could mean higher prices, and a push higher for commodities that China needs to grow.

Plus, in the Middle East, there’s a potential for an escalating conflict. That could cause key parts of the world, such as the Strait of Hormuz, to move off-limits.

That could help push oil prices higher. Higher energy costs will quickly show up on inflation measures as energy is a key component for manufacturing. And higher gas prices mean consumers have less money to spend on other activities.

 

To look at the full list of factors that could lead to resurgent inflation, click here.

Economy

Bravos Research: 3 More Months Until it Begins…

Posted on by Andrew Packer

With the start of an interest rate cut cycle, the bond market has started to readjust to lowering rates. Part of this process is the overall yield curve un-inverting. That’s where longer-dated bonds now start to have a higher yield than shorter-dated ones.

Typically, an un-inverted yield curve has occurred either during or just ahead of a recession. Yes, this time could be different due to pandemic-related polices being unwound.

However, as one of the strongest macroeconomic indicators, with a flawless record, it shouldn’t be ignored. With the 10-year and 2-year U.S. Treasury bond yield in particular un-inverting now, it’s a sign of danger ahead.

Bond yields are still somewhat volatile. They’ve even risen somewhat since the Fed cut interest rates. That’s because last week’s unemployment data indicated a strong labor market.

Even with that short-term move, investors likely have just a few more months left before conditions deteriorate.

Yes, GDP growth remains healthy too, in line with the labor market. That suggests that we still have some time left for markets to peak.

Each yield curve un-inversion is different. And the start of a recession as the yield curve un-inverts can change. With the curve entering a danger zone, investors may want to lighten up on their most aggressive trades going into the end of 2024.

 

To view the full video, click here.

Cryptocurrencies

Bitcoin Magazine: Maximizing Bitcoin Gains with ETF Data

Posted on by Andrew Packer

Bitcoin prices closed September on a strong note, rallying nearly 10%. Bitcoin prices topped $66,000 for the first time since July, after first dropping to the $50,000 range.

October tends to be a strong month for crypto, especially in the years after a halving. In fact, the entire third quarter tends to see excellent returns for bitcoin. Given bitcoin’s volatility, however, traders may want to use data to find ways to better trade.

The start of new bitcoin ETFs earlier this year provide substantial amounts of data. First, investors can track the overall flow of bitcoin into these ETFs. That creates a simple way to determine whether the big money is buying or selling.

Investors who buy bitcoin when ETF data shows strong inflows are likely to get in ahead of bullish moves higher. Those who sell when big money starts to exit the trade can sidestep a pullback.

Again, this takes advantage of bitcoin’s inherent volatility. Locking in smaller gains from trading can take some of the sting out of buying and holding a volatile asset.

Since late September, investors have heavily started buying bitcoin once again. That suggests, along with bitcoin’s monthly average history, that a further move higher is likely in the next few months.

 

To read the full analysis, click here.

Commodities

QTR’s Fringe Finance: Peter Schiff Exclusive: Gold to $26,000?

Posted on by Andrew Packer

Gold prices have pulled back slightly after hitting $2,700 per ounce. From here, it’s only about a 10% further rally for the metal to hit the nice, round number of $3,000.

Where does gold from there? That depends on a variety of factors. Gold tends to perform well when investors expect inflation. The Federal Reserve’s recent shift to focus on jobs rather than inflation supports higher gold prices.

Plus, as interest rates decline, gold looks increasingly attractive compared to bonds. That’s because gold has no yield. And bond yields are now on track to continually decline.

If conditions are right, gold may not stop at $3,000 per ounce. The metal could even accelerate its price appreciation, and hit $6,000 per ounce next year.

Such a move would likely require come kind of financial crisis. It would need to be strong enough to send investors away from the U.S. dollar. Most investors first go to cash during a crisis. Globally, the world first turns to the U.S. dollar.

The dollar could face more trouble ahead. U.S. debt continues to rise, with an increase of over $1 trillion nearly every 90 days. A debt crisis would be the kind of situation that could prove a perfect storm for gold.

 

To watch the full interview, click here.

 

Income investing

Dividend Growth Investor: Six Dividend Stocks Increasing Dividends Last Week

Posted on by Andrew Packer

Markets are near all-time highs. But the market is also rotating. Tech stocks are no longer leading returns higher. Other parts of the market are starting to show strength.

With interest rates on the path to decline, investors have an opportunity, especially with income-producing stocks. That’s because their yields will look increasingly attractive as bond yields fall. Investors who allocate some capital to dividend growth stocks may get the best returns over the next 12 months.

That’s because a dividend-paying company tends to show that a firm is profitable. And increased dividends reflect management’s confidence about the company’s operations. That can be true across a number of sectors.

For instance, fast food chain McDonald’s (MCD) just raised its quarterly dividend by 6%. It now pays a 2.2% dividend, and has raised that payout for 48 consecutive years.

Fast food sales have struggled in recent years amid a resurgence in inflation. But McDonald’s has successfully managed to boost sales with some new deals.

Another dividend growth opportunity now is with automation and aerospace giant Honeywell (HON). They just increased their quarterly dividends by 4.6%.

Honeywell shares also pay a 2.2% current yield, but they have raised their dividend payout for 14 consecutive years.

While not as exciting as tech companies, dividend growth players continue to create slow-and-steady returns. Over time, that can create tremendous wealth

 

To view the full list of companies raising their dividend payouts now, click here.

 

Economy

ClearValue Tax: The Great Melt-Up: National Debt Crisis Will Skyrocket Inflation

Posted on by Andrew Packer

The Federal Reserve has shifted to fighting inflation to protecting the job market. While most investors have cheered the news, there’s a key takeaway. It’s the fact that the central bank may allow inflation to tick higher.

If that’s the case, then inflation could even re-accelerate. Historically, that’s what happened with the high inflation of the 1970s. An initial surge higher in inflation dropped, only to reignite higher later in the decade.

With that in mind, investors may want to prepare for a melt-up in inflation again.

Besides lower interest rates, government spending could fuel this melt-up. That’s because government spending is already running a massive deficit. The U.S. government has managed to increase its total debt by nearly $1 trillion every 100 days this year.

Plus, the cost of financing that debt has now topped $1 trillion annually. That’s just money going out to bondholders of U.S. Treasury bills, notes, and bonds. It doesn’t go towards any productive spending.

In the initial stage of a melt-up, markets may rally higher. Governments like this option, as it creates a feeling of initial wealth creation. But markets may not make new all-time highs in inflation-adjusted returns.

Investors looking to protect from a debt crisis and inflation have few alternatives. Assets such as gold and bitcoin have no counterparty risk, if held directly. Financial assets in general should rise as well, from the stock market to your home.

 

To view the full danger of melt-up inflation, click here.

Stock market strategies

FX Evolution: Will October Actually Be Bad for Markets?

Posted on by Andrew Packer

Financial markets skated through September unscathed. The start of an interest rate cut cycle allowed stock to break higher in what’s historically the worst month of the year. However, for October, it’s a different story.

October is the second-worst performing month of the year. Even worse, it’s also the month that tends to have market crashes. And being the month before a presidential election, investors should expect a high level of volatility.

After September’s rally, stocks entered the month in overbought conditions. The selloff on October 1 was related to geopolitical fears, but also reflected the market’s overstretched conditions.

That’s reflected in terms of the market’s greed and fear. The market was well into greed conditions, as investors were betting on the economy avoiding a recession for now.

Typically, if the economy can avoid a recession, markets should be higher in the next three and six month period.

China’s push for new stimulus measures could help boost that higher too.

So, while October may be volatile, markets are still structurally set for further gains going into 2025. Investors and traders may want to use any market weakness over the coming few weeks to position themselves.

It’s also good to use the next few weeks to look for any potential change to that longer-term uptrend.

 

To view the full analysis, click here.