May 9, 2022 • 4M

Market Thoughts - 05/09/2022

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Nick Conn
Bringing you insight on technology, crypto, and stock market investments.
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Hello Investors,

To the new subscribers this week- welcome and thank you! Join the others who are receiving thought-provoking content weekly.

I wanted to shoot you a little update on some market trends and news that caught my eye. Keep in mind these are subject to change every day. The financial markets are very over-reactive. Any slight news can destroy the thoughts here.

Market Recap

Wall Street ended lower Friday as investors are processing Fed rate hikes, the economy shrinking, and treasury yields rising.

Most, if not all, of the big known companies had shrinking earnings. Coupled with rising interest rates, I think this is worrisome.

Let’s see how this plays out.

Week Ahead

Futures are bloody, but I think this was expected. We are seeing the rate hikes become effective. People are liquidating their higher risk assets and going into into safer bets.

I don’t think the market stops going down here, if we do it will only be for a short time.

The CPI statistics will be released on Wednesday. April CPI expects to see a 0.2% increase, after jumping 1.2% in March. This could be a signal the rate hikes are starting to curb inflation, but it is far from over.

Earnings this week:

Rivian - Wednesday

Coinbase - Tuesday

Beyond Meat - Wednesday

Pelton - Tuesday

Bumble - Wednesday

Crypto Recap

For a few weeks there, we thought Bitcoin had broken it’s lockstep with Wall-Street. Turns out, we were wrong. Bitcoin was just a few weeks behind. The Fed announced a 0.5% rate hike last week. Initially, the market pumped. This turned out to be a bull trap, the next day everything went down hill and dumped.

Bitcoin, which is supposed to be an inflation/$USD hedge, bleeding following the rest of the world. Wall Street is treating Bitcoin like a tech stock (look at NASDAQ vs Bitcoin).

People keeping asking me how low we are going on Bitcoin. I am personally not watching the Bitcoin chart. Here is the chart I am watching:

This is the USDT Dominance. It shows how much of the crypto market cap is in USDT. If you don’t know what USDT is, it is the crypto stablecoin pegged to the US dollar. We USDT.DOM is this high, it signals most of the market is in stablecoins, not crypto assets.

We have officially closed at an all time high on USDT.DOM. I think this signals a crypto “recession” looming. We are showing signs of a deep bear market. I think there is a lot more downside to come, in both markets.

Two things for your alt coins in these times:

  • If you are not out of the position, you better have high conviction.

  • Don’t get married to your bags. Most alts won’t make it through this.

Let’s stack cash, and be ready to buy out favorite assets when the time comes. Have a great week.

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