🗞 Weekly Market Newsletter | Edition No. 19
News Update + A Full Analysis of Major Indices Including Stocks, Crypto, Commodities, Bonds & Forex
Sunday November 13th,
I’ve thought of a million sentences to start this edition, but in the end I’m going to settle for a very fitting emoticon, 🤯.
I’m mind blown.
The week started with emotions running wild with the expectations of U.S midterm elections on the horizon as the Republicans sought to gain ground in the Senate and House.
As Investors, we were also waiting on the highly anticipated CPI data that could have brought the U.S Dollar to its knees and a potential FED pivot on interest rates - mega bullish potential for the week right?
But what did we get instead?
One of the world’s largest cryptocurrency exchanges ‘FTX’ declaring bankruptcy, the CEO & Founder rumoured to have mismanaged (10B) $10,000,000,000 in user funds and a flurry of panic and bank-runs on the entire ecosystem with 24/7 live coverage being broadcasted on Twitter.
…🤯
I spent 25 out of 24 hours a day since Tuesday glued to my screen aggregating as much information as possible.
As of the time I’m writing this, my mind is still buzzing, my eye movements still rapid, my breathing is shallow, I have finger twitches from the fast paced scrolling and my blink rate is faster than any 4K monitor.
It’s been that kind of a week.
At one point in time I was in Twitter spaces side by side Elon Musk, the top leaders in Crypto including the CEO of Binance ‘CZ’, the best analysts, influencers, developers, exchange founders and 90,000 listeners and panel participants as we discussed what in the world had just happened…and what it means moving forward for crypto.
(exhale)
So where do I start on this edition?
I start by zooming out.
Looking top down, *big picture*.
Macro, not micro.
Long term, not hourly.
Has the technology changed at all? No.
Have any of the blockchains stopped? No.
Was this a growing pain of decentralized innovation? Yes.
Will this likely grasp the attention of regulators worldwide to shift their focus to proper digital asset regulation? Absolutely.
We need to allow the dust to settle before we start asking questions on how the future of cryptocurrency and mass adoption will be forever changed by the events of the past week.
In the short term, we may continue to see the contagion spread to other exchanges and bank runs on their holdings.
This means, get your crypto onto cold storage wallets immediately.
‘Not your keys, not your crypto.’ Hold nothing on exchanges right now.
Do not panic over price volatility - this is not the end of crypto, but prices may experience capitulation at any moment.
It’s likely that mainstream media will use this event to paint a negative portrait over the space, but those headlines couldn’t be further from the truth.
In the early days of computers, the experts and media said they would be a fad and gawked at the idea of families using the clunky devices to perform tasks.
In the early days of the internet, the experts and media said it would be a fad and gawked at the idea of humans using electronic mailing addresses and network web pages to communicate.
In the early days of crypto, the experts and media said it would be a fad and gawked at the idea of humans using digital assets and cryptocurrencies to transfer value across the internet.
Nothing has changed.
Zoom out, be safe and follow the trend of technology - these tense moments too shall pass.
- Bramwell
📊 Weekly Poll
📰 BramwellFox MetaCapital’s Weekly News Recap
You may press the 🗞 to read more about each headline.
Major News + Crypto Headlines
🗞 Black Swan Event - FTX Insolvency [/🧵] + Crypto Industry Panic
💭 Bramwell’s Thoughts…
Genevieve is one of my favorite finance writers and her tweet thread should be explored by everyone to fully grasp the scale of the FTX insolvency.
I’m going to do my best to narrate from my perspectives of what went down this week in chronological order to the best of my factual ability.
Early last week, the CEO of Binance tweeted that due to news that has come to light about the balance sheet of FTX in addition to rumours that FTX was lobbying government officials against Binance, that he would be market selling a large number of $FTT tokens on the open market to dilute Binance’s share of proceeds from investing in the FTX exchange.
$FTT is the native token used by FTX on their platform to collect trading fees and other functions.
This immediately spooked the markets into questioning the potential insolvency of $FTX and crypto twitter immediately began investigating and asking questions only to have Sam Bankman Fried publicly tweet that there were no issues at hand and that all user funds were safe - then he went dead silent.
As the FTX token began plummeting in value, users began withdrawing their funds from FTX at a rapid pace fearing another exchange bankruptcy (ie. Celsius from earlier this Spring) and the potential of losing their funds - and then all of a sudden withdrawals were halted by the exchange.
Uh-oh.
Crypto twitter erupted into chaos demanding answers from the management team at FTX only to be surprised when the CEO of Binance was the first to make a public statement declaring that they had issued a LOI (letter of interest) into purchasing (/bailing out) FTX as Sam Bankman Fried had contacted him overnight looking for a liquidity solution.
This temporarily calmed the market, but only the tip of the iceberg had been exposed.
And what happened next was so fast and furious I don’t know how to even articulate it fluently - again doing my best from memory.
Within 24 hours the due diligence team at Binance had reviewed the balance sheet of FTX and declared that they would NOT be a buyer.
CZ tweeted
From that moment on the world learned the truth that FTX and their hedge fund company Alameda Research were missing $10B of user funds and within hours a second tweet made by ‘SBF’ unleashed the rest of the chaos.
SBF brought to the surface news that he and FTX had filed for Chapter 11 Bankruptcy and since that moment has not said a word publicly.
Then news started breaking everywhere and it has not stopped.
While I can’t in this edition cover every single moment that transpired after this tweet, let me tell you that it will be a Netflix movie in time.
I’ll drop a short bullet list outlining some major highlights:
Sam Bankman Fried and Caroline Ellison (his partner) are both the CEO of FTX and FTX U.S, both are under 30, and SBF himself had a net worth of $16 billion dollars - all of which went to zero in three days this week.
SBF owns over $72M of property in the Bahamas.
FTX was NOT a U.S based or registered exchange.
FTX had dozens of shell companies that illegal proceeds appear to have been funnelled into.
It’s worth noting that SBF was the second largest donor to Joe Biden’s political campaign and it’s being uncovered as we speak that many of the missing funds may have been funnelled to the Democratic Party.
SBF’s Mother was a leading fundraiser and party member of Joe Biden’s 2019/2020 campaign.
It’s also worth noting that a paper trail of U.S aid funds sent to Ukraine appear to have been traced and laundered back through FTX into the Democratic party.
‘Caroline’s’ Father is Glenn Ellison, an MIT economist and the former boss of Gary Gensler, the current Chairman of the Securities and Exchange Commission. 🧐
SBF rose to prominence in the industry out of no where and it’s being speculated that FTX may have been used as a vehicle to blanket the crypto industry with FUD, a government planted operation of sorts.
Would you believe me if I said everything above was still just the tip of the iceberg?
It’s best to follow me on Twitter (TheStoicSatoshi) and view my re-tweets for breaking news that continues to unfold surrounding the event.
I want to transition into my thoughts on what it means moving forward as I believe that’s what truly matters most right now.
As I mentioned above in my introduction, this isn’t the *end* of crypto, but it is likely the beginning of new sweeping standards, guidelines and regulations for centralized exchanges to be more transparent with their solvency claims and proof of reserves involving user funds.
We are likely going to encounter a reverberation effect of other insolvent exchanges that were holding their own funds on FTX, as well as uncover other shady practices that may have been occurring behind closed doors of some of the world’s top CEXs.
This may mean more fear, uncertainty and doubt in the ecosystem for the weeks and months ahead including more selling pressure placed on the total crypto market cap.
I’ll be glued to my screen again this week aggregating more information for all of you as this is likely to be remembered as the largest international financial investigation since Bernie Madoff and impacts millions of users across all borders with close ties to the U.S government - it’s a BIG deal.
🗞 October CPI Data 7.7%, is this bullish news forecasting a FED pivot?
💭 Bramwell’s Thoughts…
This news was a breath of fresh air amongst a week of sour sentiment.
For months we have been waiting for confirmation that high interest rates have played its role in contracting the economy, lowering consumer demand and increasing unemployment.
The data release for October sent stocks soaring (and likely would have been crypto too!) as market participants place their bets on a FED pivot in December during the next FOMC meeting hoping for a 50 bps hike and a more dovish tone heading into the turn of the year.
We hope to see continued downward pressure on prices into December and the formal announcement of interest rate hike reversals in Q1/Q2 2023 which may not produce an immediate bull market for risk assets, however will likely increase the appetite for equities and crypto once the dust has settled from this weeks fiasco.
🗞 U.S Mid Term Elections: Democrats maintain control of Senate.
💭 Bramwell’s Thoughts…
I wouldn’t say that I’m a Republican (or Conservative for my maple leaf readers) or Democrat (Liberal) as much as I’m an independent voter.
But I was looking and hoping to see a more balanced senate and house in the U.S political system as a result of mid-term elections.
I do believe ground was made for the Republicans, the right, but the control of policy will remain in the hands of the Dem’s for the remainder of Brandon’s term as President.
I meditated about what this means late in the week and my conclusion is surprisingly positive, here’s why.
Should the Republicans have gained a majority in the Senate, the next two years would have been spent gridlocked on bills and policies and no further progress being made as the U.S would have a Democratic President disagreeing with chambers of congress.
This may have been counter productive towards making progress on critical issues facing the most *powerful* nation in the world.
Rather, now the full responsibility is in the hands of the Dem’s to make the second half of the Presidency meaningful and effective or else face a complete party shift in 2024.
🗞 LBRY Loses Case vs. SEC: what impact will this have on crypto?
💭 Bramwell’s Thoughts…
This was released on Monday and in hindsight truly foreshadowed the terrible week ahead.
The LBRY case was an important win for the Securities and Exchange Commission as they will now have a case to refer to as precedent across the board in all future litigations involving tokens and their legal status.
The big question everyone asked was “…how will this affect the Ripple lawsuit?” and thankfully I was in the Twitter spaces when Brad Garlinghouse joined and explained that it likely will not have much impact whatsoever due to LBRY pursuing a different legal strategy and the case itself built around different circumstances.
While admitting it may be problematic for the industry, he didn’t seem overly concerned for the status of XRP or likely outcome for Ripple.
🗞 Industry Leaders Gather for Conversation on Twitter: what I’ve learned.
💭 Bramwell’s Thoughts…
After a week of chaos, I found myself grinning that 100,000 humans all concerned about the future of crypto came together alongside Politicians, Regulators, Billionaires, Lawyers, Blockchain Developers, CEO’s, Celebrities, Influencers, Traders, Random Joes + Me for 6 straight days 24/7 to openly unite and discuss how this weeks events will shape the future of crypto.
It was a shining moment and truly demonstrated the power of this technology and reiterated the reason we’re all here in the first place, to return power to the people and overtake a centralized world of power layers.
If you’re not on Twitter, you ought to be spending more time there and joining the community.
BramwellFox MetaCapital’s Weekly Market Review & Technical Analysis
📈📉 The Week Ahead in Charts
Symbols 📈 or 🐂 = Bullish / Positive | 📉 or 🧸 = Bearish or Negative
📉 DXY(U.S Dollar) + 📈CAD
💬 Bramwell’s Commentary, Analysis & Prediction for the Week Ahead:
The DXY is officially in a downtrend and I’m expecting consolidation between the May high’s of 105 and the multi-decade median of 108.
It’s of my opinion and observation that December 15th will likely be the do-or-die moment for the U.S Dollar - December FOMC Meeting. Thus I’m projecting that leading up to that day the DXY may travel across the channel and reject off the channel resistance ultimately forming a multi-month Head & Shoulders pattern, a bearish formation leading to the further downside should the FED pivot on interest rates.
It’s worth noting that the 200MA (red) has yet to be touched all year and this path I’ve drawn would give the 200MA a much needed touchdown. From there, I’m expecting a squeeze between the 200MA and median line leading to the freefall towards the larger range bottom ~101 and the 400MA approaching.
Featured Chart DXY 1D (click to enlarge photo)
The Canadian Dollar perfectly hit my target of .75 this week and I’m expecting further consolidation in this area before an eventual break to the upside towards the multi year POC (point of control) around .7775.
Featured Chart CAD 12HR (click to enlarge photo)
📈 S&P500 + 📈 TSX
💬 Bramwell’s Commentary, Analysis & Prediction for the Week Ahead:
The S&P500 had it’s best sessions of the year to end the week and many calling for the end of the bear market - which *may* be true but I’d like to point out that we are still in a downward facing channel.
On the weekly (below) I’ve zoomed out to give a big picture idea of the magnitude of a freefall that could occur should the S&P break the weekly 200MA, likely a bounce would occur around the FIB .618 ~2950 - 3000.
Else, should the market bottom have found us it’s worth of your attention to check out the 1D chart below to see the potential path this week as I’m expecting a very important test of the 200MA and the downward resistance ~4100 - break that and I believe it’s open skies for U.S equities.
Featured Chart S&P500 1W (click to enlarge photo)
I’ll add that my intuition is skeptical of such a simple break of resistance given the fact that the economy still has not rebounded and I can’t expect that corporate earnings are about to flourish anytime soon.
It’s very possible a harsh rejection occurs if the market isn’t ready for further bullish pressure on stocks - we’ll have to pay attention to market sentiment and other macro catalysts including supply chain and geo-politics as December arrives.
Featured Chart S&P500 1D (click to enlarge photo)
The TSX has shown relative strength vs. the S&P 500 and our 20,000 target was hit perfectly. I’m expecting a slight pullback and consolidation before a continuation to the upside targeting 20,500.
I’ll be looking for bullish news in the Canadian economy including GDP, CPI, Unemployment, Housing and Bank of Canada headlines.
Featured Chart TSX 12HR (click to enlarge photo)
📈 Bitcoin + 📈 XRP
💬 Bramwell’s Commentary, Analysis & Prediction for the Week Ahead
As we jump into Crypto, i’ll be showing two charts for both BTC and XRP - the weekly and the daily.
We’re officially in danger zone for both assets with the downside break of support being aggressive and fast. At this point on the charts, investors begin to sell at the bottom in fear of these types of possible breakdowns; however, it’s also at these points that a quick reversal could take place.
While unlikely given the news, it’s possible.
Looking at Bitcoin on the weekly you’ll see that I’ve used a Fibonacci tool to mark important areas for Bitcoins price action.
Typically off of a major high, the price seeks the .5 or .618 zones for accumulation and we can see that $14.7K marks the .5, while $10K marks the .618.
It’s worth noting that my most favoured analysts are projecting a 12-13.8K bottom for Bitcoin which is in line with these price estimates.
Featured Chart BTC 1W (click to enlarge photo)
On the daily, you’ll notice the June 2018 high’s of 13.8 the next stop for Bitcoin should the price breakdown below the red line of support.
Else, we may experience a short deviation from the support line and grab liquidity to the upside ~ 17.5 - 18K before making the move down, but in my opinion that’s unlikely.
All eyes on Bitcoin this week.
Featured Chart BTC 1D (click to enlarge photo)
XRP in the short term is facing the same fate.
On the weekly chart you’ll notice the point of control price approx. 30 cents meanwhile the bounce target for capitulation is around 20 cents to .25 cents.
Investors much be prepared for this price action to unfold with any downward pressure from Bitcoin.
XRP on the daily chart has weak demand zones stemming from the June lows which have not been broken, but they’re very weak supports and I do not expect for them to hold given the FUD in the news right now.
Protect your crypto, hodl’ and dollar cost average as once this wave of capitulation is over, these prices will likely never be revisited again should a positive outcome arrive for crypto regulation and the resolution of the Ripple case.
Featured Chart XRP 1D (click to enlarge photo)
Featured Chart XRP 1W (click to enlarge photo)
📈 Oil + 📈 Gold
💬 Bramwell’s Commentary, Analysis & Prediction for the Week Ahead:
I’m intuitively expecting Oil to rise up towards the Daily 200MA between $97 - $100 as recent news headlines have shown debate over Biden’s next move should OPEC+ reduce supply.
If that’s the case, Biden will likely continue to exercise the strategic petroleum reserves in an attempt to stabilize the price, but the U.S inventory is not unlimited leading me to assume price in the short term may not free fall downwards to the $75 target but face upwards pressure in the short term leading up to Christmas.
Featured Chart Oil 12HR (click to enlarge photo)
Like a good little nugget Gold is chugging along to my $1800 price targets from July, slow and steady.
If you have not invested a portion of your portfolio into Gold, it’s a very attractive asset class and I’d highly encourage offsetting risk of equities, crypto and cash with precious metals such as Gold.
Before we know it, my intuition tell me Gold will return to the $2K per oz region.
Featured Chart Gold 1D (click to enlarge photo)
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