Cryptos and Oil

Hi Shoppers,

Crypto currencies have been in a freefall since mid-May, when Elon Musk announced Tesla (Ticker: TSLA) would no longer accept Bitcoin as payment.

Things haven’t gotten rosier since then …

      • China’s announcement last week that it is going to crack down on crypto mining and trading transactions, only added to the selling.
      • Closer to home, the Biden administration would like crypto transactions over $10,000 to be reported to the IRS. 
      • Last but not least, Hong Kong has a proposal to limit crypto trading to the professional traders only — meaning you need a million dollars or more to trade it.

As for the Chinese, they have threatened similar crackdowns in 2013 and in 2017, although the latest moves have expanded on the theme.

However …

On Thursday, Reuters reported that so far not much had changed and Chinese citizens were still trading Bitcoin and other cryptos on overseas exchanges.

It is estimated that China accounts for about 70% of Bitcoin mining. According to the Reuters report, Chinese miners are unfazed by the latest announcement because of the difficulty of identifying the transactions.

China has also developed its own digital currency backed by the yuan, and our Federal Reserve is talking about its own digital currency.

Cathie Wood, of Ark Invest, says she still thinks Bitcoin will be $500,000. (And Option Pit Head Income Trader Bill Griffo has it at $250K within three years.)

And noted Bitcoin advocate Michael Saylor put it this way, “Bitcoin is a bank in cyberspace, run by incorruptible software, offering a global, affordable, simple and secure savings account to billions of people that don’t have the option or desire to run their own hedge fund.”

With Bitcoin futures being traded — and soon options, too — the bank trading desks are all in the game, and it hardly seems like crypto is going away.

So, sure, Bitcoin and crypto are having a rough spot, but they’re here to stay — and there’s a potentially cheap way you can participate right now!

This could be a hammer candle in the chart of public blockchain platform Cardano (Ticker: ADA-USD):

Remember a hammer signifies the end of a downtrend. I will be watching for a higher open this morning to confirm. Stay tuned — I’ll have an update in this afternoon’s Pit Stop email. (If you want to get on that list, shoot an email to support@optionpit.com today.)

Switching Gears

On the energy front, I am seeing a possible change in trend in Crude Oil Futures. With Friday’s bullish engulfing candle formation:

The green candle engulfs the red candle of the previous day which can signal the end of the mini downtrend.

Which leads me to the next chart, Halliburton (Ticker: HAL):

Thursday’s candle could be a hammer signaling the end of the mini downtrend in HAL.

If HAL opens and trades higher today, I am going to buy the May 28 $22.50-strike calls and pay up to $.47.

If HAL is going to move I think it will be right away, thus the short dated expiring Friday calls.

I will take my loss on these at $.25 and let them trade up to $1.50 to take my profits.

We are living through some crazy times that will be remembered throughout history.

How will you remember yourself and what you did looking back?

“These are days you’ll remember. Never before and never since…” 10,000 Maniacs

Thanks for Reading … See You Next Tuesday!

Licia Leslie

 

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