Hot Hand

The hot hand fallacy is the psychological condition that people believe an individual is "hot" or "cold" depending on past performance, when that performance has no bearing on future outcomes. The market is up 18% in the last 35 trading days, one of the biggest runs in decades. This isn’t going to continue, so it’s a reminder to check yourself and expect lower volatility and chop for the coming weeks. Expect to be BORED, and embrace it like an old friend.

In the last issue I emphasized the likelihood of a correction, and aptly titled issue #55 as “Cool your jets”. The S&P went down a little over 200 points, and the UVIX Hedge trade I posted did very well. I posted those calls at $2.70, they ran as high as $10.50/contract, personally I exited Friday around $9.50 for a 250% gain or 3.5x. Trump’s tariff seesaw gave us a very nice technical correction, worked off excess, and we continued to rally out of the green box demand zone.  

May 16^th :

June 1^st :

I am looking for VIX to fade in the 13-15 area, probably by mid July.

Big Picture:

Periods like this are good to ZOOM OUT, I’ve been expecting new ATH’s in Bitcoin for the last several issues, and we finally put them in around 112k. My bigger picture view remains the same, that we can move up to the $6-7 Trillion dollar area in Total cap, potentially by the end of the year.

Crypto continues to show tremendous strength, and it’s critical to not get shaken around by a $5,000 or $10,000 move in either direction. Looking below we can see the prior four cycles on the chart, and the importance of the MASSIVE SUPPORT we currently sit above. This means we could correct to 90k and still be wildly bullish here.

The market dynamics on the demand side are still very bullish. We are not at a cycle top, or close. Capriole’s Macro Index which combines more than 100 on chain metrics is looking very healthy and has room to run.

Total2 looks to be forming a very bullish base and I expect altcoins to outperform in the coming weeks and through the end of the summer. I do not have a slam dunk entry here or date timing, however with a 2-3 month outlook and patient allocation, the R/R here is strong.

Want to talk DEMAND? Most people don’t realize USDT is one of the largest buyers of US treasuries, and growing RAPIDLY. The stablecoin bill (GENIUS act) is likely to pass this week and could open the floodgates for TVL on chain.

I don’t have a slam dunk setup this week, but I like the looks of Nike longer term here.

AAPL is also on my list and is ready to pop once we get a China deal from Trump

The only thing I bought this week is a higher risk altcoin, called Collaterize. They have a very strong team building an RWA application. They are setup in the app store and have significant traction with recent attention from Solana’s founder. I think they can go to $100m+ market cap in time, and most importantly, they are in a good technical area to buy between .045-.055. The altcoin space has been abysmal, but I have confidence in this name.

Successful investing, and trading is a lot like hunting. For those that have hunted, it is 99% preparation, and waiting, and 1% “taking the shot”. Keep this in mind as the market volatility cools down, and only take a shot when you are 100% ready and on target. Don’t get sucked into the idea that you are “missing out” or the traders you follow on twitter are making 1000%/year – this isn’t real, and good investing takes place over months, years, and eventually decades.

If you are green YTD, you are doing extremely well and beating the market. If I can chart anything for you, or cover different sectors, feel free to send me an email. In the meantime, happy hunting 😊.

TLDR;

1. Nothing obvious here for the shorter term, best to keep high cash

2. Altcoins are going to have a bullish summer, start allocating in demand areas. I am buying $COLLAT

3. I am watching $NKE and $AAPL

Trades:

1. Last issue’s UVIX trade was extremely successful (3-4X)

2. Last issue’s “extreme risk” MSTR June 20^th 500C - dumpster fire and needs a miraculous move to get into the money. I have averaged down to about $3/contract, but it’s still an 70%+ loss currently. I will not add any further

3. $WULF is holding well relative to peers and up 50%~

4. $MARA December 20^th $20C is slightly underwater now after 2xing, could be an opportunity to buy.

5. Only new trade for me is $COLLAT at $.047~