A lot of green on the stock screens this week. That’s good. Everything is up. Gold. Stocks. Crypto.
But we all know “sell in May and go away”, so is it time to take profits, move to cash, and wait for a correction?
Probably, but the correction could happen tomorrow or six months from now. Do you want to be on the sidelines for six months while the markets are humming higher? No, you want to generate as much profit as possible. So what’s the play?
I don’t know, but I did do some selling this past week. I was close to 100% invested, and that’s dangerous, for two reasons. First, in a crash, you lose money, and second, even without a crash, you have no cash to take advantage of potential deals. So, I took some profits and moved a small portion of my investments to cash.
My biggest winner so far this year is QETH – The Ether Fund, which, as the name implies, invests in the crypto asset Ethereum. Ether is up around 400% year to date, and I’m guessing it won’t keep going up 100% each month, so some profit-taking was in order. Ether briefly touched $3,600 USD this week, and it is quite likely it will hit $10,000 before the end of the year, but it is also quite likely that it will have a 30% correction at some point in the next month or two, so taking profits is never a bad idea.
I guess if the crash happens tomorrow I will wish I cashed in everything, but for now, some cash is the safe play.
We shall see. More next week.
Mid Month Update
by JDH on May 15, 2021
It is May 15, 2021, so here’s what’s happening:
The world has not ended. The stock market is holding in there.
Gold
After a double bottom in March and April at around $1,675, gold has bounced back to $1,838, but the one-year chart continues to show a clear downtrend, and with the RSI approaching 70 it is likely that we are approaching a local top for gold.
Perhaps not.
If gold can get above the prior top at the beginning of January of around $1,950, further increases are possible, but for now, I’m thinking the short-term trend is more likely to be down than up.
I am not doing any new buying.
Crypto
This brings us to the much more interesting world of crypto.
As I write this shortly after 7:00 am on Saturday morning, Bitcoin is around $48,600, which is near the bottom of its trading range since the first week of March ($47,000 to $65,000, it’s a big range). I don’t think Bitcoin is dead. Far from it. A more likely scenario is that the whales are using this as an accumulation opportunity, and I continue to expect to see Bitcoin at $100,000 by the end of the year.
Ether is rocking, up 450% on the year, and easily my best investment year to date, through QETH – The Ether Fund, so I’m happy about that. I’m not crazy, however, so I did take some profits this week, and will likely continue to sell on further strength. Ether peaked just under $4,400 a few days ago, and currently sits at $3,888. I expect $10,000 Ethereum, likely before the end of the summer, but we shall see.
I’m not going to comment on Doge, because it’s a joke. Literally. Yes, it’s up 12,000% on the year, but I don’t own any, and I’m not buying any.
Of more interest is Cardano, and its native token ADA, which is up a modest 1,200% year to date. I will leave it to you to do your own research. This one is real. However, generally, after a big move is not the time to buy, so I’m not saying to buy now, just to keep an eye on it.
Interesting times.
Perhaps next week we get a massive crash. That will make for an interesting discussion, so tune in next week and let’s see what’s happened. For now, ride the wave.
See you next week.