In Elliott Wave terms, SPINDLE began a wave one advance on August 20. The red wave one (blue sub-waves i-ii-iii-iv-v) finished on August 26, and the red wave two (blue sub-waves a-b-c) correction ended on September 4. If this wave count is correct, SPINDLE should be heading next towards the August 26 peak in the red wave three.
During economic troubled times, Smart Money rotates into Utilities and REITs because they act like bonds, meaning the stock dividends are equivalent to coupon rates, the yield paid by a fixed-income security. However, let me expand on this a bit more. Utilities and REITs are usually drowning in debt, but during economic troubled times, interest rates go down, so debt obligations put less of a strain on cash flow and more cash flow means consistent payouts of dividends. However, let me expand no this a bit more. Investors are looking for a return on their capital.
As of June 2019, the dividend yield for the S&P 500 was 1.85%. This is below the historical average of 4.41% and close to the all-time low of 1.11% observed in August 2000.
So if investor can get a decent return on their capital from the equity markets, can’t get a decent return on their capital from bonds because interest rates continue to decline, the next best option is dividends. The barriers of entry are tough in the Utilities and the REITs sector, so with little competition and residual income, dividends are payout out consistently.
Since I wrote that post two months ago, XLU, the SPDR Utilities Sector ETF an the XLRE, the SPDR Real Estate Sector ETF are both up 8%, while the SPY, the S&P 500 ETF is down 2%.
My favorite REIT right now is Innovative Industrial Properties
but I’m waiting for price to get to the $64 level before I buy.
A REIT worth keeping an eye on is the ETF, the Pacer Benchmark Data & Infrastructure Real Estate (SCTR) which offers investors exposure to U.S. companies that generate the majority of their revenue from real estate operations in the data and infrastructure sector. Demand for data storage real estate is being driven by cloud, cybersecurity and 5G communication services. So you know this REIT has a bright future.
The chart suggests to buy on a pull back at the weekly demand at $29.
This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.
Please click the link below to listen to the 52nd episode of my weekly crypto podcast ‘Two Minute Crypto.’ These are intended to be short, single-topic ramblings on some aspect of the cryptosphere.
Welcome to Two Minute Crypto. This episode of the Key Concepts Series examines blockchain nodes and attempts to explain their role in a typical chain with as little jargon as possible. While there are different implementations of nodes across blockchains the underlying role of such nodes is generally the same. As Bitcoin is by far and away the most distributed example of a blockchain system – its node structure will be referenced.
What is a node?
A node is simply a full digital record of all previous transactions on a blockchain network which participates in the network by processing transactions and blocks in accordance with the rules encoded in that system. Each and every entry on the blockchain is stored on this point of reference.
Taking Bitcoin as an example, it is possible for any individual to download a copy of Bitcoin core and store it on their computer. Currently, this digital copy of all previous interlinked blocks is about 250GBs. It is further possible for that record to interact with the Bitcoin network to ensure that new transactions are valid and that they adhere to the rules or consensus mechanism of BTC – this is a node. A record, a ruleset, and a connection. Bitcoin nodes do not operate for profit as the record validator is not paid a fee.
A node, therefore, is essential to the security and operation of a blockchain. The greater the number of nodes the wider the distribution of a chains record and the more resilient it is. More points of reference equal greater network information integrity.
Why run a node?
Well, first and foremost, you are helping to secure the system you wish to use. Secondly, by running a node you have the ability to participate in verifying your own transactions and therefore remove all trust from your use of the network. Of course, your node needs to communicate with the rest of the system but you are assured of the validity of your transactions as you already hold a trusted record of the blockchain.
Bitcoin is often touted as the most robust blockchain system – its widely distributed node network is a key attribute of its security. While it’s impossible to get a completely accurate number for currently operational nodes – there are at least 10 thousand and growing.
It’s important not to confuse nodes with miners. Nodes hold records but miners solve the cryptographic computational problem that allows the addition of new blocks to the chain. Mining requires highly specialized equipment such as ASICS and is an energy-intensive process. Miners are paid a fee for doing so. Nodes, in contrast, operate on normal consumer-grade hardware and may operate in the background. In Proof of Work networks such as Bitcoin, it is the synergy of nodes and miners that process, validate and protect the network.
Thanks for listening.
Resources
What is Bitcoin Full Node and How to Run a Bitcoin Full node in 6 simple steps?
https://medium.com/coinmonks/how-to-run-a-bitcoin-full-node-in-6-simple-steps-a243189a5750
What Are Nodes?
https://www.binance.vision/blockchain/what-are-nodes
I hope this has been helpful. I’d be happy to answer any questions in the comment section below. Until next time, wishing you safe and profitable trading.
Workin
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I truly believe that one day this is going to happen. Passive investing now accounts for more than HALF of the US stock market and is growing. The movement has officially been made and investors do not use brokers anymore as they run to passive ETFs and index funds. This has been created just over THE PAST 10 YEARS.
At the beginning of the bull run active investments held nearly a 3 to 1 advantage over passive fund assets. That has shrank to…almost ZERO ADVANTAGE present day.
Courtesy of CNBC and Morningster
This type of investing has been killing it over the past decade and continues to gain traction. I believe that at some point this will be a HUGE PROBLEM. Once the next major downturn in the stock market starts, and these PASSIVE inflows slow, then stop, and become outflows, you are going to have a market that may undergo a faster elevator down that has ever been seen.
Over the past 10 years, the passive inflows has helped push the market higher and higher, over and over again. Well when the tide turns…the passive inflows will not push the market down over and over again, they will all run for the exit at once.
Real Estate has been relentless. During a time where NOTHING seems to be going anywhere in the US sectors and the global growth is SLOWING, Real Estate continues to push forward. I am looking at Real Estate at least testing the 94 area from the 2008 highs before pulling back. More Upside to Come.
Speaking of, I am selling my house now if you are in the market
Global growth has been slowing for a while now. Many countries are making lower highs across the board and look awful with even worse incoming data. Yields are crashing. And the only thing left are US Equities. How long can they keep the world a float?
The Vix is sitting at 19 and has built a sideways base. This matches the bear flag of all the indices off the most recent highs. If the bulls have a chance, then they SMASH the Vix like they have the past 4 years to under 16. If the Vix spike, the equity bulls will be few and far between and a liquidity issue will be on our hands for the first time in a few years I am afraid.
Vix over 25 and you will start seeing air pockets. Let’s hope the bulls can hold the line.
In “BTC analysis – 26 August” I updated my latest thoughts on Bitcoin’s medium-term movements. Since then a price reversal in the $9300s has forced a reassessment of that situation.
Previously I spoke of a bull flag. That flag was forming in a descending channel and was adhering to diagonal Fib levels as it did so, something like this:
But what appeared to be a series of higher lows caused me to reconsider and change the flag into a pennant, as seen in my BTC post last week:
Now things have changed again – or at least may be about to change.
The price movements of this last weekend may have altered the bull pennant into a more bearish converging triangle pattern.
At this stage we require a confirmation move, which we will get, one way or another.
Scenarios:
The chart below shows the two main scenarios that we may now be dealing with.
In Scenario 1 BTC is forming a converging triangle with a near-horizontal base. Scenario 1 will be confirmed if price continues to rise to about $11000.
In Scenario 2 BTC is still in a descending channel. Scenario 2 will be confirmed if BTC ceases to rise well short of $11000 and then falls below $9300 for a sustained period (more than just a few hours).
Scenario 1
If Scenario 1 is correct then it is most likely that BTC price will remain in the triangle until the final quarter of 2019, after which it will probably break downwards. We can see that a downwards break is more likely, because a flat-bottomed triangle is an indication that support is continually being tested. Eventually that support “runs out” (as buy orders are filled and traders decline to place new orders that high in a market which is turning bearish). In addition to that, most momentum indicators (such as the MACD, RSI or long-term MAs) will show that momentum is becoming/has become negative. Most telling of all is the volume, which is still steadily declining.
In the likely even that BTC does break out of this (unconfirmed) triangle in a downwards direction, the big question will be “How Low?” Recent support lies in the high $7000s/low $8000s. That is enough to catch the dip, but don’t get a shock if it fails to hold there. If support breaks, then the next recent support level only lies at $5600 and below. I think that any dip that low will be very short lived. If you do see BTC that low then buy like crazy! Between the high $7000s and $5600 is another possible support level in the mid to low $6000s. This is the support level established in 2018, though its continued existence is uncertain because:
It broke conclusively in November 2018.
No resistance was encountered at that level when BTC climbed through it in May of 2019.
After the dip, we can expect a rapid recover and then a steady climb along the long-term base trendline for BTC – until the market turns properly bullish and hype sets in.
Scenario 2
If Scenario 2 is correct, then BTC will most likely decrease in price all the way to the bottom of the channel. Since the channel is downwards sloping, the price level at which BTC hits the bottom of the channel continually decreases over time. Were price to reach the bottom of the channel today, then it would be at around $8000. But if it only reaches it a month from now, then it will be in the mid-$7000s.
Scenario 2 is still reminiscent of a bull flag, which means that it precedes a swift increase in price after hitting the channel bottom. It is unlikely that price would then bounce up and down for yet another cycle within the channel, that would be too unusual.
Likelihood
I consider Scenario 1 to be a very likely Scenario. I allocate a probability of 55% to Scenario 1. Scenario 2 is not very likely anymore. I allocate a probability of 20 % to Scenario 2. The remaining 25% is for “something else” – an as yet unforeseen price movement or variation of one of the above scenarios.
Conclusion
Whatever happens, I am predicting a relatively bearish two or three months. I think we will see a decent sized dip soon. I have been waiting with Buy orders in the $8000s for a few weeks now. Depending on what happens next, I will consider shifting some or all of those orders a bit lower, and/or perhaps placing additional Buy orders at even lower prices.
I do not see the market really picking up before December 2019 at the earliest, but on the other hand, I’m predicting a stellar (not Lumens) 2020 for BTC and crypto in general! For now I will continue to stack little bits of BTC if I can afford it, AND ALTCOINS! There is blood on the streets, this is the time to accumulate alts!
Yours in crypto
Bit Brain
All charts made by Bit Brain with TradingView
“The secret to success: find out where people are going and get there first”
~ Mark Twain
“Crypto does not require institutional investment to succeed; institutions require crypto investments to remain successful”
Study hard what interests you the most in the most undisciplined, irreverent and original manner possible. Richard Feynmann
The purpose of this weekly series is to recap some of the interesting ideas and concepts across a wide range of disciplines which each and every week in crypto seems to throw up. This ‘learners paradise’ is a great space to explore but also asks a lot of those who delve into it.
Got a grasp on basic programming logic, how about Austrian economics, or quantum computing or precisely how hashing algorithms underpin blockchains? Taking a moment to reflect or recap on the recent concepts and ideas crossing the crypto landscape can be very beneficial whether you are a hardcore day trader or just exploring a casual interest in the space.
It’s important to note that not every idea here reflects my own bias or opinion. If it’s here, it’s because it made me think.
That’s a wrap on another compelling week in crypto. As always looking forward to your comments and suggestions.
Note on Sources:
Twitter & Reddit (cryptos current meta-brains) / Medium / Trybe / Hackernoon / Whaleshares / TIMM and so on/ YouTube / various podcasts and whatever else I stumble upon. The aim is a useful weekly aggregator of ideas rather than news. Though I try to keep the sources current – I’ll reference these articles and podcasts etc. as I encounter them – they may have been published just a couple of days ago or in some cases quite a bit earlier.
