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The Wolf Den #540 - Advice To Myself

July 13 · Issue #540 · View online
The Wolf Den Crypto Newsletter
Welcome to The Wolf Den! This is where I share my ideas about the market, technical analysis, education and advice regarding trader psychology and emotional control. The newsletter is released every weekday and is completely FREE.
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In This Issue:
  1. Advice To Myself
  2. Bitcoin Thoughts And Analysis
  3. Legacy Markets
  4. CPI Numbers Today
  5. The Ethereum Network Is Drunk
  6. Charlie Munger Has One-Upped Himself
  7. My Recommended Platforms And Tools
Advice To Myself
Since the music has stopped and markets have decided to punish us relentlessly, I thought it would be a good time to reflect on the things that I could have done differently. We can’t change the past, but we can learn lessons from our experiences, which is why I have decided to codify some custom tailored advice to myself in this newsletter. Perhaps my list is similar to yours. Maybe you will be inspired to create your own.
The goal is to avoid making the same mistakes again in the future. Print your lessons out, hang them up, our shout them in them in the mirror. Just don’t forget them.
Lessons to myself, in no particular order:
Listen to my friends… and the greats - Nobody knows you quite like your friends and nobody knows more than the greats who have come before us. The market is always challenging, meaning it’s really easy for our biases to lead us astray and trick us into thinking we are brilliant when things are going well. Friends keep us on track and the greats lead the way. MANY people in my life and on my show offered soft warnings that things were likely to turn, and that platforms I trusted were riskier than I gave credit for. I simply did not listen.
Do better at taking profits - This one is pretty straightforward. When things are going well, sell! If I can force myself to buy when things are ugly, then I can also force myself to sell when things are great. From here on out, I will pay less attention to “predictions” and more attention to profits and losses. It’s okay to be the hated investor that takes profits. To be clear - I did take quite a bit of profit on altcoins, but I could have taken MUCH more.
You are playing against the best of the best - There are sharks and cutthroat billionaires waiting to countertrade your every move. Every time I buy and every time I sell, I need to ask myself who might be on the other side of the trade. I am only a small fish in a very large sea, which means defense is everything.
This is a lifelong game - Today does not matter, yesterday does not matter, and tomorrow does not matter. Investing is like maintaining good health - the practice doesn’t just stop and start at random points, but is a consistent and lifelong pursuit. I am relatively good at zooming out, but still focus a bit too much on the day to day news. It’s hard to step away mentally when I am writing a newsletter and making videos every single day.
Being contrarian is not enough - I also have to be right. It’s far too easy to get caught up in the crypto bubble and forget that 95% of the world is doubting us. Being a successful contrarian means I have to fade both the biases of the outside world and those who occupy our bubble. There are two herds, each opposed, and each likely wrong in their own ways. This is a balancing act that needs constant consideration.
You can only trust yourself - Self-custody is the way to go. Being your own bank is not an easy task, but handing over hard-earned money to others to find yield clearly isn’t viable. Whatever the shiny new future thing is that make us forget the importance of self-custody, ignore it. If crypto succeeds, the interest from yield will have never mattered. The only thing that matters is protecting what I own.
There are quite a few more, but I will save them for another day. This is a good starting point, and a list that I will revisit regularly.
Bitcoin Thoughts And Analysis
You have likely seen me draw this idea 100 times by now, but it is always what I look for as a bottom signal when RSI goes oversold. I love the 4-hour chart for this as a shorter term trader. This does not have to happen - RSI already went oversold and could easily continue to bounce. But bullish divergence coming out of oversold RSI would very likely send RSI back to overbought, which could coincide with another decent move to the upside.
That’s all I have for you today!
Legacy Markets
Futures, Stocks Mixed Before Key US Inflation Data: Markets Wrap - Bloomberg
What to watch this week:
  • Earnings due from JPMorgan, Morgan Stanley, Citigroup, Wells Fargo
  • US CPI data, Wednesday
  • Federal Reserve Beige Book, Wednesday
  • US PPI, jobless claims, Thursday
  • China GDP, Friday
  • US business inventories, industrial production, University of Michigan consumer sentiment, Empire manufacturing, retail sales, Friday
  • G-20 finance ministers, central bankers meet in Bali, from Friday
  • Atlanta Fed President Raphael Bostic speaks, Friday
Will the eurozone avoid a recession or a debt crisis? How will the euro and stocks perform in the next six months? Share your views and participate in the latest MLIV Pulse survey. It only takes a minute, so please click here anonymously.
Some of the main moves in markets:
  • Futures on the S&P 500 rose 0.2% as of 6:03 a.m. New York time
  • Futures on the Nasdaq 100 rose 0.3%
  • Futures on the Dow Jones Industrial Average rose 0.2%
  • The Stoxx Europe 600 fell 0.7%
  • The MSCI World index was little changed
  • The Bloomberg Dollar Spot Index was little changed
  • The euro was little changed at $1.0038
  • The British pound was little changed at $1.1897
  • The Japanese yen fell 0.2% to 137.09 per dollar
  • The yield on 10-year Treasuries declined one basis point to 2.96%
  • Germany’s 10-year yield advanced two basis points to 1.15%
  • Britain’s 10-year yield advanced two basis points to 2.09%
  • West Texas Intermediate crude rose 0.8% to $96.57 a barrel
  • Gold futures rose 0.1% to $1,726.70 an ounce
CPI Numbers Today
Whitehouse Press Sec. Jean-Pierre Expects US CPI Data To Be "Highly Elevated" - The Dales Report
Drum roll please.
Ladies aaaaaand gentlemen. It’s the moment that markets have been waiting for. CPI number are coming in today at 8:30 AM EST. If the White House chief spokesperson has gone on the record to warn us that the headline CPI number will be “highly elevated,” we can probably expect something pushing 9%. Markets are likely to go haywire regardless of the number, as they generally react to this sort of news with increased volatility. Also, they often react initially in an irrational manner, doing the opposite of what is expected.
Brace yourselves for a wild ride.
The Ethereum Network Is Drunk
Ethereum's active addresses hit a 2-year low amid market sell-off
On-chain activity for the Ethereum network has hit a 2-year low. According to Glassnode, active addresses right now are in the 6 million range, down from 9 million just 4 months ago. The all-time high for active Ethereum addresses was in May 2021, when 13 million addresses were active on the network. This metric clearly reflects the reduced price, and other networks are likely down way worse. This is not actionable intel, but rather a reflection of just how brutal this bear market remains.
Hopefully, both price and activity will soon recover so we can go back to the good ol’ days of complaining about expensive gas.
Charlie Munger Has One-Upped Himself
Charlie Munger Bashes Crypto as an “Open Sewer” of Evil Actors
Just this February, Munger made headlines for calling crypto, “a venereal disease” and “beneath contempt.” If that wasn’t funny enough, now he is saying, “I just avoid it as if it were an open sewer, full of malicious organisms.” Where does he even come up with these lines?
A few years back, Munger’s counterpart, Warren Buffet, made headlines for calling Bitcoin “rat poison squared."If these two ever manage to change their minds before their time is up, it will be one of the most epic pivots in history.
It won’t happen.
We don’t need them and they CLEARLY don’t need us.
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The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this e-mail constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to “Buy,” “Sell,” or “Hold” an investment.
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