Morning Market Thoughts

by DAN Good morning. I hope you had a wonderful and relaxing Thanksgiving holiday. Ours was spent back in Minnesota (very cold; no snow), and we hosted a dinner for 41 people. So our holiday was wonderful…but hardly relaxing.

The futures are pointing to a slightly higher open this morning, and traders will be looking at the retail sector for indications of how strong the consumer really is. From what I’ve read, we had the usual bout of fistfights as Wal-Mart shoppers got a head start on the joyous holiday season by doing everything possible to grab that last big screen TV. I’ve always wondered what happens to the TV after the cops come. Do they put it in the trunk of the cruiser? Can it fit in the back seat with the perp? And what is the difference between the Black Friday savings on the TV and the bail bond? Hopefully, you don’t know the answers either.

Regarding Square.com (SQ): This parabolic mover received a downgrade this morning, with the analyst noting that the buzz around the new feature of its Cash app allowing Bitcoin payments is overdone overdone. The stock is down nearly $2 pre-market (around 4%). As I’ve been noting, the massive volume in this stock, combined with the parabolic move, is amounting to a blowoff top.

I strongly recommend that you be moving out of this stock. All good things come to an end, and I do agree that the bitcoin move has been overblown. Bitcoin is rapidly being seen as a store of wealth (i.e., buy and hold until BTC hits $180,000) along with a method of payment. I think that traders might be overlooking this important aspect of the cryptocurrency. At this point on the chart, the risk of loss far outweighs the potential for higher prices. Don’t overstay your welcome. If you are a long-term investor, take a look at the weekly chart. Maybe you’ll change your mind.

I’ll see you in the forum.

–Dan

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