by Michael Keane
There are many reasons to investigate an investment into the cryptocurrency area. The testimony by Federal Reserve Chairman Powell to Congress over the last 2 days is another strong indicator. Normally, these hearings are regularly noise. But in this case, the testimony related to cryptocurrency was likely a signal.
Together with arguably every member of Congress, Chairman Powell expressed worry and a strong desire get ahead of cryptocurrency and to limit its effect on the global monetary system. You can find the unfiltered testimony here. Every member of government was in agreement. They even mentioned Facebook multiple times during the testimony. That rarely happens. This should tell you that there is recognition that cryptocurrency is being recognized in a serious manner.
This testimony also should bring back the "fraud" comment from JP Morgan CEO Jamie Dimon about cryptocurrency 18 months ago. But 6 months ago, JP Morgan released news that they have built their own coin and have a large development team doing work. The fraud comment was clearly a stall tactic. I believe Congress and Central Banks around the world are in the same delay "fraud" moment and that they are busy building their teams to handle their responsibilities in the crypto arena. It is interesting that during the testimony, JP Morgan's coin rarely if ever came up. That was not a mistake or oversight.
Some say this testimony is troublesome for cryptocurrency. It actually is the exact opposite. Legitimacy continues to strengthen. Regulation is needed. Now it is up to the cryptocurrency group to assist in helping to build the infrastructure that answers governmental questions and shows its promise to the community. A recent comment from author and blockchain investor Don Tapscott, related the development of blockchain to the development of the internet around 1995.
Some areas to investigate are chips, platform companies, and software. Per disclosure, KDK Fund does not currently have an investment in the space. Our partner, KDK Options, has an order for Nvidia call options that is not yet filled.
**All
posts on this blog are information and opinions only. They are not to
be considered recommendations to buy or sell any security. Please do
your due diligence first before trading and investing. Please direct all
questions and comments to the blog, kdkfund@gmail.com, or on
twitter @kdkfund.
Showing posts with label Federal Reserve. Show all posts
Showing posts with label Federal Reserve. Show all posts
Thursday, July 11, 2019
Tuesday, January 7, 2014
Is Oil Ready To Drop?
One of the ways that KDK Fund makes money is through short term (less than 6 months) speculative options trading. For example, KDK Fund currently owns a UUP (US Dollar) $21.50 call with an expiration of January 24th. The most recent status of the trade can be found here. KDK Fund is regularly learning about other opportunities.
One such opportunity that is starting to gain favor with KDK Fund is the idea that oil prices are set to fall for 2014. There are a few items that KDK Fund has found to support this argument.
One major piece of the argument rests in the fact that the world is starting to produce a growing amount of oil. So much so that there are multiple reports now that the rate of growth is to outpace the growth of the refining ability and global GDP estimates. In the United States, oil growth is getting to a point where projections are that the US will be oil independent in the next 5-7 years. Mexico is looking to release land that was under government control to private oil companies for exploration research. This could nearly double output. When you add oil output from Iraq and other places in the Middle East on the market, the result should be pressure on the market price.
Another large item that supports this view is the expected rising value of the US Dollar. As the dollar increases in value, the price of oil should decrease accordingly. With the Federal Reserve decreasing their QE assistance, the value of the US Dollar should increase. This is part of the reason the current dollar trade is going on.
The USO ETF is nearing multi year support in the $32.00 region. A break of that could drop the ETF to $30.00 first and a continuation to as low as $25.00.
KDK Fund will be watching the ETF USO with eyes particularly on the put side of the options market. No trade is planned yet; just research. Any action taken will be reported.
**All posts on this blog are information and opinions only. They are not to be considered recommendations to buy or sell any security. Please do your due diligence first before trading and investing.**
One such opportunity that is starting to gain favor with KDK Fund is the idea that oil prices are set to fall for 2014. There are a few items that KDK Fund has found to support this argument.
One major piece of the argument rests in the fact that the world is starting to produce a growing amount of oil. So much so that there are multiple reports now that the rate of growth is to outpace the growth of the refining ability and global GDP estimates. In the United States, oil growth is getting to a point where projections are that the US will be oil independent in the next 5-7 years. Mexico is looking to release land that was under government control to private oil companies for exploration research. This could nearly double output. When you add oil output from Iraq and other places in the Middle East on the market, the result should be pressure on the market price.
Another large item that supports this view is the expected rising value of the US Dollar. As the dollar increases in value, the price of oil should decrease accordingly. With the Federal Reserve decreasing their QE assistance, the value of the US Dollar should increase. This is part of the reason the current dollar trade is going on.
The USO ETF is nearing multi year support in the $32.00 region. A break of that could drop the ETF to $30.00 first and a continuation to as low as $25.00.
KDK Fund will be watching the ETF USO with eyes particularly on the put side of the options market. No trade is planned yet; just research. Any action taken will be reported.
**All posts on this blog are information and opinions only. They are not to be considered recommendations to buy or sell any security. Please do your due diligence first before trading and investing.**
Tuesday, December 31, 2013
KDK Fund Dec 28 Weekly Report (UUP, Year End)
KDK Fund had a quiet week. The UUP Jan 4th week (ending Jan 24) $21.50 call is still owned. UUP is currently trading around $21.50. KDK will keep the trade on looking at the following events:
- employment numbers
- Yen actions
- Euro actions
- Fed Reserve actions
With 2013 done, KDK Fund is eagerly awaiting 2014. Lessons were learned in 2013. There were trades that made money but did not have great set ups and there were trades that lost money but had good set ups and exits. The lessons learned during 2013 will no doubt improve the skill and results of 2014.
May everyone have a healthy and successful investing and trading 2014.
You can also follow KDK Fund at its Facebook page (here), Twitter handle @kdkfund, and Google plus
**All posts on this blog are information and opinions only. They are not to be considered recommendations to buy or sell any security. Please do your due diligence first before trading and investing.**
- employment numbers
- Yen actions
- Euro actions
- Fed Reserve actions
With 2013 done, KDK Fund is eagerly awaiting 2014. Lessons were learned in 2013. There were trades that made money but did not have great set ups and there were trades that lost money but had good set ups and exits. The lessons learned during 2013 will no doubt improve the skill and results of 2014.
May everyone have a healthy and successful investing and trading 2014.
You can also follow KDK Fund at its Facebook page (here), Twitter handle @kdkfund, and Google plus
**All posts on this blog are information and opinions only. They are not to be considered recommendations to buy or sell any security. Please do your due diligence first before trading and investing.**
Friday, December 20, 2013
New Trade in UUP Jan $21.50 Call Option
A new options trade has been made for KDK Fund. The January week 4 UUP $21.50 call option has been purchased for $0.25. UUP is currently trading at $21.67. The goal for the trade is $0.75. The trade will end on Friday, January 24th. Reasons for the purchase are as follows:
- Recent Federal Reserve decision to taper QE
- Increased GDP points to further strength in economy and further tapering of QE
- Increased GDP of previous quarter points to possible upward revisions of current quarter.
- Possible double bottom forming a W formation (there are 3 W formations marked previously in the chart).
- Japan and Europe still in the middle of their own QE programs
- US Government passing actual budget that provides more stability to market and economy
- Cost of trade showed only $0.08 of time value when the trade was made.
**All posts on this blog are information and opinions only. They are not to be considered recommendations to buy or sell any security. Please do your due diligence first before trading and investing.**
- Recent Federal Reserve decision to taper QE
- Increased GDP points to further strength in economy and further tapering of QE
- Increased GDP of previous quarter points to possible upward revisions of current quarter.
- Possible double bottom forming a W formation (there are 3 W formations marked previously in the chart).
- Japan and Europe still in the middle of their own QE programs
- US Government passing actual budget that provides more stability to market and economy
- Cost of trade showed only $0.08 of time value when the trade was made.
**All posts on this blog are information and opinions only. They are not to be considered recommendations to buy or sell any security. Please do your due diligence first before trading and investing.**
Saturday, December 14, 2013
KDK Fund Weekly Update (IAU trade, and more)
- The IAU December $12.00 trade still continues into next week. The current price of the options is $0.10. The projection for the price of the option is still $1.00. IAU is currently priced at $12.01. IAU moved $ for the week.
- IAU is butting down against support.
- The Federal Reserve meets on Tuesday and Wednesday that should have a significant impact
- End of year tax selling should be occurring with Gold ETF's like IAU
- Time Value still high on the option
** This blog is just information and opinion regarding a particular fund. It is not to be taken as a recommendation to buy or sell any security. Do your own due diligence before trading or investing.**
Saturday, December 7, 2013
KDK Weekly Report (IAU Put Trade and More) 12/7
KDK Fund once a week will write about the week's performance, the thoughts on the future trades, and other financial information thought to be relevant to the account.
- IAU December $12.00 Put Trade - During the week, IAU dropped from a close of $12.13 last Friday to a close of $11.93 this Friday. The put price stayed the same at $0.20. There was positive news on the economic, employment, and manufacturing numbers that were instrumental in this week's drop. The likelihood of the drop continuing is high as the Federal Reserve meets on the 17th and 18th of December to discuss the possibility of tapering the $85 billion monthly QE. Gold is nearing the yearly low. There has not been a large volume day to indicate that a bottom has been reached. Technicals and fundamentals are suggesting a continuation of the down trend. There is still quite a bit of interest in the trade as the time value is higher than expected. Positives for gold include buying pressure from China. KDK Fund will continue with the trade as it is. The goal is still $1.00 for the put. The trade will end by December 20. The initial post of this trade can be found here.
- The fund is gearing up to make its first trade of 2014. It will be made in either the first or second week of January. The plan is to buy Verizon, Ford, Google, United Healthcare, and Costco (not order specific) during the year.
** This blog is just information and opinion regarding a particular fund. It is not to be taken as a recommendation to buy or sell any security. Do your own due diligence before trading or investing.**
- IAU December $12.00 Put Trade - During the week, IAU dropped from a close of $12.13 last Friday to a close of $11.93 this Friday. The put price stayed the same at $0.20. There was positive news on the economic, employment, and manufacturing numbers that were instrumental in this week's drop. The likelihood of the drop continuing is high as the Federal Reserve meets on the 17th and 18th of December to discuss the possibility of tapering the $85 billion monthly QE. Gold is nearing the yearly low. There has not been a large volume day to indicate that a bottom has been reached. Technicals and fundamentals are suggesting a continuation of the down trend. There is still quite a bit of interest in the trade as the time value is higher than expected. Positives for gold include buying pressure from China. KDK Fund will continue with the trade as it is. The goal is still $1.00 for the put. The trade will end by December 20. The initial post of this trade can be found here.
- The fund is gearing up to make its first trade of 2014. It will be made in either the first or second week of January. The plan is to buy Verizon, Ford, Google, United Healthcare, and Costco (not order specific) during the year.
** This blog is just information and opinion regarding a particular fund. It is not to be taken as a recommendation to buy or sell any security. Do your own due diligence before trading or investing.**
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