Speculative mania has propelled both Bitcoin and the Nasdaq. Bitcoin has more volatility but the pattens are the same. Gold is acting differently.
Gold, Bitcoin, Nasdaq Today
- Bitcoin is down $5,061 to $53,710 That’s a decline of 8.5%with extreme volatility.
- Nasdaq Index is down 550 to 16,235. That’s a decline of 3.3%
- Silver and copper (industrial commodities) are down 4.0 and 3.6%respectively.
- Gold is down $20 to $2,248. That’s a decline of about 0.85%.
The above numbers are roughly 12:27 PM Mountain Time with silver and copper quotes about 12:40 PM.
Gold, Bitcoin, Nasdaq From Recent Highs
- Bitcoin $71,101 to $53,554: -24.7%
- Nasdaq 18,648 to 16,101: -13.7%
- Silver $32.10 to $27.20: -15.3%
- Copper $5.11 to $3.99: -21.9%
- Gold $2,492 to $2,448: -1.8%
Bitcoin dip buyers came in at weak technical support at just under $50,000. It bounce to as high as $55,550 a nice bounce if you caught it.
But as I type (roughly 12:56) it’s back to $53,298 down about 9.3% in the past 24 hours.
Technically speaking, If Bitcoin breaks today’s low, then today’s dip buyers are likely to exit leading to further acceleration to the downside.
Support is ~42,000 so don’t be surprised if it gets there.
Looking Ahead
Looking ahead, the stock market is still grossly overvalued.
However, the $VIX (volatility index) if so high (at 36.1 up an amazing 55% today), we can see a bounce anytime (or not).
Crashes generally happen from oversold conditions so we shall see.
Key Points
if Bitcoin continues to track the Nasdaq with increased volatility, it can get very ugly. That’s what I expect, for both.
Bitcoin represents speculative mania, not the next global currency.
Rate Cuts Coming
Also on August 3, I commented Big Changes in Fed Interest Rate Cut Expectations This Year and Next
Rate Expectation Percentage Point Change
- Sep 2024: -0.13 PP to 4.94% (-0.43 PP from current) 1.7 quarter-point cuts
- Nov 2024: -0.30 PP to 4.53% (-0.83 PP from current) 3.3 quarter-point cuts
- Dec 2024: -0.34 PP to 4.21% (-1.16 PP from current) 4.6 quarter-point cuts
- Jan 2025: -0.36 PP to 3.98% (-1.39 PP from current) 5.6 quarter-point cuts
- Mar 2025: -0.38 PP to 3.71% (-1.66 PP from current) 6.6 quarter-point cuts
Recession Has Started
On July 8, I wrote Weak Data Says a Recession Has Already Started, Let’s Now Discuss When
I’ve seen enough. A recession has started. Let’s discuss starting with a very good indicator that has few false positives and no false negatives.
My follow-up post was on August 2.
August 2: The McKelvey (Sahm) Unemployment Rate Recession Rule Just Triggered
A recession indicator based off rising unemployment triggered in July. Claudia Sahm, a former Fed economist, takes credit for an indicator she did not invent. Let’s discuss.
Weakening data explains the recession call. Yield curve action provides a confirmation signal.
Global selloffs add to recession risks. Sentiment matters.
Don’t expect the Fed to bail out speculative mania. Markets generally fall after the first rate cut. This decline ahead of time caught most off-guard.
Addendum: By Any Chance, Does Bitcoin Fix This?
Mish, you’re a really smart guy, but seem to have a blind spot regarding BTC. Here’s my take.
USD is fiat. All fiat is a Ponzi scheme. Therefore USD is a Ponzi scheme. It will go to zero, probably during my lifetime, and I’m 81. Bitcoin is unique, and will have value long after all other fiat currencies have gone to zero. Is BTC volatile if denominated by something other than Ponzi Fiat?
You may be right that BTC will eventually go to zero. But what about USD? Will it become the only fiat in history to not go to zero?
What will happen to the Dow if the ME crisis will be over without firing a shot. What
will happen to the US econ after the Fed cut rates and the BOJ lift rate for more sync among central banks. Will oil price and other commodities rise, What will happen if the regional banks merge with each other to compete with the large banks. Is it good or bad.
Iran is a Theocracy. Decisions and actions will be driven by the Quran.
They may opt to extract Blood for revenge of the assassination.
They may also opt to go for Financial repercussions which would actually cause more pain for the West. This is readily available due to their Geographic location sitting on the Straits of Hormuz.
That Iran will not act is out of the question.
As there are many who are not aware of history.
Just to clarify, in 1973-1974 as consequence for the 1973 Arab-Israel War, OPEC imposed an Oil Embargo against the US.
This caused much economic pain in the US.
That the Straits of Hormuz could do the same thing by closure is not a Far fetched Idea.
That Biden-Harris administration has left the US and entire West at Risk for its energy demands, is a strategic failure of Policy.
It was done intentionally, directly caused by the green energy transition Political decision.
The Ayatollah behaves like an army cook who yell : hold me tight bc I am going to kill somebody. Killing Haniyeh was, not an Iranian, was a perfect crime. There is no proof that Israel did it. The Ayatollah reward might be a deal between Bibi and Hamas. The Iranian leaders are scared, hiding like rats. Their ballistic missiles are ready (exposed) on the launching pads, but if they hit too hard Bibi might inflict on them a lot of pain, more pain than Jasa.
mideast is not only oil source, matter of fact its a small fraction of supply. Thank Carter’s policies to drive that nightmare more than OPEC’s influence…but WTF do I know?
Canadian Dollar has strengthened strongly two days in a row, Not much on economic calendar so good chance it is about Oil.
Crude futures are forming a sideways channel after selling down for a month on a weakening economy. Market did not take them down even given yesterdays selloff in equities. In fact they rallied in a risk off environment.
Oil Market is waiting for something to happen. Only one event still undecided, which is Iran response.
Putin and Macron asked the Ayatollah to go easy. The Yom Kippur war was a deal between Nixon, Golda and Sadat. The Saudi used this crisis to confiscate Aramco. A deal between Biden, Bibi and Hamas might insure Kamala Harris victory on Nov and Biden legacy.
I would suggest that the time lag in direct response is showing that Iran is not lead by people as you describe.
Behind the scenes there will be much talking going on to reach some form of consensus between Muslim nations as to an acceptable course of action. This being inevitable as Muslim world populace views War in Gaza as a genocide.
The Leadership of Muslim Nations would quickly get tossed if they go against their own people. For example what just occurred in Bangladesh.
There is a response coming only the nature of it is in question.
We Trade. So I suggested that Oil is a significant weapon. As the West is buried in a overextended Debt Crisis which is in process of unwinding as was just witnessed.
It would not take much of a shock to turn the whole thing upside down.
Therein is the weakness to be exploited by a Nation such as Iran to extract a Vengeance.
If you ever watched video of how a Dam first fractures. Then the weakness spreads. Then comes some water from places it should not. This builds and then the whole affair collapses.
Do I believe this can be avoided? It could have been avoided several years back. However the choices made were driven by Political ideology rather then sound decisions.
The Credit Dam is springing Leaks everywhere.
u are absolutely right.
Mish, you were wrong so many times about bitcoin….
Yes, I know
Bitcoin is $1,000,000 now like everyone told me it would be 4 years ago, and they were right.
Yep, a quick check shows, Bitcoin hit $100,000,000 two years ago, dipped to $800,000,000 yesterday and has recovered to $999,999 today, with only a penny to go
And it’s money too. Everywhere.
And even my latest post is downright silliness, Bitcoin is not speculative mania and it is not tracking the ups and downs of than Nasdaq
Anything else?
… like everyone told you… Mish, you are smart and you have some great articles on your side. But as this response shows, be careful when emotions take over. I know that you are not pro or against btc per se but it seems you want to proof a point to certain people about why they are wrong about btc. This mood does not allow a fair evaluation.
My evaluation has not changed for years.
It did change many years ago (my first perceptions were totally wrong).
I am mostly agnostic. But on several occasions I have praised Bitcoin Advocate Lynn Alden.
Here are two of them:
https://mishtalk.com/?s=lynn%20alden
The hype from nearly everyone else is the space is overwhelming.
Do you follow Mike Albert on Twitter? Incessant nonsense.
Bitcoin should have been $1,000,000 many years ago by most commentators in the space.
More importantly, what am I wrong about now? Is Bitcoin doing little more than tracking Nasdaq sentiment for two years?
Is that right or wrong?
Let’s take a look at Donald Trump’s EarSeemingly No Injury…
https://fasteddynz.substack.com/p/lets-take-a-look-at-donald-trumps
IT’S A MIRACLE!!!!!
Just stop, please. It is embarrassing.
Recent photos of Trump have raised eyebrows, particularly given his former doctor, Ronny Jackson’s statements. The medical practitioner had previously stated that a bullet had severely damaged the ex-president’s ear during the assassination attempt.
Despite Jackson’s claims that the bullet had blown off part of Trump’s ear, the new images of Trump meeting with Israeli Prime Minister Benjamin Netanyahu show no visible scarring or damage.
Odd – that meeting is two weeks after the shooting — and there is no damage to Trump’s ear… no scar… no nothing
This explains your reaction https://fasteddynz.substack.com/p/the-dumbest-species-ever
Blue Anon
Spot on re the quality of the spec.
Meanwhile:
The most crucial development in global oil markets is depletion in the Permian basin. We first warned about this in 2018, predicting the Permian would peak in 2025. In retrospect, our analysis was too conservative. We now believe the basin could peak within the next twelve months. The implications will be as profound as when United States oil production peaked in 1970, starting a chain of events ultimately sending prices up five-fold over ten years. If we are correct, this could not come at a worse time for oil markets: inventories are tight, production in the rest of the world is declining, and investors are incredibly complacent.
https://blog.gorozen.com/blog/the-permian-basin
Why is this important?
Take a long hard look at this image
https://blog.gorozen.com/hs-fs/hubfs/Blog/2023%20Blogs/2023.06%20U.S.%20Conventional%20%26%20Shale%20Production%20Since%201920.png?width=2235&height=1140&name=2023.06%20U.S.%20Conventional%20%26%20Shale%20Production%20Since%201920.png
The article is over a year old. Which means that the Permian should have already peaked. But it hasn’t peaked yet.
The Permian is likely “close” to peaking at around 6.3 mbpd. I expect it to maintain that level for several years.
Other areas such as the Bakken and EagleFord have already peaked.
I expect overall US oil production to stay above 13 mbpd for the next 2 years. Which is the most in the world.
OPEC, mainly SA, have about 4 Mbpd of spare capacity which they can bring online if needed. However, they are unlikely to do this unless the price of oil goes over $100. Their preference is a price range between $80 and $100. If it drops below $80 for too long, they will cut production further to boost the price.
And how do you know it hasn’t peaked?
Do you think that they would actually tell us?
Imagine the despair given the fact that shale is the only thing between us and Armageddon – see the chart https://blog.gorozen.com/hs-fs/hubfs/Blog/2023%20Blogs/2023.06%20U.S.%20Conventional%20%26%20Shale%20Production%20Since%201920.png?width=2235&height=1140&name=2023.06%20U.S.%20Conventional%20%26%20Shale%20Production%20Since%201920.png
Who is “they”? The actual companies that tell us their production levels; the many independent analysts, such as the IEEFA who calculate Permian production; the EIA; the IEA; or maybe one of your many cult conspiracy sources. Perhaps it’s the same organization that tells you all that fake covid sh*t you keep spreading here. You seem to fall for any fake source that will predict Doom and gloom. Or maybe you just pull everything out of your ass.
“And how do you know it hasn’t peaked?”
“Peaked” only has meaning in the context of how much resources are thrown at further recovery.
A; presumed to last indefinitely; five fold price increase; will see enough activity increase to keep flows up there for quite awhile. By the time a net barrel of oil is enough to retire on; it will be economical to recover a lot more than is done today.
A greater local/US concern, is that American fields has already been driven harder than anywhere else. So it’s now/soon more efficient to keep production up by deploying US developed techniques in other places, than it is to go over and extract yet more rounds over here.
If prices go high enough, “all of the above” does become viable. But, more likely, prices will be capped by other countries recognizing America didn’t explode and sink into the sea by evil “fracking” and other higher order recovery, hence neither will they.
The Wall Street Journal recently wrote a pivotal article (using data from NoviLabs) stating that Permian per-well productivity fell in 2022 for the first time in the field’s shale development history. Our analysis confirms these results: Permian per-well productivity fell 8% last year. The drivers of the lost productivity will only get worse. Our models tell us geological depletion will continue. Permian produces are now being forced to drill worse quality rock for the first time. https://blog.gorozen.com/blog/the-permian-basin
All shale wells suffer fast decline rates. Which is why companies are using newer advanced techniques such as microfracturing, coil-tipping fracks, and digitalization to enhance production. Add in water flooding and gas injection. And longer drilling.
All this has allowed companies to maintain or increase production, while drilling “fewer” wells.
If production begins to decline, this can be offset by drilling more wells, rather than fewer wells.
The Permian total production will eventually decline (like other shale areas) but that is a few years away.
And even when it does, that does not mean “armageddon” as you keep saying. A drop from 6 to 5 Mbpd can easily be made up elsewhere in a world market of 103 mbpd.
No different from any other endeavor: The lowest hanging fruit gets picked first.
As those get scarcer, cost go up and it becomes both necessary; but also financially viable; to buy ladders and cranes. Taller and taller ones. And then, even helicopters…..
And this from a man who has decades of experience in the oil patch:
Anyway, try to get your head around the idea that in three years, by 2027, US tight oil production will grow to 12 MM BOPD, not the 9 MM it is now. Thats what the “experts” say.
So every year for the next three years we’ll have to replace 4.4 +/-MM BOPD before we grow another 1.0 MM BOPD the same year. Man, that is a slew of new wells, most all of which will have to be drilled in the Permian Basin.
Where?
https://www.oilystuff.com/single-post/the-hamster-wheel
You are thinking US and I see the world. The US has dramatically increased oil production to 13.3 mbpd, the most in the world. This has forced OPEC to reduce production by over 4 mbpd. If US production declines, OPEC will easily offset that. Prices will not soar out of site as you keep implying.
OPEC will adjust production to keep prices between $80 and $100. Since prices are currently below $80, they will likely extend their cuts. No need to bring back their 4+ Mbpd of cuts.
Barring a larger middle east war, or some black swan event, there is no huge price spike coming based on an eventual decline in US production.
Can we get a chart for the Used Tesla Carry Trade? Asking for Jeff Green….
Is that The Fat Guy on the Larry David Show?
Not sure if our Jeff is on the Larry David Show… could be
BOJ raised the cost of borrowing from zero to 0.25%. Japanese banks and other big co plunged. The Fed should cut rates by 0.50% bc the Nikkei and the Dow made a new all time high.
In Sept 2000 there was a case against Bill Gates. Today there is a similar case against Googl.
Imagine, a huge drop in stock markets globally just because Japan tweaked its interest rate. Why is that?
Yen Carry Trade
BRK.B $900B has 25% cash after selling AAPL which was 30% of their portfolio. It was too risky. Too concentrated. Bad mgt.
Or very, very deliberate.
In Dec 1989 the Nikkei high was 38,957. After 35 years, in Feb 2024, the 1M Nikkei made a new all time high. Mar 2024 close was the highest ever. For six month the Nikkei is backing up. July was a trigger. In Aug the Nikkei plunged to BB : Feb 27/Mar 20 1989, 32,598/31,344, crossed it, but closed inside. Carry Trade bs.
Just for fun I created a stock index called the ‘Falling Knife Index’ which consists of the following stocks: CNQ, CVE, SU, VRN, FANG, CHRD, TRMLF.
Each stock is equally weighted. I’m setting the initial value to 1000. I have a google spreadsheet set up to do the calculations.
Canadians energy co.
Actually it’s what PapaDave mentioned in a prior thread that he was buying today because the crash made them all look much better.
He already said he closed out some of those positions (whether entirely or not he didn’t say). But will be interesting to see where they are in a 1 month or 6 months time.
I know !
Bought 7. Sold 3 (SU, VRN, CVE). Made, 3%, 5%, 3%. Still hold the other 4 for a trade. Own all 7 in my base portfolio.
Feel free to track them dtj. I don’t care.
I am willing to buy back the 3 I sold today if they drop again. Volatility is something to take advantage of.
Still a believer in the long term oil story. And oil stocks in particular. As a group they are limiting capex, paying down or paying off debt, buying back shares, and increasing dividend payouts. For example CVE just hit its target debt of $4b (C$) and is promising 100% of FCF to shareholders going forward. Market cap is $46b (C$).
Picked up some TIMEX on the dip.
Mish, I hope you do not take this as blowing smoke….your posts are my first daily read of each day and the last ones. GREAT content, thought-provoking and we also get to read comments from Liberals (who drink the Narratives Kool-aid – – we know who they are and they are puzzling and strange) and also my “SPEAKING-TO-A-MIRROR” compatriots, who question EVERYTHING THAT ARE NARRATIVES (Ben Hunt does a good job on this subject)….
I NEVER believe a word spewing out of the BELOW-THE-NOSE BUNG HOLES on Politicians and we KNOW that we cannot trust a word of the Mainstream “PRESS.”
So, having your research and perspectives, where I MOSTLY agree with you, is refreshingly timely and fun to read.
THANK YOU!
A usual, stress in the system is reflected by Bitcoin performing like any other speculative entity. It goes down with tech stocks.
Just think of all the money spent mining that crap and spewing emissions into the atmosphere running SETI at Home on steroids to create and asset that has a serial number
Mish, your pointing out the the SAHM RULE, as an example of commandeering a technical pattern and tweaking it slightly, is SUCH a great catch.
Reporting it to US has triggered people, esp those that have been interviewing her as if she is SOOTH SAYER….to call her a GENIUS.
IS ANYONE MORAL and TRUTHFUL ANY MORE?
HT Woodsie Guy
Tweet inserted as an addendum
🤣 🤣 🤣…..Look at Mish trolling like a pro. Well played sir, well played.
On a more serious note, good lord that’s a shitload of scratch. Wow….just wow.
I’m hoping the markets rally until open tomorrow. Then I will short the snot out of them. Looks like we may hit the October lows by the end of August. Once Nvidia earnings come out, I’m expecting a bounce at that point.
Be sure to know HOW to know that the longs have gotten exhausted. KNOW HOW TO READ A CHART! I am a self-directed FAMILY OFFICE comptroller who went to school to learn technical analysis and I use Dave Halsey’s Charting Methods (Measured Moves – – believe me: THEY WORK – – I teach retired pals all over the world how to use them)….
So, you need to FIND RESISTANCE TECHNICALLY and I would GUESS, unless you surprise me, that you will have NO IDEA where resistance lies other that Moving Averages or Bollingers, or ELLIOTT WAVES — or DOUBLE TOPS, or BREAK-OUTS/BREAK-DOWNS: all bunk.
The Technical analysis that I have seen on TV are bunk. The THOUSANDS of pretenders at TWITTER are full of shit. They make it up. NONE OF THOSE TECHNIQUES WORK: NONE OF THEM.
Only measured moves.
I have to believe that most everyone knows Bitcoin is a ponzi scheme. Gold has been traded similarly.
Could you explain this comment? Today’s drop is likely covering shorts. I’d expect a run for a safe haven fairly soon–now, what qualifies as safe haven? It used to be utilities and self-storage 🙂
That was a hell of a lot of shorts then. But that doesn’t change the fact the bitcoin is a ponzi scheme.
nope – I know a couple of crypto traders — one a banker one a lawyer… they are adamant it’s going up 10x
Ponzi schemes can go up too, until you run out of fools
Early in the morning NDX 1M was below Apr close but closed above. NDX 1M, SPX 1M and DIA 1M are above 2022 high for eight months. They didn’t flop. They might, but they didn’t.
Gold is no inflation hedge, obviously. If it were, it would be up today, not down.
Over the short term all markets are subject to the stampeding of the lemmings. Over the long term gold is a great inflation hedge.
“over the long term, gold is a great inflation hedge”
Oh please, that’s simply not true.
Gold is a terrible hedge against inflation long term too.
Forget gold as an inflation hedge. Instead, think of it as a safe haven, a hedge against Fed incompetence and Wall Street greed. If the elevator continues falling, gold will do well. The trick is getting off and into the fire sale, when it develops. This is 2007-9 scaled up.
Buying gold and burying it in the desert in a secret location somewhere out near Hoffa’s body is also a hedge against everything from wives filing divorce, hospitals sending $500,000 medical bills, lawsuits, and other financial predators.
gold is money. Nothing more, nothing less. Our constitution, and the Big book agree.
BTC has no legitimate use case. Let’s assume a retailer actually accepts it. What do they do? They immediately (and now automatically) convert your BTC into USD. Theoretically, when you spend BTC, all you’re really doing is buying dollars, which is the currency whatever you’re buying is priced in.
Bitcoin is pure speculation at this point. Since it is not a safe haven, it will drop hard and fast compared the the stock markets. It will bounce with more speculators jumping in, but I suspect the trajectory is still down
This is exactly what Mish said and pointed out in one of his articles a week or two ago!
Bitcoin is not looking like gold today, I actually expected a bigger move downward in gold and this is a good sign the speculators are not holding. Gold must be in strong hands…
I paused my summer vacation to come in and take some profits. My SPY September puts printed 70% tendies. TLT is up nicely and climbing. Did covered calls on IWM to lock in 8% thru December. Profits! Profits! Profits! T-Bill trade may finally be coming to a short term end.
Hope everyone else is banking coin today. Easy (predictable) money baby. ….$….$
I’d short TLT here. It’s easy and predictable.
Don’t think so, TLT will eventually go down but way after the fed stops cutting and we hit the next wave of inflation. I may sell LEAP calls on some of it but I gotta get juicy premium profits.
We’ll see how much control the Fed has come Sept.
I’m in tech and simply never understood why people are putting their faith into something that seems so intangible and disconnected from anything that can be said to have any actual value. Maybe I just don’t understand the intrinsic value of calculating a hash…I’m open to the idea that maybe I just don’t understand the technology.
shitcoin is modern day version of Tulips
Are the Charts Named Correctly?
Thanks….
Thanks Fixed
“…Bitcoin represents speculative mania…
Bitcoin solves this…………….
I think that’s hilarious
I figured a bit of wit was in order on a day like today.
very hard to figure out what is correct. i fell for the bitcoin spiel and put about 3% of my portfolio in it. very conservative investor otherwise.
can i buy a bitcoin bond?
or pay my taxes with it?
what about a car loan or mortgage?
“Crashes generally happen from oversold conditions so we shall see.” Huh?
Yes it is .. and also gold in USD.
The first fractal crash for the global ASWI achieving a peak valuation on 16 July 2024 (unadjusted for inflation) is a 1 July 2024 6/13/7 of 13 to15 day ::y/2-2.5y/2-2.5 3 phase fractal crash series. This initial crash series will be followed by a valuation fractal growth series gain until near or shortly after the US presidential elections – after the zero sum game winners reinvest in global equity markets under the umbrella of a contacting global macroeconomy at the real citizen consumer level. Debt liquidation over the next 12-15 months will be repaid in dollars, Euro’s, Yuan,Yen, and Indian Rupee’s. Gold and cryptocurrencies will be (transiently) liquidated to repay debt.
… a 1 July 2024 6/13/13-15 day y/2-2.5y/2-2.5y three phase fractal crash decay series…
I love big-word strategies like Fibonacci and fractal. My personal favorites are: Brownian motion, random walk, and Deus ex machina
Actually I was noticing that NQ and Yen looked very similar to me today. Both peaked on July 11th, 2 days after I wrote my AI article questioning whether it was a Kurzweil Singularity or DotCom 2.0
But it is likely all related to yen carry trade. And people are selling BTC to meet their margin calls on stonks too
We made the 200 day in NQ and ES more quickly than I thought we would, something which hasnt happened since the high yield in Treasuries last October
Made a lot long treasuries but got out too soon
They have made a textbook Turtle Trader breakout. We will see what happens next
But I thought BTC was supposed to be negatively correlated and an inflation hedge. They told me so…
I heard Dogecoin was even better
I watched a high nett worth guy … accept a USD300k low interest loan offer from his bank… convert the entire amount to Dogecoin … I am not kidding
He keeps doing that, he’s gonna be a low net worth guy real soon
wealth has zero correlation to wisdom.
I said differently, and bought gold.
Bitcoin is the only economic constant in the universe. Have fun getting debased.
Mental Illness on display here
We have a new leader in the “Dumbest Comment of the Year “ competition!