Wednesday, 14 June 2017

The Rise of Ethereum and the Fall of Bitcoin, and My 1st Ether

 Spikes Big and Small 

I sold half of my Bitcoin to buy some Ether on Aug 2016 when it was priced around $10. (Actually, the reason why i bought my 1st Bitcoin was because i wanted to buy my 1st Ethereum. At that time, it was easier to buy Ether once i own a Bitcoin.  Ethereum is way too new to have its own exchange. This is described in my post Bought my 1st Bitcoin, The Halvening and Bitfinex Hacking, just go to the end of that post). I was thinking that in the early days of Bitcoin, its price could shoot up 10 times in a few months because its market cap and supply was tiny, and risks was huge. Such ten-bagging isn't possible in Bitcoin today.



While it's true that Bitcoin soared from $1300 to $3000 in less than 2 months (from April to June 2017) due to the Japanese legalization, but it did a massive moonshot from $100 to $1000 in less than 2 months (from Oct to Nov 2013) after the U.S. Congressional Hearing.

As stunning as the recent rise of more than double in Bitcoin price in less than 2 months this year, it's not even in the same league when comparing to the spike of 10 times in price in the mother of all spike in Bitcoin price that transpired in Dec 2013. This is because the market cap and supply no longer allows such ridiculous spike in price today.


What The Fork ! 

When i bought Ether at $10, i thought such spike like 10 times in price rise is still possible with Ethereum. After holding it for a few months, i started to lose patience as the price of Ether drifting from $10 to $8, and at the same time, Bitcoin price was soaring.

ethereum logo

But it wasn't just the price drop that caused me to lose patience, it was the whole hard fork business when Ethereum was split into 2 Ether coins. So i thought i just got out of Ethereum altogether and sit on the sideline and watched these 2 forks of Ethereum fighting it out and see which would emerge victoriously. Who know, i thought to myself, there were going to be another hard fork? And the same thing might happen to Bitcoin in the next few months.


 Bitcoin 2.0 

Ethereum has been coined Bitcoin 2.0. In many ways, Ethereum is the next generation of Bitcoin. When Bitcoin first started, the people who tried to pitch the virtues of Bitcoin by pointing out the blockchain technology. In fact, they screamed 'blockchain' as the greatest invention, and because Bitcoin is built on top of blockchain, Bitcoin must deserve the public's respect. In short, these early supporters tried to sell Bitcoin to the public by pitching the concept of blockchain.

Well, the blockchain technology has certainly won the world over. In fact, its widespread applications has far surpassed Bitcoin. So the people who tried so hard to sell the Bitcoin with blockchain technology is probably regretting it now, big time. Among other things, blockchain is also enabled the world to create other cryptocurrencies (among many other things), and the best crypto contender for Bitcoin is Ethereum.

In fact, it's entirely possible that one day Bitcoin would vanish from the world and blockchain will live on. I'm not saying Bitcoin will die. I don't know. Nobody knows (anyone who tells you they know about the future is lying to you). But i'm far more certain of blockchain's survival than Bitcoin's existence because blockchain has been taken up by every financial institution and their dogs.

You can think of blockchain as the engine of cryptocurrencies. And if blockchain is an engine, then cryptocurrency is a car, and Bitcoin is a brand of car. Ethereum is another (newer) brand of car. You can put an engine into a car, boat, train, plane, lawn mower, etc. Engine and blockchain is far more universal than any brand of car or cryptocurrency. And indeed, blockchain could be used for services that are totally unrelated to cryptocurrencies, just as engines could be put into machines other than cars.


Bitcoin and ethereum coins


Like Bitcoin, Ethereum is built on top of blockchain, but with extra bells and whistles like smart contract. Ethereum is a more versatile and more programmable version of Bitcoin. And naturally hold more promise than Bitcoin. This is why it receives the backing from large multinational companies the likes of Microsoft, Intel, J.P. Morgan, etc. This was what attracted me to Ethereum in the 1st place.

The early Bitcoin supporters should have kept their mouths shut about the blockchain technology (if it was possible). Perhaps, they thought that Bitcoin and blockchain was inseparable, and didn't realize that blockchain has such universal appeal and applications outside Bitcoin. In fact, with the blockchain technology, an upgrade like Ethereum (or something even better in the future) would one day come and replace Bitcoin. Would it? That would remain to be seen. Bitcoin is just the 1st cryptocurrency in a long line of evolution of cryptocurrency. One thing about technology is that is never standing still. Being the oldest and and the 1st isn't a good thing when it comes to technology.


 Ethereum Today: The Bitcoin of 2014 

Ethereum wasn't launched until mid 2015. In term of stage of development /evolution, the present Ethereum is equivalent to the Bitcoin in 2014. I.e. it just had a huge price spike after its 1st official recognition. Something akin to the U.S. Congressional Hearing for Bitcoin.

I knew about the backing of Ethereum by U.S. multinationals, but i didn't realize that when i bought my 1st Ether in Aug 2016, the EEA (Enterprise Ethereum Alliance) hadn't been formally announced until March 2017. So when i gave up on Ethereum a few months after my 1st purchase, i took my eyes off the Ethereum radar. And when i checked it a few months later, the ETH price went from $8 to today's price of $370 from March to June 2017. Just when i was out of it for a few months, it rose more than 45 times in price without me. I expected this massive spike to appear in Ethereum, and yet, i still managed to miss it. Things are happening at breakneck velocity in the digital world in general, and cryptocurrencies in particular, and i blinked. Perhaps, the better explanation was that i was impatient. I just needed to put it in the bottom draw, and forgot about it for another 4 or 5 months. This impatience is my biggest bane. What can i say? D'oh! I supposed.

Don't forget to kick yourself as well for blinking...

No point crying over spilled milk or missed opportunity of 45 times increase in value of my 1st Ethereum holding. If i think today's Ethereum is in the same development stage of Bitcoin in early 2014, i should expect far higher price rises than Bitcoin going forward.

Remember too that Ethereum is backed by Fortune 500 companies while Bitcoin isn't. Of course, Bitcoin wasn't associated with any company or government, and that is its strength and weakness (depending how you look at it). While Ethereum is backed by a consortium of large companies, that is also its strength and weakness. You could argue that Bitcoin is an ideological cryptocurrency while Ethereum is a commercial cryptocurrency.


 Switching Wagon 

Today (13 June 2017), i decide to sell 80% of my Bitcoin and took the proceeds to buy Ethereum. This is not only because the price of Ethereum can grow faster than Bitcoin, but Bitcoin starts to look tired as it reaches $3000. There will be a sizable correction in Bitcoin price coming.

The following chart showing all signs that pointing to a down turn in prices in the short term. The tops are getting closer, suggesting it's losing momentum. The technical indicators are showing bearish divergence. And its prices are getting too far from the averages. The few pullbacks in the last 2 months are outweighed by more price rises, it needs to have to deeper correction to have a healthy chart. Also, i think the coming scaling business would cause higher volatility (most likely to the downside). I expect Bitcoin price to have a healthy correction to $2200 to $2500 in the short term.

Bitcoin price chart

I suspect many would jump onto the Ethereum wagon either to benefit to its higher growth trajectory, or to shelter from the price drop in Bitcoin, or simply being viewed as the next Bitcoin, or to diversify their cryptocurrency holding.

In term of ETH price growth's projection, many already believe its market cap will surpass Bitcoin's market cap by the end of 2017. The Ethereum community (Ethereumian or Etherer?) even give this event a name, 'The Flippening' (remember The 'Halvening' for Bitcoin ?).

This anticipation of the Flippening by the end of year isn't entirely ludicrous. When i bought my 1st ETH in August 2016, the Ethereum to Bitcoin market cap ratio was about 1:10 (about 1 and 10 billion respectively). Today, the ratio is about 8:10. Bitcoin is only ahead of Ethereum market cap by a nose. So, the Flippening will occur soon. End of year isn't at all a bold call.

Bitcoin and Ethereum market caps as of 13 June 2017
Bitcoin and Ethereum market caps as of 13 June 2017


I'm interested in the development of Ethereum as much as Bitcoin. With this purchase, it's forced me to pay as closer attention to Ethereum as i have for Bitcoin.

Could ETH price repeat the BTC's 50 - 60% price drop in Dec 2013? Certainly. But then, i tend to think that history doesn't repeat exactly, especially if the situation isn't identical. For one thing, cryoptocurrency (in this case, Bitcoin) wasn't anywhere as well known or as we widely accepted as it's today. Secondly, the ETH chart looks better than BTC chart. Lastly, Ethereum isn't as widely known as Bitcoin. As i said before, Ethereum is like Bitcoin in 2014, nowhere near as well known as Bitcoin today.

Short term (weeks), ETH is just as overvalued as BTC, but medium term (months) ETH is better. As for long term (years), nobody knows. Clearly, i switch to ETH for the medium outlook.

Short term, sitting in fiat currencies is the best option. But i'm just not that smart, and i wish to cultivate a bit more patience.




Tuesday, 13 June 2017

Funny Caption 48: Berlusconi and Bush's Best of Friends

Berlusconi and Bush during Columbus Day in Whitehouse


"Why can't everyday be Columbus Day in the White House ?"

"George, maybe it's the alcohol talking. I think you're the greatest !"

"Presidential Office romance is never a good idea."

"Don't know where, don't know when, but I know we'll meet again on some drinking days."

"Ewwwww !"




Monday, 12 June 2017

Yunnan Garden Restaurant

Yunnan Garden Restaurant
1 Fusionopolis Place #02 - 02
Galaxis Singapore 138522

Used to visit a Yunnan restaurant that was minutes walk from our place in Sydney. I can recall a large portrait of Chairman Mao adorned its wall. Because of the large portrait, i thought that Yunnan was Mao's birthplace (confusing Yunnan with Hunan, which is Mao's actual birthplace). While Yunnan cuisine isn't as distinctive as Cantonese or Sichuan's, but it's worth trying out.

Unlike Western gourmet restaurant that tends to have only a dozen of dishes in their menu, the typical Chinese restaurant offer close to hundred. Since Yunnan dishes don't have such variety (at least, not in this restaurant), many other non-Yunnan dishes are added into the menu. So we ordered anything with the word "Yunnan" in it.


 The Place 

The restaurant is located in Fusionopolis, which in turn is located in One-North, which is the hub (a fave Singapore word) for Singapore cutting-edge research district, especially in biotechnology and offices for media company. And the company names and architectures of the district are reflecting that.

Fusionopolis building, One-North, Singapore
Fusionopolis building (left), Galaxis (right)

Galaxis building, One-North, Singapore



 The Food 



Mee Pok with XO Sauce:  8 / 10
This is one of the Singaporean dish that fills up the menu, and the best dish we tried. You can't really go wrong with XO sauce and this doesn't disappoint. The noodles are springy enough. Quite appetizing.



Deep Fried Yunnan Spare Ribs:  7.5 / 10
Is it my imagination, or this spare ribs dish is almost a twin to Peking Pork Rib (京東排骨) with its sweet and sour sauce. The meat is reasonably juicy and tender. While I'm not into sweet and sour sauce, if that's your cup of tea or sauce, give this a try.



Yunnan Steamed Tofu Topped with Shrimps:  7 / 10
The presentation is certainly nice, where the tofu surrounded in sauce like lotus floating in a pond. The tofu or bean curd is smooth and silky enough, but that couldn't be said about the prawns, which are likely to be frozen. Maybe it's too much to ask for fresh prawns. Okay lah !



Overall:  7.5 / 10
Overall, not bad lah. Worthwhile checking out if you haven't tried Yunnan cuisine, and you'd like to sample all the different Chinese provincial cuisines. The 3 dishes came out in the order listed above, but they should be come out in the exact reverse order because the 1st dish is the strongest tasting and the last one is the most mild tasting.




Friday, 9 June 2017

Funny Caption 47: President Trump's Handiwork



"Did someone just say 'a most beautiful piece of chocolate cake and covfefe' ?"

"Is that what Speaker Paul Ryan means when he said, 'Trump is the most hands-on president' ?"

"Orange alert! NATO detractor's coming through !"

"Trump demonstrates to NATO leaders his 'America First' policy."




Tuesday, 6 June 2017

Gold's Bull Market Final Technical Reisstance - Part 3

I've been waiting impatiently to write the part 3 - the FINAL part - of this article series of Gold Bull Market's Final Technical Resistance.

Actually, i mentioned in part 2 that the more correct title for this article series should be Gold BEAR Market's Final Technical Resistance because until the gold price crosses above this 6 years long term downtrend resistance line, gold should be considered to be in the bear market, technically.

Gold price chart showing a breakout of a 6 years long term downtrend resistance
Gold chart from 2011 to 07 June 2017 showing 6 years downtrend resistance line.
(Click photo to enlarge)


The gold price is - by definition - in the bear market since Aug 2011 because its price has kept below this downtrend line, UNTIL today (6 June 2017. It would be nice if today is 6/6/2016. So close. Remember SPY = 666, the 2009 low?).

I've noticed lately - in the last few months or so, that the chart that showing this 6 years long term downtrend line appeared in the web in far greater frequency than when i published part 1 of this article series back in 30 July 2016.

This is probably due to the fact that the more times the gold prices hit this downtrend resistance and fail, the more technician will have to sit up and notice, and give it the respect it deserves. Since the height of 2011, the prices had tested this downtrend resistance for no less than 8 times. The price finally breaks out of this downtrend today. This is clearly a very important technical resistance, or else gold prices wouldn't keep on failing at this resistance for 6 years and 8 occasions that separating over wide span of time.

As i'm typing this, the time is NY time 11:30am, and the gold price extends more than 1% gain. Let's get in a closer look with the following chart. There's no mistake about it. We've a blast off. Free at last!

ABX - which i hold - gaps up by 4.3%. Market isn't closed yet. Typically, 1% gain in gold price doesn't translate into more than 2% rise in ABX. Perhaps market is telling us that this is no ordinary 1% rise in gold price. Unless there's an unforeseeable event occurs between now and the market close today that reverses all the gain, i think this breakout is confirmed. I know, i know, i should wait until the market close to write this post. Well, i can't wait...

Gold price chart showing a breakout of a 6 years long term downtrend resistance
Gold chart showing breakout above downtrend resistance line
(Click photo to enlarge)

This is a pivotal technical event that the long suffering gold bugs have been waiting for 6 years to signal that the bear market is over, and the bull market is starting today.

Part
Gold bugs party

Is it to early to pop the champagne corks and throw the bull party?

Yes, there's still much work to be done by the gold prices, BUT this is an important technical milestone, the 1st milestone for the rest of the bull market.

I've been waiting for some catalyst in the form of geopolitical event for the gold to do this ultimate breakout, but neither the French Election nor Brexit nor even U.S. Election last year could do the trick. So this is somewhat unexpected. But when one is considering that US Dollar (DXY) has been falling since the start of this year while 10 Year Bond Yield (TNX) has been falling since mid March this year. And even the stock market is in the weaker seasonality, gold should gather strength on the back of these weakening forces. In fact DXY has fallen BELOW the level in the U.S. Election day. If gold couldn't break out now under these favourable conditions, i don't know when.

I guess there's no coincidence that the gold breakout occurs (since yesterday, but not convincingly) when DXY just falling below the U.S. Election level 2 days ago. Remember that the gold started its resurrection in 2016 when TNX was low. Well, TNX has been headed in that direction in the last 3 months.

DXY price chart showing prices fall below that of U.S. Election Day
Blue line showing the price level of DXY on the U.S. Election (7 Nov 2016)
(Click photo to enlarge)

While there's still a lot work for the gold chart, but today's price action is a very promising.

The 1st work that the gold chart needs to work on is to close above the last peak of $1290 (occurred on 18 April) today.

Is it possible that the price could drop back below this downtrend resistance? Of course, it can. It's natural for the price to come back down to test the downtrend line, and bounce back because it now acts as a support. We wouldn't want to see it to drop back below the downtrend resistance. If it does, this is a false breakout. Will have to wait and see in the next few days. I'm bullish in the medium terms because even a false breakout wasn't possible before.




Monday, 5 June 2017

Bitcoin's Changing Landscape of Geography

As i mentioned in this previous post about the Japanese Legalization of Bitcoin, which leads to a huge increase in Japanese money flowing into Bitcoin (as well as Korean money, but to a smaller degree). This sudden new money moving into Bitcoin market causes the corresponding sudden Bitcoin price's parabolic rise.

The U.S. Congressional Hearing is very important because it occurred in the nascent stage of Bitcoin development, but the Japanese legalization is in a sense more important. Because while U.S. Congressional Hearing is a kind of nod from U.S. government. I.e. that the U.S. government wasn't going to outlaw Bitcoin (especially in the light of the heavy use by Silk Road operators in the Dark Web at the time of 2013), but the U.S. hadn't recognize Bitcoin as legal tender as in the case of Japanese government.

I have often cited in earlier posts that Chinese Bitcoin community is the largest, but this latest Japanese government official legalization of Bitcoin have changed the landscape of Bitcoin community considerably.

Here's a Bitcoin exchange volume distribution that appears in my early post dated 8 Sep 2016, which is only some 8 months ago. Look at how dominant was the Chinese bitcoin trading volume.

Bitcoin's exchange volume distribution as of 8 Sep 2016
Data as of 8 Sep 2016 (source: bitcoincharts.com)
(Click photo to enlarge)


In the above chart, JPY trading volume is so negligible that it doesn't show up in the chart at all. Look at the same chart for today (29 May 2017) below and see how big the slice that the Japanese Bitcoin community has carved out of the Bitcoin exchange volume pie. In fact, JPY's trading volume is now larger than CNY's.

Bitcoin's exchange volume distribution as of 29 May 2017
Data as of 29 May 2017 (source: bitcoincharts.com)
(Click photo to enlarge)

Look at the seismic shifts of currency distribution in the Bitcoin trading volume in just 8 months. In Sep 2016, because of Chinese capital outflow or flight, the Chinese made use of Bitcoin to do the job as i discussed in my articles Will Bitcoin Price Break Out of June's Peak. In my following post The Sudden Drop of Bitcoin Price suggests how Chinese Bitcoin community could have a large influence in Bitcoin price because of their dominance. The Chinese government crackdown on the capital flight based on Bitcoin had obviously has some impact, and the relative Chinese Bitcoin trading volume has shrunk considerably.

The latest pie chart shows a much healthier landscape for the overall global Bitcoin market because of geographical diversification. The 1st pie chart doesn't even show JPY (as the Japanese was once bitten by the Mt. Gox fiasco and shy away from Bitcoin). The 2nd pie chart shows the significant increase in the size of the slice of JPY. There's also a dramatic increase in USD and EUR. The large increase in USD could be easily attributed to the declining dollar, and simply its rise of popularity, as well as Investment vehicle like Bitcoin Investment Trust (GBTC) that based on BTC price, and is no doubt pushing more USD exchange volume into the Bitcoin market, making USD the largest trading currency by exchange volume.

I'm quite sure that the Japanese legalization has also the general boost to the profile of Bitcoin and its overall positive impact on all currencies / geography. Indian, Russian, British and even Brazilian have also jumped on board the Bitcoin bandwagon.

Bitcoin will gain greater acceptance by the mainstream business community or general public when more of major economies of the world come forth to declare Bitcoin as a legitimate alternative to fiat currency. Although i can't see countries like China, Russia and India are going to do that soon, if ever (and Russian government even banned Bitcoin before, but changed their mind later. Although citizens of these countries also want Bitcoin the most. That's the whole point, isn't it?).

Even the ransomware like WannaCry gives the Bitcoin price a boost as they make their demand to be paid in Bitcoin, just like the Dark Web's Silk Road operators. But the impact of ransomware operators on Bitcoin are far smaller today than those by the Dark Web's Silk Road operators, who made use of Bitcoin at a time when Bitcoin market cap was relatively diminutive. Also the amount of money involves in ransomware is also much smaller. While this isn't a positive publicity for Bitcoin, but this also increases the diversification of Bitcoin community.

The Chinese dominance in Bitcoin in late last year clearly illustrates how the event in China would have great influence in the Bitcoin price. As the Bitcoin geography/currency is more diversified, the effect of any 1 geographical Bitcoin market won't have as much impact on the global Bitcoin price. Of course, it also implies more cash entering the Bitcoin market from different geographical locations. Again, good for the growth and development of Bitcoin.

Like a balanced and safe investment, diversification is the key. This geographical diversification is good for stability of the Bitcoin market. While the Bitcoin is still too volatile compare to all markets outside crypto markets, but it's much less volatile (or more stable) compare to its early time, like the spike in Dec 2013 after the US Congressional Hearing that went up some 8.5 times in less than a week!  The spike in May this year, while it's impressive when compare to non-crypto markets, is relatively subdue compare to the Dec 2013 price spike. This is the kind of evolving stability that's occurring in the Bitcoin market.

Many observers - like Dennis Gartman - who thinks Bitcoin will fail because of its extreme price volatility. I take no issue with him because he makes a good point. Although he probably hasn't noticed how much price volatility has come down as i just described. Remember that Bitcoin is a payment system (without that, it's nothing), and to be a viable payment system for business, price stability is a very desirable attribute. If there's going to be an utopian world where there's no fiat currencies, and only Bitcoins for the exchange of goods and services, then price stability is even more important. Both the size of the market cap as well as currency / geography diversification would bring increasing stability to Bitcoin price.



Wednesday, 31 May 2017

Bitcoin Rush and Parabolic Rise

This post / article is the follow up on my previous post Bitcoin Price Breakout on Japanese Legalization of Bitcoin. So whenever i say "previous post",  "that post", on such thing, i mean the post to this link.

I said in this previous post that i wasn't gonna trade in and out because my investment in Bitcoin is small (but getting bigger rather quickly). But when i saw this chart below, which is not a BTC price chart, but a Google Trends chart, i thought i should get out of Bitcoin, temporarily.

Google Trends showing interest for "investment in Bitcoin"
Google Trends search terms
Spike occurs for the period 14 May to 20 May 2017

Bitcoineer, pirate captain
      Arr...I only take Bitcoins !
I also mentioned in that post that there're 2 historical spikes in Bitcoin price chart. The 1st spike occurred soon after the positive U.S. Congressional Hearing on Dec 2013, and the 2nd spike occurred this month on the Japanese legalization of Bitcoin. But if you look at the interest on "How to invest in Bitcoin" above, the spike in Google Trends search for this month dwarfs the small blip in Dec 2013. This is understandable because Bitcoin is more widely known today than Dec 2013 when Bitcoin was hardly known outside a small circle of Bitcoiners (or is it Bitcoineers? I prefer "Bitcoineers" because it sounds like "Buccaneer". I'm also thinking of the Iceland's Pirate Party, who's an arrdent supporter of Bitcoin. Arr!).


The vertical spike in the above Google Trends chart suggests a sudden surge of interest in the public that draws a large a pool of new money into Bitcoin. As they say "easy come, easy go" or "here today, gone tomorrow". If they come all of the sudden, they also leave all the sudden. A flash in the pan. I'm referring to the trading, not Bitcoin itself; it remains at least for awhile (nobody knows how long). As a long term Bitcoineer (i'll start to use this term from now on. I hope it'll catch on), you shouldn't participate in such a Bitcoin rush. Leave it to the day-traders and newbies. The newbies are, by their very nature, chase market, and pushing prices higher. But if short-term trading is your thing, this parabolic rise was a fantastic opportunity. I said "was" because it's over, for now, until the next big event, and the accompanied parabolic rise.

Bitcoin price chart showing 2 event that sends price to parabolic rise
Bitcoin price chart showing the 2 pivotal events that send the price into parabolic rises

Another thing i mentioned in the previous post is that while Bitcoin is more well known today, its spike in price will still be less than that in Dec 2013, which went up by some 8.5 times.

I also said in the post that there will be a pull back quite soon. But i didn't expect to be so soon. I keep forgetting (more accurately disbelieving) that things can happen at this lightning speed compare to any other market outside crypto markets. I have to get accustomed to the fact that what takes other markets months and years to play out would only take crypto market like Bitcoin days and weeks to play out. Sometimes hours.

If the price of an investment - Bitcoin, gold, shares, etc - only move up or down at a steady pace, the best strategy is just to hold it. Trading in and out of small moves will lead to losses due to brokerages and imperfect entries and exits (nobody is perfect). But if the moves are huge such as those in Bitcoin price in the final 2 weeks of the month of  May, trading in and out make lots more sense.

Bitcoin price chart on Poloniex as of 29 May 2017
Bitcoin price chart on Poloniex as of 29 May 2017
The red bar with a very long wick underneath implies the bottom is in, especially when it crosses an important MA

After seeing the Google search terms spike, i decided to get out of Bitcoin at $2600 (my actual sell order was $2580. I always give some margin of safety). As soon as the sell order is filled, i placed a buy order for $1830. I expect the price would pull back to $1800 (again for margin of safety, i bought it at $1830). Of course, i didn't expect the price to drop as low as $1548 (on Poloniex where i traded anyway). This is very typical of Bitcoin's head spinning volatility. It could overshoot as well as undershoot by a wide margin.

So my profit for this quick trade is $2580 - $1830 = $750. This is certainly a worthwhile effort, considering that i didn't even have to try very hard to get as perfect an entry and exit as possible. In fact, i missed the entry price by a huge margin (the price dived as low as $1548) and yet i still manage to make an impressive gain. If i just put in a little bit more effort, $1000 gain wouldn't be out of the question. So why not trade it when it's so easy? It's just too irresistible not to.

Now that this fast and furious correction is complete (in my view) as it pulls back to its 20 day MA. This is a healthy correction, and the Bitcoin price can now resume its upward path in a more "realistic" (for Bitcoin) pace after pulling back from its unsustainable parabolic rise.

It would be healthy that Bitcoin will trade sideways for a week or two (i can't expect the impatient Bitcoin market to do that for a few months. It's like asking a little kid to stand still for a few hours).

Next time when you see such a spike in Google Trends chart again (and the accompanied parabolic price rise in Bitcoin chart), it's time to get out and get back in after the price correction. You won't have to wait for long. I'm impatient, but Bitcoin market beats me in that respect. Not that i complain. The Google Trends chart could be used alongside with Bitcoin price chart to get the signal of a short term top.

On the other hand, if you haven't owned any Bitcoin, last 2 weeks were the worst time to get into Bitcoin (unless you day-trade it). Now, it's better to buy some after this correction if want to become a long term Bitcoineer. Arr!

Would there be more price volatility in the up coming scaling issue? Will have to wait and see. No market move in a straight line.




Sunday, 28 May 2017

Lucky Saigon: A Trip Down Memory Lane

Lucky Saigon
17 North Canal Road
Singapore 048829


It's been awhile, and I'm homesick for (but never sick of) Vietnamese food. Well, Saigon is 1 of the my 3 homes (arguably 4). The other 2 being Sydney and Singapore). For 1 thing, I like the name of the restaurant, Lucky Saigon. Who doesn't like luck? As for Saigon, that was the name of my 1st home (the capital city of South Vietnam) until they changed it to Ho Chi Minh City after the Fall (not Autumn, Yanks) of Saigon in 1975, named after the father of Vietnamese communism. Many people fled the city after the name change (some by helicopter on a rooftop in a big hurry).

Have you noticed how many Vietnamese restaurants have "Saigon" in their names? A lot, i tell ya! As for Ho Chi Minh City, i can't recall any Vietnamese restaurant has that name in it (there may be a bust or 2 of him in a few Vietnamese restaurants). The diners, like the Saigonner (or is it Saigonnese?), may immediately flee the restaurant if they rename it to Lucky Ho Chi Minh City. So it's safer to stick with Saigon. I hope they change Ho Chi Minh City back to Saigon. The city of Leningrad (Lenin is the father of USSR Communism) has been reverted to its old name St. Petersburg (after St. Peter). Why not Ho Chi Minh City?



They may dance like robot or Egyptian (or robotic Egyptian), but the song is Saigon Is Oh So Beautiful (or Sài Gòn Đẹp Lắm, or Sai Gon Dep Lam if you don't want to bother with funny Portuguese squiggles around Latin alphabets). Nobody writes a song about Ho Chi Minh City (or name a restaurant after it). Get the hint? I know you know, Vietnamese government. Change it back, for God's sake. I know you believe in (Catholic) God, now.

Sorry, i was suddenly struck with Saigon homesickness (it hadn't happened for a long while and thought i was cured of that incurable affliction, but i had a sudden acute relapse just then). Now, i have it under control once again and ready to talk about the food. Food cures all ills, right? Food, the best medicine. Food and laughter, even better.


 The Place 

The restaurant is located on the 2nd floor, which i like. I like to eat food that's elevated to a higher level, and at the same time, look down on people walking by below.

They don't usually have a ladder at the end of their staircase, i imagine (just good food and rainbow. No leprechauns, i promise). They were doing maintenance while we were there. It's rather quiet at lunch time on a Saturday.

Staircase, Lucky Saigon restaurant, Singapore
There're 2 "welcome you".
Perhaps 1 for Yank, and 1 for Brit. Where's 1 for Aussie?
I guess there's just not enough "Welcome you" to go around.


Some people prefer the smell of coffee in the morning (others - like Lt. Col. Bill Kilgore in Apocalypse Now (1979) - likes the smell of napalms , i like the sight of girls in áo dài (= long cloth). Ao dai gives the waitress that c'est ne pourquoi aura that serves me up with an extra kick of nostalgia, and bon appétit. Yum yum.


Dining interior, Lucky Saigon restaurant, Singapore


 The Food 

Bill, Lucky Saigon restaurant, Singapore
La bill.  Prices are quite competitive, especially in the city location.


Pho Bo (Beef Noodle Soup):  8.5 / 10
We wanted to order 2 of our fave Vietnamese soup noodles: Bun Bo Hue and Bun Rieu (which i can cook, but too much work and doesn't seem worthwhile just for the 2 of us). The appearances of these 2 dishes in the menu also signal to me an existence of an authentic Vietnamese chef in the kitchen. But when the waitress suggested to me to give Bun Rieu the flick, perhaps after hearing me ordered in Vietnamese, we opted for Pho Bo.

Menu, Bun Bo Hue and Bun Rieu, Lucky Saigon Restaurant, Singapore
Bun Bo Hue and Bun Rieu, my 2 fave Vietnamese soup noodles

Anyway, Pho Bo should be a standard litmus test of their standard. This is one of the more authentic tasting pho i tried. The beef are decent, not so tough. Decent beef is hard to find in Singapore restaurants. The soup is ideal, and the noodles are just right.

My only complain, there was not enough greens. But this isn't a criticism of this restaurant, but Vietnamese restaurants in Singapore in general. Veggies are too expensive here.

Pho Bo (beef noodle), Lucky Saigon restaurant, Singapore
Pho Bo (beef noodle)

Bun Bo Hue (Hue Spicy Beef Noodle): 8 / 10
Try this if you like a spicy, sweat inducing, tongue scorching noodle soup.

This one isn't as hot as those I have tried before in Sydney, which is surprising as Singaporean love spicy food. A couple of ingredients or toppings are also missing. Probably because you can't get them in Singapore. I've tried, but no luck (clearly, neither can Lucky Saigon's chef).


Bun Bo Hue (Hue Spicy beef noodle), Lucky Saigon restaurant, Singapore
Bun Bo Hue (Hue Spicy beef noodle)


Cafe Sua da Ice (Coffee with Milk):  8.5 / 10
For the Singaporean who's used to drinking coffee with condensed milk, this Vietnamese coffee isn't hard to getting used to. But it isn't just the condensed milk that sets the Vietnamese coffee apart. The 1st time i tried Sydney coffee, i found them rather sour (or acidic), having accustomed to the bitter Vietnamese coffee beans. After many years of drinking coffees in cafe like Starbucks or Coffee Beans and Tea Leaf, now i find the Vietnamese coffee bitter. I've learnt to appreciate both. But i still prefer the Vietnamese blend. I'm probably biased because of my childhood experiences and the incurable nostalgia. The tongue of a child is always more forgiving than an adult one.


Vietnamese coffee, Luck Saigon Restaurant, Singapore



Bo Kho Banh Mi (Beef Stew with Bread Roll): 8 / 10
I like stew of most kind, and this beef stew is no exception. But i like it even more because it's eaten with French stick. There's nothing quite like eating bread that's been dunked into the stew. The meat is little dry (just a little, and quite typical in a stew. I'm just being picky). The stew is quite rich without over the top. And the star anise is just the right amount without being overwhelming that i've came across in some other places.

Beef stew, Lucky Saigon Restaurant, Singapore




Wednesday, 24 May 2017

Thought of the Day 31: Cause and Cure of a Headache

Crown, Romanian king


“A crown is not a cure for a headache.”     - European proverb

It's usually the cause of it, especially if it's heavy.




Wednesday, 17 May 2017

Cyclical Reversal in Gold and Commodity Markets

Fundamentals of gold is one of the most difficult thing to work out. Probably because gold could be viewed simultaneously as a commodity, store of value, inflation hedge, geopolitical fear hedge, etc. The forces that drive its price are multiple. So it's simpler and better to do technical analysis on it.

Gold is many things, but industrial metal ain't one of them. Or is it? Its industrial usage is certainly play a small role. But then, if you look at the price action from the cyclical commodity peak of 2011 up until today (17 May 2017), gold's correlation with commodity is quite strong.

Let's look at 3 charts in particular.

Spot gold chart from 2011 to 2017
Spot gold chart from 2011 to 2017


Metals and Mining ETF chart from 2011 to 2017
Metals and Mining ETF chart from 2011 to 2017

Spot Copper price chart from 2011 to 2017
Spot Copper price chart from 2011 to 2017


The XME (Metals and Mining) ETF capture prices of industrial metal. I've also included Dr. copper because it's the supposedly most important barometer of industrial strength.

The 3 charts all shown important similarities. They all peaked at 2011 and bottomed in the beginning of 2016. Actually gold is slightly ahead, therefore leading, the other 2 charts by a month or so. All 3 prices are kept under the long term resistance lines that extend from 2011 up until today. And the green arrows in all 3 charts all showing that their prices are within the striking distances from the long term downtrend resistance line.

While i haven't included them, many other charts of diversified mining majors - BHP, RIO, FCX - all showing similar price actions. This shouldn't come as a surprise.

After a strong run-up from the 2016 bottom, the commodity complex peaked in Feb 2017, and corrected for some 3 months. Maybe i speak too soon, i think the correction is over and ready for the next leg up. The price actions so far are telling me this, at least for a short term rally.

If i need to cite fundamental reasons, i'll say the falling DXY plays a part. And the OBOR (One Belt One Road, aka Belt and Road) Initiative initiates this commodity rally. If OBOR is going to play out as it's planned, its effect on commodity prices should dwarf Trump's proposed infrastructure spending (if it happens at all). And also, PRC is just better at doing these things than USA as they have done so in the last 3 decades. There's talks that China may underwrite some of the U.S. infrastructure deal, which is win-win for both countries.

The size of the project is mind boggling that this project involves some 65 countries (and intends to expand to 100 countries). When all said and done, it should inject some 4 - 8 trillion dollars into the world economy, much of it flows into commodities.

If the current commodity rally is going last for a few months, all the charts with the long term downtrend resistance lines would likely be broken, taking gold along with it for the ride. I couldn't see how gold would be down or even stalled out while the commodity complex is charging ahead.

Perhaps, the correlation between gold and the commodity complex has more to do with the reflation theme. When commodity prices are rising, this leads to inflation, and an inflation hedge is the most notable and enduring investment theme for gold. Geopolitical risks like Brexit or French Election or Trump's D.C. dramas only provide transient boosts to gold prices as a fear hedge. As soon as those fears subsided, the gold rallies quickly fade away. A flash in the pan. Only inflation fear can sustain gold rally over a long period because inflation can last for years while geopolitical fears last only as long as the events, which typically for days or weeks. So for a sustained bull market in gold or commodity to occur, you need an economic boom that ignites inflation (something central banks have been trying to do for years with some successes).

OBOR and U.S. Republican infrastructure build will take time to play out. Depending how much of these 2 gigantic projects are being implemented, but as far as commodity prices go, we are much closer to the bottom than the top.

Even ignoring the falling DXY and OBOR, the synchronized global growth we are witnessing right now alone should be positive for commodity prices and inflation. So sooner or later, the long term resistance line will be broken. I bet on sooner.

If you're thinking about buying gold because of the scenario i painted above, you're better off buying base metals like copper or even zinc. They're likely to outperform gold.