Stocks found stable footing this week. But cryptos continued to chop back and forth.
While some folks in the crypto HODL (Hold On for Dear Life) crowd went rushing for the antacids, others – like the readers below – are looking at it a different way…
Reader question: Teeka, the [crypto] market is crashing… I’m sure your advice would be to relax, hug your children, take a walk, and turn off the noise. We’ve been through this before.
But if we really believe in the future of crypto, isn’t this the time to double down? To “be greedy when others are fearful”?
– John P. (Legacy Research member)
Reader question: If all you tell us is true – that prices will come back greater than before – and I believe you – should we not take this opportunity to buy cheap? I keep waiting for you to tell us that, but you never do.
To me it seems obvious, but you are the expert. Are you buying? If this is the case, we should be too.
– Cynthia W. (Legacy Research member)
Teeka’s answer: A lot of you have been contacting me and asking, “Okay, is now the time to buy? When is the time to buy?” And I’m saying to hold off here – just for a couple of weeks.
The selling isn’t over yet, so be emotionally prepared for lower prices.
When you’re in an environment where people are panicking, liquidity is low, and fear is high… prices get hammered. I think we’ll see another week or two of basic pandemonium, turmoil, and volatility, and then I think we’ll have wrung the market out at that point.
The key question to ask during a time like this is, “Do crypto assets still have a future?”
And the answer to that is a resounding “yes.”
Just recently, Japan’s largest bank said it’s considering using a crypto project called Ripple to facilitate its cross-border payment transactions. Multiple major U.S. banking institutions and huge college endowments are coming into crypto.
So crypto as an asset class is here to stay.
In the meantime, this selling has really unearthed a very interesting opportunity. There’s a particular niche in the crypto market that I’m finding wildly interesting. It’s an area of the market that I think can actually provide lifetime income as the market recovers.
So what I’ve been doing is really putting a lot of energy into identifying these areas where not only are you going to have massive capital appreciation, but also have a double-edged effect of income appreciation through the income that’s being thrown off the asset.
It’s a little bit early, though. We’ve still got a bit more selling left… But I think that as we get into the second week of December, the market’s going to be very interesting.
Moving from cryptos to commodities… one reader has a question about batteries for our resident geologist and favorite Canadian, International Speculator editor Dave Forest…
Reader question: I heard nickel sulfate will energize the electric battery market. What is your opinion on this? Thank you for your assistance.
– Dave N.
Dave’s answer: That’s correct. About 60% of known nickel resources are in a form called “laterite.” It’s a kind of crumbled rock that forms in tropical countries, where heat and rain chew up the landscape.
The thing is, nickel laterite is not suited for making batteries… And converting it into the nickel sulfate end-product that battery makers need requires specialized processing facilities which cost billions of dollars to construct.
What battery manufacturers really need is a rarer type of nickel known as nickel sulfide. Nickel sulfide deposits come with a chemistry that’s much easier to convert into input products for batteries.
But there’s a catch. Nickel sulfide is only found in a few places on the planet. The biggest source is the Sudbury District in eastern Canada – a geological freak of nature that geologists believe was created when a giant asteroid smacked into the Earth there, melting the crust and creating huge nickel sulfide deposits.
Western Australia is also a significant producer of nickel sulfide. But aside from Australia and Canada, the only other place on Earth with big nickel sulfide deposits is Russia – a source that could be cut off from the rest of the world by international sanctions.
So we have a hard-to-find metal, with one of the world’s largest supplying countries potentially being lost to most buyers – at the same time that demand is set to explode.
And going forward, the situation gets even more dire. There simply aren’t many new mines on the horizon that can meet the surging demand for nickel in batteries.
That supply crunch means the potential for big runs in the nickel price – the kind that will cause a spike in nickel stocks.
Let’s close this week’s Daily Cut mailbag edition with an email I just got from Wall Street insider-turned-Palm Beach Trader editor, Jason Bodner…
Jason’s comment: Even with the market heading back up this week, readers and friends keep asking me the same question…
“Are you still bullish on stocks?”
Here’s what I’d say:
On October 25, I told my PBT (Palm Beach Trader) readers…
The good news is, a proprietary ratio that I look at that tracks unusual institutional buying and selling suggests we’re just days – or hours – away from a trough before a significant recovery.
It has been very accurate over the years when it comes to pinpointing bottoms in the market.
Since our live data began five years ago, the oversold indicator appeared three times. In each instance, the market rose higher just a few weeks later. The average return of the S&P 500 was 8.4%, while the average return of the Russell 2000 was 7.3% – just eight weeks after seeing an oversold indicator.
In short, the bottom is either here or near.
And what’s happened in the four weeks since we got that market oversold signal?
The S&P 500 is up 3.9% and the Russell 2000 is up 4.4%.
So to answer the question I opened with… Yes, our signals say we go higher from here.
Before signing off, I want to say a few words about the first-ever web event featuring Legacy Research founders Bill Bonner, Doug Casey, and Mark Ford.
If you didn’t see it on Wednesday night, you still have a few days left to catch the replay. I urge you not to miss it.
Where else can you eavesdrop on three self-made multimillionaires having a candid conversation about how they made their fortunes… and what they’re doing with their own money now?
Access the replay here. And don’t wait… it may already be gone by the time you read this.