Weekly Market Update 18 - 06 - 2022 - Further downside risk, Crypto meltdown, Elon being sued

Jun 18, 2022

Welcome to your Weekly Market Update 

The market is still flashing red, and unsurprisingly. Through out the year we have spoken about the risk of further selling within the stock market and that risk is playing out. At this point in time the risk for further downside is still prominent as inflation worries continue. Major investors are yet to pour back into hedge funds which indicators fear is still high in the investment world. This is where patience will be our biggest strength. Even though the growth sector has been hit the hardest, it is typically the sector that will indicate a recovery. So, we still remain overall long term bullish in the sector, but we are more than willing to be patient and wait for the recovery. It becomes very dangerous if you start attaching time scales to recoveries as you may take unwise risk decisions. We continue to hold a non-leveraged stock portfolio for this exact reason.

Chart of S&P 500

The crypto currency market is becoming a indictor for risk appetite amongst investors, as we saw during the pandemic – risk appetite was high across the board and cryptos certainly saw the benefits of that. However, that is no longer the case, and we have been stressing that cryptos can move much lower still. The truth of the matter is there is still a very little use case for cryptos and that ultimately will affect demand. Bitcoin will look to continue being the leader – as we see smaller coins are still in heavy correlation with BTC. The crypto markets will bottom out, the question is …where? That is a question no one can answer but if we see a break of $20,00 and we may start seeing the $10,000 mark again.

Chart of BTC

Elon Musk is being sued for $285 Billion dollars for alleged dogecoin pyramid scheme. The coin fell 125 on Thursday and is now trading 92% down from its all time high, tesla stocks even tumbled by 8.45%, however this could be because of the reports indicating a price hike in their car prices. The accusations are aimed at manipulations of price and profiting from its trading. Mr Musk has been known to be active on social media, indicating that tesla may take payment in dodge coin and even indicating that SpaceX will start taking payment in dodge coin, which heavily causes price swings in the coin.

Chart of DodgeCoin/USD

Until the next week’s Market Updates…Have a great trading week! 

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