Market update and eToro Portfolio Update – 24 June 2022

Dear copiers and followers, click the link below to watch my video about the latest market update:

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In alternative you can find below the full transcript:

Hello, welcome to this special Market Update.
Today is the 24 June 2022.
My name is Vincenzo Stefanini and my eToro username is vincenzost.

I am making this video because many people want to understand what’s happening on the market and what is the outlook for the next few months.
First of all, I post a video every month about the status of my portfolio, but I am going to make a special video like this one more often, when necessary.
Even when I don’t post on eToro, I am managing the portfolio every day and analysing the charts, so be assured that your money is managed daily.
In this video I am going to talk about the current macro situation, I will do a technical analysis of the main assets, I will explain what changes I am making to my portfolio, what you can do now with your investment and the positive expectations for the future.

Looking at the macro level, we have multiple topics which are affecting the market.

1. High inflation. As you know, the inflation in the US (and the rest of the world) is very high at the moment. It’s not peaked yet and it’s probably going to increase further. Also, the real inflation is much higher than the official numbers.

2. Rising interest rates. Because inflation is very high, the Federal Reserve (and other central banks like the ECB) are increasing the interest rates. They do this because they want to reduce inflation. However, this also pushes down the prices of stocks and cryptos. In fact, both stocks and cryptos have been in a downtrend since November of last year, when the tapering and the increase of interest rates were announced.
The crypto market is correlated to the stock market at the moment. So when stocks go down, also cryptos go down. This correlation is temporary and I think that at some point stocks and cryptos will not be correlated anymore.

3. Recession. The quantitative tightening is going to reduce the supply of money available, which is going to bring down inflation because there will be less liquidity in the system. However, this is very likely going to trigger a recession soon. Actually, I believe that we are already in a recession, but we need to wait for the data to come out in the next few months to confirm this.

4. The war in Ukraine. This has been going on for months now and it creates uncertainties in the markets and markets don’t like uncertainties.

5. Negative sentiment. Because of all these reasons, the sentiment of the investors is very negative. People are scared and are selling. This is pushing prices even lower.

6. Overall, the macro situation is bearish and I am expecting the bear market to continue until the FED stops raising rates and starts decreasing rates.
However, we can still make a profit even during a bear market, so don’t worry and remain invested in the portfolio.

Now, I am going to show you some charts and make a technical analysis, so you can understand what each asset is doing and is likely to do in the future.
We are going to look at the main assets, such as the S&P 500 Index, the Nasdaq 100 Index, Bitcoin and many others.

The S&P 500 Index is trading below all the major moving averages.
The overall trend is bearish.
It’s currently trading inside a descending channel and it’s currently getting closer to testing the 21-day moving average.
The RSI is neutral.
We can expect a relief rally up to the 50-day moving average and up to the top of the channel.
However, for the moment the trend is bearish, so I am going to add short positions to the portfolio.

The Nasdaq 100 Index is in a condition very similar to the S&P 500.
The Nasdaq Index is also trading below all the major moving averages.
The overall trend is bearish.
It’s currently trading inside a descending channel and it’s currently testing the 21-day moving average.
The RSI is neutral.
We can expect a relief rally up to the 50-day moving average and up to the top of the channel.
Because the trend is still bearish, I am going to add short positions to the portfolio.

Bitcoin is currently correlated with the stock market, in fact, they are moving in the same direction.
Bitcoin is also trading below all the major moving averages.
The overall trend is bearish.
It’s currently trading inside a descending channel.
The price is far from the 21-day moving average.
The RSI is bearish.
We could see a relief rally up to the 50-day moving average and up to the top of the channel.
However, it needs to hold the $19,700 level.
Because the trend is still bearish, I am not buying more at this point, I am holding my current positions and I am waiting for the price to revert to the upside before adding new long positions in crypto to the portfolio.
Just for your information, I am not allowed to short cryptos because of the legislation in the UK, otherwise, I would do it.

I am not showing a chart for all the assets otherwise this video would be too long, but I am just going to quickly say the overall trend of other main assets that I am watching every day.
By the way, I might add more charts to the next videos.

Ethereum (and all the major cryptos) is also in a bearish trend.
The Energy sector, the commodities sector and oil have all switched recently to a bearish trend, after a long period of a bullish trend, but we need to wait to see if it’s just a correction or an inversion of the trend, so I remain neutral for the moment.
The volatility index (VIX) is decreasing, but still higher than usual so my view is neutral at the moment.
Gold and Silver are also moving in a bearish trend so far, but the trend will change in the future.
The US Dollar Index is trading in a bullish trend.
Bonds have also traded in a bearish trend, along with stocks. This is unusual and it might change soon.

Based on all the information provided so far, this is my strategy:
First of all, we need to follow the trend and trade what we see, not what we want;
I am going to add more long positions on gold and silver;
add more short positions to stocks, at the right time;
hold my crypto positions;
reduce my bond exposure;
I am going to wait before adding long positions on oil, commodities and energy;
reduce risk portfolio; get more defensive to preserve the capital and make a profit.

So, what can YOU do now?

The first thing to do is to keep calm and don’t panic.
Selling now at loss and waiting on the sideline is the worst thing to do. Also, it would be too late for that.
Instead, we can profit from this situation.
As you know, it’s normal to have some months negative, but in the long term, I am always making a profit.
In fact, I made a lot of profit buying during the last crash in March 2020 when all people were selling.
So, if you are already invested in my portfolio, keep the copy open, make sure the copy stop loss is set at the minimum and relax. Remember that this is an investment for the long term.
If you have some cash that you don’t need in the next few months, consider adding more funds to the copy.
If you are not copying my portfolio, now might be a good time to start investing.
If you have a large sum to invest I suggest starting small and adding a fixed amount to the copy every month. In this way, when the market recovers, you will make a big profit.

Despite all this negativity, there are some positive expectations.

The investor’s sentiment is so negative and assets are oversold, so we can expect a relief rally in the short term.
Also, we can make a profit even when the market is going down.
We will have also the opportunity to buy again crypto and stocks at much lower prices in the future.
When the FED stops increasing rates and will start to reduce rates again, it will begin a new bull market.
This might happen sooner than expected.
The fundamentals of Bitcoin remain the same.
Cryptos move in cycles, so after this negative cycle, there will be again a positive cycle. Cryptos are not dead.
This is instead a great opportunity.

I hope this video has been helpful for you.
If you liked this video, please press the like button and subscribe to my channel.
If you have any questions, you can contact me on eToro or on my social media accounts.
Follow me for more updates and videos like this.
Hope you have an amazing day.
See you in the next video. Bye.

Vincenzo Stefanini
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