ESP Tuesday: Nursing the pre-Holiday Hangover. Hedging But Looking to Buy Bitcoin in Dip. New Trade on Tap.

Tomorrow's PCE number should be interesting.

All parties lead to hangovers. And today is no different.

So, Wall Street is nursing a bit of a pre-Thanksgiving hangover after yesterday’s big day while the Bitcoin rally takes a breather. As a result, I’ve put on a hedge on our Bitcoin trade. I am nowhere near bearish on Bitcoin, and I suspect we will be buying on a dip at some point when things calm down.

This hangover could easily lift if tomorrow’s PCE inflation number comes in good enough to keep the bond market from rekindling its upward trend.

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Our Extended Stay (ESP) portfolio remains in solid shape with all eight distinct positions holding their own. I am also adding a new very contrarian housing related pick to the mix.

Market Update

The major indexes are mixed this morning. The New York Stock Exchange Advance Decline line (NYAD) is holding above yesterday’s breakout, which is comforting. We want NYAD to hold up and move steadily higher.

The U.S. Ten Year Note yield (TNX) is hugging the critical 4.3% yield area after yesterday’s break below the key chart point. A sustained move below 4.3% will trigger a test of 4.2% and the 200-day moving average. A sustained move below 4.2% would be bullish for stocks.

Bitcoin is pulling back after being overbought for the last few weeks (RSI above 70). I am hedged on Bitcoin right now, but remain bullish longer term. You can see the details on the hedge in the paid portion of this post.

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