As bitcoin price fell by 20% on Monday, some traders are anxious to know if now is the time to buy. Todd Horwitz of BubbaTrading.com is waiting for this pullback to continue some more.
The Meadows have had an intense end to the week last week, and they've barely recovered today. Todd bubble Horwitz of global trading.com is back to give us his update on how he's trading this tumultuous and volatile market. Bubba. Welcome back. It's been a while since we spoke happy new year. Happy new year, David.
Thanks for having me back on always a pleasure to be with you. Oh, it was a pleasure to have you too. Bye. Bye. We have to get a trader's perspective on what's going on. How did you, what, what was your initial reaction when you saw prices on Friday? Well, obviously at the time I was extremely long and I wasn't thrilled.
So it was, it was kind of a big ouch you'll say, uh, but we actually did reverse, you know, we do all of my trading is done through algorithms that I have, and of course. They switched over to the shore side and we actually sold into the rally last night and we'll remain short now until the trend changes.
I mean, I think the trend. For the short-term is clearly turned lower, but there'd be full and give full disclosure. David, I always own metals now buy more physical when I'm trading, I'm trading the futures of the paper gold. So it's a different scenario for me. I'm always an investor in metals in general, but as a trader, I have to take where I think I can make the most amount of money in the shortest period of time.
So. Investing wise, I buy all the time. But as a trader right now, I'm short and I will stay short until the trend reverses back to the us. It's good that you made that distinction. People are conflicted. Now on one hand, they're saying, Hey David, why are you covering all these daily fluctuations? Just ignore the noise by the meadow and hold it.
On the other hand, they want me to cover news like this because they need to know when to sell, when to buy on a short-term basis. Some people are traders as well. So how do you reconcile this difference, Bubba? Well, I think you have to make up your mind, you know, first of all, if you're buying the physical metal or you're buying something in the hole for a long-term, you're buying that as an investment.
Which is fine. I mean, I have all kinds of investments that I'm going to hold forever through good markets through bad markets. But if you're, if your distinction is trading the market, then your overall goal is to be with the path of least resistance. Okay. And according to the work that I do, the new path of these resistances lower now, we've been long since almost the bottoms of the Mo gold move.
So even though the overall. I sell off hurt it. Didn't take away all of our profits from the rallies that we had made going into there. So you just have to be prepared and you have to be prepared to exit if you're trading. But again, investors should not be bothered by Dayton daily news or noise or whatever, which is correct.
I mean, in fact that Bubba trading, we say. Dre the news you lose. Yeah. All right. So let's go over the markets again. Let's recap. What happened Friday? And then today as well, silver market, we talked about golden or show the silver market was, was down even more than gold. It was, you know, still silver, double malt, all the tile metal stand about 10% last week, you know, as a trader, when you see prices move like that, what's how do you react to that?
What, what's your initial impulse? When you see on the prices like that? I'm sorry. My first impulse was to watch it because. Hey, I don't. I try not to get involved intraday. I would rather let the market close. I know from treading markets for 43 years. That you have a lot of either panic or too much jubilation at any one given point during a trading day when the emotions are running high.
So I think the first thing anybody should always do is take a step back and take a deep breath and say, do I really want to either enter or exit here? And I think you're always better off in a panic sell, which I think that's what we saw on Friday is to sit back and relax and wait. And confirm after the markets are done so that you're not caught up in the daily, emotional swings of people.
Bubba, what do you think caused the sell off on Friday? Well, I, I think one of the things we're seeing here, David is there's a lot of things going on with, with politics. I think that the flooding of the, uh, the, the, the money's just the monetary, they continue to edit money supply from the federal reserve is, is teaching people that may be.
The federal reserve and the central banking system is not very good as we believe. And they're looking for alternatives, which are not regulated by central banks, that can't be printed and can't be created. And I think you saw that overall fear of missing out trade going on in Bitcoin all the way through the weekend until late yesterday, when Bitcoin had hit almost 43,000 and is now subject to subsequently dropped down to about 32,000 at the moment.
Yeah. Don't you think monetary policy where stimulus should be a good thing for the metal people were banking on more stimulus following the Georgia runoffs to drive metals higher, but that clearly didn't happen. What, so how do you read this? Well, I think one of the things you remember is you buy the rumor, sell the news because everybody had assumed that that was going to happen.
They already priced that in, you know, markets are so efficient. They're very rarely surprised by a news item. So they had already priced in the packages that you're talking about. So once the news came out, it wasn't, it wasn't anything that was unexpected. It was already expected and they had overbought going in.
And of course we know when they decide to get up, they sometimes panic sign out. So I would expect, although we are short right here as a trader, I would expect to see probably a market's consolidating here for a while before committing to the next big move, which I, I do believe. Well, how long would you stay short on the markets by what?
At what point would you reverse in that, on that position? Well, we use, you know, I, I have a proprietary algorithm that I use and I will say short until that changes. However, if I, if I see gold, you don't get back near probably 2000, that would probably trigger. The, the potential, you know, reversal. Now that number can change on a daily basis that depending on the action, the actual physical in the trading action during the day.
But as of right now, you know, in 1966 was kind of like the, the peak there. So we get back to there. It'll make me look a little bit closer. And then of course, if we get close to 2000, it might trigger, but. Certainly that I can change because that's more of a day-to-day number, not a longer period type of call.
Yeah. I'm wondering, so, yeah. W what I'm wondering specifically is your downside. So we're at 1850 right now. We're just under 1850 as we speak now, is there like a downside floor that you would be anticipating once it hits that floor? You would say, all right, I'm out of the short. No, we, I don't look for tops or bottoms.
I try to catch what they call the meat out of the move. So it will find a bottom. I will not buy the bottoms because again, I think when you try to buy bottoms, you are guessing, and you are gambling versus trying to scientifically play the market by the way that they're laid out. So I will wait. It'll find a bottom, it will start to rally.
And then once it shows me that the bottoms are actually, and I will then reverse out and go along and cover the short position. Okay. So the momentum here on the, uh, on, uh, on Monday, are you looking at more upside momentum or more downside momentum for now? I think it's going to be pretty choppy. David. I think we saw last night they opened, they got up almost 20.
Then they were down this morning, almost 10. And now they're back up about $15. I think that you'll see some pretty choppy action. Coming on here. And then of course we will then make the real decision, but I would expect over the next few days to see some consolidation and no real major breakout in one direction, or how are you looking at the economy now, Todd, because I asked because silver is dependent, we're partly dependent on industrial demand and a its industrial component is actually stronger than gold.
So I think the economy is really important for silver. How are you reading the economy? Oh, I think the Academy has got a chance to get better. Now, the real question we have to ask is that they already priced in really good news, you know, with the vaccine now out, you know, we ha we, we have, we're starting to see a little bit more opening now, still one of the big problems that we don't discuss as the fight for stimulus money, uh, because the, the new party in charge is trying to bail out all the broke States.
That have, you know, like my state, Illinois, which is one of the highest tax States in the land, which is busted, they're trying to get money to bail out those. So I think that will depend. Uh, but I think what we have seen is a lot of destruction in, in small business, which will hurt in the short term. But, you know, typically out of all, these types of situations comes much more strength than I expect to see strong growth.
Maybe not in the next week or two, but over the next six to 12 months. And again, silver is one that I always love, even though I'm sure at the moment, I'm always a big buyer of silver because I think it's got the biggest potential to make the biggest moves. You wrote a commentary piece today about Bitcoin and how cryptocurrencies are going to be the next goal.
First of all, can you explain why you think cryptocurrencies will be the next gold and then give us your outlook on sort of prices for Bitcoin. Well, actually, I opened to the question really opened the dialogue, you know, do you think that Bitcoin will replace gold than any? And I don't think it will replace it real possibility.
And of course, in the libertarian world, Of of money. You know, we don't like central bank intervention. We don't, I liked the ability to create more currency out of thin air. So I believe that the crypto space itself, whether it be Bitcoin or ether or some of the others, I believe it's real. And I think it's going to be around for a long time forever, basically.
And I think it is starting to work now that it's gone over a trillion dollar market cap. I think it's worrying some of the regulators, but I don't, I'm not quite sure how they're going to be able to regulate it. When they get there, but I do think that you will see. Many more places will start to take cryptocurrencies as a form of payment.
And I think the ability not to have a central bank intervening within your currency will also create more strength down the road, but I don't think it'll ever replace the actual stored value of gold. You know, I've spoken to some investors and, uh, over the last couple of months about how. They think gold will be replaced by cryptocurrencies.
And actually they're backing this up with their money. They're really selling their gold and buying Bitcoin. Instead, some investors will, the markets have speculated that this is the reason for why Bitcoin has done so well. And gold has led in the last couple of weeks. Where do you stand on this debate?
Well, I think you're making a mistake by taking all of your money and selling out your current asset base. I think that in the crypto space, For now that the money you're putting in should be totally capital that you expect to lose at all. I mean, it has not proven. And, and one of my concerns and why I'm I'm in, but I'm in on a small scale where if it went to zero tomorrow, I wouldn't lose a sleep.
However, I think that you have to understand, I don't know where the backing would be or where the value is. If something goes wrong. Now I liked the concept is very good and very solid. But there's still a lot of unknown questions here, but you aren't yet seeing a lot of major funds put their money in, but remember we're at a point in time and markets in general that everybody's chasing every asset class and chasing money.
Yeah, Bitcoin's down. Well, right now, 15%, it was down 20%. At one point today, would you buy at these prices? Where would you wait? I would wait. I wouldn't be looking at Bitcoin. If I were going to step in and buy Bitcoin today, I'd be looking for more like twenty-five thousand. Uh, for me for now. I mean, right now it's, it's in a, almost a free fall from the 43,000 we saw over the weekend.
Yeah. Like it didn't come down now it could stop and find some support earlier and then I'd be willing to step in. Okay. Bye-bye thank you very much for your updates today. It was a pleasure speaking with you. Thanks, David. Always a pleasure to be on Kitco news. Okay. Well, catch up with you again soon and thank you for watching Kiko.
I'm David Lynn.