Bullish Boom Bot

The risky exposure of this strategy has been reduced to around 25%. Two recent developments have contributed to this quick reduction in positions.

First, several coins generated exit signals due to the latest drop in the crypto markets.

Second, the risk status from major crypto coins turned red which led to a reduction of all remaining positions in this strategy.

On the contrary, equity markets have not been as weak as the crypto market recently. A switch to a red status does not appear very likely for equities at the moment.

Risk signals from the equity markets proved reliable for a long time to detect systematic market risks for all asset classes. Hence, even though the crypto risk status turned red it is not necessary to exit all positions in this strategy yet. Also entering new positions at a risk adjusted size is still possible.

Below you can see a screenshot of recent risk levels for equity and crypto markets. Recent updates are published on my website www.systinvest.com

Globally, risky assets as equities and crypto started a year-end-rallye. This let my crash risk indicator to switch from red to green status. Since end of November the exposure in this strategy has been increased step-by-step and is now back to almost 100% risky coins.

Nevertheless, the risk status of the markets is still fragile and can switch at any time back into red territory. 2024 will tell us whether the recent rallye has been the beginning of a longer lasting bullish period. Historically, a bullish period after a long and deep bear market has shown very attractive returns.

You can follow my crash risk indicator on my website.

https://www.systinvest.com/latest-status.html.

Since mid of March my quantitative crash risk indicator has switched towars a yellow "warning" status and turned back to a green status recently.

Even though inflation came back to the Agenda beginning of March and even though the collapse of Credit Suisse came suddenly but not really as a surprise, the broad market directions have been positive throughout risky asset classes like cryptos or equities.

The risky exposure in this strategy has been reduced quite strongly for a while during which up to 80% USDT have been hold. Just recently the strategy is back at 100% riskier exposure.

Even though the current status of the crash risk indicator is green and despite the recently strong positive markets, investors should not forget that an uprise in inflation, a stricter than expected monetary policy by the Fed, another black swan events in terms of collapses of unexpected big names or an increase in geopolitical tension can all create downward pressure in the broad market again.

Nevertheless, for investors with a mid- to longer-term investment horizon the baseline scenario should generally be to stay in the market up until the point when downward pressures becomes high or even a crash is emerging. Especially for such situations I have developed my crash risk indicators which at the moment all show a green status.

After this status changes this strategy will react accordingly and systematically. Anyone who wants to follow the most recent risk status can do so on my website https://www.systinvest.com/latest-status.html.

The Fed has spoken and the markets are reacting. Inflation is back on the main menu causing equity markets to gear up on their way down.

Nevertheless, a sharpe correction or even crash has not happened yet. After several weeks of weakness in risky asset classes there is now even more reason to stay cautious.

During the last days several sell signals have been triggered in this strategy which increased the USDT-exposure to almost 70%. Since USDT is the safe haven in this strategy, the exposure to risky crypto coins is therefore at its lowest point in the last weeks.

My quantitative crash risk indicator has not reacted yet though, but the triggers are still coming closer. It might be only a question of days or weeks to turn the switch and to stay as safe as possible in case of a severe downturn of the markets.

It appears almost certain that 2023 will be as much a shaky ride as 2022, maybe even worse. If the recent crisis reaches the real economy even more severely with higher layoffs and unemployment, defaults on mortgages and high yield bonds, then the worst period of the current crisis is still ahead of us.

During the last week the crypto markets have come under pressure.

Interestingly the divergence between crypto and equity markets still holds, where the downward pressure has been stronger in the crypto space.

The latest downturns impacted the portfolio allocation as well. Several sell signals have been triggered which led to an allocation to the "safe haven" USDT of around 50%. The highest in many weeks.

Since the rallye at the beginning of the year has mainly been triggered by a relief in the fear of higher inflation and interest rates, this relief has come under pressure recently.

Whoever hoped that the beginning of the year may lead to a bull market like in 2021 must be very disappointed now. It appears that 2023 will be a difficult year to invest again. The risk of a sudden shift to the downside shall not be ignored.

My crash risk indicator is still on green status for global markets, but the triggers have come a bit closer in the most recent week. Nevertheless, at the moment the trading strategies are still active and dependent on the availability of entries or exits the portfolio allocation can go in any direction at the moment.

As soon as the global crash risk indicator turns red, the allocation of this strategy will follow the "safety first" approach.