This Is Not Investment Advice
The Market Right Now
Heading in to a week where the economic data (and in my view focus on the Fed) comes back in full force, smaller and medium sized growth stocks very notably sprung to life on a Friday where the bulls had everything lined up going their way. But - do we have even more brewing trouble with the behemoths?
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The “futures were up” Friday morning and everyone was giddy and ready to go seemingly . . . . even Bitcoin was trading up and trying to help. But the short squeezish day left the Daq closing near the lows for the day. Action should get more intense this coming week with more participants actively involved. Let’s see what happens.
Bitcoin Monthly
Bitcoin Weekly
Bitcoin Daily
Global M2 YOY vs BTC YOY
Again - will continue to emphasize that in my very humble opinion the majority of participants frankly are looking at M2 strictly through CNBCesque hopium controlled lenses. What matters is the rate of change and what happens at the margin. Market already knows everything going on now . . . . . and since market is a discounting mechanism it is constantly seeking out changes at the margin.
This view shown below is zoomed in going back to the middle of July 2022. Yes indeed the Central Banks have in a general sense expanded Global M2 during this time. However - the Red Circles help highlight how at the margin the rate of change of M2 has not been going straight up. And just look at Bitcoin during this same time. For the record - I don’t view this as the ONLY indicator or signal, but there has been strong correlation here over time and logically it aligns very well in my opinion.
Bitcoin Bottom Line:
Let the market tell/show us what is next
$85.7/$86.7
$91.3Kish
$89Kish
$95 - $97Kish
$80.5
$79.6/$78.5
Although Money Flow on Lower Time Frames continues to repeatedly tease upside moves . . . . . sadly the Money Flow on the Monthly right now is pretty decisive and the Weekly just simply keeps teasing but lacks that big thrust to convince investors and traders . . . . .
There are certainly bullish outcomes available for a very sharp counter trend move in the short to intermediate term . . . . . but will the put sellers (buying spot to hedge) and other participants let the market find a spot where a violent reaction is quite likely to ensue . . . . .
Risk On/Off
Still very open minded towards a showdown eventually (perhaps sooner than many might expect) between Risk On and the market’s perception of Real Rates one year out. Yes - I realize that most projections for Core PCE suggest/hope that core consumer inflation kind of trickles down into the 2.2% to 2.5%ish range, and maybe it will. Here’s the 5-Year, 5-Year Forwards which show that the market recently flipped towards expecting inflation to rise at the margin starting 5 years from today:
5-year forwards don’t seem to be telling me inflation expectations are gone (that line above would be a slow drip down consistently) and below is the 30YR UST:
I don’t know what will happen with inflation in the near to intermediate term, the Fed, or rates/credit in general. I can say my current interpretation of what the market is telling me is that Risk On is not entirely sure and neither is the market. Stocks are expecting an essentially perfect scenario. Are bonds expecting the same?
Top Industry Groups
Top 20 Leading Stocks
Nasdaq General Market Indicators
QQQ Weekly
QQQ Daily
HYG Weekly
HYG Daily
PLTR Weekly
Risk On/Off Bottom Line:
13/20 of the top Leading Stocks from Investor’s Business Daily are either precious metals or medical/biotech . . . . . a few AI or high tech related popped back onto the list this week . . . . again not the end of the world but also in my view indicative of where we are right now and the market telling me to maintain prudence and patience . . . .
When I look at the Top 20 Industry Groups from Investor’s Business Daily after this week’s action . . . . . . it looks and feels a bit more bullish to me than the last couple of weeks . . . . . . not a full steam ahead signal per se . . . . telling me that potential Leading Stocks and/or high powered growth stocks are present and accounted for and ready in many cases . . . . . . but the behemoths with market caps in the Ts still drive sentiment . . . . . . and that Higher Time Frame Money Flow continues to whisper aggressively in my ear about being prudent and cautious . . . .
Ahhhhh the ebbs and flows of markets . . . . . will publish a new report on Private Credit soon . . . . . . . KRE/KKR/OWL bulls celebrating a tad too early or actually way too early perhaps?
GOOG looks quite decent on the charts right now . . . . . conversely PLTR and NVDA have this look to them like the market or someone or something is hoping/begging they perform better . . . . if PLTR is an “AI Leader” or “tip of the spear” type of AI Play . . . . . well sorry to inform the crowd but that’s 3x now it dove below 10 Week EMA on surging Volume . . . . . since August . . . .
Part of me certainly finds it interesting and notable that the Nasdaq should have been up 500+ points easy on Friday . . . . . just look at our Watch List . . . . but it wasn’t . . . . Bitcoin helped . . . . growth stocks and some groups were really moving . . . . . so why didn’t institutional investors in aggregate step in with big buying . . . . . why?
A positive signal (no complacency) that our Watch List was sizzling Friday . . . . 75% of stocks follow the overall market trend . . . . . positive early signals . . . . . but 75% of stocks follow the overall market trend . . . .
The way junk debt and QQQ are trading strongly urge me to maintain prudence and caution . . . and most importantly Higher Time Frame Money Flow across the board essentially . . . .
If Space becomes a thing . . . . .
In my humble opinion again my feeble mind is unable to grasp a solid sense of directional bias in the short to intermediate term . . . . . on the one hand we have the Watch List trying to get going . . . . . but with some titans breaking down . . . . QQQ/HYG Accumulation/Distribution and Higher Time Frame Money Flow ugly . . . . . credit telling me to take it easy . . . . a slew of econ data and Fed focus pending . . . . still heavy cash and ready, light, nimble . . . . . not the time to be walking into a bar and waving a gun at people acting like a tough guy . . . . in my view . . . .
Not shocked if the focus really intensifies on credit in general and junk debt signals . . . .
If Space becomes a thing . . . . .
Mining Update
Please consider these are positions specific to a mining business I control via entity. I might be active long/short BTC direct and/or TradFi to hedge/trade with/against the mining business exposure.
Sold BTC vicinity $122Kish, about 30% of the stash held from mining was sold, sitting in cash earning. Remainder sold $116Kish. Current posture is very heavy cash, zero short term credit balance. UPDATE: Sold almost entire Bitcoin stash for the mining business. Very heavy cash earning. Zero short term credit.
If/when the Money Flow for Bitcoin turns Green emphatically on the Weekly, I have lots of bullish options. I could buy spot, buy more machines, long BITU, long forward hash, and/or hold onto mining rewards for a considerable amount of time before converting to fiat. My posture will change based on the Weekly and Monthly Money Flow. If both are Green, then all tactics deployed to hold BTC as long as possible before converting any to fiat. If just the Weekly turns Green then start leaning into this strategy. UPDATE: The Money Flow is Red on the Monthly and Red on the Weekly so defensive posture continues. I am very heavy cash, all the bills are paid, and zero short term credit. I can get more aggressive but am not as of just yet.
UPDATE: Moving forward from specific types of entry points I will likely be both Long and Short and may use ETH for mainly downside hedging. 12/16 sold majority of SBIT. I make adjustments throughout the week using various points and factors (Value Area High, Value Area Low, etc.).
UPDATE: Moved cash into SEP IRA and into Traditional IRA intended to long BTC when ready.
TBT light (sold a chunk off), UUP
Check recent posts for Single Stock Shorts
Alex Grey
Mystic Eye
