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Price action is what really matters. Fundamentals are always just a narrative.
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Price action is what really matters. Fundamentals are always just a narrative.

GMG Research
Apr 4, 2022
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Price action is what really matters. Fundamentals are always just a narrative.
gmgresearch.substack.com

Last week’s article:

  • Inflation and how it will be tamed at costs

  • The surge in home prices will collapse under rising mortgage rates

  • Consolidation is expected.

NOW:

  • Levels to watch: S&P 4400, QQQ 350, CORN 26.50, AMD 100, XME 60

  • Follow us on twitter @gmgresearch

  • Expect more volatility.

  • Mortgage rates broke a 40 year trend!

  • 2s/10s are inverted, but who cares. The next presidential election (which is during the projected recession) should be more important than the inversion

  • Utilities are extremely strong right now & cannot be overlooked

  • Commodities, our miners (XME) and precious metals are still strong

  • Trading one asset class is trading blind, don’t pigeonhole yourself

S&P

Important Stanely Druckenmiller Quotes (he’s the best):

“Earnings don’t move the overall market; it’s the Federal Reserve Board… focus on the central banks and focus on the movement of liquidity… most people in the market are looking for earnings and conventional measures. It’s liquidity that moves markets.”

“The first thing I heard when I got in the business, not from my mentor, was bulls make money, bears make money, and pigs get slaughtered. I’m here to tell you I was a pig. And I strongly believe the only way to make long-term returns in our business that are superior is by being a pig. I think diversification and all the stuff they’re teaching at business school today is probably the most misguided concept everywhere. And if you look at all the great investors that are as different as Warren Buffett, Carl Icahn, Ken Langone, they tend to be very, very concentrated bets.”

MacroOps had a nice writeup last week on Druckenmiller.

The housing market will drastically cool down. Notice the leading indicators hurting below (HD, KBH).

Food for thought: The vast majority of statistics that you see quoted are useless and are just a narrative. Follow price action. (SBF is the smartest around).

Twitter avatar for @SBF_FTX
SBF @SBF_FTX
3) But the truth is that I think most people misuse, and overuse, statistics. So much so, that many people would be better off ignoring data than what they're currently doing. I think it took me a while to come to terms with this.
12:52 AM ∙ Mar 26, 2022
650Likes54Retweets

Keeping This Important Bitcoin Chart Here.

Return always wants its risk payment. Not Investment Advice.

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Price action is what really matters. Fundamentals are always just a narrative.
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2 Comments
tolkach1
Writes Tolkach1
Apr 4, 2022Liked by GMG Research

Soros:

'In the course of my investment activities, I discovered that financial markets operate on a principle that is somehow akin to scientific method. Making an investment decision is is like formulating a scientific hypothesis and submitting it to a practical test[…]

taking this view, it is possible to see financial markets as a laboratory for testing hypotheses, albeit not strictly scientific ones […]

Most market participants do not view markets in this light.'"

I appreciate the reminder re: vols.

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