What to focus on in these markets.
What to focus on in these markets.
The bottom line:
The S&P trend is still intact
Real yields ripped higher last week, which trashed speculative/tech/Ark
MCHI & FB are great risk/reward positions
Ark names are seeing capitulation and will base soon
If Bitcoin gets rug-pulled, then mega-tech will too.
The bond selloff last week was pent-up flow & re-positioning from risk funds, which had to wait for their 2022 “risk-budget” to be implemented. Real yields exploding higher is what destroyed Arkk and speculative tech. Bund yields are almost positive, for the first time forever which confirms the move in higher rates. The US 10 year is feeling it as it tests key resistance near 1.8%.
Going back to our Nov 29th call on cash…
“With elevated valuations, unstable economic conditions, the backdrop is becoming much more hostile toward investors in the intermediate term, understanding the value of cash as a “hedge” against loss becomes more important. Yes, cash will lose purchasing power over time but when volatility spikes, equities can lose a lot more. And remember this, Wall Street does not make fees on investors holding cash…”
S&P: The trend is still intact for now
This is what caused the real pain in Ark and speculative growth.
Most inflation IS transitory
10 yr yield will stall near 1.8%
Real rates are in focus
Meta Platforms, Inc is the strongest relative mega-cap name. Nice setup here with a stop at $295.
We bet Brent will continue higher
Bitcoin is all you need to watch. All other cryptos will follow.
FREE ALPHA
Long China Developers/Short US Home-builders. What perfect timing - China is aggressively easing, especially when it comes to property/housing due to the Evergrande crisis, all while the US is hiking/tightening financial conditions. A top trade.
Our Ten Commandments
Work harder than anyone else
Busy people always find time
Timing is everything
Harder you work, luckier you get
Investment is a trade gone wrong
Be the dumbest person in the room
Manage the draw-downs and compound the returns
Trading only one asset class is blind
Fundamental investing was always just a narrative
If you don’t combine asset allocation, trend & momentum following, macro and tail hedging strategies in your long-term portfolios then good luck to you.
For Entertainment purposes only. Not investment advice