91% Probability of Fed Cut on Dec 18th

Hey guys, welcome to another edition of the Magnelibra Markets. Today’s episode #63 is entitled “91% Probability of Fed Cut on Dec 18th”

Quick Disclaimer: The following podcast is for educational purposes only. This is not a solicitation to buy or sell commodity futures or options. The risk of trading securities, futures and options can be substantial and may not be appropriate for all listeners.

Today’s employment report showed that the unemployment rate rose from 4.1% to 4.2%, and above the 4.1% estimate. The Establishment report showed a gain of 227K, however the household survey fell by 355K to 161.141 million. Those are the key numbers and have led to a spike in the rate cut probability today to 91% for a 4.25-4.50 Fed Funds rate 25bp cut on Dec. 18th.

As far as the bond market reaction, pretty muted, but the 30Y chart is pointing to lower rates ahead:

The US Govt 10Y is now on the path to recycle back down to 3.20% that is 100bp lower or if you buy a 10Y at 99.125 the price at 3.20% would be 107.26, that is 8 full handles and 13.5/32nds for every $1000 that is $84.22 +interest:

As far as equity index futures, the SP500 and Nasdaq are both higher with the SP500 up about 1% this week:

The Nasdaq is +3% on the week:

As far as other futures markets, we are watching Crude Oil, its telling us the worlds engines are slowing down and a weekly close under $67 would be disastrous technically:

We are also watching Copper, if the Tariff war heats up this may be one to watch, but if we are truly fighting a global slowdown, well then this may just end up being another short opportunity:

As far as Bitcoin, we saw massive levered liquidations late yesterday driving BTC down from $104k to $92k but has since recovered, $93500 is still our weekly support level:

As far as the Wall Streetization of Bitcoin, well it continues as the ETF holders are now up to 1.1m or $110.5Bn worth:

Here are a few more data points which we have shared before last week:

Compared to today we see that the (Values using $100k/BTC locked price):

100k plus = 0 change

10k to 100k = -2 addresses and -38,074 BTC or monetized or transferred $3.8B

1k to 10k = -13 addresses and -4,446 BTC or monetized or transferred $444.6M

100 to 1k = +396 addresses and +51,161 BTC or monetized or transferred $5.1B

10 to 100 = -20 addresses and +790 BTC or monetized or transferred $79M

1 to 10 = -1889 addresses and -4960 BTC or monetized or transferred $496M:

So if we net out the 1 or > BTC crowd that is +3841 BTC or $384.1M

We aren’t sure what data points really matter when it comes to this other than the fact that the top dog 100k and up as time goes on should continue to grow because over time, it would be expected if the price continues to rise, eventually they would sell off their holdings, but who really knows, now the game has levered participants with futures and derivatives and naked shorting via fiat games…but its going to be fun to watch!

Alright let’s look at another data point, this time involving Tether, which has seen a hefty 3208% jump in market cap since 2019 now up to $135Bn. Bitcoin market cap is up only 1357.7%. The Bitcoin to Tether market cap ratio is 14.4x now the last time it was this high was the Sept to November 2021 time frame. Over the next year Bitcoin fell from a high of $69,000 to a low of $15,460 a downdraft of 76%!

I am not saying this will transpire rather pointing out just another data point for reflection and relative value. Bitcoin hit a high of $104,000, a move of this same magnitude would drop it to $24,960!

Tether is an interesting animal, we are entrusting that they have the reserves they say they do, that they are unencumbered but are they? Also what is stopping Tether from issuing Tether and buying Bitcoin outright? All valid concerns, but one thing is clear the amount of Tether continues to rise without ever falling, so does that allow for further leverage some how?

OK on to the settles from yesterday and the MEGA8s where our options position is eating up nearly half of the recent up move, but that is ok, we are subject at times to sacrificing in order to be protected and everyone has a different way to play this game, this is just one way that we are showing:

Market cap continues to rise:

The MEGA8s chart does concern us here as to the extension levels it has reached in our 2 year long trend channel:

Ok as far as settlements:

The Bitcoin and Dax are this weeks winners so far:

Alright we leave you with one last thing and it has to do with gambling in today’s society, we commented on X yesterday about this. SMU monitored 700k online bettors and noted that an astonishing 5% withdrew any profit, with 3% of the losers accounting for 50% of the revenue! This was our reply:

Society can do a lot better and partition its resources in a more effective way, that we are sure of. Even in a free society, many things should remain illegal! There is a greater good that we should all want to pursue and by allowing our younger generation to be enticed by the false prosperity that these gambling sites perpetuate, well that doesn’t give us a cozy feeling lets just say! At some point in time we have to look out for the collective good and somehow, allowing excessive access to gambling isn’t something we should be doing. Yes there are profits, but to what degree of degradation to humanity overall?

Anyway we hope you have a good weekend we will be back with more over the weekend and we will be sending out our Annual Its a Wonderful Life rendition for 2024, so don’t miss that one, it is truly a great learning lesson for all! Thank you to our subscribers, we are getting close to 500 and we hope you can contribute, share our work, or just give it a like if you can, till next time. Cheers!

DISCLAIMER: For educational purposes only. This is not a solicitation to buy or sell commodity futures or options. The risk of trading securities, futures and options can be substantial and is not for everyone. Such investments may not be appropriate for the recipient. The valuation of futures and options may fluctuate, and, as a result, clients may lose more than their original investment. Nothing contained in this message may be construed as an express or an implied promise, guarantee or implication by, of or from Magnelibra Capital Advisors. Magnelibra the Commodity Trading Advisory and its proprietary long/short commodities, futures and options managed accounts may hold long and or short positions in the various futures and markets that Magnelibra covers. We will never claim that you will profit or that losses can or will be limited in any manner whatsoever. Past performance is not necessarily indicative of future results. Although care has been taken to assure the accuracy, completeness and reliability of the information contained herein, we make no warranty, express or implied, or assume any legal liability or responsibility for the accuracy, completeness, reliability or usefulness of any information, product, service or process disclosed. If you are interested in opening an individual managed futures and options account to compliment your overall investment portfolio you can visit our website at https://magnelibra.com for more information. We are implementing a new trading program launching at the start of the new year, which will include access to Bitcoin futures and options. Please contact or make inquires directly to our introducing broker Capital Trading Group, please contact Nell Sloane at nsloane@capitaltradinggroup.com

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