Bonds Buyers Showing Up
The 2nd Trump Era Begins
So the US Bond market was hit hard in Q4 and now the big run up in yields seems to have hit a reversal point. After hitting the low around 3.90% in the US Govt 30y, the market has run all the way up, posting an intraday high 5.005% yields seem to be turning around here. The MCA CTA Market Sentiment tracker has flipped the bond market to a long now, first time in awhile. We highlighted the potential of this reversal occurring at the 5% area for the 30Yr and also highlighted this big reversal candle last week in the US Govt 10Yr where 4.371% is now are bull target some 20bp below:
As far as that MCA CTA Market Sentiment Tracker:
This is our commodity advisor tracker and is an offshoot of our proprietary sentiment indicator used for our CTA Managed Accounts. This tracker gives a good indication of overall market tone in the market segments that we cover. We can customize any sort of risk tolerance and adjust for volatility and tailor it to any appetite. Obviously there are nuances that we can’t speak of but an account is customized to match an individual investors appetite for risk. Inherently a managed futures and options account is already in the ultra risky side of the portfolio bucket, but there are way so deleverage and reduce risk, especially if it is just a smaller portion of an investors overall holdings. Feel free to inquire using the information at the bottom of our letter.
Ok before we move on we had to touch upon the new administration and the sweeping changes that will and have already occurred. Obviously for our non domestic US readers, this may not be as important for you guys, but in all honesty we believe the new administration will have far are reaching effects to all around the globe. The Trump doctrine is one of an “American First” policy. This means anti-immigration, Pro-Tariff, Pro- US Energy initiatives and an administration that will focus on strength of our domestic forces in all aspects. So with all of this we would suspect a great amount of uncertainty both here and abroad. With that uncertainty we can expect to have volatility on any new changes once implemented. The markets don’t like change, so this will be an interesting year for sure!
There wasn’t a shortage of tech billionaires in attendance and no doubt a signal to the world that America’s digital infrastructure is at the top of the US Defense priority list! With Elon, the Zuck and the Bezos in attendance, lets have a little fun and bring our our special chart, dedicated to showing how many days in a row just 1% of their net worth in their companies could be measured if they donated 1% of their net worth and held a $100k lottery per day. Elon takes the cake at a staggering 83.1 years or some 30,331 days in a row!
Also today MicroStrategy bought another 11000 more Bitcoin moving their total up to 461k, and their MSTR trades at a 1.96x premium, not sure why really:
As far as the options MSTR selling strategy, the options premiums are making up for the stock underperformance and this strategy does take into account if options are in the money the exit price for that week is that strike, so we have all the data correct and for those wondering why at $390 per share is the MSTR equity showing a -10.97% that is why, but you can see that the options premiums returns below as well:
Ok as far as the settles go we have Friday’s thru today shown:
As far as the 5 day and 30 day changes, the 5 and 30 day winner is Bitcoin+16.67% and 15.03% respectively and the loser is Nat Gas on the 5 day -3.38% and the EuroBund -1.79% and the British Pound -1.62%:
Ok guys that’s it, we have been a bit under the weather lately but wanted to get this out there to our subs and followers. We do all this in hopes you find value in the way we look at markets and the way we present what we find. Everyone has a unique viewpoint and ours comes from 25 years spent navigating not only the markets but finding out what truly moves them both up and down! We believe we can convey value and we know its hard to look at some of this stuff objectively and it seems just as easy to just buy everything and never look at it. Hell maybe it is that easy, the problem is when the collective start to think that, that’s when everything turns, so its best to always look at this from a much broader context. Ok till next time, cheers!
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