Equities Consolidate, Bond Yields Higher and Metals Continue Strength
Subscriber Trading Trackers
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We hope everyone had an enjoyable Memorial Day weekend. Its also the end of the school year and summer is upon us, so what does that mean for the markets? Please none of that Sell in May and Go Away garbage, the markets are too fast for old wise tails. Anyway we wanted to just take a look at a few charts before we get into the subscriber only section. It seems like the equities should consolidate here now as the first major resistance points have now been met.
First chart here is the QQQ ETF, this week our resistance area is 525 with support down at 495 and our bull/bear pivot is 487. We like the rejection at the former triangle support and this makes perfect technical sense:
Next up the SP500 futures, we will expect upside targets to be capped at the 6035 level and put structures would be well warranted on a run up there. On the downside 5750 is support is backed up by the bull/bear pivot reversal level of 5625:
When we look at the Nasdaq futures we have 21750 as first resistance on the week and like the SP500 would favor put structures there. On the downside the target is 20375 and would expect buyers to defend these levels on the first pass. Below 19875 is trouble here for the Nasdaq and all the new retail buyers that we have seen flood into the tech sector:
When we look at our longer term spread between the SP/NQ futures its interesting to note the outperformance of the NQ as retail has come rushing in to buy stocks off their lows, yet the NQ couldn’t make a new high vs the SP500 at this point yet. This may lead to the SP recovering a bit here vs the NQ as the market consolidates and or sees a little bit of profit taking off these recent lows:
Another chart we are eyeing is Silver, it has looked really strong here since bouncing from the $30 level and now is targeting the 34.51 area which should press it to well above $36 this time around:
As far as Gold, well we have $3408 on the upside as the target now this week and $3192 is the weeks support. All in all the metal complex looks strong on continued USD debasement:
Moving over to bond land the U.S. 10Y yields are butting up against the 4.50% level and will need a move back below 4.40% to see a push back down to lower levels and against the continued sellers in U.S. Treasury land:
When we look at Friday’s settles in the US yield curves we saw a small flattening but overall we will continue to believe the shorter duration notes will outpace longer term bonds and a massive steepening move is still our base case scenario:
Moving to CryptoCurrency land, Bitcoin hit our resistance area up at $112k and has backed off a bit:
As far as Monero, it hit a weekly high at $420. It continues to see real heavy buying interest with bouts of levered selling that are soon accumulated and higher highs and lows continue to be the trajectory here:
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Magnelibra CTA Trading Sentiment
ZF, CL, RB move to -1 Short bias, NG moves to 1 Long bias and A6 moves to 0 Neutral:
MEGA8s Portfolio Tracker (Top 8 largest equities by market cap)
The group fell $245Bn in market cap on Friday and the 525C QQQ hedge expired OTM. We will most likely target the 520 calls this week or maybe even take a shot at a decent put structure, for now lets work to start the week the QQQ $520C sale at $4 or better. Also we adjusted the options hedge data as we added the missing data from 4/25. We try to keep this tracker as accurate as possible and hope that our hedges can continue to try offset some of this downside these long only structures have:
MEGA8s total market cap chart
The 200pMA is the market cap target support now:
StrategyB (Bitcoin vs MSTR) Covered Call Portfolio Tracker
In our May 20th Subscriber only note we highlighted and said this:
“This weeks hedge is the $430 Call. Volatility QoQ is now down -7.50%. The strategy is +28% over the last 7 months. With Volatility sinking, MSTR Put structures seem warranted. The June $350/300 put spread is around $7.50.” MTR Subscriber Only post 5/20
We continue to believe this structure is warranted as Saylor continues to swap shares for BTC!
MSTR acquired more BTC today and the premium over outright Bitcoin has now fallen to 1.65x and their average BTC acquisition price rises to $69,979 We expect the premium to continue to decrease to 1.5x:
Daily Settlement Sheet
Bond market bounced on Thursday and Friday, Equities were all down on Friday and FX was stronger across the board as were the metals complex with energy mixed to lower:
The 5 & 30 Day rolling changes
Bitcoin and Gold were the weeks big winners +8.16% and 6.80% respectively with the Russell2k and the Nikkei the weeks big losers:
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