Markets Seem Exhausted
Uncertainty Ruling the Day
There is a lot to be said about the lack of support on this latest rally and given the US fiscal budget issues as well as the structural mega imbalances that come with QE, it seems as if many forces are acting upon global markets all at once here. We had prepared some early morning charts but we were unable to get this note out to you. We are taking a short break in the day here to just post a few charts that we made last night.
With the Nasdaq futures currently trading down about 400 from last nights chart shown below, we have to say buyers targets are in sight here and we would suspect at least a few players to start supporting NQ around the 14750 area which as you can see puts the market near the 100eMA:
The next chart the SP500 is also nearing the 100 eMA (sorry it says 10 on the chart), will we get a W style dip, buy, dip buy? Possibly, and 4330 area is as good as any to start dipping toes:
The equities lack of support is a byproduct of higher rates as the Taper Tantrum, which will never truly be tapered, has hit both equities and rates, here is the US Govt 10y, 1.62% seems obvious target:
We would also like to take a look at Silver, we like the $22 area but we know what happened the last time equities tanked, it took the metals down with it, so that is clearly on our minds. We aren’t sure of the catalyst if or when that will happen, but $22 is important and a trade settle below would negate our bullish theme:
We put out the Nat Gas chart last week and noted there would be some casualties, of course Zhedge posted about a fund yesterday. Although we won’t bring up any names, rest assure shorting vol in this set up seems like a death sentence. We know vol types love selling and it does pick up the pennies in front of the steamroller and sometimes, well you get flattened and run over, this may be one of those times:
On the fundamental side of energy and especially Nat Gas, we have been seeing some interesting reports about the Atlantic Meridional Overturning Circulation (AMOC) and something called the Beaufort Gyre. If you don’t know what these are and if you live in Europe, well you better read up. This is an ocean salinity thing and when fresh water meets salt water, well we all know which one has a lower melting point. Anyway here is a link to a paper that if interested offers some compelling information. Phys.Org AMOC Article
For all you global warmers…good luck explaining this one away…
Imagine a supply and demand shock alongside a real global climactic change, what will this look like?
Alright finally lets look at Bitcoin:
The global central banks will continue to pour on the regulatory constraints on the real decentralized inflation fighter known as Bitcoin. All of this talk of central bank digital currencies is garbage, generally the majority of fiats are transacted digitally now anyway. So don’t be confused by central banking digital currencies or their acronym CBDCs. They are not decentralized and they are certainly not immutable. As long as a central party controls issuance etc, it will never compete with the real power of Bitcoin protocols, that is decentralized and immutable. Instead realize this kind of balance sheet below, should make it very obvious as to the inferior nature of fiats. Fiat is debt, and unless we have US Treasury non debt money, it will never compete with Bitcoin:
This kind of inflation in assets/ deflation in purchasing power only results in one thing, the massive concentration of wealth and power into a very few hands.
Now on to an excellent must read for all of us as we go through these very uncertain times in regards to Covid. I think this Spartacus authored article pretty much states everything you need to know to make an informed decision on whether or not you believe or are being led to believe, there is a very big difference. For us the narrative is very clear, many are relying not on science, but relying on group think and association. We hope this article finds you well.
Stay versatile my friends, there are many attacks on many fronts and we all need to dig deeper in order to make sense of it all. The path forward is being led by the stagflation prospects from fiscal, geopolitical, environmental and bit of forced oppression. The uncertainty is real, its pervasive and it will lead to many questioning the prospects of what constitutes value. Are we on the precipice of a major global revaluation, realignment? Maybe, then again its been in the works for many years…
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