Quick Fundamental and Technical Look
Market Technical Charts
As we have noted for many weeks now, this Iran conflict is not going to end any time soon. We do not have confidence in the current administrations ability to negotiate freely, partly because the arrogance of President Trump stands in the way of his ability to accurately judge the situation. No matter what he is being led to believe, no matter who is truly in control of our country, the developments suggest that this will be a prolonged conflict that will grow like a weed or cancer. It is quite unfortunate but its currently what the data is suggesting and this means volatility will end up destroying many a trader in both traditional markets as well as digital markets.
We know the mentality of a leader like Trump is win at all costs, but this is not a TV reality show, this is not a game, real lives are at stake and billions of them at that. The “YOU’RE FIRED” mentality is a dangerous game to plan on the global geopolitical stage. Yes there are times where a firm hand and arrogant mentality are certainly required, all traders know this, however there are also times where restraint and negotiation are for the betterment of all parties involved. We are afraid that humility is not the current administrations strong suit and it will prove to be an impediment toward diplomacy and real peaceful negotiations.
As far as the markets, you guys know how we feel about the underlying monetary fundamentals. The FOMC has been in contraction mode for years and that never bodes well for the levered, extend and pretend crowd. As our last paid note to our subscribers laid out, our economic incentive system is clearly defined by the annualized increase in the Federal Reserves balance sheet and our post’s data made that very clear.
Honestly there isn’t any denying that global asset nominal values are a pure function of the global central banks asset base multiplied by some factor. This valuation system works fine into perpetuity, that is until we need to switch to a log methodology merely to keep track of the growth rate. This is where we stand right now and we have said it many times before, the 2025 to 2035 decade will be very different than the prior one.
We haven’t had a generation see a decadal loss in equity returns, well given the levels we are at today, it will not surprise us to see this come to fruition. The boomer generation has so much excess supply of everything that as time goes on that supply glut will inundate an already capital starved system and then things truly get interesting.
Please stay the course with us so you can be well positioned with the right knowledge so that you do not get caught in the mess!
As far as a few technical charts:
This week for the SP500 futures we believe the bull move last week will be tested for its legitimacy and that 6925 is the upside target for the bulls while the bears will try to pressure the market back below our bull/bear pivot line down at 6650:
Same idea in the Nasdaq futures 24350 is key and we suspect the bears will test that with the 23850 level below that as key weekly support:
This week the QQQs will have 596 as the focus to stay above for the bulls. The large back to back weekly candles seem like reactionary moves to the middle east outcomes and are driven by CTA trend followers adding to positions, but that sentiment does change quickly if the prior two weeks moves are negated, CTA trend followers will move to net sellers not buyers:
Ok we will have the full subscriber update later today. Just wanted to get this out to you guys quickly. We have been busy working on our digital project and are confident that our vision is the correct one for the future as we continue to explore this path successfully.
CONCLUDING THOUGHTS
If you have trading questions, want to discuss market setups, are curious about monetary policy, or have any other topics in mind, we are here to help. Subscribers can click the chat icon to connect directly, or you can reach out to us via DM or email. Our mission is to help you sharpen your skills, become a more informed trader or investor, and continue growing together. Thank you for your ongoing support, for reading, engaging, and believing in our vision.
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