Sellers Dominating Risk Assets Now

A ton of risk right now! Tariffs incoming and Technical charts

Good evening everyone, we wanted to get all of this data out before tomorrows trading day. We believe the markets are in some very real trouble here now and that the first bounce wave of bottom pickers will now be forced to dump and find a new lower equilibrium level. MTR has talked about the declining consumer sentiment, the declining prospects for hiring, the declining prospect for businesses to pass off increases in costs which will squeeze their margins. We also know the Trump administration is about to set upon a course of fresh global tariffs to compliment his America First policy come April 2nd.

We have also noted how higher rates are absolutely murdering leverage and is leading many to dump assets in real estate and take on some serious losses. All of this in the face of all the main stream media types still talking about “inflation.” WE DO NOT SEE IT.

This inflation premise is residual and not forward looking. We can’t assess our economy on the past solely, we have to anticipate where things will be in the future and that is where the real skill comes in. All to often, when things do go awry, everyone says, “I NEVER SAW IT COMING!” well dear MTR readers and listeners, you have been well informed and know better. Here take a look at the latest Atlanta FED GDP Now estimating a Q1 -2.8% level:

This is massive guys and we have been warning for weeks that the post election euphoria is gone and was an aberration, was transitory and now the reality of price discovery is about to set in across the bulk of the global economies.

When we speak of the economic fundamentals, well look no further than homeownership and jobs data. In order to balance our expected dour data, let’s take a look at a positive housing chart first, showing that nearly 40% of homeowners don’t have a mortgage. We also have 22.7% with a rate higher than 4%. Overall this looks like a strong starting point and it is.

However as jobs fall and as housing supply comes to the market, well that equity you thought you had is no longer there and with rates still elevated, the available pool of buyers is also diminished and in some cases by over 70%! What we mean by this is that at a 2.75% mortgage rate compared to a 6.75% mortgage rate, this results in a reduction of 70% of available or potential buyers!

So onto the dire data that we are seeing in real estate, this is the newest pending home sales data sitting at all time lows:

Not only are the buyers not showing up, but discounts are not helping, which means a deeper probe into the actual clearing price for some of these homes has yet to be discovered, but is probably some 20 to 30% lower than current levels!

So we have housing data looking sour and now the jobs numbers are starting to show a big increase in layoffs:

So the macro side of fundamental economics is telling MTR the writing is on the wall for new lower price discovery across the board for risk assets. To further solidify the case for complacency by all of retail across risk assets, lets look at the percentage of households holdings of equities from BofA. If this doesn’t alarm you and show you how bad its about to get, well, your just not paying attention!

So with that backdrop, you guys have all been forewarned, if you haven’t hedged, if you haven’t taken a few chips off the table, well, your taking on a lot of undue risk. No we do not care about your time frame and its longer term nature. This is a cyclical event in nature and you shouldn’t be so arrogant. Remember in order to make back a 50% loss you need to make a 100% return…this is a reality many fail to realize and no trader or investor likes losing money.

Look we get it, you want to stay long everything, you have been conditioned, but what you aren’t seeing is that the new frontier is no longer fiat central banked reserve QE and ZIRP, the future will be much more decentralized and we aren’t quite sure what this looks like, but we are certain, the old ways of the monetarists will be hampered by this new decentralization effort.

Hedging a long only portfolio can be scary we know, but you know what is scarier, losing 50% of it!

We know 401k types are pretty much locked out of hedging, the only thing you can do there is drop your equity portion to about 30% and move the bond side up to 40% and 30% cash, something like that.

Some investors that are tech heavy can look to the QQQs ETF and maybe look at the June 20th 2025 monthly expiration, put spreads. Assume a 30% drawdown from here (470 x 70% = 329). So we can target a potential move to 329 in the QQQs, so let’s look at trying to hedge for this kind of scenario over the next 3 months.

For instance if you have a $100k portfolio and you want to hedge some of it, you can put on a QQQ 420/350 put spread for about $5, so maybe a 5 lot or 2.5% max cost hedge since our cost to buy this spread is ($5 x $100) x 5 spreads = $2500. For every $1 the QQQs trades below 415, your spread will make $500. This 2.5% of portfolio is just an example, some more risk averse types could do more, some less, our goal here is not to tell you what hedges to put on, only present ideas for you to contemplate.

You can run a whole host of scenarios through any one of the various AI’s DeepSeek, Gemini, Grok, we highly recommend you start acclimating yourself to these AI tools and interacting with them, they are a wealth of information!

Anyway I think you get the picture! Ok before we get to the technical charts let’s just look at what MTR Subscribers get on a daily basis. By joining and subscribing you will gain access to our data which includes, our Magnelibra Commodity Trading Advisor Market Sentiments Tracker, this will give you keen insight to overall market trends for all the sectors that we cover, this will give you a greater understanding of monetary flows moving across the various market sectors covering bonds, equities, currencies, energy, metals and Bitcoin.

We often see a lot of advertising for “trader education, sign up, get funded” we can only tell you this, THERE ARE NO FREE LUNCHES, you have to put in the time, you have to get a mentor, and you need to be proactive in your learning. Nothing in life is free and you get what you pay for. Anyway hit that subscribe button and gain access to a brand new mindset!

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