A quick update. I'm bullish!
A tradable low in risky assets?
Hello MacroTactical Crypto subscribers.
This is a quick real-time update as it looks to me like we are making a tradable bottom in risky assets.
Since November, I have been mostly bearish risky assets, and very bearish crypto (see here, here and here) as the Fed message got more hawkish, QT entered the conversation and Web3 and ETH hype was embarrassingly bubbly.
Now, we have somewhat of a mirror situation. Twitter is piling on ARKK for its bad performance, VIX went back to the highs and failed, and there has been a meaningful fear trade today despite the fact that there is a ton of empirical evidence showing military invasions / attacks are almost always buying opportunities and not selling opportunities in US equities. And the web3 haters have been getting just as much airtime as the bulls.
It seems to me we may have achieved peak fear and a tradable bottom in stocks today.
Massive rejection in gold and oil... Huge hammers in SPX and NQ (see charts below).
And the US economic data has picked up after the omicron scare.
We still have QT coming but I could see a period of 2 or 3 months of bullish conditions from here for US stocks and crypto with today's low marking an intermediate low.
Pick whatever you like best and stay away from Russia and anything related to that area as we could have ongoing mini-fear trades as people estimate the probability of Russian incursions into NATO territory.
I like BTC, SPX, MXN, AUD, NZD, and SEK.
Two trades look particularly good to me:
Long bitcoin with a stop at 31400
Long NZDUSD with a stop at 0.6614
Or buy 1-month NZDUSD calls. I’m putting those two trades in the CURRENT VIEWS section of am/FX (my global macro daily).
If SPX makes a new low (i.e., ES trades below 4100), my view is wrong.
Some charts:
bd