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February 2024 – patience is how the big money is made

Outlook: The chop I called to begin the year is likely over and risk will make sizable gains over the coming months. Barring an unlikely hawkish surprise out of the Fed, rates should continue to fall alongside a decaying DXY. Many money managers have joined the chorus of economists making bearish calls for early 2024. Their capitulation will provide fuel to the fire.

VTI: Large caps continue to drive most of the performance and will continue to do so while the small caps provide further bullish pressure as they play catch up. Expect a continuation of positive momentum on a weekly scale. Buy everything.

IWM:  A weekly hammer off the 200W MA is very bullish and sets up for a break of the consolidation zone that goes back to mid-2022. A breakout would project measured upside to 235.

USD/JPY: While the rest of the DXY goes nowhere, the yen has proven particularly weak against the dollar. An ascending triangle has formed which, if broken, projects upside past levels not seen since the 80s. Support at 142 and rising.

Rates: Inflation has done its worst and though the economy remains resilient, the tightness applied by nominal rates should continue to drive yields down throughout this year.

SPGSCI: Structurally showing signs of a bottom with the 200W MA holding, but I ultimately believe longs will be caught off guard by a sudden move lower. 531 stop.

ETH: Disappointing January action however ETH is coming into its strongest month with major tailwinds in the form of easing policy, protocol upgrades, and a potential ETF mid-year. BTC: With the ETF hype behind us, the question remains: how realistic is it for continued outsized gains? A new cycle regime would suggest 49,000 or more, whereas a repeat of old dynamics puts BTC ~32,000.

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NOVEMBER 3, 2024 OBSERVATIONS

As discussed in prior weeks, broad equity price action will remain choppy around the top until the election results are clear. The worst-case scenario would...