Outlook: The continuation of regional bank failures has done little to negatively impact price action across risk assets. Now, with the economy showing signs of strength in the labor market, the bearishness that once accompanied inflationary data has reversed for now. Couple this with what was effectively a statement of pause from the Fed and the scenario that drives a mid-year rally is well in play. The current overweight bearish positioning will only add fuel to rallies as shorts are forced to cover and cash-rich long-only managers have no option but to jump back in or risk underperformance. I’m not calling for new highs, but there’s plenty of room for appreciation.
QQQ: Upside to 352 on a breakout with resistance at 334.
SPY: Higher highs and higher lows means the trend is up. A hold above 417 should pressure the bears.
DXY: Sitting on support, the mean reversion event is still down, not up, and a breakdown will bolster any bullish risk breakouts.
Yields: Equites seem to do best when yields are neither crashing nor mooning. The sideways action that has defined the longer end of the curve is bullish for risk.
ETH: Breaking out of an ascending triangle bottom which historically has always led to significant upside. Measured move to 4000 may be unrealistic, for now, but 3000 is in play.
Gold/BTC: I like both, but my long-term thesis remains that the market cap of Bitcoin will reach that of Gold. The value of gold inventory stands at an estimated 12.3 trillion. Bitcoin’s market cap is 572 billion. That’s a 21.5x difference. I’ll ride the young stallion and keep the old buck around for insurance.