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REPRICING MAY RATE HIKE

Outlook: The highly disinflationary data in the first week of April has been overshadowed by one data point in the headline unemployment rate. The overreaction has led to a repricing of a Fed rate hike in May to 70% (from 50%) in what I believe will be the move to fade. Yields and the dollar did not just bottom. Let’s not lose sight that ISM data, ADP employment, and JOLTs all came in under expectations with initial jobless claims exceeding estimates by 10%, with price action across broad markets supportive of this trend well in advance. 

BTC: Consolidation at the top almost always means higher prices ahead, and BTC will be no exception. I expect a test of 30,000 on the way to 37,000. 

ETH: When BTC goes, ETH follow. Final resistance at 2000 before a run for 2500. 

Indices: S&P and NASDAQ will continue their ascent, each respecting their rising channels. Growth has more room to run than value, but you can’t go wrong with either.

VIX: Lower highs will eventually lead to lower lows, bolstering my bullish risk call.

SPGSC: Commodities have peaked and the downward trend has not bottomed for H1.

Crude: An obvious bounce off the 200-week moving average is not a sign of a new leg up. I expect sideways action at best.

Gold/Silver: I like both, but gold relatively more.

10Y: Buy the dip. Panic selling from the employment survey results will be regretted.

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JANUARY 12, 2025 OBSERVATIONS

Multiple selloffs in equities following strong jobs and ISM data highlights a general concern of returning inflation at a time when valuations are already quite...
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