An End To COMPLACENCY
CLIENT TRADE UPDATES ON QQQ & AMZN, GOLD & SILVER, BITCOIN, SPX & MACRO EVENT RISKS
A Crisis of Confidence
We have a “yuge” confidence crisis:
in Crypto/Bitcoin - which is well deserved…
with metals volatility - from FOMO…
and as a result of the SaaS sell-off - from AI “thrive, survive, dive” investor fears.
It was time. We needed an end to COMPLACENCY.
Monday Feb 2nd I warned clients I was bearish at SPX $7000:
“the market is not pricing in the fallout from Epstein file reveal, crypto crash, metals volatility, MAG7 inertia, and CTAs on the cusp of selling.”
Tuesday Feb 3rd “Market Pullback Thoughts” as I anticipated the next rotation would be volatility:
“For those not use to volatility, this would be a good time to step aside and let if fall or protect/position/profit now.
I’ll let you know when it’s safe/safer…”
Then Wednesday Feb 4th was the worst day for Momentum (-11.5%) since the March 2020 Covid Crash. My early call in late November for the Growth-to-Value rotation simply picked up speed through all of December and January, culminating in a 6-sigma move yesterday! I did say I saw it running into February!
Congrats Tech Shorts & Value Longs!
And I wasn’t kidding when I reviewed broken sectors & stocks live past few days, saying, Software & Crypto NEED an intervention.
With that, the biggest threat to bears now is a US-CHINA Summit where Trump really does taco out… as in “I WAS JUST KIDDING”!
But what are Vegas odds of that!?!
Would it even help for more than a bounce?!?
Investor confidence is badly shaken, especially as Bitcoin is potentially made irrelevant by Epstein file reveal.
The fall-out from this sector alone is greater than the metals volatility, as crypto exposure on US household financial conditions is large. h/t Geoffrey
As discussed this morning, the hit to consumer wealth that affects disposable income and spending is under-estimated from losses in the bitcoin/crypto space. Even Trump is selling!
JUST IN: Donald Trump’s World Liberty Financial SELLS $5,000,000+ worth of Bitcoin.
Add to that the hit to the wealth effect from the tech sector on household conditions!
This is even bigger as passive investing & cap-weighted indices made sure of it.
We aren’t just talking concentration risk unwind from AI data center over-investments by the mega cap tech hyperscalers.
This software sell-off is seriously sending 2000-vibes through the investor community before retail even gets their portfolio statements at month-end.
Risk Happens Fast
Ok, so my Mom-radar doesn’t suck.
Reminds me of a story when my middle child whispered to her younger brother years ago when she thought I didn’t hear them:
“Don’t try and get anything past mom. She is a bloodhound.”
Ok, so maybe I’m good at smelling volatility BECAUSE I raised teenagers.
Either way, it’s here, and we need to track my MAG7 ratio roll-over I warned about like a bloodhound.
