Tales Of The Tape 3/10/2022

Market action is a little slow this morning. Ranges are somewhat choppy and feel like there is an underlying independent variable that is yet to be identified. Or could it just be Bitcoin?

Either way, it is difficult to understand what is leading the market under the surface. Aussie-yen cross following market rates all the meanwhile equity risk continues to shoot lower.

The downside is mostly led by the ARKK themed hyper-growth names. A massive trend line is fast approaching on the name. Trying to be very selective on entry points on these names. No need to be a lazy buyer here.

Alibiba showing just how much stocks can keep going down. There have been several big long-term trend lines that looked like they were going to hold support but quickly cut through the lines like a knife through butter. Its easier to buy after the market demonstrates that it is honoring the zones. Speaking of BABA, this chart below is hideous. I'm not involved.

Rates continue to creep higher off a strong inflation print this morning.

I don't think the inflation from energy has been properly reflected yet on the top line figures on the latest CPI data data. This is for February. The gist is that the green bar should be a lot bigger. Have to wonder if services CPI will come down though and core MoM rates will stay almost inline? Anyway, if you are trading the bonds it still seems fairly obvious to lean on shorting long end treasuries.

Here is a chart of the T-bond contract over the years. It seems to me that we still have more downside in the medium term and pretty good fundamental backdrop for them to keep dripped.

Outside of the macro, I really still like CCJ here in the medium/long term as a position trade. Inflows should start to become a big deal and the beta is quickly decoupling as nuclear starts acting like its own "asset class". I'm keeping it simple with a 10% trailing stop loss on the position and trying to let it ride.

Uranium prices are hitting the highest levels in decades.

If I am right on rates, banks should start to outperform again in the medium term. It seems a lot of the negative flows are coming from beta/risks to European banks. As we approach 53 on Citigroup, it seems like an interesting risk-reward.

Also loving the CRWD chart.

Best of luck.