How Can I Go Wrong?
The perception of the ease from which future gains in risk assets will be derived is making all-time highs along with the markets. For every concern that we had six months ago, that same concern has been replaced with sense of wonderment as to "how can I go wrong?" How can I go wrong buying when the Fed will inevitably ease rates at some point in the near future? How can I go wrong buying when even if we go into a recession it will be offset by more liquidity in the system? How can I go wrong buying when NVDA is doing nothing but going up, with the AI narrative creating exponential gains? How can I go wrong buying when inflation is no longer a concern? How can I go wrong buying when Trump is likely to win the election, creating a dream scenario for the US economy via lower rates and business friendly policies? How can I go wrong buying when the S&P is surely headed to 6000? How can I go wrong buying when China is injecting massive amounts of liquidity into the global financial system? How can I go wrong buying when the US economy is as resilient as it has been? How can I go wrong buying when even though rates have skyrocketed, the markets don't care? A near endless list of "how I can wrong?" This is in stark contrast to Q4 of last year when the list of everything that could go wrong was performing a perfectly executed camel clutch on the mind's of investors, rendering them unable to process the gains that were to come. Now let's be absolutely clear: Being a contrarian simply for being a swashbuckling, against the grain cowboy is peak plebeian behavior. This is not a contrarian call simply because everyone is now bullish. Price structure, leadership and negative divergences in cross asset correlations are confirming this on multiple levels that are only growing by the week. What is throwing everyone off, including bears who have the right idea but seem to be lacking in the ability to execute, is that we are up against ascending resistance levels. Meaning that new highs are more manipulative than would otherwise be the case. We remain rather heavily long crypto, crypto related equities, biotech and emerging markets. Short growth and mega-cap/mega-confidence trades. Certainly not a bearish portfolio mix, but nonetheless, more defensive than we have been in quite sometime. Tread light. Much can go wrong. Zenolytics Turning Points is 430+ editions in and only getting better. Find out why institutions and individual investors have come to depend on our...
Weekly Note Preview: How The Events Of This Weekend Between Israel & Iran Shift The Scenarios For The Markets Over The Short/Intermediate Term, Along With Key Price Levels To Expect In A Best & Worst Case Scenario.
In this weekend's 433rd edition of Turning Points we have a 13 page note discussing how the events of this weekend between Israel and Iran shift the scenarios for the markets over the short to intermediate term, along with key price levels to expect in a best and worst case scenario. Additionally, significant shifts in the crypto market are discussed, along with how to best prepare for a scenario few expect to take place. What follow is a brief preview from this weekend's note: The conflict currently unfolding between Israel and Iran is a volatility enhancer. As I will detail in the pages to come, this is an important concept to understand as it will influence how price structure evolves from this point forward. Equally important to grasp is that conflicts of this nature are rarely, if ever, triggers for a broad trend reversal. Again, going back to one of my favorite market axioms, “they don't ring bells are market tops.” Those selling because they fear an expanding crisis in the Middle East are doing so due to the fact that this event is scary enough that they feel compelled to count their blessings, while heeding the sound of a loud bell triggering their decision to move into more conservative investment territory. Essentially, when surprise geopolitical events take place you have a chaotic loop of fear and volatility feeding into one another, given the unpredictability of the time ahead and the feverish efforts of investors attempting to price in a new variable. In my experience, trading through every conflict since the mid-90s, the primary trend prevails every single time. The only thing that changes is that volatility is enhanced. What this means for price structure is patterns that are nice and neat, responding to support areas, while behaving in a somewhat predictable manner, become chaotic and unruly. Basically, support areas are compromised. Daily bars expand significantly. And as a result, fear goes through the roof as investors fall into the trap of thinking a shift in trend has indeed taken place. The envelope for volatility expands drastically, which is something many investors are uncomfortable with, especially when they are being pelted with an absolute barrage of scary news from all fronts. To view the entirety of this weekend's note, you can subscribe by clicking here. Zenolytics Turning Points is 430+ editions in and only getting better. Find out why institutions and individual investors have come to depend on our service through each and every type of market environment. Click here for details. Disclaimer This website is for informational purposes only and does not constitute a complete description of our...
The Staggering Message Being Delivered By Gold
Those who have been wrong, will continue to be wrong. There is no middle ground in this market. It is a winner take all type of market cycle that will fail to provide any type of reversion to the mean typically associated with normal price environments. In fact, what gold is telling us more than anything else is not so much that WW3 will breakout tomorrow or that inflation is going to double digits by year end. Rather, what gold is telling investors is that asset volatility is set to go parabolic as those who hold assets seek reprieve from central bank policy gone wrong. The only place to be granted reprieve is through aggressive asset allocation in the two asset classes that have been ahead of the central bank devaluation curve for more than a decade: Crypto and Growth Stocks. The recent vertical move in gold is the market saying, "you think asset volatility in recent years has been dramatic, well you haven't seen anything yet." The direction of gold is telling investors that the assets will continue to inflate, whether crypto, growth equities, precious metals and to a lesser degree real estate. This weekend's 14 page note goes over the various scenarios involving the current technical structure of the market and how Q1 earnings to be released during the latter half of April play into the overall pattern. To a greater extent, taking a more zoomed out view, the targets for the major indices for the remainder of 2024 are anything but traditional or standard in scope. Rarefied air is the only description being fit. Zenolytics Turning Points is 400+ editions in and only getting better. Find out why institutions and individual investors have come to depend on our service through each and every type of market environment. Click here for details. Disclaimer This website is for informational purposes only and does not constitute a complete description of our investment advisory services. No information contained on this website constitutes investment advice. This website should not be considered a solicitation, offer or recommendation for the purchase or sale of any securities or other financial products and services discussed herein. Viewers of this website will not be considered clients of T11 Capital Management LLC just by virtue of access to this website. T11 Capital Management LLC only conducts business in jurisdictions where licensed, registered, or where an applicable registration exemption or exclusion exists. Information contained herein is not intended for persons in any jurisdiction where such distribution or use would be contrary to the laws or regulations of that jurisdiction, or which would subject T11 Capital Management LLC to...
Onto Q2…With A Caveat
As we close out a stellar Q1 at Zenolytics, I want to highlight one element of trading during this quarter that deserves everyone's attention as we head into Q2. For reference, this was a tweet from early in the quarter, on January 19th: Turns out this resistance area on the NDX was indeed the spot, as once it was touched, the character of the market shifted entirely. Here is the NDX chart after today with the same trajectory sitting in red. Not coincidentally, the red trajectory marked the ceiling for this rally for entirety of the second half of Q1. Certainly within the realm of possible outcomes for a rally that very few saw coming in the first place. So what now? Q2 gets exponentially trickier. What we have seen during the past few weeks is but a preview of what to expect during the months to come. Price action will be much more choppy. Leaders will rotate dramatically. Investors who fail to be agile with their trading will be run over completely. What the pause at the key red trajectory signifies is a market that is preparing to go to war with investors. That war will involve numerous whipsaws prior to the market finally deciding on a direction from here. A high probability exists that the direction will be up. Prior to that taking place, however, there will be numerous whipsaws and misdirection plays that can be taken advantage of through the right allocation decisions at the right time. The easy part of this rally is behind us. Spring trading has always been a difficult proposition for investors, giving birth to sayings like "sell in May and go away." While we have no plans of going away at any point soon in this magnificent bull run, it would be wise to guard your gains during the weeks and months ahead. Zenolytics Turning Points is 400+ editions in and only getting better. Find out why institutions and individual investors have come to depend on our service through each and every type of market environment. Click here for details. Disclaimer This website is for informational purposes only and does not constitute a complete description of our investment advisory services. No information contained on this website constitutes investment advice. This website should not be considered a solicitation, offer or recommendation for the purchase or sale of any securities or other financial products and services discussed herein. Viewers of this website will not be considered clients of T11 Capital Management LLC just by virtue of access to this website. T11 Capital Management LLC only conducts business...
When We Last Left Off…..
When we last left off, the market was in the process of manipulating investors into a series of incorrect, neutral/bearish positions prior to the FOMC decision this past Wednesday. This weekend's edition of Zenolytics Turning Points goes over in detail what is possibly one of the better setups of the year, with multiple key indices and mega-cap tech names all lining up for a powerful move in the coming weeks. In addition to this, the psychology of this uptrend continues to be warped, at best. Put as simply as possible, a vast majority of investors missed out on what was one of the greatest layups in buying risk assets, whether equities or crypto, during Q4 of last year. They completely whiffed on getting allocated during early to mid Q1. And now they find themselves sitting on a street corner bucket debating their future as largely irrelevant members of a capitalist society that continues to frown on group think, as it always has. We are at the very early stages in a resumption of a secular equity bull market that started in early 2010s. Go back and read my posts from 2011 talking about one of the greatest bull markets ever - a supercycle as I coined it then - taking shape when everyone was still jaded from 2008-2009. This trend to the upside will continue until the early 2030s according to the secular bull market cycle. In fact, history tells us that the most profitable portion of a secular bull market is during the latter stages, which will take place from 2025 onward. Tune out 99% of what you think is true about the markets and the economy in early 2024. The bullish case couldn't be clearer, despite the wall or worry that continues to haunt investors well past a point that is reasonable. Zenolytics Turning Points is 400+ editions in and only getting better. Find out why institutions and individual investors have come to depend on our service through each and every type of market environment. Click here for details. Disclaimer This website is for informational purposes only and does not constitute a complete description of our investment advisory services. No information contained on this website constitutes investment advice. This website should not be considered a solicitation, offer or recommendation for the purchase or sale of any securities or other financial products and services discussed herein. Viewers of this website will not be considered clients of T11 Capital Management LLC just by virtue of access to this website. T11 Capital Management LLC only conducts business in jurisdictions where licensed, registered, or where an applicable registration exemption or exclusion...
Market Manipulation At Its Finest
Last week was one thing. We knew it was going to be bearish, acting accordingly by bringing down our equity exposure to levels not seen since Q3 of last year. In fact, we put on a small index short position that was covered this morning for a minuscule profit. However, now with the Fed meeting a short time away, the market is doing its utmost to manipulate investors into a position of confusion, disallowing any firm commitment in either direction. What became clear with the market action to close out last week was that the bears failed to capitalize on a number of catalysts, both technical and fundamental, that should have allowed them to string together much more significant losses than the near flat performance in the SPX. The giveaway that the market is in manipulation mode came with the big gap this morning that served as bait for bears, who love to short large gaps on thin volume. Now we are getting what is seemingly a confirmation in the overnight session, with risk assets declining, led by crypto. Yet another attempt at baiting bears and tepid longs into making sub-optimal decisions into the FOMC. Expect this trend of manipulation at its finest to continue through Wednesday. I expect that by Thursday the market will reveal its hand, demonstrating a firm commitment towards further upside, with a high probability of NDX 18400 being taken out to close the week. If you are trading in the markets and you don't know who the sucker is, then you are the sucker. Fortunately, we have spotted the suckers. Behave accordingly. Zenolytics Turning Points is 400+ editions in and only getting better. Find out why institutions and individual investors have come to depend on our service through each and every type of market environment. Click here for details. Disclaimer This website is for informational purposes only and does not constitute a complete description of our investment advisory services. No information contained on this website constitutes investment advice. This website should not be considered a solicitation, offer or recommendation for the purchase or sale of any securities or other financial products and services discussed herein. Viewers of this website will not be considered clients of T11 Capital Management LLC just by virtue of access to this website. T11 Capital Management LLC only conducts business in jurisdictions where licensed, registered, or where an applicable registration exemption or exclusion exists. Information contained herein is not intended for persons in any jurisdiction where such distribution or use would be contrary to the laws or regulations of that jurisdiction, or which would subject T11 Capital Management LLC to any...
The Next Leg
As we are now roughly four months into this rally, a recognition needs to take place of a leveling up in the difficulty of extracting gains from this market. November - March was relatively easy. The opportunities have been boundless, from NVDA to crypto, in this relatively narrow bull market, it simply took a recognition that momentum was working and every other piece of analysis offered up offers little value, whether macro related, fundamental valuation analysis or otherwise. Save your moral hazard based, overly intellectualized bearish arguments for college economics class, as the only thing that matters in the markets is capturing gains while they are available. With that said, it is important to understand that with the easy money more than likely behind us, there will be numerous curve balls to come during Q2, as we quickly approach April. It begins with the Fed next week, with what is likely to be a continued resurgence in inflation as PPI will show tomorrow, and as a result Powell getting caught between a rock and a hard place, having to walk back, ever so slightly, his recent dovish stance. The market is not prepared for even the slightest hawkish results out of the Fed next week. There are no hedges. The bears have largely been forced to capitulate. In other words, there is a lot of hollow ground beneath the market should things begin to turn sour. Ultimately, any weakness will more than likely be a buying opportunity for those with dry powder. Our current allocation here at Zenolytics allows us the luxury to take advantage of what is likely a difficult period ahead, while nearly everyone is expecting smooth sailing a la November - March. The game is going to change in Q2. We are about to get an early preview of the changes to come during the second half of March. Strap in. Zenolytics Turning Points is 400+ editions in and only getting better. Find out why institutions and individual investors have come to depend on our service through each and every type of market environment. Click here for details. Disclaimer This website is for informational purposes only and does not constitute a complete description of our investment advisory services. No information contained on this website constitutes investment advice. This website should not be considered a solicitation, offer or recommendation for the purchase or sale of any securities or other financial products and services discussed herein. Viewers of this website will not be considered clients of T11 Capital Management LLC just by virtue of access to this website. T11 Capital Management LLC only conducts business in jurisdictions where...
Where And What To Look For In The Days And Weeks Ahead
A little over an hour ago I delivered to clients this weekend's edition of Turning Points. In it we have 16 pages of technical data reviewing the importance of what occurred this past week, not just in the Nasdaq, but also key individual names and ETFs. There are times in a market trend where everything comes together in an undeniable and overwhelming fashion. This past week was a text book example of such an occurrence. As a result, we have taken down net exposure to levels not seen since Q3 of last year. At the same time, an interesting divergence is taking place in risk assets as crypto continues to garner investor attention, with increasing focus on alternative crypto names. The overall trend remains in its infant stages, as Bitcoin is just beginning to flirt with new all-time highs, while other key tokens are still some ways away from new highs. Most alt names have yet to make a move at all. Over the next 12-18 months, an inordinate amount of investor attention will be driven towards crypto due to the expansion in market caps taking place, further solidifying crypto as a major asset class with opportunities far beyond just Bitcoin. This bullish view on crypto isn't something new around here either. In fact, I have been discussing this since October of last year, when we were buying MSTR in the 300 range and subsequently, ETHE in the mid-teens. While we continue to trade in Bitcoin and ETH related names, the greatest gains for investors will come from discovering well placed alternative crypto names that have potential in excess of 10x. You cannot trade around the volatility in these names, which is why we choose to take positions and simply sit on them for the duration of the cycle. In the case of both equities and crypto, the focus of investors should remain on finding opportunities to increase bullish exposure. We have plenty of firepower to increase exposure to equities in the days and weeks ahead. Certainly looking forward to what are sure to be many new opportunities presented throughout whatever volatility the market decides to give us in the time to come. Zenolytics Turning Points is 400+ editions in and only getting better. Find out why institutions and individual investors have come to depend on our service through each and every type of market environment. Click here for details. Disclaimer This website is for informational purposes only and does not constitute a complete description of our investment advisory services. No information contained on this website constitutes investment advice. This website should not be considered a solicitation, offer...
Weekly Note Preview: The Importance Of The Technical Events That Took Place This Past Week; The Push/Pull Effect In Major Indices; The Role Of Small-Caps Moving Forward; Analysis Of 4 New Positions Being Initiated This Week
In this weekend's 420th edition of Turning Points we have a 16 page note discussing the importance of the technical events that took place this past week; The push/pull effect in major indices; The role of small-caps moving forward; Analysis of 4 new positions being initiated this week. What follow is a brief preview from this weekend's note: The NDX 18000 level has been a focal point of my analysis since mid-January as both a point of attraction for the markets and a potential resistance point that would dictate our next set of steps based on the reaction. In fact, the NDX 18000 level is only superseded in importance by the infamous key red trajectory on the SPX that plagued the market for nearly two years, resulting in breakdowns, excessive volatility and all types of market shenanigans that are thankfully behind us. The manner in which the NDX took out its key red trajectory on Friday is on par with the December 12th breakout in the SPX over its key red trajectory. Let's first look at the SPX from the December period in order to gain perspective of what can result following such an important technical event. To view the entirety of this weekend's note, you can subscribe by clicking here. Zenolytics Turning Points is 400+ editions in and only getting better. Find out why institutions and individual investors have come to depend on our service through each and every type of market environment. Click here for details. Disclaimer This website is for informational purposes only and does not constitute a complete description of our investment advisory services. No information contained on this website constitutes investment advice. This website should not be considered a solicitation, offer or recommendation for the purchase or sale of any securities or other financial products and services discussed herein. Viewers of this website will not be considered clients of T11 Capital Management LLC just by virtue of access to this website. T11 Capital Management LLC only conducts business in jurisdictions where licensed, registered, or where an applicable registration exemption or exclusion exists. Information contained herein is not intended for persons in any jurisdiction where such distribution or use would be contrary to the laws or regulations of that jurisdiction, or which would subject T11 Capital Management LLC to any unintended registration requirements. Visitors to this site should not construe any discussion or information contained herein as personalized advice from T11 Capital Management LLC. Visitors should discuss the personal applicability of the specific products, services, strategies, or issues posted herein with a professional advisor of his or her choosing. Information throughout this site, whether stock...
Weekly Note Preview: The Confluence Of Factors Playing Into The Long-Term Secular Bull Cycle; The Best Sector To Take Advantage Of What Lies Ahead; What We Plan On Doing With Our NVDA Long Position; A New Position Being Initiated
In this weekend's 418th edition of Turning Points we have a 15 page note reviewing long-term expectations for the markets; The best sectors to take advantage of what lies ahead; A review of crypto, including the current state of alternative crypto investments; What we plan on doing with our NVDA long position; What to expect from the markets during the weeks ahead; A review of a new position being initiated on Monday. What follow is a brief preview from this weekend's note: We are in an unusual space in time given the convergence of a number of unprecedented technological, economic and geopolitical developments taking place simultaneously. This naturally creates the tendency towards caution as there are few corollaries to what 2024 and onward is in the process of becoming. The predominant sense of caution is further amplified by where it is we have come from the past several years. Whether the extreme volatility of the 2020 pandemic market or the recent 2022-2023 secular bull market consolidation that saw mega-cap tech stalwarts like META lose 80% of their value from peak to trough, investors have been conditioned to expect the worst and hope for the best. Let's consider for a moment where we are in time: - Geopolitical power structures shifting - USD reserve currency dominance being challenged - Inflationary pressures unpredictable - AI creating growth that is exceeding that of the dot com boom - AI creating economic, social and political ramifications that are both unpredictable and unprecedented - Crypto being an unregulated, highly speculative financial sector seemingly waiting in the wings for AI integration, while demonstrating continued resilience against regulatory authorities - Developed nation balance sheets being leveraged to the hilt, with massive amounts of liquidity remaining in the global economy - A two year consolidation in the US markets in 2022-2023 that created extreme volatility in key assets, further dissuading investor participation - A secular bull market that, as I have demonstrated in the recent past, is squarely mid-cycle in terms of overall age A literal powder keg of technological, economic, social, political and technical convergences. Bringing us to what is the most important chart in finance. This is a chart I have been sharing for nearly a decade now, as it continues to track expectations perfectly. To view the entirety of this weekend's note, you can subscribe by clicking here. Zenolytics Turning Points is 400+ editions in and only getting better. Find out why institutions and individual investors have come to depend on our service through each and every type of market environment. Click here for details. Disclaimer This website is for informational purposes only and...