Hey it’s Kieran! another week is upon us and the markets are open, so let’s prepare for another crazy week.
Before we gets started, I am looking for a Full Stack Developer to join my team on a part-time basis. I will send a separate mail on this soon but if you have a passion for trading, are excited about creating software in this niche, and have skills in the Django Python framework, React JS and (although not necessarily) the MT4 API, then reply back to this mail, I’d love to chat with you. With that said. let’s get started!
Weekly Watchlist
This week, earnings season ramps up and the big central banks kick off their first meetings of 2024. In terms of data we’ll get the Fed’s preferred gauge of inflation, the personal consumption expenditures index on Wednesday, US GDP numbers on Thursday, as well as New Home Sales and Unemployment numbers the same day.
The Macro View
All Time Highs. Well we finally did it, new All Time Highs traded in the S&P 500. The first ATH since Jan 2022. What a streak of green weekly candles we’ve had to get here.
This is purely a tech rally. As we have been tracking all along, this is very much a concentrated rally, with no participation from most other sectors outside of Tech.
Tech Positioning Sentiment. What is interesting is that according to Deutsche Bank, tech positioning is only just positive and is far from extreme levels, meaning it could have plenty more room to run.
Overall Positioning does not support these All Time Highs. Looking more broadly at positioning across all sectors, according to Goldman’s positioning indicator, we are at neutral. Pretty crazy to register All Time Highs, with positioning here.
Almost no inflows. An explanation for the lack of chasing these new highs can be found by looking at the inflows into equity ETF’s, practically no inflows so far this year.
US tech v Chinese Tech. As US Tech goes to the moon, Chinese tech is going the opposite way. When this trend reverses it will be a trade for the ages. For now, one can only wonder how much more they can diverge.
Suez Canal Transit Trade Volume is crashing hard. Red Sea attacks are decimating supply chains at an even bigger rate then the pandemic, however the markets do not seem to care. If they suddenly do, the reversals could be huge, so stay safe out there and have a great week!
I hope you found this interesting and useful. As ever, keep your risk management top of mind, trade safe, and stay nimble out there.
Have a good week!
Kieran
www.traderseed.io
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