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EXCITEMENT GROWING IN GOLD, BITCOIN, & ENERGY (ANTI-CURRRENCY PLAYS)

RECORD QUARTER FOR THE HISTORY BOOKS

Click All Charts to Enlarge

GOLD: Continues pushing higher, now trading at levels we have never closed at! The close here or higher risks creating a lot of frustration as we continue holding (and broke through Thursday) the upper part of the trend channel (dip buyers aren't getting filled).

1 - SITUATIONAL ANALYSIS

Q1 RECAP

• Nearly 40% of all trading days in Q1 were record closing highs for the S&P 500. Most since Q1 2013
• The S&P 500 has had 4 more up days than down days this year (32 versus 28), and those are the difference between the index being up 4 pct rather than its actual YTD price return of 10 pct. Two of those days were driven by NVDA and TSM. One was the day after the January Fed meeting. The last one was 5 days into the new year, a momentum carryover from 2023.
• The Public is Increasingly Getting into Stocks:
• Retail traders net bought $7.7B this past week, +2.4 standard deviations above the last 12M average.(Chart Right Top)
• FINRA margin debt vs NYSE.(Chart Right Bottom)

Q1 WINNERS v LOSERS

Strong start to 2024 with a clear cyclical tilt. Mag-7, US stocks main drivers so far in 2024, while clean energy has disappointed. (Chart Below)

MARKET CONFIDENCE BUILT ON EARNINGS GROWTH , FED PIVOT & NO RECESSION

Rising earnings outlooks is assisting in supporting a strong "Risk-On" sentiment (chart right).

Earnings is supported by increasing GDP growth outlooks and improving Leading Earnings Indicators (below left).

Morgan Stanley analysts (below right) are fairly representative of the Sell Side consensus.

2 - FUNDAMENTAL ANALYSIS

RISING S&P 500 PE RATIOS

The aggregate P/E has increased from 17x in late October to 21x and currently ranks in the 90th percentile since 1985. However, the latest leg of valuation expansion has not been confined to the mega-cap stocks. The equal-weight S&P 500 ("SPW") P/E has also increased from 14x to 17x and now ranks in the 92nd percentile. (Chart Right)

The S&P 500's P/E ratio has moved up to 24.4x from 22.3x at the start of the year. That's 32% higher than the historical median P/E going back to 1988 (18.5x) (Chart Below)

CREDIT MARKETS

Since Credit always leads markets, we are watching it closely. This includes:

1. Inverted yield curves,
2. Negative swap spreads,
3. Collateral shortages,
4. Tightening of credit standards by banks and
5. Reduced commercial lending.
6. The High Yield Corporate "JNK" Market.(BELOW)

THE HIGH YIELD CORPORATE "JNK" MARKET

It appears that the Credit Markets are approaching the conclusion of their major corrective consolidation. Appears likely to be complete over the next 90 days.

YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART

Macro Analytics Chart Above:  SUBSCRIBER LINK

3 - TECHNICAL ANALYSIS

THE HEADLINE MARKET: MAGNIFICENT 7

• We have reached the vertical lift part of the parabolic (geometric) lift shown by the dashed red line.
• We have Divergence with momentum (bottom pane),
• Momentum appears to be rolling over (bottom pane)

MATASII CROSS: WEEKLY - CONTINUES TO SIGNAL A MAG-7 BUY

YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART

Macro Analytics Chart Above:  SUBSCRIBER LINK

"CURRENCY" MARKET (Currency, Gold, Black Gold (Oil) & Bitcoin)

CONTROL PACKAGE

There have EIGHT charts we have outlined in prior chart packages that we will continue to watch closely as a "control set".

1. US DOLLAR -DXY - MONTHLY (CHART LINK)
2. US DOLLAR - DXY - DAILY (CHART LINK)
3. GOLD - DAILY (CHART LINK)
4. GOLD cfd's - DAILY (CHART LINK)
5. GOLD - Integrated - Barrick Gold (CHART LINK)
6. OIL - XLE - MONTHLY (CHART LINK)
7. OIL - WTIC - MONTHLY - (CHART LINK)
8. BITCOIN - BTCUSD -WEEKLY (CHART LINK)

INTEGRATED GOLD MINERS

We have a close eye on Gold and the INTEGRATED GOLD MINERS as represented by Barrick Gold. Barrick has broken out of its long term declining overhead resistance trend.

YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART

Macro Analytics Chart Above:  SUBSCRIBER LINK

US EQUITY MARKETS

CONTROL PACKAGE

There have FIVE charts we have outlined in prior chart packages that we will continue to watch closely as a "control set".

1. The S&P 500 (CHART LINK)
2. The DJIA (CHART LINK)
3. The Russell 2000 through the IWM ETF (CHART LINK),
4. The MAGNIFICENT SEVEN (CHART ABOVE WITH MATASII CROSS - LINK)
5. Nvidia (NVDA) (CHART LINK)

S&P 500 CFD

YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART

Macro Analytics Chart Above:  SUBSCRIBER LINK

S&P 500 - Daily - Our Though Experiment

Our Though Experiment, which we have discussed previously, suggests we have put in a near term top (or very close to it) and will now consolidate before possibly completing one final small impulse higher or put in a 1-2 Wave of a much higher degree.

NOTE: To reiterate what I previously wrote - "the black labeled activity shown below, between now and July, looks like a "Killing Field" where the algos take Day Traders, "Dip Buyers", "Gamma Guys" and FOMO's all out on stretchers!"

YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART

Macro Analytics Chart Above:  SUBSCRIBER LINK

STOCK MONITOR: What We Spotted

BOND MARKET

CONTROL PACKAGE

There have FIVE charts we have outlined in prior chart packages that we will continue to watch closely as a "control set".

1. The 10Y TREASURY NOTE YIELD - TNX - HOURLY (CHART LINK)
2. The 10Y TREASURY NOTE YIELD - TNX - DAILY (CHART LINK)
3. The 10Y TREASURY NOTE YIELD - TNX - WEEKLY (CHART LINK)
4. The 30Y TREASURY BOND YIELD - TNX - WEEKLY (CHART LINK)
5. REAL RATES (CHART LINK)
6. FISHER'S EQUATION = 10Y Yield = 10Y INFLATION BE% +REAL % = 2.332% + 1.9037% = 4.235%

As rate-cut expectations fell from 6 this year to 3, Treasury yields rose... non-stop... all week with the belly of the curve underperforming (5Y yields up 28bps on the week). Yields all ended back up near their year-to-date highs.

YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART

Macro Analytics Chart Above:  SUBSCRIBER LINK

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