Stock Market Enjoyoors Get in Here
Now what? Warsh hiked rates into an oil supply shock, pretending all was normal and he was just fending off a little inflation. Markets hated his guts, sold it down, and then ripped it higher the very next session.
Diesel fuel is selling for $6+ nationwide and the only reason why stocks are hovering near highs is because the Iran war is so stupid and nonsensical — most feel it’s only a matter of time before it is resolved. After all, how much of this shit do our beloved leaders really think we’ll take?
Then we have the mid-terms ahead of us with dems promising to slow AI, conjuring up fanciful stories plagiarized from The Terminator movies.
Many believe rates are en route a lot higher; but I challenge the temerity of these claims crossed against the backdrop of THE IRAN FUCKING WAR and when it ends, so does your rate hiking cycle.
That said, September has been a tepid month thus far, gains in tech, losses in anything remotely related to the consumer. If you are a business that intends to sell wares to Joe Public — good luck with gas prices hitting fresh recourd highs on a daily basis. I do believe I once mocked the notion of tHe cOnSumeR bEing DeaD here — but that was me not believing the war would really continue and here we are — with the blockade in place and barely any crude escaping the chokehold of the Hormuz. Ergo, and it goes without saying, I hereby pardon myself for saying those words.
The potential alpha in all this is leaning into the market while rates and oil are elevated, taking a calculated bet that resolution is around the bend. To not do this trade would mean missing out on what will be a melt up and a short squeeze for the ages. By the time a deal is made, the gains would have already been enjoyed.
That doesn’t mean markets would cease going higher, under conditions of crude down and rates down. But you’ll hate buying your fav stocks already +15% and that will likely lead you to “wait for a pullback” that may not come in the timeframe you’re comfortable with.
On the other hand, should oil and rates keep climbing, markets cannot sustain a rally for longer than a few days — since the strain on the economy will become untenable.
Alas, perhaps we should end this weekly greeting on a high note. The Bitcoin cycle-fags are in full bloom — predicting a melt up for the ages starting October. We have seen a nice bump in BTC the past few weeks, along with it some BTC miners. Many of those miners have been converting to AI compute plays, such as HUT (BCW is long). Have a gander at the October seasonality of such a play.
BTC for October.
My sense is, the pain trade is up. Between the Dario antics and the war — the mood is glum. The NAAIM exposure index registered 71% last week, meaning most professional advisors are legged out of the market, usually a contrarian signal leading to short term bottoms. Over in Stocklabs, we registered a 12mo oversold signal on Wednesday, the first since the markets bottomed in March. Any good news on the oil front is sure to light a fire under stocks and into October.
Good luck hunting. See you fuckers next week.
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