Bull or Bear

Hey guys

Bear market or the beginning of a new bull rally???
Well Twitter is crawling with accounts calling it the beginning of a new bull market but that’s what pays the bill for them.

So let’s see some macro and sentiment .

-So lets just start by addressing yesterday’s CPI data –. Both came in low and the data shows some positive signs causing markets to have an orgy over the data. Markets pumped and noticeably a lot of people turned bullish that might have previously been bearish.

• But lets get this right… The data was good but looking month over month these areas of the market still went UP. Housing, still up 0.5% from the month prior, new cars.. still up from the month prior. As expected it was only really energy that went down significantly. Food actually still increased 1.3% - 1.1% from the month prior.

• Inflation is still at 8.5%+ so there’s still a lot to do here guys.

-Smart Money Vs Dumb money indicator – Still showing smart money in the ‘’neutral zone’’ while Dumb Money is in ‘’extreme optimism’’ – Historically this isn’t a healthy dynamic and usually we see muted gains or even a decline when this is the case.

• Fear and Greed Model – Now hitting 80 – over the last 24 years the SPX has returned -0.3 annually when we are above 80.

Looking at Future Returns when we went from 5% (extreme pessimism) to 80% (extreme optimism) during bear market rallies the index saw weakness almost immediately after hitting these levels.

so if the narrative of peak inflation is now dominant then all we have to see is a 3.5% gain in SPX that will hold in the next 1-2 weeks and thats probably the confirmation. if that happens then crypto will follow like any risk asset.

My sentiment remains bearish on the long term.