MAD Macro - Who's Crazy Now
So Who’s Crazy Now
So Who’s Crazy Now
Wow! The world is full of crazy people. It’s getting hard to tell who are the crazy ones. Last year, it looked like Michael Saylor, the CEO of MicroStrategy, was clearly crazy for loading up his balance sheet with bitcoin. The Board of Directors moved him up to Executive Chairman. You know the old, “F—k up, Move Up” system. Guess what? After a 100% bitcoin rally, now they are breaking even. So Michael Saylor is asking who’s crazy now? Everyone is asking, is the Tin Man crazy to run for President again? At the moment, yes, it looks like he is very crazy. He is touring around Ireland looking like he is running for President of the wrong country. Jill got tired of handling the Tin Man so she is taking a break this week. His son Hunter and sister Valerie are on duty in Ireland. He is a handful. Hunter and Valerie are double teaming him and he is still a gaff machine. Maybe next year we will be asking ourselves “Who’s crazy now?” Not the Tin Man. Already the decision to spend the week touring around Ireland was a very good one. A 21-year-old gamer was responsible for leaking top secret U.S. intelligence documents. How embarrassing. Being out of the country, touring Ireland is not so crazy. If it turns out that next year we end up with the Tin Man and The Orange Monster running for President, guess what? All of us, the entire country, will be the crazy ones.
You know what else is crazy? The market. Maybe not crazy, just a little manic. As I mentioned yesterday, we have an odd technical setup. Market sentiment is bearish and there is reportedly a very large leveraged short position in the futures market. Yet the CBOE volatility index is making new lows for the year, a clear signal of market complacency. So who is crazy, the bears or the bulls? What would George Costanza do?
Markets are mixed or mixed up today. JPMorgan’s earnings were just released. The stock is up about 5% after the earnings. So the DOW jumped and the NASDAQ dropped, obviously manic. We get important economic news with the release of Retail Sales at 8:30 am. They are expected to drop 0.4% month-over-month, same as last month.
I updated the U.S. dollar index, U.S. 2yr yield, ether, bitcoin, spot gold, CBOE volatility index, S&P futures and NASDAQ 100 futures charts below.
The U.S. dollar is testing the lows of the year and 2yr yields are close to unchanged after falling back below 4% yesterday on the soft PPI report.
Ether is breaking out to the upside after a successful system upgrade. Maybe the crypto world has a new leader, although bitcoin is now up 100% from last year’s low.
Gold is close to making new all-time highs. I wonder, could someone give gold a system upgrade or do we need to wait for another U.S. banking crisis?
The CBOE volatility index made a new closing low yesterday for the entire bear market. Normally this would be a clear sell signal for the market but with the bearish sentiment and large short position, who knows? The S&P is close to unchanged and the NASDAQ 100 is slightly lower this morning following the JPM earnings report and waiting for the Retail Sales report.
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Unless otherwise stated, Bloomberg is the source of all data and charts.
S&P 500 futures are a type of derivative contract that provides a buyer with an investment priced based on the expectation of the S&P 500 Index’s future value. Nasdaq 100 futures are commodities futures products traded within the equity futures sector. West Texas Intermediate (WTI) oil is a benchmark used by oil markets, representing oil produced in the U.S. Brent Crude Oil is a blend of crude oil recovered from the North Sea in the early 1960s, whose price is used as a benchmark for the commodity's prices. The U.S. dollar index (USDX) is a measure of the value of the U.S. dollar relative to the value of a basket of currencies of the majority of the U.S.'s most significant trading partners. UBS Bloomberg Constant Maturity Commodity Index is a total return rules-based composite benchmark index diversified across commodity components from within specific sectors.
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