Macro Alchemy

I think that it will get messy at some point, but this 10% correction just really flushed out the bulls and the bears that pilled in... are now getting squeezed. Based on all the data I am seeing right now, a 20% increase by the EoY for stocks is on the table.

The upside in risk assets doesn't seem to be over. The SPX will probably face resistance around 7200-7300, but it looks like the AI bull isn't stopping here. Doesn't even feel that this is about money printing or deficits, but a real tech boom.

For US stocks, any company with access to Mythos or the top US AI models could accelerate to the upside. If these models get released at some point, if top crypto devs don't have access to them (i.e. BTC, ETH, etc)... then crypto is in huge trouble.

I see too many issues ahead, but positioning and sentiment clearly indicated that that the bottom is in the short-medium term. Might not be a long term bottom, neither for stocks nor crypto, but for now the potential upside remains.

It's clear that the market got too bearish and now rising. At least that's the case for stocks. It's clear there is no ceasefire and that there will be a blockade either way, but maybe where we are going oil doesn't matter.

Oil is looking quite weak here. Other commodities like Natural Gas too. Seems like positioning in commodities going into the war was already heavily long (at least that was the situation in March before oil had hit 120$). Brent is trading below Crude which is definitely signaling something. I think we are potentially in a heavy demand destruction phase both due to high rates, high oil prices, and AI disruption. Oil has a double top higher, hence it could hit that level in the near future... but Brent also has a triple bottom lower. Wouldn't be surprised if we saw a complete collapse first before oil runs higher again.

This has huge implications for everything, and markets will be affected too. #Bitcoin hasn't followed to the downside yet, but it definitely could... It looks like it is Sep 2022... and haven't seen the final legs yet. Will Anthropic help fix all the bugs? Will that be enough?

$IGV seems to have fully broken down. Probably due to #Claude #Mythos, which I think is totally real. We are very close (and probably already there) to AGI. If not now, within a few months we will be. Getting 100% to SWE Bench Pro = AGI/ASI to me.

Right now it's very hard to see any significant decline for risk assets. Even crypto seems primed for a strong rebound. Like the above indices retested their key breakout levels, one could say BTC did the same in the 60-75k area.

Sentiment got significantly bearish, while positioning seems to be pretty neutral (or was actually slightly bearish going into the war). Extreme bearishness on the dollar has also subsided substantially. $RSP and $DIA retested key breakout levels and bounced perfectly.

Although Crypto might be vulnerable due to AI (short term) and energy prices could go higher due to the war, markets have rebounded sharply after getting substantially oversold. The S&P 500 swept several key lows and filled major gaps. Then rallied hard, erasing the war losses.

However, I don't think the war is over, and I think their overall plan is to take out as much oil production as possible for reasons that go beyond markets and economics.

Of course we are also having demand destruction and other ways of pushing prices lower... like SPR releases, fake 'ceasefires', rerouting, increased production elsewhere...

Based on TA, oil has most likely not topped yet. The two double tops both on Crude and Brent are waiting to be broken. Yes some tankers are going through the straight, but there has already been a substantial loss of oil and gas in the region.

Maybe at some point an equilibrium is reached, but in the short term I can see pain... For Bitcoin the pain will be for attacks on Bitcoin itself. For Ethereum it will probably be pain for attacks on projects that run on its blockchain (Ethereum can more easily adapt)

Even if OpenAI & Anthropic are heavily help miners, exchanges and core devs... bugs could still be found faster and faster by others in the future. Even if they do help some projects, they won't be able to help everyone... and what happens if a Chinese model takes over?

Bitcoin is extremely vulnerable right now... An issue I've been flagging forever regarding BTC and many crypto assets, isn't quantum computing, but increased capabilities by AI to find bugs.

Bitcoin seems to have bottomed, and stocks seem to have too. The stocks that have been rallying still seem strong, but even the weak ones seem to have put in a bottom. #bitcoin #stocks #riskassets