Mid-Week Update

March 6, 2024

Tuesday showed more interesting patterns after a doozy start to the week. Equities took some beating, while BTC hit a new ATH and reversed sharply lower. It feels like there were many moving parts to gyrations that weren’t driven by any meaningful data point.

I have posted a new article titled “Risk Markers”. It is about identifying certain market segments and associated gauges to build an early warning system. We specifically examine leverage and its impact on volatility indices, which can help us identify turns.

We had some interesting comments from the Fed’s Bostic, who said he would probably not anticipate back-to-back cuts. This is somewhat significant given the current narrative and how much markets have reduced rate expectations over the past few months. He is, however, known for his relatively more hawkish stance in his recent appearances.

Bonds didn’t budge on those comments and started the week on a better footing. ISM Services Index fell to 52.6 from 53.4 in February. The employment sub-index declined to 48.0 from 50.5, which implied a potentially softer employment picture ahead.

Gold had another follow-through, climbing to new highs, which raised a few eyebrows. Part of it was correlated to the rally in bonds, especially real rates, but there is more to that story, which is worth keeping an eye on.

Let’s now look at what else has been flagged on the charts. I am very happy with the positive feedback from users who have been granted access to my scripts on TradingView. If you are interested, get in touch.

Let’s go!