Weekly Macro Analysis 03.11.24
The Kamala Dip
Many changes within the Macro Score Pieces, but just a slight change in the Overall score.
If we dive a bit deeper, we can see that the rotation from Tech into other aggressive sectors is progressing.
While that is what Bull Markets do, I cant help but feel worried due to the extremely overweighted tech stocks. If money leaves them too fast, we will see sharp downmoves in the markets.
However two of them: Tesla and Amazon are on the verge of breaking out and taking the leadership, when MSFT and AAPL show weakness.
At the same time NVDA, NFLX and META look fine.
Another warning sign however is the outperformance of Gold relative to stocks in the recent weeks and months.
Election special:
The BTC breakout failed last week, which was very much expected by me, since everyone on X and Discord were talking about it.
This gives a great opportunity, in case Kamala Harris wins the election.
Trump has been leading in the polls and was being touted as the reason for the recent BTC rally, if he loses and BTC takes a dive into 64000$ I think we have a really good buying opportunity.
Same goes for IWM (Small Caps).
Would be a typical Fake Out - Shake Out - Break Out pattern, that allows bigger market players to load up much cheaper, shakes out weak hands and makes them chase a Break Out at much higher prices as they have sold.
It works even better with big news as triggers and a very anticipated reaction:
Would not be surprised to see many FinTwit “Traders” try and short the failed break out only to get their faces ripped off, by a BTC rally to 100K
(This is how I imagined the BTC Break Out to play out last monday, so far so good)
Looking at a whole other direction for the next bullish development: Biotechs have been very strong lately, especially compared to TLT, which historically has a very high correlation to the Longterm Yield sensitive sector:
TLT got absolutely wrecked lately, but XBI (Biotech) held up great, and looks to have build a multi week consolidation pattern:
The daily perspective:
Many earnings for the Biotech sector are coming in the next two weeks, that could provide a catalyst for an explosive rally.