Weekly Macro Analysis 07.04.24

Have we seen the Top?

Risk Signals Overview

Overall Score: 4,5/15

Conclusion: 

Seems like we should be more cautious in the near term, Growth and Tech are underperforming Value and Inflationary themes.

Sentiment, especially among Retail Traders has shifted into Bull Mode and they massively bought the dip this week. 

I think we are seeing an intermediate top in the markets, maybe because the markets will begin to price in a “higher for longer” regime by the FED. 

I will not buy any Breakouts or Pullbacks until we see better conditions and have closed many of my positions last week.

My only holdings in my Macro Portfolio are Goldminers, Energy producers and UK100. 

We could see some serious volatility with the CPI numbers in the coming week.  

Lumber to Gold: Risk Off

IEF/TLT: Risk On still

XLU/SPY: Risk Off

XLY/XLP: Risk On, barely

XLK/SPY: Risk Off, with the peak in late january

NQ/Gold: Risk Off

DJT/DIA: Risk On

IWF/IWD: Risk Off

SPY: A down week with volatility rising. Yet firmly above 200 DMA

SPY Distribution Days in past 4 weeks: 4

Volume and Breadth went negative

Big moves in retail trader positioning: eTorians bought the dip in equity and sold into the Metals and Energy rally.

AAII Investor Sentiment: 

CNN Fear and Greed Index: 

Strongest: Energy, Comm. Services, Basic Materials

Weakest: Consumer Defensive, Healthcare, Real Estate

Interesting to note, that Rate sensitive sectors sold off, despite a Risk Off sentiment, this could mean for me that market participants are slowly transitioning towards a “higher for longer” rate policy view.