Continuing on with the theme of artificial markets following the core FED MISTAKE of adding unconsciousable balance sheet monies, which are still in the 8.8 Trillion dollar area, and keeping interest rates low for at least a year too long. So we had an artificial Bull market it stocks, and now an artificial manufactured recession.
How does this end, no one knows? But what we do see is a low level of conviction on the part of the majority of investors, just look at the pieces of the broad array of yield curves, and the underlying rates. If you average the 30 to 10 YC, 10 to 05 YC, 05 to 02 YC, and 02 to 3 mo YC, you will see a historically low level of variance, it is like all the rates are 3.00 % at the moment, the market is afraid to stick its head up.
The one thing you do see is a high level of short position pile-on by the big money FED friends who shepherded the artificial bull market in stocks.
As we have outlined over the past couple of months, as we look at the light coming down the tunnel, is our portfolio of 70 % devoted to technology, (EV, Chips, and Bio). Our biggest success during this May 11 to June 17 bottom, has been everywhere but in the core chip area (SMH, NVDA, and SOXL) which have been heavily shorted by the FED followers. Stocks and ETF’s that are acting relatively well, and some very well in the BIO and EV space are: VIR, CRWD, NTLA, BEAM, RBLX, SGFY, VCYT, RIVN and CERS. And at the core, ARKK and ARKG which have worked less well but are ok.