Trading Inflection Point…

9:00 AM CST Post

This morning in early trade we are seeing the continuation of the Russell gaining on the Nasdaq 100 with the all-important 0.1224 level being breached on the ratio. More importantly is what is shaping up on the charts in interest rates, the Dollar, Gold, and Crypto. Our Climate Tech Model is doing some reallocation as it appears a trading inflection point has been reached on interest rates, the dollar, gold, and crypto. Interest rates and the dollar are exhibiting bottoming behavior while Gold and Bitcoin are exhibiting topping behavior.

So the Model is keeping core stocks positions in EV, Battery, Solar, Infrastructure, Biotech, but cutting Chip area by 50 %. The Hedging / Speculative area, 33 % of model, is seeing the biggest change. Long Russell stocks in the ETF TNA are being liquidated and the Climate Tech area is being hedged, dollar for dollar face value by a short Nasdaq 100 ETF SQQQ allocation.

Here are the four charts triggering the re-allocation.

First, Interest rates. Here is the chart that we watch most closely, the average of the (30Y+10Y+5Y+2Y), it takes out the FED influence on FF rates and yield curve directions, leaving a core direction.

The second chart is of the dollar. The 101.00 area is showing signs of building support.

The third chart is of Gold. Four dates stand out as resistance on this chart. August 2020, March 2022, May 2023, and December 2023.

The Fourth chart is of Bitcoin. Current area is showing substantial resistance.