Broad Market Outlook
Come Saprai, I'm sorry, I mean, as you may know for the last week I have been bopping around Italy taking in some of the sights in Florence, Rome and the Amalfi Coast floating on my $12 inner tube next to $12 million dollar yachts.
Being completely frank, I did not look at the market once while I was away. I was focused more on banging gears in my little Fiat 500 up and down the coast of Italy then giving a second thought to what the Standard E Povero 500 was doing.
Now granted I didn't look at the market while I was away, it was ironic or coincidental that the Euro and USD traded at parity for the first time in 20 years. Making my Euro Trip quite affordable. Maybe I was not trading stocks while I was there but I was picking up amazing artwork for my home at the best exchange in 2 decades while people rented my home while I was on vacation, so I guess in actuality, my guests paid for my artwork. As a result I was still able to scratch that trading itch we all have with the least amount of risk in my own game.
Coming back after the trip and scanning the markets for the first time in a a week, I have to say, things look pretty decent out there broadly speaking.
We continue to see bases form and the free fall drops have seemed to have stopped. The most telling thing for me that we are getting near the end of the stormy action of 2022 is the 10 year continues to play follow the leader with Energy.
We did a great job of milking the Energy sector for all he had this year while also avoiding the disaster that followed. I looked back over some recent trades that I was apart of and we did a great job knowing when to throw in the towel on the Energy sector.
As Energy was peaking, I was lucky enough to get out of SLB before the nearly 33% drop that followed.
Now if we look at the 10 year compared to Energy.
Chart wise and even percentage run up wise, Energy and the 10 Year could be twins, yet Energy was born 2 minutes earlier. We saw how Energy faded into support and has since started to roll over. The little brother wants to be just like his older half and seems to be following suit. If this continues then the overall market should start to find more confidence in these bases where we can push higher and back towards all time highs.
Which is the exact opposite of what most people are the street are thinking or expecting to happen.
Macro Rotation Outlook