Macro Market Update:
There are a host of macro capital sentiment/rotation charts to consider when assessing where we are in terms of market risk appetite. One of my favorites is IPO/BND.
IPO/BND measures two extremes, when speculative capital is driving markets (IPO) vs. when capital is fleeing to safety (Bonds). This chart, when compared to major market index charts like
$SPX also tends to give HTF indication on pivots in advance since the most speculative of institutional capital tends to leave first, such is the case with IPO's.
Last week, we hit a key inflection point with a pullback from the 0.382 of a HTF fib channel. However, since markets have been very volatile, the chart shows 2 scenarios:
1⃣ ST Continuation of this ratio to the downside indicates a shift of money flow where institutional capital is exiting risk positions (i.e. the "AI Bubble" narrative). This Week's close should be telling of this if we get downside continuation.
2⃣ We are currently in an obvious HTF Bullish trend of capital injection into markets, we can see that CMP is above 🔑horizontal fibs & continues to break structure to the upside with clear W BOS support. As you can see, I've marked several levels on the chart which we are respecting on D closes (0.6896 & 0.7342). For this scenario, the next daily closes into the week should provide even more clarity. However, the fact that we have W closes above GP fibs is not to be ignored👁️. It indicates an increased probability that the ratio continues to the upside.
NFA, but I have been either re-accumulating or scaling into positions in certain sectors. I believe some sectors/indexes will start to outperform others. I think stuff like AI, Oil, other majors in S&P/NQ which are currently trading at premium levels are all non-tradable assets from an ROI perspective, at least for me. I don't like to be stuck in forever ranges unless it is in a HTF Wyckoff accumulation.
Apart from the sector plays I mention usually, I like Hang Seng or
$IWM plays for capital rotational outperformance.
Excited to see how it all plays out. I'd keep an eye out on at least this macro chart for the coming days & gtfo of risk trades generally if Wed-Friday trend down👌