Markets at a Glance #2
Ceasefire? Are Bears Done for?
This week saw some of the biggest move from bulls this week, which I closed my longs into. The question is are we good now? Is the war over? Are we out of the woods now?
If you are looking for confirmation about your bias, you aren’t going to find it here. I have no clue where we are going next, but I would argue being level headed and not anchoring your bias on either side is the most important. Here are some facts that we should think about moving forward.
Why did the Market Move?
Obviously we had the ceasefire tweets from Trump about a two week ceasefire and something that could (or might not) end up being a deal. Personally, I’m not going to put much weight into whether a deal actually happens. I’m not a geopolitical expert. If you listen to geopolitical experts for everything chances are you wouldn’t be doing great in this market. There is little edge in guessing what this administration is going to do or say. What makes more sense to focus on is the speed and the strength of the move. Personally this tells me
There is a lot of capital in the sidelines that are hungry for markets to go back up.
Markets care less about the actual outcome of events but rather the perception of them.
The issue is at this point it becomes less clear what’s going to happen. The move for me was to look for the mean reversion from a 3 sigma move but what happens after we move back to the mean is not clear. Remember, markets are forward looking. After the news has been priced in, you need to think about the secondary effects that could impact the markets. Is this another fake out? Will a deal actually happen after two weeks? Will all parties play ball? I’m not saying it will or won’t happen. But you need to consider what the market is pricing in and whether you have a statistical edge in playing here. The move more often than not is some patience.
Thoughts on Crypto
VVV: Truly one of the standouts from the last few months. Tech wise it seems to be the most exciting thing to come out of crypto AI for a while now and would be something to continue watching in the future. Unfortunately too high for me to consider making a move. Will keep watching carefully.
ZEC: I took some smaller longs into this considering the big move up already. I think the narrative is very clean and think it’s somewhat decorrelated from btc enough that it could feasibly continue to run even if the market were to go down a bit. (Might be a stretch though).
Monad: Brought this up last week and it seems to be moving quite nicely. Will keep watching but feels like there are greener pastures somewhere else in alt land at this point.
Keeping this one short because I am just waiting to see what happens next. Wouldn’t risk too much either way right now.