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Rich Excell
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Stay Vigilant
The first Stay Vigilant of the new year is out!

I use a lot of the charts I had shared this week in the articles but I also look at the ISM data, the jobs data and the set up into earnings

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More importantly ...

Stay Vigilant
#markets #investing #finance #stocks #bonds #allocation #stayvigilant
And ... we're off!
The start of the new trading year always feels a little bit like a horse race, only one that is the second one run by the same horses in a given day. Why do I say that? Because we always have the memory of how the last race - 2023 - ended. Will the momentum continue? Will there be profit-taking by traders? How will asset allocators react?

Chart of the Day - night before Christmas
'Twas the night before Christmas, when all thru the ranks
Not a trader was stirring, not even their dranks;
Their PNLs were hung in the Box folders with care,
In hopes that a big bonus soon would be there;

The PMs were nestled all snug in their beds;
While visions of fast cars danced in their heads;
And the COO in her 'kerchief, and CIO in their cap,
Had just settled their bonus pool for a long winter's nap,

When alerts on Bloombergs began to ring with a noise
They ran to their desks expecting profits and joys
Away to my terminal I flew like a birdie,
To write a LinkedIn that is always too wordie.

The data that showed all across my computer screen,
Gave soft-landing vibes & markets were green,
When what to my curious mind did get stronger,
But a feeling that rates were to be higher for longer

With a little old Chairman so stubborn & slow,
I knew in a moment he must be JayPo.
Still fearing the mem'ry of one Arthur Burns,
He called out his colleague giving each one their turn:

"Now, Goolsbee! now, Harker! now Bostic and Cook!
Hey, Schmid! Hey, Barr! Hey Kugler you look!
We've seen this story play out many years in the past!
We don't want inflation to reignite much too fast"

While traders heard the rumblings they turned a blind eye,
Because every market was heading straight to the sky;

So on to the Substack this writer then flew
With a blog full of charts and commentary too—
I wanted to remind all the readers of risks
That were in the news but where none thought exists

As I wrote in my head, and was turning around,
Straight my inbox scary stories abound.
Drones were shot down and geopolitics seemed scary,
But shipping & transports had me feeling quite weary;

A bundle of problems I seemed to pick up like sticks,
And was shocked to dig in to find a very low VIX.
My eyes—how they twinkled! Option ideas could be fun!
But also did worry that the theta would cost tons!

(Theta is the amount that the option premium decays,
when the markets are quiet like during slow holidays);
So I took a deep breath and said time to go slow,
Let's look for spreads in March when stocks may go low;

But for now I understand that it is Santa rally season
Traders are riding longs and need not give a reason
Many people choose to fight it with much sturm und drang
But for me I just chill out knowing markets yin and yang

So keep your positions tight and enjoy the year end rally
But don't get too complacent when you are checking your tally
There is an old saying that market vets say 'bout these gains
Don't confuse a bull market with someone with brains

I will be done writing these missives each day for this year
But for the readers I'll be back soon as 2024 is near
As for now I want to enjoy my family and friends,
And not give a darn how much anyone spends.

So I want to exclaim, as I go out of sight—
“Happy Christmas to all, and to all a good night!”

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Stay Vigilant
My last Stay Vigilant for 2023 is out.

I go back through the year and look at what I got right, what I got wrong, and how I might change my approach going forward.

I welcome any and all comments. Let's get better together.

Happy Holiday Season and as always ...

Stay Vigilant
#markets #investing #finance #stayvigilant
A year in review
At the end of every year, I think it is important to go back through your thought process each month in an attempt to improve. I'll let you in to my personal review

Stay Vigilant
For my Stay Vigilant blog this week, I am sharing the Macro Matters webcast that I did with Tony Zhang, Ph.D., GMP, MBA, CFA. We discuss what is driving the markets and where there may be risks.

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More importantly ... Stay Vigilant
#markets #investing #finance #stayvigilant
The macro that matters
I had a discussion this week on what the markets are pricing, and what that means for risk-taking

This week's Stay Vigilant is out on Substack

I build on my post from Thursday about the bullish argument. I really want to delve into this to understand it and see what I think of it. If you have input or different thoughts, please let me know.

Have a great weekend and ...

Stay Vigilant
#markets #investing #bullsvsbears #stayvigilant
The bullish argument
Building on a LinkedIn from this week, I explore the bullish argument. Do I have this right?

Chart of the Day - risk on?
We are starting the week with a general risk off feeling across equity & bond mkts. The 10-yr yld briefly moved above 5% & is hovering near there. SPX & NDX are looking lower with support still not for several percent
It is not a great set up and if you read my Stay Vigilant Substack over the weekend ((1) Risk vs. Reward - by Richard Excell - Stay Vigilant ( you would know I don't think the margin of safety is enough to offset the rising risks

However, not every asset class has the risk off feeling today. I open my page to the Bloomberg crypto screen & it shows me that almost all of the top 10 coins, including the 2 biggest by far, are all trading higher at are at the highs of the last 30 days

Something has crypto traders feeling pretty good over the last month when we can say that equity & bond traders are not feeling the same way. I sense that some of this move is related, while some of this move is idiosyncratic

The big stories have been the SEC losing court cases to crypto firms. The big ones are losing to Ripple on the case that said not all cryptocurrencies are securities. The other involved Grayscale & the SEC rationale from keeping the firm from converting to an ETF

The ETF talk, with BlackRock, Fidelity & Invesco now involved along with mainstays like Grayscale & ProShares, re-opens the discussion of crypto for the masses. In spite of all of the talk about decentralization, the masses have shown time & again they need trusted 3rd parties to fully adopt

This discussion has seen the percent discount on the Grayscale trust products collapse over the last several months. The Bitcoin trust discount has fallen from 45% to 11% & the Ethereum trust discount has fallen from 56% to 22%. Whether this is conversion talk or opportunistic traders, it is a big enough move to note

Perhaps there is another catalyst as well & that ironically may be the FTX trial that has been going on in NYC. There is an element that with the circus & attention surrounding this negative story maybe we are in a 'sell the rumor, buy the news' type of environment

It also may have something to do with another notion that the assets FTX held are presumably being sold off to build the fund that will pay off creditors. That included more than $1bb of Solana, also at a 30 day high, and $500mm of Bitcoin

Finally, while central banks are tightening monetary stimulus, which might be at odds with crypto price action, legislators & the Executive branch are on a spending spree & might not be in a position to raise the debt ceiling. This is another reason why having even a crypto 'hedge' may make sense

2022 was unmistakably a bad year for crypto, with all of the negative stories combined with very negative price action. However, the worm has turned for crypto in 2023, winning court cases, seeing more positive stories & getting the best price action of any asset

Stay Vigilant

#markets #investing #cryptocurrency #stayvigilant
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