The information in this message does not represent any financial or investment advice. They're just random thoughts in my head.
gm
MACRO - Well equities had a pretty strong bounce on Friday closing 1.6% and 2% higher respectively on SPX and NDQ, with futures progressing a tiny amount higher today. We saw quite the rally in interest rates which now puts 10Y all the way back to 394bps, from highs of around 407bps this year. Finding it tough to pinpoint a specific reason as to why and it's tough to find something - so it may just be a technical move and indeed it does appear that net positioning in US treasuries is the most short it's ever been. While we have had a run of bad data, what it does mean is that people are getting/feeling more bearish and it's become somewhat of a known quantity. With stocks still up a decent amount on the year, I do feel cautious still from a risk-reward standpoint. I should say that thinking about risk-reward does not equate to me feeling bullish or bearish, that's not really how I think about deploying capital. I try to strip it down to simply buying low and selling high - that actually has nothing to do with whether I think prices are going up or down in the short or even medium term. So when I say I don't love the risk-reward here, I think it means the downside is still potentially bigger than the upside in the short term and I would want better levels to buy, it doesn't mean that I necessarily think prices are going lower in the short term. This week we finally have payrolls on Fri for which I see current consensus at -35k vs last month's whopping 517k. I think it's prob a bit too early still to judge whether that is actual consensus or not, but these estimates coming out may be another reason why we saw Friday's rally.
CRYPTO - The breakdown in correlation between crypto and tradfi continues but sadly this time it's crypto underperforming as we ended the day lower on Friday despite the big move in stocks. BTC at 22.4K and ETH at 1565 with altcoins looking like they're a good 30-50% off recent highs in a lot of cases which I'm sure would have rekt people. I think following on from above and given current risks in the market I would want lower levels to consider adding - as mentioned 1200 is the level for me on ETH to start averaging down from. I personally don't think we get there but happy to be patient for it if it happens. I mentioned this in our Discord (discord.gg/degenznft) over the weekend but I also decided to sell $APE coin. As mentioned in previous commentary, I thought there was potential for the Summoning to utilise $APE in the mint, but it appears that got delayed to 15th March which is just 3 days before the supply unlock - too close for my liking and at this stage it feels right to take profits despite missing out on the highs.
NFTs - $72m of marketplace volumes yesterday and it's interesting to see Blur's market share drop to 65%. The shiny new meta is Owls which went from a floor of 0.02ETH to 0.34ETH in the space of a couple of days. I think anything that captures some form zeitgeist (think Moonbirds) will always do well. I have no idea if owls will go to 1ETH or go to 0 but at this point getting involved is like getting involved in a shitcoin that's already up 1600%...would you do that? Elsewhere there is a lacklustre move in floor prices but I would observe that they do seem to be slowly progressing lower. Volumes are also notably lower across the board but that might just be the weekend event and people trying to touch grass. NFTs do feel a bit homogenised at the moment which is understandably boring for a lot of people. I do think there's interesting things going on in the crypto art world and for me this will be a continuation of the two worlds separating.
GL this week!
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