The market continues to send signals that nearby risks are elevated, and there is no clear indication to us in which direction the next sustained move will come.
So, as has been the vibe for the past couple of weeks, I'm looking for trades that can offer my portfolio some diversification.
I've anticipated sideways price action for a month.
This continues as my intermediate outlook (months) has shifted from bullish to neutral as Bitcoin lost $56,000 and stocks appear as if they need time to improve.
My short-term outlook (weeks) moves from neutral to bullish, with Bitcoin and Ethereum at their lows and negative funding set us up for a bounce. I remain long on tokens like HNT, SOL, and BLUR holding support, but await further market shape before becoming overly bullish.
High Beta outperforming Low Volatility stocks is usually something we see in healthy market environments.
This year, however, High Beta has been struggling to make any progress vs their Low Volatility counterparts.
"Beta" is essentially how volatile a stock is relative to its benchmark.
So High Beta think $SMCI, $NVDA, $AMD, $AVGO and others. You have half the S&P500 High Beta Index in Technology and another 17% in Consumer Discretionary.
In contrast, for Low Volatility think Berkshire Hathaway, Coca-Cola, Visa, Procter & Gamble. You'll find a lot of Financials, Consumer Staples, Utilities and Industrials in this group.
Here is the ratio of High Beta vs Low Volatility breaking down to the lowest levels all year.
The Analysts here at All Star Charts were discussing Natural Gas in a recent analyst meeting, and the feeling is that 'ol Natty might be putting in a bottom and ready to reverse higher.
It's certainly got me in the mood to 'F around and find out.'
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While crypto is down, Helium is up. That's relative strength.
I'm also watching Polygon for longs and Maker for shorts.
More widely, the correlation between crypto and stocks is back. With Bitcoin nearing my bullish invalidation of 56,000, stocks are selling off and that's dragging crypto down.