Happy Tuesday!

20 AUG 24

Headwinds or Tailwinds Update (HoT Weeklies): 24w34**: Fund Updates + Market Outlook + Question of the Week:

Carbonwolf Alpha, Fund Alpha: 

$QALM #Fund Alpha (Futures Algo Scalping) 2024 YTD Stats:

Total Portfolio Performance for 2023: +167%

Total Portfolio Performance 2024 YTD:  +61.68%

(Risk Level 3 -recently unlocked at 60%+ YTD)

Major Indices:

2024 YTD Performance:

QALM = Quantitative Algorithmic Leveraged Momentum

TD = Trading Days

Winners and Losers Recent ~3 QALM Trades:

240820 /NQ, SHORT, WIN: +27.5% (Closed, +0TD)

$Amarok #Amarok II: 2024 YTD Stats:

2023 Closed Trade Win Rate: 2/2, 100%

Total Portfolio Performance for 2024:

*Reopening Soon under Amarok II*

Observations:

Tailwinds:

+MegaCap and Semis Momo. Megatech companies bounce sharply up from mid-August swing low pivot (05 AUG 24). Last week represented the best week of the year for the Nasdaq 100, S&P 500 and the Dow Jones. SPX highest close since 23 July. The Magnificent 7 reclaims ~+356 Billion in Market Cap. See Chart1.

Megacap Momo from week of 05 AUG intraday lows:

Sector Leaders Last Week

Q3 Index Leaders

Webbush's Managing Director, Dan Ives: "…tech earnings coupled by our recent checks in the field/Asia has only bolstered and validated this bullish view of tech stocks heading into year-end and 2025."

+Fed Watch and Consumer Outlook. CPI came in largely around expectations last week lifting the broader markets higher. Zip Recruiter's Chief Economist, Julia Pollak: "It is time for the Federal Reserve to declare 'mission accomplished' in its war against inflation, stop fighting the economy, and turn its focus to the employment part of its mandate."

July Consumer Price Index:

July CPI Month-over-Month Changes

Mortgage refinancing jumps ~+35% on 30-Year Fixed Rate mortgage rates falling from ~6.8% to ~6.4% -representing a surge of ~+118% Year-over-Year in mortgage refinance demand. See Chart2.

Consumer Indicators

Fed Funds Futures

Headwinds:

-Mixed Macro Signals. The U.S. Economic Signals are increasingly overlapping -suggesting consolidation before powering higher or sharper move lower if larger exogenous downside catalyst presents itself (ex: increased war footprint in Israel, Ukraine, etc., Election Surprise, Jackson Hole Negative Outlook Speech, etc.).

Mixed Macroeconomic Signals

Single-Family Starts down ~-14% Monthly.

Bearish Housing Starts

Top Small Business Concerns, source: Chase Business Banking Survey

• Inflation remains top concern
• 20% Uncertain economic conditions
• 17% Rising taxes
• 47% AI and its impact on business

-Consumer Caution. Auto Loan Defaults rising slightly above 2019 levels, but still below 2009 highs. Consumer Sentiment continues slightly lower. See Chart3.

Auto Loan Defaults

New Auto Prices/Rates

Home Depot CEO, Edward Decker: "Higher interest rates and greater macroeconomic uncertainty pressured consumer demand more broadly resulting in weaker spend across home improvement projects. Additionally, we saw continued softness in spring projects…"

Retail giant Macy's to close ~150 stores. Macy's plans to invest in ~350 stores that are still open and plan to open new locations of Bloomingdale's and Bluemercury.

Sentiment. Investor Sentiment ending 14 AUG 24: Bullish: ~42.5%, Neutral: ~28.6%, Bearish: ~28.9%. Chicago Fed President, Austan Goolsbee: "You don't want to tighten any longer than you have to… and the reason you'd want to tighten is if you're afraid the economy is overheating economy looks like to me."

Stifel Chief Equity Strategist, Barry Bannister: "Stay defensive. It's too soon to jump back in… Expect an S&P 500 correction to ~5,000 by October… There is a risk of a bear market if the slowdown becomes a recession."

St. Louis Fed President, Alberto Musalem: "Data does not support recession concerns… Time may be nearing for change in policy rate."

SPX Technicals. Close: 5,240.03. VIX: +18.04 = “Neutral.” Fear/Greed Index: 24, "EXTREME Fear." Key Long support level to hold above this week is ~5,461. VIX has shrunk from above 40 during 05 Aug intraday low to currently below 16 handle -implying short term volatility is stabilizing over the very short-term. SPX turns positive for August last week. Gold ("/GC") rises above $2500 handle. Copper rises above $4.1 per pound handle after a strike in BHP's Escondida copper mine in Chile threatened to disrupt more than ~5% of global supply. See Chart4.

 All-important Fed Summit at Jackson Hole, Wyoming this week. Fed Chief Powell's speech on Friday will likely set the tone through to the next FOMC decision.

Question of the Week:

Will Fed Chair Powell give the all-clear signal for first September Rate Cut on Friday?

Disciplined Alpha,

MFA

**These two CLOSED proprietary Hedge Fund Updates are for informational purposes only. Our past performance does not guarantee your future results. Always do your own due diligence, research and suitability before investing or trading.

Happy Tuesday!

06 AUG 24

Headwinds or Tailwinds Update (HoT Weeklies): 24w32**: Fund Updates + Market Outlook + Question of the Week:

Carbonwolf Alpha, Fund Alpha: 

$QALM #Fund Alpha (Futures Algo Scalping) 2024 YTD Stats:

Total Portfolio Performance for 2023: +167%

Total Portfolio Performance 2024 YTD:  +67.42%

(Risk Level 3 -recently unlocked at 60%+ YTD)

Major Indices:

2024 YTD Performance:

QALM = Quantitative Algorithmic Leveraged Momentum

TD = Trading Days

Winners and Losers Recent ~3 QALM Trades:

240807 /NQ, Long, WIN: -197.5% (Closed, +0TD)

240807 /NQ, SHORT, LOSS: -100.0% (Closed, +0TD)

240731 /NQ, Long, WIN: +220.0% (Closed, +0TD)

$Amarok #Amarok II: 2024 YTD Stats:

2023 Closed Trade Win Rate: 2/2, 100%

Total Portfolio Performance for 2024:

*Reopening Soon under Amarok II*

Observations:

Tailwinds:

+Megas Mettle. Despite the recent broader market sell-off, the majority of the Megacaps have been preventing a larger-scale fall by continuing to come in around expectations. Granted, their respective forecasts are normalizing for less-than-stratospheric growth which investors have grown accustomed to post-pandemic earnings forecasts.

Magnificent 7 Standings:

+Glittering Gold -Original and Digital. Gold ("/GC") reaches all-time highs last week as concerns grow around market rotation, seasonality and election volatility. See Chart1. Barrick Gold's President, Mark Bristow: "Given its importance to the economies of many developing countries and the proximity of its activities to people and natural habitats, the mining sector is uniquely placed to support the United Nations' Sustainable Development Goals."

Historically, gold does well during rate-cutting cycles. Given Bitcoin's ("/BTC") reputation as a digital counterpart, its price is expected to follow commensurately, according to a 10x research report. Despite the overall Bitcoin bullishness and growing acceptance as digital gold, BTC has not yet been tracking like /GC in times of broader equity market sell-offs.

Gold Futures have gained ~21% this year and ~27% over the last 52 weeks. Pepperstone Research, Chris Weston: "The wind is to gold's back and the market goes into U.S. nonfarm payrolls long and strong and for good reason -the investment case for the yellow metal is clearly skewed toward higher levels, where notably the market has ramped up expectations of Fed easing to a point where the debate is where the Fed needs to front-load cuts in September or maintain a slow and steady approach to easing."

Biggest GOLD Options Spotted:

Headwinds:

-Markets Falters from Peak - Buffett Increases Cash Position. NASDAQ enters correction territory after losing ~8% over the last three sessions. Chipmaker Intel ("INTC") suffers worst trading day in 50 years -since 1974. Erases ~$30 Billion in its own market value. Down ~-25% after announcing disappointing earnings report, cutting workforce by ~15,000. At the time of this writing, INTC (despite creating the, now monstrously sized, chipmaking industry) is worth less than ~5% of chipmaking behemoth NVDA and less than half -around 40% -of Advanced Micro Devices ("AMD"), which have market values of around $2.5 Trillion and $216 Billion, respectively.

Crypto sell-off wipes out ~$270 Billion in value. The Magnificent 7 loses ~$1 Trillion in value in less than a week. Russell 2000's second straight loss of 3%+ for first time since 2020. Dow Jones has worst day last week since March 2023. Boeing, Intel, Chevron and Caterpillar lead declines. All SPX sectors lower last Friday. Declines led by Discretionary, Materials and Financial Sectors. AMZN worst day since April 2022. NASDAQ hits lowest level since May, yesterday.

As of 03 AUG 24:

Chipmakers ("SMH") log third straight weekly loss. SMH enters Bear Market territory -down ~23% from record highs roughly three weeks ago.

Berkshire Hathaway's ("BRK/A" Warren Buffett cuts ~$75.5 Billion in equity positions, including dumping ~50% of its AAPL stake. BRK/A's cash stockpile grows to a record ~$276.9 Billion.

-Jobs Report Reduction and Fed Inaction. Weaker-than-expected Jobs report push markets lower, last Friday. Change in Nonfarm payrolls (JULY) +114,000 actual versus +185,000 estimated. See Chart2. FOMC leaves Fed Rates Unchanged last Wednesday. Then, Broader Markets fall after disappointing TSLA earnings report and Jobs report increase fears of recession.

Allianz's Chief Economic Advisor, Dr. Mohamed El-Erian: "Pandemic cash depleted, higher debt servicing costs… 50% chance of soft landing given debt, inequality and risks… One negative surprise or external shock could be bad…"

Wolfe Research's Chief Economist, Stephanie Roth: "Payrolls miss fuels narrative that Fed is behind the curve… Data increases odds the Fed will see 2+ cuts… Base case is unemployment rate jump will reverse in August."

Sentiment. Investor Sentiment ending 31 JUL 24: Bullish: ~44.9%, Neutral: ~29.9%, Bearish: ~25.2%. DoubleLine Capital Founder, Jeffrey Gundlach: "Economic data is clearly weakening, upcoming reports will strongly inform Fed's path…Don't think the Economy is that strong… Think Fed will cut rates more than Market thinks, 150BP of cuts likely in next year…"

Iran-Israel Conflict. RBC's Helima Croft: "The assassination of the Hamas political leader Ismail Haniyeh overnight in Tehran moves this conflict appreciably up the escalatory ladder and edges the region closer to a wider war."

SPX Technicals. Close: 5,240.03. VIX: +27.88 = “EXTREME Fear.” Fear/Greed Index: 21, "EXTREME Fear." Previous key level of 5,331 broken. Key Long support level to hold above this week is ~5,101. U.S. 2-YR/10-YR Spread becomes least inverted in ~2 years. The "re-steepening" versus the "inverting" of the yield curve is what typically causes the most Market pain. 10-Year Yield drops to December Low. See Chart3. Oil paces for its best day -immediately following Iran's Ismail Haniyeh assassination, last week. VIX "Fear Gauge" at March 2023 high -hits above 37 in Sunday's session.

Question of the Week:

Did the Fed make a mistake in not cutting rates last week? Why? Or, Why Not?

Disciplined Alpha,

MFA

**These two CLOSED proprietary Hedge Fund Updates are for informational purposes only. Our past performance does not guarantee your future results. Always do your own due diligence, research and suitability before investing or trading.

Happy Tuesday!

30 JUL 24

Headwinds or Tailwinds Update (HoT Weeklies): 24w31**: Fund Updates + Market Outlook + Question of the Week:

Carbonwolf Alpha, Fund Alpha: 

$QALM #Fund Alpha (Futures Algo Scalping) 2024 YTD Stats:

Total Portfolio Performance for 2023: +167%

Total Portfolio Performance 2024 YTD:  +56.67%

(Risk Level 3 -recently unlocked at 60%+ YTD)

Major Indices:

2024 YTD Performance:

QALM = Quantitative Algorithmic Leveraged Momentum

TD = Trading Days

Winners and Losers Recent ~3 QALM Trades:

240726 /RTY, Long, Open: -100.0% (Open, +2TD)

$Amarok #Amarok II: 2024 YTD Stats:

2023 Closed Trade Win Rate: 2/2, 100%

Total Portfolio Performance for 2024:

*Reopening Soon under Amarok II*

Observations:

Tailwinds:

+AI Investment Resilience. Despite Semiconductor sell-off since reaching all-time highs, optimism around advanced AI chips remains high. See Chart1. Servicenow CEO Bill McDermott: "Simply put, enterprises are investing in business transformation. They are investing in AI. They are building a new reference architecture for the decades to come. This is the largest, most compelling business opportunity in the world."

U.S. Secretary of Commerce Gina Raimondo: "Our goal is to have 20% of leading edge chips made in the U.S. by 2030…"

IBM CFO, James Kavanaugh: "We've been talking about all year long, very dynamic, albeit solid, macroeconomic and buying behavior… but I think clients are all looking at how do they leverage Gen AI for competitive advantage…"

Deepwater Asset Management's, Gene Munster: "This is a buying opportunity, the substance of AI will give investors confidence to stay the course…"

+Defiant Small-Caps. Inflows rotating from Large- and Mega-Caps into Smal-Caps. See Chart2. Small-Caps not cheap on an absolute basis, but still cheap relative to large caps at a ~25% discount. Russell 2000 at 15.5x, trades slightly above historical average P/E of 15.2x.

Within Small-Caps Camp, Russell 1000 value stocks are outperforming Russell 1000 growth stocks and timing matching ~July 12 SPX peak. This suggests that not only are investors taking profits from Megacap Growth and rotating into Small-Caps -they are specifically selecting Small-Cap value vs. Small-Cap Growth.

Headwinds:

-Slowing Consumer? U.S. Personal Savings as a % of disposable income shrinks to mid-2022 levels. See Chart3. U.S. Consumer Sentiment remaining stable at 66.4 versus 66.0 estimated. New Home Sales weaken 617k vs. 644k estimated. Slight rise in unemployment vs. unemployment. See Chart4.

Personal Consumption Expenditures (PCE) -source: Bureau of Economic Analysis

-Mega Cap Sell-Off. Wednesday of last week was the worst day of the year for the NASDAQ and S&P500. Worst day since 2022. The Magnificent 7 lost ~$760 Billion in Market Cap that day alone. Selling pressure was ignited by TSLA failing to meet earnings expectations. Bernstein (Underperform Rating on TSLA currently): "Tesla's auto business does not appear to have found a bottom in terms of margins, we continue to expect little to no growth in 2024 and 2025, and believe that in general growth stocks only work when they grow…" Auto revenue declines ~7% Year-over-Year. TSLA Profit falls for second straight quarter.

TESLA Sentiment -source: CNBC

GOOG/L sells off despite a double beat on earnings and revenues -because of slowing ad revenue and growing expenses. Seasonal weakness, Election uncertainty and slowing economy are increasing downward market pressures over the short-term. Strongest rotation in decades triggered by softer CPI and rate cut expectations. Concentrated Tech positioning increased the unwind risk ahead of rotation.

MSFT under pressure after earnings report, despite double beat on Earnings and Revenue due to Microsoft Azure and other cloud services growth of 29% vs. 30.2%.

Sentiment. Investor Sentiment ending 24 JUL 24: Bullish: ~43.2%, Neutral: ~25.1%, Bearish: ~31.7%. Bloomberg Op-Ed, Bill Dudley: "Historically, deteriorating labor markets generate a self-reinforcing feedback loop. When jobs are harder to find, households trim spending, the economy weakens and businesses reduce investment, which leads to layoffs and further spending cuts… Although it might be already too late to fend off a recession by cutting rates, dawdling now unnecessarily increases the risk."

SPX Technicals. Close: 5,436.44. VIX: +17.83 = “EXTREME Fear.” Fear/Greed Index: 43, Fear. Previous key level of 5,488 broken last week. Key Long support level to stay above this week is ~5,331. Seasonality: Mid-July to October historically tends to yield more down days and VIX also tends to rise. FOMC decision tomorrow. A surprise rate cut may spark a melt-up rally. A signal for a future rate cut expected by economists. Majority of Megacaps report this week, representing ~21% of the SPX. As Earnings Season continues, anything less than blowout earnings will likely yield a sell-off.

Question of the Week:

Will the Fed cut rates this week? Why or why not?

Disciplined Alpha,

MFA

**These two CLOSED proprietary Hedge Fund Updates are for informational purposes only. Our past performance does not guarantee your future results. Always do your own due diligence, research and suitability before investing or trading.

Happy Tuesday!

23 JUL 24

Headwinds or Tailwinds Update (HoT Weeklies): 24w30**: Fund Updates + Market Outlook + Question of the Week:

Carbonwolf Alpha, Fund Alpha: 

$QALM #Fund Alpha (Futures Algo Scalping) 2024 YTD Stats:

Total Portfolio Performance for 2023: +167%

Total Portfolio Performance 2024 YTD:  +60.72%

(Risk Level 3 -recently unlocked at 60%+ YTD)

Major Indices:

2024 YTD Performance:

QALM = Quantitative Algorithmic Leveraged Momentum

TD = Trading Days

Winners and Losers Recent ~3 QALM Trades:

240724 /RTY, Long, Open: +50.0% (Open, +1TD)

240724 /NQ, Long, Open: -100.0% (Open, +1TD)

240719 /NQ, Long, Loss: -100.0% (Closed, +0TD)

$Amarok #Amarok II: 2024 YTD Stats:

2023 Closed Trade Win Rate: 2/2, 100%

Total Portfolio Performance for 2024:

*Reopening Soon under Amarok II*

Observations:

Tailwinds:

+Super Small Caps. Last week, the Russell 2000 spiked higher while the mighty Nasdaq Composite dropped lower in almost equal measure. See Chart1. 2Q earnings expected to show Small Caps' Year-over-year improvement. Small cap Financials not expected to trough until 3Q 2024. See Chart2.

Yardeni Research: "Lowering of inflation without recession is possible… Don't think Fed rate cuts are necessary… Rate cuts could fuel market meltup given the ~$6.15 Trillion in money market mutual funds

Rotation into Small-Caps from S&P 500 and Megacaps continue. Strategas' Dan Clifton: " Expect more liquidity in August, a $250 Billion increase, keeping financial conditions loose through summer." Ether ETFs begin trading.

+Earnings Momentum. Semiconductor Megacap Taiwan Semi (TSMC) continues push higher. Net revenue +40.1% Year-over-year on AI demand surge. CapEx budget narrowed to $30 Billion - $32 Billion. Raised Q3 revenue guidance to $22.4 Billion - $23.2 Billion.

Megacaps, en masse, have yet to report. Of the ~14% of SPX companies already reported, they are pushing higher on both Earnings and Revenue Expectations. See Chart3. This week's PCE (Friday) likely to shift the odds of both a July and September rate cut higher. Sectors benefitting especially from Fed Rate cuts: Small-caps, Industrials and Financials.

Magnificent 7 Earnings Report Schedule:

Headwinds:

-CrowdStruck. Cybersecurity giant Crowdstrike global outage causes havoc throughout multiple industries. Among the affected:

Tesla's Elon Musk: "We just deleted Crowdstrike from all of our systems, so no rollouts at all."

IT outage recovery expected to be slow and tedious because it is a massively tedious and manual recovery process. Only way to fix is manually remove the file. This problem will likely be compounded by remote locations and sensitive infrastructures.

Crowdstrike's CEO, George Kurtz response: "Crowdstrike is actively working with customers impacted by a defect found in a single content update for Windows hosts. Mac and Linux hosts are not impacted. This is not a security incident or cyberattack. The issue has been identified, isolated and a fix has been deployed."

-Election Volatility. With Biden's sudden Presidential bid withdrawal, odds are now being recalibrated for a Harris vs. Trump showdown. See Chart4. Political shocks are not impacting stocks with ample liquidity being provided to financial markets. Liquidity being the buffer allowing financial markets to digest the political uncertainty over the short-term. Harris currently trails Trump by several percentage points.

Historical Precedent: The last time a sitting President withdrew from a re-election bid was in 1968, President Lyndon B. Johnson. S&P 500 pushed higher 15.1% after the official withdrawal on 31 March 1968. The next day the SPX closed 2.5% higher.

Morgan Stanley Election Outlook: "If the nominee is Harris, we think policy paths should be relatively unchanged, as she represents largely a continuation of the Biden administration's policy priorities… We think the most impactful market takeaways are still exposed to a potential Trump win."

Sector Implications of Trump Win

Sentiment. Investor Sentiment ending 17 JUL 24: Bullish: ~52.7%, Neutral: ~23.8%, Bearish: ~23.4%. Goldman Sach's Lindsay Rosner: "The Fed can start cutting rates in September… June CPI report was soft enough for easing to begin… Expecting U.S. to avoid a recession." Existing Home Sales (June) -5.4% Month-over-Month and -5.4% Year-over-Year.

Coca-Cola: "Inflation is landing. Pricing overall last year ex a few inflation countries was 6% -now it's heading to a 2-3%, a normalized rate… China momentum is tepid in macro sense… Latin America strong, especially Brazil and Mexico."

SPX Technicals. Close: 5,555.74. VIX: +14.72 = “Fear.” Fear/Greed Index: 58, Greed. Key support level to stay above this week is ~5,488. Nasdaq 100's worst week since April, Nasdaq also has its worst day of 2024. Semiconductors have worst day since 2020. Russell 2000, prior to recent peak, was up ~1% or more for four straight days. That's only happened 13 other times in history. Historically, 1 year later, the Russell 2000 has been higher 11 times and up an average of ~25%.

Question of the Week:

Was Crowdstrikes' global outage/disruption a true outlier, one-off event? Or, can society expect more of these in the future from cybersecurity companies?

Disciplined Alpha,

MFA

**These two CLOSED proprietary Hedge Fund Updates are for informational purposes only. Our past performance does not guarantee your future results. Always do your own due diligence, research and suitability before investing or trading.

Happy Tuesday!

…And, We're Back from Summer Think Weeks!

16 JUL 24

Headwinds or Tailwinds Update (HoT Weeklies): 24w29**: Fund Updates + Market Outlook + Question of the Week:

Carbonwolf Alpha, Fund Alpha: 

$QALM #Fund Alpha (Futures Algo Scalping) 2024 YTD Stats:

Total Portfolio Performance for 2023: +167%

Total Portfolio Performance 2024 YTD:  +64.80%

(Risk Level 3 -recently unlocked at 60%+ YTD)

Major Indices:

2024 YTD Performance:

QALM = Quantitative Algorithmic Leveraged Momentum

TD = Trading Days

Winners and Losers Recent ~3 QALM Trades:

240715 /NQ, Long, Win: +375.0% (Closed, +3TD)

240711 /NQ, Long, Loss: -10% (Closed, +0TD)

240708 /NQ, Long, Win: +200.0% (Closed, +3TD)

$Amarok #Amarok II: 2024 YTD Stats:

2023 Closed Trade Win Rate: 2/2, 100%

Total Portfolio Performance for 2024:

*Reopening Soon under Amarok II*

Observations:

Tailwinds:

+Reasonable Market Valuations. Russell 2000 (Small Caps) on a historic win streak. On pace for 5th straight gain of 1% or more for first time since 1979.

Forward Price/Earnings Ratios Estimates for Major Indices, source: FactSet:

All-time highs for: Hilton, Goldman Sachs, J.P. Morgan, Eli Lilly, Apple and Oracle. For the first time since the Financial Crisis, the Russell 2000 rallied more than 3% on a day that the S&P 500 closed down -last week. October 10, 2008 is also the only other time that inverse pairing occurred. Megabanks J.P. Morgan Chase, Wells Fargo and Citi post Q2 beats.

Inflows -source: Bank of America Securities:

+Current CPI and the Fed Temperature. June Consumer Price Index eases more than expected. Black Rock's Rick Rieder: "CPI Data indicated we're much closer to normalcy." Fed Chief Powell: "Hard landing scenario is not the most likely scenario now." Fed President Daly: "With the information we have received [last Thursday], which includes data on employment, inflation, GDP growth, and the outlook for the economy, I see it as likely that policy adjustments, some policy adjustments, will be warranted."

Oppenheimer raises SPX price target from 5,500 to 5,900. Oppenheimer's John Stoltzfus: "Recent economic data that includes: slowing inflation rates, resilient jobs numbers and jobs postings along with Q1 earnings results suggest to us that the current bull market has legs to run higher."

Headwinds:

-Megacap Overweighting. If you remove only NVDA from the S&P 500, then the 2024 YTD SPX gains of ~15%+, shrinks to ~10%. Further, if you remove the Magnificent Seven: NVDA, AAPL, MSFT, GOOG/L, META, AMZN and TSLA then the SPX YTD gains fall to ~6%.

Magnificent 7 Ranking by Market Cap (as of 16 JUL 24):

Collectively, the "Magnificent Seven" combined Market Capitalizations represent nearly one-third (~32.72%) of the benchmark

500-company-strong index. Effectively, when these stocks have a down day, it's significantly harder for the rest of the 493 SPX stocks to counter-balance to the upside. See Chart1: despite the majority of stocks closing positive -the SPX still finished nearly ~1% in the red because of the outsized weighting of the aforementioned stocks.

-Rising Debt. U.S. Corporate Bankruptcies rise in June -source: S&P Global. ~75 new corporate bankruptcy filings. Highest number recorded in a single month since beginning of 2020. ~346 total filings in 2024. Highest in ~13 years.

Consumer Credit Card Debt Outstanding:

Delinquency rates also rising. See Chart2. U.S. Federal Debt servicing payments are now ~33% higher than fiscal YTD versus 2023.

Sentiment. Investor Sentiment ending 10 JUL 24: Bullish: ~49.2%, Neutral: ~29.1%, Bearish: ~21.7%. After Trump Assassination attempt, odds of a Trump Presidential win has increased. Fortune Magazine: "Trump's voters are energized, Biden's voters are demoralized after the shooting…" Trump 'more confident in a victory following events over the weekend. Trump has an enthusiasm advantage with committed voters. Likely to get a boost from swing voters out of sympathy.

PredictIt.org

SPX Technicals. Close: 5,650.17. VIX: +13.04 = “Neutral.” Fear/Greed Index: 63, Greed. Key support level to stay above this week is ~5510. Gold hits highest level since May, last week. Japan's Nikkei achieves another record close last week. Personal Consumption Expenditures Deflator: Headline vs. Core continues to trend downward. See Chart3.

Question of the Week:

Is the overweighting of a small number of Megacap stocks (e.g. Magnificent 7) good or bad for the S&P 500 overall in 2024?

Disciplined Alpha,

MFA

**These two CLOSED proprietary Hedge Fund Updates are for informational purposes only. Our past performance does not guarantee your future results. Always do your own due diligence, research and suitability before investing or trading.

Happy Tuesday!

21 MAY 24

Headwinds or Tailwinds Update (HoT Weeklies): 24w21**: Fund Updates + Market Outlook + Question of the Week:

>>>This will be the last issue before our Summer Think Weeks. The HoT Weeklies will return in mid-July. Thank you for your positive feedback and continuing support. Have a fantastic Summer Start!<<<

Carbonwolf Alpha, Fund Alpha: 

$QALM #Fund Alpha (Futures Algo Scalping) 2024 YTD Stats:

Algo Krakens: Long, Current Win Rate: 51.63%

Algo Krakens: Short, Current Win Rate: 66.67%

Total Portfolio Performance for 2023: +167%

Total Portfolio Performance 2024 YTD:  +31.40%

(Risk Level 2: "Futures Options Algo Scalping" -previously unlocked at 30%+ YTD)

Major Indices:

2024 YTD:

$DJI ~+5.79%;

SPX ~+11.56%;

COMP ~+12.13%;

GDOW ~+9.19%;

/CL $78.17

QALM = Quantitative Algorithmic Leveraged Momentum

TD = Trading Days

Random Recent ~3 Trades:

240521 /NQ, Long, Win: +80.0% (Intraday: Closed, +0TD)

240520 SPX, Long, Open: +3.45% (Swing: Open, +1TD)

240520 /NQ, Long, Loss: -60% (Intraday: Closed, +0TD)

$Amarok #Amarok II: (Derivatives), YTD:

2023 Closed Trade Win Rate: 2/2, 100%

Total Portfolio Performance for 2024:

*Reopening Soon under Amarok II*

Observations:

Tailwinds:

+NVIDIA and the "Everything Rally." Wall Street Traders fixed on NVDA earnings on Wednesday -as the de facto "canary" for the AI-stock movement. Institutional Traders expect a large beat and raised guidance in upcoming report. They expect this to generate a small positive reaction from stock after earnings. Forecasts 3-4x growth in the next 3-4 years despite multiple drawdowns. Deutsche Bank raises SPX Year-end target to $5,500. Deutsche Bank: "Earning cycle has plenty of legs… Overweight Financials, Consumer Cyclicals and Materials."

Wall Street Q1 Expectations for NVDA

NVDA earnings report is likely to be the most impactful report for the S&P 500. It's responsible for 1/3 of the S&P 500's Q1 earning growth. Earnings expected to be 5 times greater than last year. Revenues poised to more than triple from a year ago.

The Everything Rally 6-Month Gains

+Record Territory. Dow Jones closes above $40,000 for first time last week. S&P 500 and Nasdaq also hit record highs last week. See Chart. BlackRock's Senior Managing Director and CIO, Rick Rieder (~$2.4 Trillion AUM): "Would hold equities for next couple of years… If rates stay where they are, the equity market can move a lot… Equity Market Technicals have been impressive."

Performance since April lows:

Earnings Growth Year-over-Year Expectations

Headwinds:

-LEI, Sentiment and Divergence. The U.S. Leading Economic Index ("LEI") was worse than expected -0.6% vs -0.3% estimated last week. The LEI's April decline was driven by consumer sentiment, new orders, the negative yield spread and building permits. The divergence between Real GDP YoY %Change and LEI YoY %Change is the largest ever since before 2000 -without experiencing a recession. See Chart. Housing starts weaker, lowest level in nearly 4 years.

-Geopolitics. Russia starts "Nuclear Exercises" today. Iran President and Foreign Minister along with other ranking officials killed in mysterious helicopter crash. Iran in shock and outrage. Iran's Supreme Leader will now control succession for president. However, a family succession for Supreme Leader would delegitimize the regime. Khomeini and Khamenei always argued that hereditary rule under the shah was illegitimate. Israel's Netanyahu: "U.S. threat to withhold weapons is a consideration in Rafah, but not deciding factor…" Slovak Prime Minister Fico shot in assassination attempt -previously in life-threatening condition, improving slightly but still in serious condition.

Sentiment. Investor Sentiment ending 15 MAY 24: Bullish: ~40.9%, Neutral: ~35.9%, Bearish: ~23.3%. JP Morgan Chief, Jamie Dimon: "I'm cautiously pessimistic…" Fed Reserve Governor Waller: "In the absence of a significant weakening in the labor market, I need to see several more months of good inflation data before I would be comfortable supporting an easing in the stance of monetary policy."

SPX Technicals. Close: 5,321.41. VIX: +11.86 = “Neutral.” Fear/Greed Index: 63, Greed. Key support level to stay above this week is ~5225. Gold Comex ("/GC") technicals topping out. Equities watching for Nvidia's all-important earnings report tomorrow after the bell. VIX below 13 and near 2024 lows, suggesting grind higher behavior -absent a large catalyst expanding volatility unexpectedly.

Question of the Week:

Will Nvidia disappoint tomorrow? Or, will it be the next excuse for the "Everything Rally" to continue?

Disciplined Alpha,

MFA

**These two CLOSED proprietary Hedge Fund Updates are for informational purposes only. Our past performance does not guarantee your future results. Always do your own due diligence, research and suitability before investing or trading.

Happy Tuesday!

14 MAY 24

Headwinds or Tailwinds Update (HoT Weeklies): 24w20**: Fund Updates + Market Outlook + Question of the Week:

Carbonwolf Alpha, Fund Alpha: 

$QALM #Fund Alpha (Futures Algo Scalping) 2024 YTD Stats:

Algo Krakens: Long, Current Win Rate: 56.63%

Algo Krakens: Short, Current Win Rate: 66.67%

Total Portfolio Performance for 2023: +167%

Total Portfolio Performance 2024 YTD:  +34.80%

(Risk Level 2: "Futures Options Algo Scalping" -previously unlocked at 30%+ YTD)

Major Indices:

2024 YTD:

$DJI ~+4.96%;

SPX ~+10.00%;

COMP ~+9.99%;

GDOW ~+8.27%;

/CL $78.17

QALM = Quantitative Algorithmic Leveraged Momentum

TD = Trading Days

Most Recent ~3 Trades:

240515 /NQ, Long, Win: +242.0% (Closed, +1TD)

$Amarok #Amarok II: (Derivatives), YTD:

2023 Closed Trade Win Rate: 2/2, 100%

Total Portfolio Performance for 2023:

*Reopening Soon under Amarok II*

Observations:

Tailwinds:

+Bull Trend Technicals Intact. S&P 500 earnings delivered just enough to support bull trend. Bifurcation between emerging growth and Megacap companies. Fed is looking for worldwide disinflation as support for future rate decisions. PIMCO's Erin Browne: "Modestly overweight equities… Equity allocations should also help mitigate the inflation risk… AI: in a very early stage; long growth runway ahead suggest we're not in bubble."

Q1 Earnings and Revenue Scorecard:

Performance since October 2023 Market Bottom:

Bullish Bank Rally, Six-Month Performance:

+Speculators Still Strong. Meme Stocks back in-play with momentum. Gamestop ("GME") up ~+226.73% over the last week. AMC Entertainment ("AMC") up ~31.98% today. Notional options and stock volume greatest surge since ~2021. Options implying a 50% move in either direction this week. GME shorts get crushed. Month-to-date losses for GME Short Sellers ~-$1.2 Billion. GME up ~+3,160.79% since 13 May 2020. No fundamental changes for GME. Meme Stock Leader "Roaring Kitty" activated an army of Meme stock buyers with a single picture. See Image. Omega Family Office, Leon Cooperman: "…We have a stock market at or near a high. We have tremendous speculation in individual stocks."

China Stealth Rally in progress. One-Month Gains:

Headwinds:

-Debt and Sentiment. Inflation expectations show Consumer fears of rising inflation, according to University of MI survey. It showed one-year inflation expectation climbing to 3.5% from 3.2% in April, potentially giving companies more cover to jack up prices. See Chart. State Street Global Advisors, Head of SPDR Research, Matthew Bartolini: "When the Fed says it is data-dependent, every time there is a data release, it is potentially a Market-moving event." Producer Price Index ("PPI") comes in hotter-than-expected: +0.5% vs. +0.3% expected. U.S. Treasury: "Monthly interest payments on the U.S. debt up 35% to $102 Billion." Notable increases in spending include:

-War Games and Taxes. U.S. Department of Defense buys new "Doomsday" Fleet, intended to be a continuously operational Pentagon in the sky. Israeli tanks amass near Rafah -forcing some 300,000 of the more than 1 Million civilians. Rafah considered Hamas' last stronghold. Israel: "…Must invade to dismantle Hamas and return scores of hostages taken from Israel…" Egypt strongly objects to Rafah offensive, saying it intends to formally join South Africa's case at the International Court of Justice alleging Israel is committing genocide in Gaza -an accusation Israel vehemently rejects.

Proposed Biden Tariffs on Chinese Goods:

China's Ministry of Commerce Reaction: "This will seriously affect the atmosphere of bilateral cooperation. The United States should immediately correct its wrong practices and cancel the tariff measures on China. China will take resolute measures to defend its own rights and interests."

Sentiment. Investor Sentiment ending 08 MAY 24: Bullish: ~40.8%, Neutral: ~35.4%, Bearish: ~23.8%. Goldman Sachs' Head of Multi-Sector Investing, Lindsay Rosner: "Stay away from over-levered capital structures… Trim areas of the market with reliance on lower funding costs in the near-term… Look for geographic diversity."

SPX Technicals. Close: 5,246.68. VIX: +13.41 = “Neutral.” Fear/Greed Index: 54, Neutral. Key support level to stay above this week is ~5151. Copper up ~29% in last six months. SPX ~1% from historic highs. VIX lowest close of the year ~12.55. Advance/Decline Line: SPX near new high. SPX Mid-Cap new high. SPX Small-Cap highest since December. Nasdaq closes at All-Time High today. Critical read of CPI tomorrow. CPI will likely set the tone until the next FOMC decision.

Question of the Week:

Will the Consumer Price Index ("CPI") come in lower-than-expected or higher-than-expected tomorrow?

Disciplined Alpha,

MFA

**These two CLOSED proprietary Hedge Fund Updates are for informational purposes only. Our past performance does not guarantee your future results. Always do your own due diligence, research and suitability before investing or trading.

Happy Tuesday!

07 MAY 24

Headwinds or Tailwinds Update (HoT Weeklies): 24w19**: Fund Updates + Market Outlook + Question of the Week:

Carbonwolf Alpha, Fund Alpha: 

$QALM #Fund Alpha (Futures Algo Scalping) 2024 YTD Stats:

Algo Krakens: Long, Current Win Rate: 56.63%

Algo Krakens: Short, Current Win Rate: 66.67%

Total Portfolio Performance for 2023: +167%

Total Portfolio Performance 2024 YTD:  +30.16%

(Risk Level 2 previously unlocked at 30%+ YTD)

Major Indices:

2024 YTD:

$DJI ~+3.17%;

SPX ~+8.76%;

COMP ~+8.80%;

GDOW ~+6.81%;

/CL $78.37

QALM = Quantitative Algorithmic Leveraged Momentum

TD = Trading Days

Most Recent ~3 Trades:

240506 /NQ, Long, Win: +237.5% (Closed, +1TD)

240506 /NQ, Long, Win: +200.0% (Closed, +0TD)

240503 /NQ, Long, Win: +10.0% (Closed, +0TD)

240503 /NQ, Long, Loss: -225.0% (Closed, +0TD)

$Amarok #Amarok II: (Derivatives), YTD:

2023 Closed Trade Win Rate: 2/2, 100%

Total Portfolio Performance for 2023:

*Reopening Soon under Amarok II*

Observations:

Tailwinds:

+Apple Alpha. AAPL achieves double beat on Revenues and Earnings and issues biggest buyback ever. Raises dividends 4% to $0.25. AAPL in talks with EV maker Rivian and unveils new iPads with new Magic Keyboard and Apple Pencil Pro. Q2 2024 Revenues by Category:

Tim Cook on Vision Pro Forecast: "The reality is that the forecast that we had internally, before we shipped for the quarter, we came in inline with it… And the enterprises… they buy a few units, and do their testing and their application development and then they come back and deploy. And so it takes a while to get the flywheel started, but we're excited about it.

+Treasury Yields Yielding. U.S. Treasury Yields pause from punching higher after April Payroll growth is lower than expected. Treasury yields mostly lower today. See Chart. Fed Chief Powell: "Rate hikes unlikely… Still expects inflation to decline." Major Averages bounce back from April Intraday Lows:

Headwinds:

-Fed and Market Opinions. FOMC decision last week left rates unchanged. Decision was unanimous. Overall number of expected Fed rate cuts lowering. See Chart. Fed: "Notes lack of further progress on inflation in recent months." Q1 Employment Cost Index +1.2%; highest in a year. April Chicago PMI miss; lowest level since Nov 2022. April Consumer Confidence miss; lowest level since July 2022. Fed Gov. Barkin: "Full impact of higher rates is yet to come, will take edge off demand."

Fed Survey Forecast:

Geopolitical Games. Russia announces it will hold Nuclear exercises. Israel updates U.S. on Rafah Invasion Plan. U.S. issues sanctions on more than a dozen China, Hong Kong Based companies. China leads world in AI Research, AI Articles in top research clusters:

Sentiment. Investor Sentiment ending 01 MAY 24: Bullish: ~38.5%, Neutral: ~29.0%, Bearish: ~32.5%. Mastercard CFO, Sachin Mehra: "I'm seeing a decent amount of stability in terms of affluent and mass market hold up nicely in the U.S. and the rest of the world." Trivariate's Adam Parker: "We have more of the market than ever in high-beta, high quality Technology growth stocks… To the extent that there is a market correction, these high-quality growth Technology stocks are likely to materially underperform the market."

SPX Technicals. Close: 5,187.70. VIX: +13.23 = “Neutral.” Fear/Greed Index: 39, FEAR. Key support level to stay above this week is ~5151. Average monthly move for S&P 500 in May during election years <0.50%. U.S. 10-Year diverges from Bloomberg Economic Surprise Index. No sustained weakness in credit. VIX back to pre-correction levels. SPX and Nasdaq effectively double YTD performance from ~4% to ~8% in a week.

Question of the Week:

Do you subscribe to the old Market adage: "Sell in May and Go Away" for 2024?

Disciplined Alpha,

MFA

**These two CLOSED proprietary Hedge Fund Updates are for informational purposes only. Our past performance does not guarantee your future results. Always do your own due diligence, research and suitability before investing or trading.

Happy Tuesday!

30 APR 24

Headwinds or Tailwinds Update (HoT Weeklies): 24w18**: Fund Updates + Market Outlook + Question of the Week:

Carbonwolf Alpha, Fund Alpha: 

$QALM #Fund Alpha (Futures Algo Scalping) 2024 YTD Stats:

Algo Krakens: Long, Current Win Rate: 52.17%

Algo Krakens: Short, Current Win Rate: 63.64%

Total Portfolio Performance for 2023: +167%

Total Portfolio Performance 2024 YTD:  +29.59%

(Risk Level 2 previously unlocked at 30%+ YTD)

Major Indices:

2024 YTD:

$DJI ~+0.34%;

SPX ~+5.57%;

COMP ~+4.31%;

GDOW ~+4.48%;

/CL $81.55

QALM = Quantitative Algorithmic Leveraged Momentum

TD = Trading Days

Most Recent ~3 Trades:

240430 SPX, Long -25%, (Active/Open, +0TD)

240430 SPX, Long -13%, (Active/Open, +0TD)

240429 /NQ, Long -195% (Closed, +0TD)

240425 SPX, Long -200% (Closed, +1TD)

240425 SPX, Short +200% (Closed, +1TD)

$Amarok #Amarok II: (Derivatives), YTD:

2023 Closed Trade Win Rate: 2/2, 100%

Total Portfolio Performance for 2023:

*Reopening Soon under Amarok II*

Observations:

Tailwinds:

+Alphabet's Record-Breaking Q1. 4 of 7 Megacaps reported. META, GOOG/L and MSFT double beat on EPS and Revenues. TSLA double miss on EPS and Revenues. AMZN to report today. NVDA reports tomorrow. AAPL on Thursday. Alphabet "GOOG/L" announces first time ever dividend ~0.51%. YouTube and Google Cloud combined annual run rate ~$100 Billion+ estimated for Year-end 2024. Fastest total revenue growth rate since Q1 2022. Google cloud revenue  +28% YoY. Also announced a new $70 Billion buyback. GOOG/L joins the $2 Trillion Market Cap Club.

+Chips Betcha Can't Fund Just One. Chips Act keeps AI Chips funds flowing. U.S. awards Micron $6.1 Billion in grants to support their larger ~$50 Billion gross capex planned spend for U.S. Manufacturing through 2030. Expected to help grow U.S. share of advanced memory manufacturing from less than ~2% to ~10% by 2035. Nearly $33 Billion in Chips Funding so far. See Chart. Goldman Sachs Forecasts ~$200 Billion in Capex spend from Magnificent 6 alone.

Headwinds:

-Inflation Inclinations. Input cost inflation rising slightly. Hot Employment Cost Index ("ECI") data pressures markets, +1.2% in Q1. Fast Food Price Inflation rises faster than actual inflation since 2014. See Chart. McDonald's CFO: "The Macro headwinds have been more significant than we expected." Core PCE slightly higher than expected +2.8% vs. +2.7% YoY. Former Fed Governor Kaplan:

Biggest risks to the U.S. Economy:

1. Continued high inflation
2. Fed cutting too late, too little
3. Global economic weakness
4. Supply disruptions from Middle East wars
5. Fed cutting too early, too much

Douglas Gordon, Russell Investments: "Plateauing inflation could impact market expectations for the removal of restrictive monetary policy, challenging current equity market valuations, particularly outside mega cap market leadership."

GDP Grumbles. U.S. spending as portion of GDP nearly ~20%. In contrast, Marshall Plan post World War II was sub ~9% of GDP. See Chart. MetLife Investment Management Drew Matus': "More volatility ahead for markets… Expecting slowdown for economic growth… Geopolitical risk will drive even more turbulence."

Sentiment. Investor Sentiment ending 24 APR 24: Bullish: ~32.1%, Neutral: ~33.9%, Bearish: ~33.9%. J.P. Morgan: "…Policy tradeoff could move away from Goldilocks narrative, together with a continued risk of concentration reversal, too steep projections for earnings acceleration this year, and position unwind." Wolfe Research, Stephanie Roth: "The Fed to cut at a quarterly pace next year… This week's data may be the last of the hawkish news for now."

Question of the Week:

How many times will the Fed cut interest rates in 2024? Or, not?

Disciplined Alpha,

MFA

**These two CLOSED proprietary Hedge Fund Updates are for informational purposes only. Our past performance does not guarantee your future results. Always do your own due diligence, research and suitability before investing or trading.

Happy Tuesday!

23 APR 24

Headwinds or Tailwinds Update (HoT Weeklies): 24w17**: Fund Updates + Market Outlook + Question of the Week:

Carbonwolf Alpha, Fund Alpha: 

$QALM #Fund Alpha (Futures Algo Scalping) 2024 YTD Stats:

Algo Krakens: Long, Current Win Rate: 52.17%

Algo Krakens: Short, Current Win Rate: 63.64%

Total Portfolio Performance for 2023: +167%

Total Portfolio Performance 2024 YTD:  +33.14%

Major Indices:

2024 YTD:

$DJI ~+2.19%;

SPX ~+6.30%;

COMP ~+4.57%;

GDOW ~+4.98%;

/CL $83.40

QALM = Quantitative Algorithmic Leveraged Momentum

TD = Trading Days

Most Recent ~3 Trades:

$Amarok #Fund One: (Derivatives), YTD:

2023 Closed Trade Win Rate: 2/2, 100%

Total Portfolio Performance for 2023:

N/A, temporarily closed.

Observations:

Tailwinds:

+Magnificent/AI 7 Earnings Week. Scheduled Earnings Report this week: Tuesday: Tesla and Amazon; Wednesday: Nvidia and Meta; Thursday: Microsoft, Apple, Google. SPX Daily chart is currently oversold. Every industry is exposed to Artificial Intelligence. See chart. However, observed AI adoption is not as strong as initial estimates. That narrative could change as the Megas report this week.

+Bitcoin Halving Harvest. ~+$10 Billion of inflows since /BTC spot ETFs started trading. Halving historically props up price on lower supply. Bitcoin supply is designed to stop at 21 Million coins. "Halving" is meant to control the scarcity and maintain valuation. Last halving is expected to occur in the year 2140. /BTC demand is high, but tempered by macro-market concerns. Since last halving, /BTC price was ~$9,000 and Institutions were only starting to look at Bitcoin.

Post Performance Past Halving Events:

2012: 50 BTC to 25 BTC: +8,693%

2016: 25 BTC to 12.5 BTC: +281%

2020: 12.5 BTC to 6.125 BTC: +592% one year later

Headwinds:

-Moderating Megacap Momo. Megacap companies lose nearly ~$1 Trillion (~$970 Billion) in Market Cap value since Monday to Friday of last week. NVDA ~-$300 Billion; AAPL ~-$178 Billion; MSFT ~-$169 Billion; AMZN ~-$125 Billion; META ~-$79 Billion; TSLA ~-$77 Billion; GOOG/L ~-$42 Billion. NVDA, most of the Semis including: AMD, INTC and TSMC and TSLA in technical Bear Markets. UBS' Jonathan Golub on Megacap Tech: "Our downgrade of the Big 6 -from Overweight to Neutral -is… an acknowledgment of the difficult comps and cyclical forces weighing on these stocks… momentum is collapsing, with Big 6 EPS growth expected to decline from 42% to 16% over the next year, while the rest of TECH+ and non-TECH+ stocks accelerate."

-Tesla Troubles. TSLA hits new 52-Week Low. Down more than ~40% YTD. Six major Analysts downgrade TSLA Price Targets including:

Wedbush's Dan Ives: "The clock has struck midnight for Musk to lay out the strategic plan for the future." The Wall Street Journal: "Elon Musk Postpones India Trip, prompting questions over TSLA plans."

Sentiment. Investor Sentiment ending 17 APR 24: Bullish: ~38.3%, Neutral: ~27.8%, Bearish: ~34.0%. Fed Beige Book: "Several reports mentioned weakness in discretionary spending, as consumers' price sensitivity remained elevated. On balance, contacts expected that inflation would hold steady at a slow pace moving forward. At the same time, contacts in a few Districts -mostly manufacturers -perceived upside risks to near-term inflation in both input prices and output prices."

SPX Technicals. Close: 5,070.55. VIX: +15.69 = “Neutral.” Fear/Greed Index: 40, FEAR. Key support level to stay above this week is ~4850. SPX 5000 psychological level broken last week and recovered yesterday. Last week SPX, NASDAQ longest losing streak since October 2022. SPX historically due for a 5-10% correction. Cocoa Prices hit new high, ~+171% YTD. German 10-Year Bund and U.S. 10-Year Bond Spread hovering near widest gap in 4.5 years ~2.138 (Monday).

Question of the Week:

Will the demand and proliferation of Artificial Intelligence ("AI") create power shortages in the U.S.? Why or why not?

Disciplined Alpha,

MFA

**These two CLOSED proprietary Hedge Fund Updates are for informational purposes only. Our past performance does not guarantee your future results. Always do your own due diligence, research and suitability before investing or trading.

Happy Tuesday!

16 APR 24

Headwinds or Tailwinds Update (HoT Weeklies): 24w16**: Fund Updates + Market Outlook + Question of the Week:

Carbonwolf Alpha, Fund Alpha: 

$QALM #Fund Alpha (Futures Algo Scalping) 2024 YTD Stats:

Algo Krakens: Long, Current Win Rate: 52.17%

Algo Krakens: Short, Current Win Rate: 63.64%

Total Portfolio Performance for 2023: +167%

Total Portfolio Performance 2024 YTD:  +33.14%

Major Indices:

2024 YTD:

$DJI ~+0.29%;

SPX ~+5.90%;

COMP ~+5.69%;

GDOW ~+2.84%;

/CL $85.28

QALM = Quantitative Algorithmic Leveraged Momentum

TD = Trading Days

Most Recent ~3 Trades:

240415 /ES, Short +43.8% (Closed +0TD)

240415 /NQ, Long -205.0% (Closed +0TD)

240405 /NQ, Long -150.0% (Closed +0TD)

$Amarok #Fund One: (Derivatives), YTD:

2023 Closed Trade Win Rate: 2/2, 100%

Total Portfolio Performance for 2023:

N/A, temporarily closed.

Observations:

Tailwinds:

+American Capital Muscle. Most Megabanks double beat on earnings per share ("EPS") and revenue including: JP Morgan, Citi, Wells Fargo, Goldman Sachs, Blackrock, Bank of America and Morgan Stanley. Charles Schwab total client assets grew to $9.1 Trillion, ~+20% YoY. Goldman Sachs CEO, Solomon: "We're in the early stages of re-opening the capital markets." Blackrock now manages nearly ~$10.5 Trillion in Assets.

+Buy the Dip (and Chips). Goldman Sachs: "We would 'buy the dip' in global equities with our macro baseline of resilient growth but continue to recommend the Dollar as a portfolio hedge." Patient Capital, McLemore: "The path of least resistance for the market remains higher." Neuberger Berman Private Wealth: "Last week's [hotter-than-expected] inflation data isn't enough to derail the market rally." Samsung gets $6.4 Billion for Chip Production in U.S. Raimondo: "Plans to invest all Chips money by end of 2024."

Headwinds:

-Middle East Escalations.

Timeline:

07 OCT: Hamas attacks Israel, killing 1200, capturing 240

08 OCT: Iran backed Hezbollah attacks Israel

19 OCT: Iran backed Houthis fire missiles at Israel

27 OCT: Israel invades Gaza

19 NOV: Houthis attack Red Sea shipping

24 NOV: Six day ceasefire between Israel/Hamas

01 APR: Eilat, Israel hit by air attack

01 APR: Israel hits building in Damascus housing Iranian military leaders

14 APR: Iran attacks Israel

Iran lacks the capability to close the Strait of Hormuz. Iran may replicate 2019 playbook of attacking tankers, pipelines and critical energy infrastructure. Iran-Iraq political complex has a primary source of revenue: oil exports. Thus, it is in Iran's best interest for Oil prices to continue moving higher. Biden: "U.S. will not take part in Israeli retaliation against Iran." U.S. Secretary Yellen: "Fully expect further sanctions against Iran in coming days… All options to disrupt Iran's terrorist financing are on the table." If Israel does not show restraint in its response, oil prices will likely spike. Defense names up after Iran attack including: RTX ("RTX"), Northrop Grumman ("NOC"), General Dynamics, ("GD") and L3Harris Technologies ("LHX").

-Weakening Earnings Growth. Q1 S&P 500 YOY Earnings Growth slipping. On 01 OCT: +9.6%; On 01 JAN: +7.2%; 15 APR: +2.7%. China March data misses: YoY Retail Sales +3.1% vs. +4.6% est.; Industrial Output +4.5% vs +6.0% est.

Tesla to cut ~10%+ of its workforce. Approximately ~14,000 workers worldwide. Tesla CEO, Musk: "There is nothing I hate more, but it must be done. This will enable us to be lean, innovative and hungry for the next growth phase cycle." JP Morgan on Tesla: "…the sweeping TSLA layoffs announced yesterday, amounting to a reduction in crewed production capacity, should now leave no doubt that the decline in deliveries has been a function of lower demand and not supply." Formerly, a $1 Trillion market cap company, now if TSLA price stays below $157, market cap under ~$500 Billion. Fed Chief Powell: "Recent data have not given us greater confidence to cut… Likely taking longer than expected to achieve confidence to cut."

Sentiment. Investor Sentiment ending 10 APR 24 : Bullish: ~43.4%, Neutral: ~32.5%, Bearish: ~24.2%. JP Morgan:  "…We don't think the rapid repricing in Fed's rate cuts expectation changes our bullish view, as above-trend GDP growth still supports corporate earnings." Fidelity Director of Global Macro, Jurrien Timmer: "3-4% inflation could be the new 2%... Expecting a U.S. soft landing… Market rally is sustainable." Bank of America CEO, Moynihan: "Consumer spending has slowed, but is hanging in there."

SPX Technicals. Close: 5,051.41. VIX: +18.40 = “Extreme FEAR.” Fear/Greed Index: 38, FEAR. Key support level to stay above this week is ~5050 area, secondary area ~4850. 5179 and 5104 support areas broken last week.  /VX climbed to 2024 highs at ~20 handle before easing back slightly. Gold "GC" near all-time highs. As Dollar and Treasury Yields creep higher, commensurate negative pressure on equities is expected.

Question of the Week:

Will Israel escalate the Middle East tensions further? Or, will they ease back?

Disciplined Alpha,

MFA

**These two CLOSED proprietary Hedge Fund Updates are for informational purposes only. Our past performance does not guarantee your future results. Always do your own due diligence, research and suitability before investing or trading.

Happy Tuesday!

09 APR 24

Headwinds or Tailwinds Update (HoT Weeklies): 24w15**: Fund Updates + Market Outlook + Question of the Week:

Carbonwolf Alpha, Fund Alpha: 

$QALM #Fund Alpha (Futures Algo Scalping) 2024 YTD Stats:

Algo Krakens: Long, Current Win Rate: 54.69%

Algo Krakens: Short, Current Win Rate: 61.90%

Total Portfolio Performance for 2023: +167%

Total Portfolio Performance 2024 YTD:  +35.74%

Major Indices: 2024 YTD: $DJI ~+3.17%; SPX ~+9.23%; COMP ~+8.63%; GDOW ~+6.75%; /CL $85.32

QALM = Quantitative Algorithmic Leveraged Momentum

TD = Trading Days

Most Recent ~3 Trades:

240409 SPX, Short +850.0% (Closed +4TD, Green Dragon Wing Kraken)

240408 /NQ, Long -47.5% (Closed +0TD)

240405 /NQ, Long +700.0% (Closed +0TD)

240404 /NQ, Long -80.5% (Closed +0TD)

$Amarok #Fund One: (Derivatives), YTD:

2023 Closed Trade Win Rate: 2/2, 100%

Total Portfolio Performance for 2023:

N/A, temporarily closed.

Observations:

Tailwinds:

+Federal Funds. Taiwan Semiconductor "TSMC" gets $11.6 Billion in Grants and Loans from Chips Act. $50 million to train and develop local workers in Arizona. TSMC has already created ~25,000 jobs and has attracted 14 semiconductor suppliers for the state. Supports investment of $65 Billion in 3 greenfield labs in Phoenix. Goal is to manufacture the world's most advanced semiconductors and support 5G/6G communications as well as high-performance computing. U.S. currently manufactures ~12% of world's semiconductors and represents ~34% of the world's demand. -Source: McKinsey. Bloom Energy "BE" to receive up to $75 Million in Federal Tax Credits to expand Fremont, CA Plant

+March Jobs. March Nonfarm payrolls stronger than expected with +303,000 vs. +200,000 estimated. Unemployment Rate 3.8% vs. 3.9% previous; Average hourly workweek +4.1% vs. +4.3% previous; Labor Force Participation 62.7% vs. 62.5%; Global Venture Capital Deal Activity for Robotics and Drones trending lower since 2021 in favor of Artificial Intelligence.

Headwinds:

-Gold and Black Gold. Gold hits fresh highs as Central Banks increase hoarding. June Gold Comex "/GC" ~$2,370 per troy ounce. Costco sells ~$200,000,000 in physical gold bars online monthly for multiple months. May Oil Futures "/CL" ~$85.61 per barrel. Citadel via Financial Times: "Global oil market likely to be extremely tight." U.S. Strategic Petroleum Reserve at lowest levels since ~1985. Crude oil continues to push higher due to Middle East turmoil. Energy SPDR Index "XLE" ~+14.55% over last year. Rally started prior to Middle East escalations.

-Q1 Executive Insider Selling and Fed Hawks. Amount of Stock Sold in Q1 2024: Jeff Bezos, Amazon "AMZN" ~$8.5 Billion; Andy Jassy, AMZN ~$21 Million; Mark Zuckerberg, META ~$135 Million; Peter Thiel, Palantir ("PLTR") ~$175 Million; Frank Slootman, Snowflake ("SNOW") ~$69 Million. Ratio of inside sellers increasing dramatically recently. See chart above. Fed Governors Neel Kashkari, Christopher Waller, Lorie Logan, Michelle Bowman and Raphael Bostic reducing their Fed Rate Cut Outlook to "One cut, maybe none."

Sentiment. Investor Sentiment ending 03 APR 24 : Bullish: ~47.3%, Neutral: ~30.5%, Bearish: ~22.2%. JP Morgan Chief Jamie Dimon: "We are prepared for a very broad range of interest rates, from 2% to 8%... Markets seem to be pricing in at a 70% to 80% chance of a soft landing -modest growth along with declining inflation and interest rates. I believe the odds are a lot lower… Rates could surge as national debt rises…" "If long-end rates go up over 6% and this increase is accompanied by a recession, there will be plenty of stress -not just in the banking system but with leveraged companies and others." "Small changes in interest rates today may have less impact on inflation in the future than many people believe."

SPX Technicals. Close: 5,209.91. VIX: +14.98 = “Neutral.” Fear/Greed Index: 61, Greed. Key support level to stay above this week is ~5179 area. Apple "AAPL" breaking below 50-DMA and 200-DMA. Energy prices are one of the most important economic data points and they continue to push higher. Headline CPI report released tomorrow. Earnings Season to kick off on Friday with Banks. Investors likely to punish companies for double misses versus counter moves based on future company narratives.

Question of the Week:

Will the price of Gold break above $2,500 per troy ounce this year? Why? Or, why not?

Disciplined Alpha,

MFA

**These two CLOSED proprietary Hedge Fund Updates are for informational purposes only. Our past performance does not guarantee your future results. Always do your own due diligence, research and suitability before investing or trading.

Happy Tuesday!

02 APR 24

Headwinds or Tailwinds Update (HoT Weeklies): 24w14**: Fund Updates + Market Outlook + Question of the Week:

Carbonwolf Alpha, Fund Alpha: 

$QALM #Fund Alpha (Futures Algo Scalping) 2024 YTD Stats:

Algo Krakens: Long, Current Win Rate: 58.90%

Algo Krakens: Short, Current Win Rate: 63.16%

Total Portfolio Performance for 2023: +167%

Total Portfolio Performance 2024 YTD:  +22.04%

Major Indices: 2024 YTD: $DJI ~+3.93%; SPX ~+9.14%; COMP ~+8.19%; GDOW ~+6.51%; /CL $85.44

QALM = Quantitative Algorithmic Leveraged Momentum

TD = Trading Days

Most Recent ~3 Trades:

240328 SPX, Long +225.0% (Closed +2TD, Red Dragon Wing Kraken)

$Amarok #Fund One: (Derivatives), YTD:

2023 Closed Trade Win Rate: 2/2, 100%

Total Portfolio Performance for 2023:

N/A, temporarily closed.

Observations:

Tailwinds:

+Household Wealth. U.S. Household Wealth hits record high ~$156 Trillion. U.S. Household Wealth gains from stocks ~$4.7 Trillion -source: Federal Reserve.

Stock ownership by Wealth Group:

Top 10% ~86.9%

Top 1% ~49.4%

Middle Class Wealth Gains (since 2020):

+45%, ~$14 Trillion

Top 1% Wealth Gains (since 2020):

+49%, ~$8 Trillion (from equities)

+Commodities Rising. Copper Breaking Out. Russell 3000 Equal-Weight Copper breaks above 200-Day moving average; Relative to Ex-Copper Equal-Weight Russell 3000, Copper is outperforming. Copper has turned bullish. Gold pushing all-time highs also breaking out from previous resistance at ~2,050 area since ~2019. Energy Sector gains in Q1 2024: ~+12.5%. Cocoa soars to record high last week.

Headwinds:

-Minimum Wage Woes. California enacts $20/hour minimum wage for fast food workers. In effect for chains with 60+ locations nationwide. Impacts ~500,000 workers in CA. New York State raises Delivery Worker Minimum Wage to ~$19. International Franchise Association President & CEO, Matthew Haller: "These are small businesses and they're facing now mandated higher costs. And those costs are going to get passed on to the customer and will likely result in fewer jobs." Highest Minimum Wage in U.S.: Washington, D.C. ~$17; Washington State ~$16.28; California ~$16 ($20 for fast-food workers). Lowest Minimum Wage in U.S.: ~20 States $7.25.

-Tech Turbulence. Increased downside risk for Semiconductors. ETF SOX index coming off its best five-month return since 2000. TSLA biggest S&P 500 loser in Q1. Tesla's worst quarter since Q4 '22. Global EV Production, 2024E Share: ~9% Other; ~15% U.S.; ~22% Europe; ~54% China. TSLA YTD Performance: ~-29.06%. Citigroup downgrades entire Tech Sector.

Sentiment. Investor Sentiment ending 27 MAR 24 : Bullish: ~50.0%, Neutral: ~27.6%, Bearish: ~22.4%. Latest inflation data shows some stickiness. ISM Manufacturing Employment Index has been in contraction territory 11 of the last 14 months.

Morgan Stanley Private Wealth's 2024 Scenarios:

SPX Technicals. Close: 5,205.81. VIX: +14.61 = “Neutral.” Fear/Greed Index: 63, Greed. Key support level to stay above this week is ~5179 area. SPX in overbought conditions with Price Action over ~1 Standard Deviation over the 200-Day Moving Average. U.S. 10-YR T-Note trading in channel between ~4.3 and ~4.0 since last December. However, "toying" with 4-month high yield close. Japan's Nikkei falls more than 1% last week. U.K. GDP data confirms recession in 2023. BTC holds steady at ~$70,000 handle. Watch ADP Private Payrolls on Wednesday and March Employment Report on Friday.

Question of the Week:

Will Tech Stocks (Nasdaq/$COMP) end higher at the end of Q2 2024? Or, lower than 16,400?

Disciplined Alpha,

MFA

**These two CLOSED proprietary Hedge Fund Updates are for informational purposes only. Our past performance does not guarantee your future results. Always do your own due diligence, research and suitability before investing or trading.

Happy Tuesday!

26 MAR 24

Headwinds or Tailwinds Update (HoT Weeklies): 24w13**: Fund Updates + Market Outlook + Question of the Week:

Carbonwolf Alpha, Fund Alpha: 

$QALM #Fund Alpha (Futures Algo Scalping) 2024 YTD Stats:

Algo Krakens: Long, Current Win Rate: 54.39%

Algo Krakens: Short, Current Win Rate: 63.16%

Total Portfolio Performance for 2023: +167%

Total Portfolio Performance 2024 YTD:  +20.37%

Major Indices: 2024 YTD: $DJI ~+4.23%; SPX ~+9.09%; COMP ~+8.69%; GDOW ~+6.51%; /CL $81.24

QALM = Quantitative Algorithmic Leveraged Momentum

TD = Trading Days

Most Recent ~3 Trades:

240325 SPX, Short +45.0% (Closed +0TD, Gamma Butterfly)

240322 /NQ, Long +92.5% (Closed +0TD)

240321 /NQ, Long +55.0% (Closed, +0TD)

240321 /NQ, Long +92.5% (Closed, +0TD)

$Amarok #Fund One: (Derivatives), YTD:

2023 Closed Trade Win Rate: 2/2, 100%

Total Portfolio Performance for 2023:

N/A, temporarily closed.

Observations:

Tailwinds:

+Sector Leaders and Buybacks. Leading S&P 500 Sectors, Quarter-to-Date: Comm. Services ~+16%; Technology ~+13.5%; Energy ~+11.5%; Financials ~+10%. Month-to-Date: Energy ~+9%; Materials ~+4.5%; Comm. Services ~+4.5%; Utilities ~+4%. Consensus 12-month EPS growth rising to ~10% for the S&P 500 and ~20% for the Tech sector. Executed Buybacks: 2020 ~$538 Billion; 2021 ~$919 Billion; 2022 ~$950 Billion; 2023 ~$815 Billion; 2024 (est.) ~$925 Billion.

+Follow the Leader. Last week's FOMC left rates unchanged. Morgan Stanley: "The difference between our call for four cuts this year and the FOMC's three cuts will come down to core PCE inflation -we expect core PCE inflation to reach 2.4% this year (vs. FOMC at 2.6%)." JP Morgan: "Overall, [last week's] meeting supports the view that the Fed will initiate a gradual pace of easing in June." If the Fed cuts rates in June, the People's Bank of China, Bank of Korea, Reserve Bank of India, Bank of Indonesia, Bank of Taiwan and Reserve Bank of New Zealand will likely join the easing camp and cut interest rates around the same time or in 2H24.

Headwinds:

-DOJ vs AAPL. U.S. Department of Justice and 16 States sue Apple for "monopolizing smartphone markets," blocking innovative super apps, suppressing mobile cloud streaming services, limiting third-party digital wallets. AAPL response: "If successful, it would hinder our ability to create the kind of technology people expect from Apple -where hardware, software, and services intersect. It would also set a dangerous precedent, empowering government to take a heavy hand in designing people's technology. We believe that this lawsuit is wrong on the facts and the law, and we will vigorously defend against it." AAPL was formerly the largest company by Market Cap in the world. Currently top 3. AAPL down ~11% YTD.

-Fed Hawks. Despite Fed Chief Powell's dovish comments, other Fed Governors remain skeptical. Fed Governor Bostic: "The economy continues to deliver surprises and it continues to be more resilient and more energized than I had forecast or projected… And so as a consequence, I've sort of re-calibrated when I think it's appropriate to move." Fed Governor Cook: "Fully restoring price stability may take cautious approach to easing monetary policy."

Sentiment. Investor Sentiment ending 20 MAR 24 : Bullish: ~43.2%, Neutral: ~29.6%, Bearish: ~27.2%. CNBC All-America Economic Survey, Question: "Good time to invest in stock?" All respondents ~37% Yes; Financial Elites ~60% Yes; Who is Better -Biden or Trump? CNBC Survey, on Inflation ~+27 Trump; on Healthcare ~+18 Biden; on Middle Class ~+5 Trump; on Overall Economy ~+30 Trump; on Crime ~+28 Trump.

SPX Technicals. Close: 5,203.58. VIX: +13.24 = “Neutral.” Fear/Greed Index: 67, Greed. Key support level to stay above this week is ~5104 area. AAPL at "Death Cross" Formation. TSLA in "Death Cross" Formation since early February. Markets are closed on Friday and Core PCE (Fed's favorite indicator) prints on Friday so outsized reaction is likely on Monday.

Question of the Week:

Will Apple end 2024 higher or lower than today's price (~$171)?

Disciplined Alpha,

MFA

**These two CLOSED proprietary Hedge Fund Updates are for informational purposes only. Our past performance does not guarantee your future results. Always do your own due diligence, research and suitability before investing or trading.