Hey all, MktContext here. From time to time I look for incredible Substack authors in the finance space to share their thoughts with you. As traders, it’s important to hear different perspectives and round out our views. My good friend Jason Perz is a professional portfolio manager, commercial real estate investor, and retired pro BMX rider. His newsletter, Against All Odds Research, consistently offers insightful quant signals and market trends. Please enjoy today’s guest post.
Welcome to this week's letter. Going forward I will start talking about my “personal” portfolio. We are going to start taking more speculative bets using options and more. You guys have seen a few of these over time but some major developments have happened and the discount to premium ratio is looking tasty.
She is just a model and she looks good and we are seeing some major moves setting up. Today we will talk about a few. For paid subscribers, we are going to put these trades into action. Now that we have the reversal system going public (Holy Canadian Dollar), it’s time for the next step, those who have seen my posts over the past decade (before I could not talk due to regulations) you know what I mean.
At AAO
You will not learn…
How to perform macro miracles!
You might come down with…
Systematic rage or regime dementia. But we are here for you!
You will learn how a professional trader does this. That is what I offer.
Today let’s talk about the fact that more stocks are moving up then moving down and where you want to position yourself and how we take advantage of it.
”I never expected a bowl of cherries
I'm just a Virgo trying to find my own version of the Virgin Mary
And when I let them carry me to a cemetery
I wanna be buried with a pocket full of clarity”
-Atmosphere
Equities (What to expect)
Global Advance Decline Line continues to make new highs. As I said earlier. If the AD line is making new highs, stocks follow.
If you ever want to get me talking. Get me talking about global macro trading. It is the most fascinating thing in the world to me. I understand that my posts are all over the place or so it might seem. I know I am mentally divergent. I know that this leads me to make so many weird connections.
I will have friends that talk to me and say something about a dragonfly. I will start talking about how lions are known as great hunters but they have a 40% average kill rate (Like most traders weird and not weird).
This will make my friends think that I am not listening to them but in reality I am making that connection because a dragonfly has the highest kill rate.
It is the same way with global macro. I can’t think about breadth without looking at 5 currencies 10 commodities and every sector. Oh and then BONDS… It is endless. This is why systematizing my analysis has been crucial to my success.
All of the smart guys in the room continue to say that breadth can’t expand. I have no idea why that would be a thing. One, there is no can’t in trading. When someone says the word can’t, you should always think it is possible.
I say that word sometimes and I immediately laugh at myself for how ridiculous I sound. Anything can happen I follow my system and methodology and I let the chips fall where they may.
I don’t know anything about anything, my emotions could drive me in the wrong direction at times. We have to be open minded at all times. Don’t get stuck on being right and never say “that cant happen”. If you do, fade yourself.
Being right does not equal making money.
Going forward I am going to get into my global macro bag. I have been holding back certain things because (who will trade that or if it is possible to trade these things) but now I think all I can say is what I do.
I hope that people make money and learn from it because I am a kid who grew up eating ramen noodles for dinner. Cutting lawns all summer to try to go to summer camps that I never got to go to and never made enough money to go to. I also had gym memberships to be able to shower because I was sleeping in the back of my ‘89 Chevy Caprice.
What I am saying is that this is how I trade, it is applicable to anyone. Yes certain things took time to gain more capital but I have been this person from day 1.
Nasdaq/Small caps. We can’t say if that is 100% a top yet but the probabilities are high that it is. We still like small caps here. We still like banks here. We still like industrials here. But as long as it is in an uptrend, stay long technology.
Bonds (What it means for stocks)
A story about relative strength.
Just because something fell the most out of every asset class, it does not mean it will be the leader. Bonds fell the most relative to stocks and commodities since 2020. It has not caught up yet. We have been bearish as hell on bonds for years. Shorting them from 2020-2023.
Now, not so much.
Bonds are breaking out of the cloud for the first time since 2020. We have signals for futures across the curve.
SOFR-Two year-Five year-Ten year-Thirty year and call options on the 30 year.
Next week we will talk about some new options trades on the futures market.
Keep holding your long term calls.
Energy (Oil-Do something)
If this bond move is really going to take off it will be driven by slowing global growth. If that is going to be the case then oil will start to give us sell signals.
How do we take advantage of it?
At the moment I would suggest looking for call options in a couple areas.
Bonds
Precious metals
1-2 year options on CCJ the uranium miner.
Paid subscribers, we have some things to talk about.
Taking Advantage of Macro Markets
I don’t care who you are or what time frame you trade. Hell, your goal should just be to make money. Understanding global macro and systematic macro will enhance your trading. Macro is back!
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Looking forward to bringing you more insights next week. Until then, stay informed and stay ahead.
Until then my friends!
Against All Odds Research
Stay Connected:
YouTube: Against All Odds Research Channel (@againstalloddsresearch)
Twitter: Jason P (@jasonp138)
Substack: AAO Research
Disclaimer: This publication is for educational purposes only. The authors are not investment advisors and nothing here is investment advice. Always do your own due diligence.
Interesting thoughts and a good article. I think small caps could outperform the Nasdaq for a bit here but I also think it's probably short lived. The longer term trend is likely in favor of Large Caps and the Nasdaq as the digital age continues to play out and the market continues to concentrate around the largest companies. The rich get richer as the old saying goes.
Thanks my friend. Hopefully you all enjoy it!