Beware the ides of March!
As the soothsayer warned Caesar, I will warn you that this low-volume, BS rally can easily reverse itself – especially in light of the upcoming data. Perversely, the Atlanta Fed’s GDPNow projection of NEGATIVE 1.5% for Q1 (which we noted on Friday in our Live Member Chat Room) has reignited speculation that the Fed will be cutting soon but the Fed does not have a mandate to protect the Stock Market – especially when it’s still trading at 26 times earnings…
Notice there are NO volume bars in the above hourly chart. This rally came 15 minutes into the close on Friday and, over the weekend, President Trump said the US would establish a “Crypto Reserve” which means, in essence, using US Funds to buy up a bunch of crypto coins that the President and his friends have already invested in like SOL, which is the platform Trump’s coins are based on.
Bitcoin has blasted back from freefall to $78,000 back to $93,000 again – on very thin weekend volume with surprise pick, Cardono, gaining 50% on Trump’s seemingly random decision to include it as a “Strategic Reserve” of the United States Treasury.
As we know, Trump owes a lot to the Crypto Bros who funded his campaign and the payback had been underwhelming in Trump’s first month as crytpo prices actually had their worst performance since 2022, when the Biden Administration wisely said “Not in our banks!” To be fair, the Biden Administration also refused to make Pet Rocks, Goldfish and Beanie Babies a reserve currency – those guys just didn’t seem to like anything except the legal tender currency of the United States of America….
“For a president who thrives on being the market’s hero, last week’s risk asset performance was anything but inspiring,” QCP Capital said in a note on Monday. “The political calculus was clear — Trump needed a win before his approval ratings start slipping, a metric he likely takes very personally.”
Even funnier, the stated plan to fill the US reserves is the Trumpiest thing ever as the OFFICIAL White House Statement declares that the US Crypto stockpile will be “potentially derived from cryptocurrencies lawfully seized by the Federal Government through its law enforcement efforts.” So go ahead and invest in Bitcoin – Federal Agents stand by to seize it if you look at Trump sideways…
Meanwhile, I’m not sure if “Sic gorgiamus allos subjectatos nunc” should really be the Treasury Department’s new motto as it’s already taken by the Addams Family (“We gladly feast on those who would subdue us“) – though I guess that does sum up our new Oligarchy to a tee.
Speaking of subduing, this morning I’m hearing the non-stop spin on CNBC glorifying the way Trump and Vance roped and hog-tied Zolenskiy in the White House on Friday and how it was the right thing to do and how it’s unrealistic for Zolenskiy to expect Russia to pull out of the parts of Ukraine it invaded. One woman (with a Russian accent) even explained how Russia had 70% of the Ukraine at one point in the war and now they only have 20% and Zelenskiy should be happy with that. WTF???
You know folks, not to compare Trump to Hitler but this is exactly what Chamberlain did with Hitler when he invaded Czechoslovakia and the reason you don’t remember it was Czechoslovakia is because APPEASEMENT DOES NOT WORK and Hitler continued on to take most of Europe in a war that cost tens of Millions of lives. Unlike Hitler (who was 51 at the time), Putin is 72 years old – a child compared to Trump but how long do you think he’s going to wait until his next conquest?
And WTF is with Trump’s demand that Ukraine not join NATO? Why not? What possible logic could there be other than helping Vladimir Putin?
Of course Trump is right, Zelenskiy has “no cards” in the US/Ukraine relationship as the card he used to have was an alliance with the US, which has, since its founding, stood up to oppression around the world. But we abandoned that moral high ground with Trump’s re-election (and it was not a trick, it was the platform!) and Friday’s meeting ended the alliance, not just with Ukraine but with Europe as well. As noted by Bloomberg: “America’s Loss of Soft Power is Putin’s Gain“.
Of course, Trump being Trump he was unable to see Ukraine’s Europe card because he doesn’t believe anyone else matters but the European Union has 450M people (330M for the US) with a $20Tn GDP ($28Tn for the US) and they ARE capable of supporting Ukraine (37M, $179Bn) against Russia (150M, $2Tn GDP) and that is what has been going on all weekend. Zelenskiy has said he would meet Trump again for “serious talks” – let’s not hold our breaths…
Anyway, back to the markets, which are up about half a point in the Futures so we might test those strong bounce lines this week but it will come against some pretty scary data-points. So scary, in fact, that the Fed’s Williams, Bowman, Kugler (x2) and even Chairman Powell are ALL scheduled to speak after Friday morning’s Non-Farm Payroll Report – so I’d expect that to be some sort of disaster.
This morning it’s PMI, ISM and Construction Spending. Motor Vehicle Sales tomorrow, PMI, ISM and the Beige Book on Wednesday, Job Cuts and Productivity and Friday we get Consumer Credit once the Fed is done spinning NFP – an interesting week ahead.
Surprisingly, earnings are still a thing – mostly small caps now but a few biggies thrown in to keep it interesting like TGT, FL, KR, JWN, M and COST this week on the Retail side and MRVL and AVGO representing Tech. If we can get over those Strong Bounce Lines on our charts, we have our Watch List Stocks ready to trigger but VIX 18.55 suggests there is no reason to rush in at the moment.
So strap in folks – it’s going to be a wild week!
