An Accelerating Buy Climax

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  1. Although, the large wave in issuance we’ve seen over the last 12-months doesn’t help the longer-term picture, as this raises the supply side in our Equity Market Supply & Demand Model.

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  1. Last week we saw an end to the second longest streak of VIX trading over 20 (246 days to be exact). Chart from @vixologist who is also a great follow on the twitters.

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  1. Via BofA… “At last, an affordable tail risk hedge: the surge in option buying noted above has pushed prices for upside calls to the most extreme levels relative to puts in at least 20 years, as our derivatives strategists have noted. Investors looking for tail risk hedges may be able to buy option collars (buying a put and selling a call) at the most attractive levels in decades.”

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  1. The incredible strength underlying this market rally means the downside is likely capped once we finally do enter a corrective phase. @edclissold points out that “The Nasdaq has lots of “fallen angels” so the A/D line has a downward bias. Even in the 674% rally from 3/09 – 2/20 the A/D was rangebound. It’s broken out to its highest level since 3/08. The 706 new highs is a record back to 1979. Incredible technical picture. @NDR_Research”

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  1. The total market cap of all major cryptocurrencies just surpassed the $1trn mark. For reference, the estimated total market cap of gold is $9-$10trn.

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  1. Sentix’s Bitcoin Sentiment indicator is at its highest level since Nov 2020. In the past, this level of enthusiasm has either marked an intermediate top or preceded a point of major acceleration.

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  1. The improving “strategic bias” towards bitcoin amongst funds, as well as the surprisingly low premium to NAV in GBTC, suggests to me that it’s probably the latter — this would also fit with our accelerating buy climax thesis.
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Disclaimer: All statements are solely opinions and are for educational purposes only.

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