Getting Macro Magic with the Reed's Report

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Every month Mark Boucher and Chuck Whitman do a Reed's Report where we outline the different factors that are driving the macro environment of the markets around the world. In this report we provide a detailed analysis of each of the different asset classes, top stocks to go long, top ETFs to look at to go long, top stocks to go short, and of what to expect in the coming months. Our students use this to frame their investment thesis and trading ideas for each month, and today we're sharing the macro view from our December Reed's Report Monthly Webinar. Watch the video to get true Macro Magic from the Market Wizards: 

As we go into December isn't a Taurus trend killing month it's a notorious year killing month. It's a month I've seen hedge fund managers lose their entire year in the month of December. It's always important to understand how December behaves. December is a wildcard every year in terms of how the markets behave, particularly as we start moving towards Christmas. From December 15th to 20th, through Christmas week, up till New Year's, the market can behave very erratically. One of the things you always want to remember is that when there are big trends on, you tend to have everybody on that move. Any kind of counter trend moves. Two things happen, you have players in the market who have profits, and they don't want to see those profits disappear. This means a loss of management fees and a loss of bonuses. They get hyper aggressive to protect their profits in the month of December, and so because there's this hypersensitivity to the protection of profits, you often get these violent one way moves that happened in December because everybody is liquidating to try and protect their profits. This often happens and then the trend resumes in January anew. As we go into December this month, we have a lot of markets that are in transitions. We don't have one of the things Mark and I spent a great deal of time doing which was trying to identify the top trends, but as we come into the end of this year, the markets that have been in top trends in the last three, four months, we see that they are all in a state of transition. When we look at this list, this list is actually very small. There's a couple common things you can see. One you can see is weakness in the Canadian dollar. This is showing up in these crosses euro to euro, CAD Sterling CAD, the New Zealand dollar Kiwi CAD and then on the downside you can see the CAD versus Swiss. The Canadian dollar is weak, but notice what's not in here. It's not in here versus the dollar. You can see the New Zealand dollar is in here, both as a long and as a long here against the Aussie dollar. There's not a lot here. Then when we look at outside of FX, you'll see we have natural gas. Natural gas is really interesting to me because natural gas is enormously high volatility, and there's a lot of fear going into winners surrounding natural gas. One of the things to always remember is if there's fear in the market and people are really scared of the upside and it's going down, it's probably going a lot lower; and then we have wheat and we have coffee. Wheat was making new lows today and coffee has been down near as lows. In the way WAM RS Report this is one of the things that's going to jump out when you are looking at the shifts in the last month. You can see Dollar Index is a leader on the downside: it was one of the strongest trends of the year and it really fell apart; crude is weak; and on the upside yen, which has been our favorite short all year long, you'll see the yen is leading and relative strength increasing on the upside along with the euro and the 30-year bond. You can see in the WAM row strength 20 You can see all of these that have been going down this year that are in this transition phase and rally in the sector ETFs. You see some big shifts to the sector ETFs XL E which has been a leader all year, it's still not bad. It's still up there, but it's been weakening. However, you can see XLK which has been beat up all year coming off the bottom, really strong emerging markets coming off the bottom, and then communications and staples coming off the bottom, and again, you can see these big relative strength shifts going on as the market is transitioning off the lows. With that, I'm gonna turn it over to Mark as we get more into the macro picture.

First thing I want to look at today is the yield curve. We've got the three months 10-year yield curve, and this is a two year to 10 year yield curve. A couple of things about this: generally when we have both the three months and the two year in inversion, like we have now, every single time that's happened since World War II, we've had recession somewhere in the next 12 to 24 months. Okay, so we've been inverted. The other thing that I want you to look at is the degree of inversion, right? We think of that inverted yield curve, it's like the gas pedal or brake of lending, right, because banks basically borrow short term and lead long term. When the short term rate is above, the long term rate doesn't make sense for banks to live, they're going to lose money, they're going to borrow short, loan longer, the long the short rates are high, so they borrow at a higher rate than their lending doesn't make sense. The lending stops and that's why it's sort of a cause and effect relationship, why an inverted yield curve leads to a much lower degree of lending that slows down the economy. The degree of inversion year two is more than we've seen since 2000 and then this third month is getting as high as 2000s. Generally, the higher the degree of inversion, and the longer it lasts, the deeper the recession. The other thing I want to point out about inverted yield curve, is that it's really important to understand these green lines are the bottoms in the market. Just coming after the bottoms in the market ... what I want you to see is you don't get a bottom in the stock market. Since World War II is when we've had an inverted yield curve, where the curve steepens to at least 100, and often much more than that. Well, what that tells us right now is we're not in an area where we would actually be looking for a sustained bottom in the market because yield curves are still heavily inverted. That means lending activity is being cut back substantially. That's going to weigh on growth ahead, and we haven't had the steepness that then brings you blending back in to start to turn the economy around. Realize that we have never not had a recession since World War II with this kind of developments. Both of these yield curves being inverted, realize that deeper inversions tend to correlate with bigger recessions and realize that the market is unlikely to bottom until the yield curve starts steepening 100 and up. We're not close to being there. Another thing that's happening this time that doesn't happen very often is the global yield curve is inverted. The global yield curve has been a good predictor of recession for the global economy, or for at least two thirds of the main economies in the system. Since World War II, what this tells us is that we're likely to have recession, and it's likely to be a global recession, and then the other point a lot of people bring up is once you wait until the yield curve starts to come back, you get most of the decline in the stock market, generally in bear markets. Look at when you started inversions, and how much more you had to come. We haven't really gotten that much since we started our inversion here, it's likely that we're going to go more, especially with the inversion being so deep. From a sort of a liquidity perspective, it's not likely that we're seeing a sustainable bottom period. The other thing I want to point out is the Taylor rule, which is something that policymakers use. And in fact, John Taylor wrote a book that basically recommended using this as a primary tool of the Federal Reserve for where interest rates should be. Look at where the Taylor rule says "interest rates need to go above 6% if we're going into recession", and we're not above seven and a half percent. It's possible that the Fed has more tightening than the market is realizing yet. The Taylor rule implies we need to go further than the analysts and the Federal Reserve officials are currently talking about. The other thing that it's important to know is what's happened to the savings rate. Savings rates exploded higher when we got all those stimulus cheques, but that's mostly been spent and now the savings rate is at new lows since World War II. Really? Okay, now think about the US economy for the past 20 years: it has really needed cheap capital savings and is one of the sources of capital. Without a large pool of savings. that's bad. Now that savings is depleted, if interest rates go higher, it's gonna be very difficult not to have further recession. We have a ton of economic and macroeconomic tools that we look at, that we compile that have had a very good track record at predicting recession. Here are a couple of them. One is leading economic indicators, going way below zero, and we've done that recently. The other is the leading economic index falling below its 18 month moving average. That's happened to both of these so they are now clearly predicting recession. We're going to be looking at a bunch of different macro tools. They're all in concert predicting recession for the most part. Here's another one. Chicago PMI falling below 40. See, every time that's happened, there's been a recession since World War II. It's called Eight of the last eight recessions and it's not had any misses. Since then, yet another tool we'll look at is PMI below this. They're all telling us that we're likely heading into recession pretty quickly here. The PMI isn't falling below 50, which forecasts recession. What I want you to realize is that, okay, so we've got leading economic indicators, we've got PMIs, we've got the yield curve, we've got a lot of things telling us that we're very likely to be in a recession and potentially a deep one. What's happened to stocks is they fallen on par, too, with bear markets that have not been accompanied by recession. It is likely if we do go on recession, we have more downside, based on just the average market fall when you get a recession and a bear market. Another thing I want you to notice is that we have models. These are models from Morgan Stanley that basically do a pretty good job of anticipating moves in both earnings and in leading economic indicators. Both of these are collapsing, they're falling very sharply which suggests that we're going to have earnings declines that could be very sharp and we're going to continue having a degradation in economic indicators ahead into recession. The normal earnings decline in or during the recession is a 26.5% decline in earnings. We've had something like 5% so far. We likely have a substantial amount of earnings declines coming up either starting in q1 most likely or in q2, we're going to start to get earnings declines. What generally happens when we start to get earnings declines is that analysts begin to say, oh, boy, we hadn't really anticipated as analysts are looking at double digit earnings increases next year. What happens just as you go into recession, the recession starts to bite and analysts trip all over themselves to revise their estimates lower. That is one of the things that leads markets to fall sharp. Then the other thing to realize is just looking at the average bear market with recession, we haven't fallen really to the normal average levels in anything in ITSM PMIs and unemployment and in earnings decreases.

Goldman Sachs does good chart here. They're talking about bear markets since World War II. They are cyclical, which shows a lot of the non recessionary bear markets and structural things like when we have a bubble of high degree of overvaluation, or we have structural problems in the economy. Well, we have talked about how we have a lot of structural problems in terms of supply chain problems, in terms of inflation, in terms of a lot of things. Normally, when you have a structural recession, you have the deeper bear markets over 50% and averaging over 40%. They last longer: instead of lasting an average of 15 months, they last an average of two years. Another thing that normally happens in a bear market, particularly one accompanied by recession, and this didn't happen in 2020, because as soon as we really before we started the recession, we got massive stimulus. It's a very, very short recession. Generally during recessionary bear markets, you get valuations that correct to more normal levels, although we've corrected to the by the way, this is the biggest valuation splurge, the highest valuations for stocks ever, including 1929. We have only just declined back to the highs of 2000. If we do have recession, and we're going to get a bigger decline in valuations that a company's in horrible bear market company by recession. Now, here's the bull argument, you always want to understand what if I'm wrong? We have fail safes and all kinds of things, because the markets can do anything. Usually, they follow pretty closely to what different theories say but we want to understand what the opponents are thinking here; the bulls are thinking they have a good point, a lot of times when inflation peaks, you get a bounce in the market. So we want to be watching for how sustained and how substantial that drop in inflation becomes and how the market reacts to it. My suspicion is that if we start to see recession really develop, the market will shift its focus away from Fed tightening, like it normally does towards how bad are the earnings going to be hit and how bad is a recession getting get? That's when you usually get that final phases of the bear market where it's actually about two thirds of the decline in stocks most of the time. The other thing to realize is that if you look at this nice study by Research Affiliates, it goes back and looks at since World War II, that times when inflation really flared, what went above 7% went above 8% for a number of months, which we've we've reached all those requirements. In those situations, in developed markets since World War II, and really many examples, it's taken many years for inflation to come back below 3%. Right now the market is discounting that it will take less than a year to get back down. The other thing that we've talked about before, which remains the case, you haven't had the normal capitulation that you get at the end of a recessionary bear market. Even the 2020 recessionary bear market, even though it was just as deep but very quick recession, we got the VIX rising above this 40 level approximately. That's where usually you get what shows you that kind of capitulation, you've really not had anything like that. This is because we really haven't had the retail investor capitulated yet, the retail investor has not capitulated and that's something that normally happens at the end of a recessionary bear market then leads to a bottom in stocks; we haven't really had that yet. Another thing to realize that's food for thought. Here's the 1929 and 1932. bear market: we had nine bear rallies of over 20%, all of which failed and led to new lows. That was from historic bubble levels that we've surpassed. Now, I'm not predicting we're going to have an 8029 to 32 bear market. What I want you to understand, you can have a lot of bear rallies that are very steep and still the market turns down and makes new lows in a bear market. This is kind of a bear market analog that basically shows bigger bear markets that accompany recession 1973 to 2000 and from 2007 to 2008. You can see that recently, it's followed the script pretty well so far. It's rallying a little more on this bear rally than usual. Basically we're about halfway done with major bear markets of downside potential, and we're about halfway done in terms of time. If we start sliding into recession, first quarter of next year or little past that this is going to be an indication that we're likely being more operative. Okay, so we can see that from a macro basis. It really looks like we're heading for a recession with pretty high liability. Then we've got valuation problems, we've got all kinds of situations that are likely to lead to further downside, but we want to always confirm that with internals, and internal technicals that we look at, these are our supply and demand indexes and they're a bit of a mess. What you need to see is that the main index in orange is still below its downtrend, the supply index moves, the opposite direction of stocks in royal blue, and is still above its long-term uptrend. The net of the two, it's kind of in a downtrend, but in a in kind of a trading range, none of that. The other thing I want you to notice is we haven't really had a very steep decline in supply during this recent rally, and we haven't had nearly as much of a rally in demand in this rally off the October lows as we had off the August lows. We haven't had anything like this big move in the spread that we had. From an internal basis, at least so far, that mid June to August bear rally has been quite a bit stronger than the bear rally we've had so far. Normally, when you get a major bottom, that's when you get some of the biggest moves and these kinds of internals in favor of demand and against supply and we're not seeing that yet. So far the internals are saying, "Yep, this bear market is likely continuing as well". Now, in August, the June to August rally, remember, we started getting up to the point where we were some a couple of these were breaking trendline, not a plurality, but a couple of these were starting to break trend line and we were starting to say okay, we really need to watch things, we're not quite there yet, you can see that all of the major internals remain below their long term trend lines right now. However, we're getting a little bit close. What I would say from the major internals is if the plurality of these broke clearly above their downtrend lives and broke their August highs, then we would have to throw in the towel and say, "All right, the internals are telling us something different than the macros". This rally may last a while maybe we'll have a double dip or something like that. But we're not seeing that yet. We're not even seeing the get again, we'll look at the S&P really has some pretty big resistance between 40/140/200. That is also at the trend line, and it's around this 200 day moving average, this is one of the areas along with this 43 to 4400 area that we would look for very early to peak. Start watching that pretty closely. The other thing that we like to have as a failsafe, just in case of bull market starts and we haven't really caught it yet, is we have these sort of weekly thrust indicators, and we have also daily thrust indicators, we have about 50 of those. Normally we get at least a dozen of those going off. In the first couple of months or so of the rally. We're not anywhere close to a dozen so far and our weekly thrust indications 1, 2, 3, 4 of them that we watch. If we were to get three of those to go above, we would start to say okay, but something's happening that we're not considering: so far, none of those have gone above. We're not getting indication from internals that our macro outlook is wrong.

What I would suggest people do is start watching for a couple of things that happen with a with a much more commonality in bear rallies. That is we get these five to 21 or even five to 34 Bar daily pattern double tops or head and shoulder tops that happen around 200 Day averages that around 50 day average of around a real resistance levels were at a resistance level is 41 4200 level. If we were to get some kind of a double top or head and shoulder top on a daily chart, five to 21 or five to 34 days in and then we break down with either 80% down volume or strong volume fraction down. That's what all these boxes are and they tend to happen much more frequently in barrel. It's the other thing that often happens. It's important to understand that you get false breakouts a lot in bear rallies. In other words, here we have High Wycombe, we actually make new lows and we break that high, but we can't hold it. We instead make a topping formation and start to break down again. That's a false breakout, then you find that false breakouts tend to proliferate substantially during bear markets. When you break above a level you don't want to just say okay, it's done. Shit it must be a bull market, you want to start watching it really carefully, is it going to fail here, as it often does during bear markets. Then the other thing that you can watch is this percent of the S&P above their 50 DMA, which is this indicator above here, then you can see that when it rises above 70, and then falls back down below 70, it's been a very good indicator that bear rallies are over. So far, we've risen above the 70 level, and we're still above it. I would watch for this to fall back and close back below 70 as one indication that the bear rally could be over watch this uptrend line carefully, it looks like we're possibly forming a head and shoulder top here with a shoulder here, let's see if we get some kind of a topping formation could get a double top. It could be at this 42 to 4300 level, it's possible that this rally could extend as long into February. As long as our major internals don't really tell us we're wrong. Our thesis that we're in a bear rally is likely to obtain and we're going to be watching for a reversal back down. You can see that the market has had a nice trend channel and we're back at it. Then we're back at this trend channel resistance at a point where we have this high volume node resistance to this 41 4200 level that is really a key level we'll be focusing on to see if it can hold or not ahead. The other thing, it's an IT audit, we had a lot of negative sentiment that lasted for a really long time here and got to extremes and we went to pretty much extremes in October as well. During the bear rallies, we have bouts to overdone levels. And we are now at overdone levels on the fear and greed index suggesting it sentiment has shifted to the bullish side. That's when you want to start watching for peaks and bear rallies. The other I really tasty. It's really important to watch the trends in bonds and the dollar here long bonds. This is the 10 year Treasury yield. Again, this broke out above a trendline than a monthly chart that had been in place since the 1980s earlier this year, suggesting that interest rates are not in a secular decline anymore. They're actually in a secular rise. First real major resistance we're going to be watching surround this 5.3 area we haven't quite gotten there. Here's on a daily chart, you can see we've got a pretty good uptrend channel that's formed. We're starting to come to one of these support levels here between about 3.2 and 3.6. We're going to be watching whether we can hold this level or not. It looks like inflation has probably peaked, but isn't coming down super sharply. It's possible that rates could come up double top or even make higher highs. If they do so, if we get a significant rally in rates further, that's likely to be taken as a negative by the market. It's really something to watch out for. If we hold this level and begin to bounce in rates, it's likely to be market negative. As rates have come off, the dollar has come out sharp, we've come off from 115 to basically 104 on the dollar. Now we are testing some really significant sport. We're testing a former breakout level here in this 103 to 104 level in this zone here and we're trying to bounce off that to starting today. I don't know where that rally is going to hold but really watch this 103 to 104. If we break down below this uptrend channel and the end is 103 to 104 level, it suggests that rates are really likely coming down more sharply and the dollar is going to be coming down more sharply and that's going to be less pressure on the downside for the market. If we hold and we begin to bounce off these levels, that will be renewed pressure for stocks or gels then I have talked about it last month but I just want to emphasize that you haven't had a recessionary bear market bottom in the stock market since World War II without a peak in bonds happening at least two and a half months beforehand and by at least we're talking two and a half months to as long as 24 months. Generally bonds peak and/or rates peak and bonds bottom at least two and a half months before you get a bottom in the market. What I want you to understand is really rates peaked a little bit after our stocks at the October lows, so we don't have any time on that two and a half months unlikely that the market is bottoming ahead of rates peaking. You can see that that was the case during the inflationary 70's as well, rates peaked at least two and a half months before stock market's bottom, even when stocks were rising because the inflation rate peaked. All right, so let's take a look at our monthly lists. We've got our ETF lists, it's got fewer energies, but still some of them and it's starting to get some industrials started to get some base metals, defense, health care, some dividend plays, some infrastructure plays solar energy, we've had sort of clean energy in there for a long time that's still holding up. Then it's got kind of a color coding for the major sectors and then these are the VB is for very bullish, though. The blacks are the ETFs that are showing the strongest, like on a 25 checklist of things that includes Zacks and shaken and some other tools as well. I like to kind of keep track of that and I put it on our list now. You can see we've got industrials, we've got healthcare and biotech, we've got some financials, mostly insurance, and brokers, we still have some energies. Refiners we have some infrastructures, dividend plays, staples and foods, and solar and clean energy. Then we've have now for the second month, some foreign stocks. Last month was the first month that we had any was Turkey; Turkey has done extremely well. We have Turkey, Mexico, Japan, and some of the European indexes. Most of those are fueled heavily but huge decline in the dollar, it's like an 8% decline in the dollar over the last month. When you have dollar denominated indexes, that means they're all rising by that plus, so it really helps support indexes. That's why that dollar trend is really important to watch. On the downside very negative that are in red. Really the main thing is real estate, also have some bitcoin also have some consumer recession areas. These are really the ones where it, when we get it, it looks like you get that break down and a five to 21 bar pattern off of resistance and you get the strong volume traction or 80% down volume coming off that that looks like it's a very clear correction over these are where you really want to pay attention to to sell short, at least hedge your exposure and potentially go net short.

On the long side, we do have some things that look better than we had really in the August rally. Defense PPA, for example, is making new all time highs and trying to break out new all time highs and so are some of the ultra dividend revenue vehicles. Those would be ones if you're looking for long's for your long exposure, those don't have upside resistance and are likely to continue higher if the market does continue higher. Biotech has had this big bus 10 month base breakout. This got a lot of volume in here you can see this is a huge HBN. What that likely means is even if we start declining, the ones that break out of substantial bases like this are likely to hold up better than the market as a whole. Then on the downside really we have some communications. F Comm we talked about last month also have Bitcoin. I really like if you're going to short Bitcoin, and we'll look at it at the end. I like Bitto because what Bitto does is it basically keeps rolling nearby futures. This is similar to what u and g does for natural gas. When you do that you basically keep paying for a premium, have that premium erode and then pay for it again, in that rollover. It's actually not a really good strategy for being constantly long and it has sort of sort of an embedded depreciation in it. If you're gonna consider shorting something in the Bitcoin space, I really liked this one, it has a lot of volume, it has options on it, and it has that embedded decline that will add to the decline that you get in Bitcoin and related entities. Then the other thing, of course, that we've talked about real estate is the bane sector that is showing up as still being very negative. So you've got potential topping formations, and you've got dozens of potential real estate ETFs that are in red that you can look at. If we get a signal that the correction is over, these are ones that you would go to first to look and see where is the best pattern that looks most reliable that I can get short with. I don't know long's is a bigger list this month, we got two pages of it instead of one, you can see here are potential bases. A lot of them a lot of potential bases here, these are the ETFs in red are the stocks that are still basing units. If the rally continues and gets more legs, you want to be looking for breakouts and knees. Then these are the post breakout plays they already have broken out. If you're a short term trader and you want to get capture some of the really super strong short term likelihood outperformance situations, you want to look in the post breakouts on the long side. Good example is FES just broke out, it's holding up relatively well even today compared to some of the others. This looks like a valid breakout. This is a breakout to new all time highs. It's a triple digit earnings groaner and it's one of the groups that we're looking at as a top group. If you are going to be considering long exposures, it's one on our list that looks pretty good. In terms of shorts, it's a little bit shorter of a list. It's got autos, internet, real estate, software, credit card payments, and consumer loans and gaming, mostly, that seemed to be among the weaker groups. We just had a breakdown in this enterprise software. Asana is new all time lows, it's a weak group, and it has earnings losses, it's likely to continue down. Even if the bear rally continues, it's likely to hold up relatively well on the short side. If we start to gain traction, on the downside, this should be a leader. All right, let's look at some commodities. One thing we talked about how gold is trying to form this false break down below really major support. We've done that now. One of the things that's really fueled gold is this news that came out that we had more central bank purchases of gold in the last quarter than ever before in history. We've talked about in the past how we felt that the sanctions that the West did on Russia were really a severe overreach. One of the things that they did that they've never done before in history is they actually seized the Russian Central Bank dollar denominated assets. We talked about how that was really an overreach, because think about it, if you're another central bank, that's not in the US, and you're you've got assets in your central bank, you just realize that dollar reserve assets could be seized by the US at the stroke of a pen anytime. That's not the kind of safety that you want for reserve assets. So what we've had in response to that is we've had BRIC nations trying to reform a gold currency to to denominate their trade in because they want to be outside of the dollar, because they're afraid to hold dollar assets. We've had China doing the same thing. Really, the big dumping of the dollar, which led to a major decline of over 10% in the amount of trade denominated in the dollar happened after 2014. 2014 is when the US led a trough in Ukraine, and tried to basically get a friendly government to the west to take over. We've kind of had a civil war since then. Ever since 2014, the Russian Central Bank used to have huge dollar reserves, and it's essentially sold off all of them. A lot of that has gone into gold. Now we see China's starting to do the same thing. China is concerned about Taiwan frictions and other problems and the US is sort of getting its companies to move towards French shoring and nearshoring instead of Chinese production for goods and so China looks at what we're doing to Russia and says you're not going to do that to me so they're dumping their dollars and they're buying gold at a record pace. Now we've talked about last month how gold tends to bottom about four months before stocks do because really it's it's recession often hurts gold because it just hurts all assets, people need liquidity, and they don't everything that's liquid. Generally, gold is really sniffing out, when is the Fed going to shift and move toward ease. Once that happened, gold kind of leads that charge to say that that's starting to happen. We probably don't see that yet there's still potential for a further leg down. This is a wildcard that could have gold bottoming much earlier than normal really want to watch this HBN be around $172.50. If we can get over that, when you can see we're carving out a potential head and shoulder base here, we can get over this HVTN, that will be a stronger indication of a more lasting bottom, and a signal to add some gold. The other thing I think is really important to watch, just on an economic basis is what's happening with oil here. Oil has been extremely volatile in the last month along with natural gas. We talked about there's a sort of 7577 support level, if it really breaks down and follows through below that that likely means if the oil market is discounting a recession that's deepening. Whereas if we get over 9620, that likely means we got supply problems that are overwhelming concern about recession. Right now, we're retesting the 7577 level, we've come off of this HBN, we've made a sort of a lame attempt to try that 9620 and couldn't get there really important if we break down below these recent lows, and start following through on the downside that would be in recession imminent, the oil market really confirming that. Then you can watch the energy Spyder as well Excel-E it's in a range. Again, if it breaks to the highs that will suggest that oil is going to be at least holding up. If it breaks to the downside, under 8720 on a closing basis, and oil breaks down on that 75, you've got a lot of confirming evidence that we're heading for a recession fairly quickly.

All right. Bitcoin has broken down and we've got it written, we've got this failure of FTX. The government is trying to use that to do all kinds of regulation. This is a real confidence problem. The degree of loss assets looks like a lot of those assets where it's been supporting Democrats in the last election. Regardless of that, the missing assets just keep growing. It was first 3 billion and now we're talking about 8 billion and potentially more. That means the repercussions we've had now sort of a first wave of secondary bankruptcies happening among cyber currency firms that had, you know, obligations from FTX. That's probably not over and there's potential for another leg down. Now we form potentially on a weekly chart basis. This pattern I really like which is a breakdown and immediate flag. If we told pretty much these prior lows at 17. Five as resistance and we break down and close to new lows. I think that's a great sell signal and it's fairly low risk, at least for Bitcoin. You could look at Bitty and some of those other things as vehicles that could give you some real fuel. If we're if we're heading down into recession and cyber currencies are leading.