I Have Little More To Say Than This...
Listen Closely
I haven’t felt all that inspired to write lately. In the last week or two, I’ve found it difficult to separate the signal from the noise in markets, so I’ve decided to just remain quiet and still as this volatility subsides. However, today, I listened to an episode of a podcast that I wanted to share with everyone, hence this edition of the newsletter. Before sharing it, though, let me provide some background on the content of the episode…
In this edition of the newsletter, I shared that I thought the S&P 500 would straddle 4,400, that the DJIA would straddle 34,000 and that the NASDAQ would straddle 14,000 for a bit. If you look at the performance of these indices over the course of the past two weeks or so, you’ll see that they’ve done exactly that. I also shared that I thought a melt-up would follow - and a bust would follow that. These are not my original thoughts, though. They are simply a part of a macro framework to which I subscribe. And that framework comes from David Hunter, a macro strategist with 40+ years experience on Wall St. (according to his Twitter bio).
Since the crash of March 2020, I haven’t seen anyone call what’s transpired in markets as accurately as he has, and I follow the work of a lot of macro strategists. Let me put this in context for you. You all know how much I like the work of Papa Raoul, yet if you asked me to choose between following either his calls or Hunter’s, I’d chose Hunter’s without question or hesitation.
So, without further ado, here is the episode that I suggest you listen to. David Hunter is the featured guest.
I would say that this is likely the most important podcast episode I’ve listened to in the last year or so. I can’t stress enough that you at least listen to it all the way through. (And if the Bitcoin logo on the host’s shirt is as cheesy and off-putting to you as it is to me, disregard it. It has little to do with the content of this episode.)
TL;DR - We’ll experience a melt-up to the the following numbers in the following indices:
S&P 500 - 6,000
DJIA - 45,000
NASDAQ - 20,000
After that, we’ll get an 80-90% crash.
Do I think what Hunter says in the podcast is gospel truth and/or is destined to happen? Not necessarily. Again, though, I just haven’t seen anyone call things as correctly as he has over the course of the last two years. I witnessed a lot of people scoff at him two years ago as he stoically predicted that the S&P 500 would rise dramatically from its low of about 2300 in March 2020 to new highs before the year was out. And rise to new highs before the year was out it did.
So, if I see the indices above resume their climb upward (and quickly at that), I will be taking my money out of markets long before those targets are hit.
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In other news, some people have asked me if I think the Stock 2 Flow model for Bitcoin is still valid. My answer is “yes”, more or less. However, where I think Plan B got it wrong is that the model is more of a general model for crypto and not just Bitcoin, which means that Bitcoin likely won’t hit the absolute highs on the model, but that the entire market cap of crypto will rise significantly and quickly before the upward portion of this cycle concludes. Willy Woo talks about this in this episode of What Bitcoin Did. I suggest listening.
Double lastly, this edition of the newsletter marks almost a year of my writing it. If you’ve found it helpful and would like to donate, you can do so via:
Venmo: @Francis-Corva
PayPal: @fcorva
Thanks!
Best,
Frank
Twitter: @frankcorva