The Seven Day Scope (Snipers Only)
All the content that you could ever need!
The week of content… not much has changed for us. We are still riding our trends and sitting on our hands for the most part.
So this week I put together 5 interviews for us.
Richard Brennan-https://youtube.com/live/QSNGASWXfmc This is the way you want to think about markets and trend following. This was a great interview filled with wisdom and life lessons. Really this was a beautiful conversation.
Moritz on his Hedge fund Performance I always love talking to Moritz. The man is so cool, calm and collected. Another systematic trend following trader.
Jason Shapiro and a short segment with Jeffrey Hirsch-Do I need to say more. Jason is one of my favorite people to chat with. He really understands market psychology. He is very passionate about it just like me. He also has a great first name. Jeff is on for the first 15 minutes and we run through his seasonality models and how he is trading this election cycle. This is from our live show with Better System Trader that is on every week at 2pm EST.
Yesterday we posted a podcast on here (if they are not lives you will receive them early) with Mr. Breakouts and it was one of the deepest interviews that I have ever been a part of. This was so much fun to put together. I hope you all enjoyed. Check our podcast section for the video.
And finally.
Today we did a live with my buddy Brian G on Regime Change. This will talk about why we think we are getting in to a new regime and how to trade it!
I put a lot of time in to doing these videos. Nothing will expand your mind like listening to discourse between people who do the thing that you want to do. If you already know an abundance of things, you will expand your mind by listening to other professionals. You never want to stop learning.
Ok so what happened this week?
Performance YTD
SPX sectors YTD
The dollar is the most important headwind that we need to keep an eye on right now.
The cumulative fund flows are expressed as a percentage of the assets under management (AUM) at the beginning of the year.
The substantial amount of money market funds held by US households indicates that they have significant purchasing power for equities. Currently, US households own $3.8 trillion in money market assets, marking a record high that is $1.5 trillion higher than pre-pandemic levels.
From Goldman "We expect households will be net buyers of $100 billion in US equities in 2024. Households are the largest owners of the US equities, directly holding 39% of the market. Household equity demand has typically been strongest during periods of solid economic growth. Despite elevated equity allocations, we expect that record levels of money market AUM, falling cash yields, and the strong economic outlook will drive households be net buyers of US stocks in 2024."
I know everyone is getting annoyed with me talking about the energy trade but it is where the value is. At the moment. Overall the sectors that are beating the SPY in a 5 week period is energy, materials, industrials, utilities (I would not touch them with bonds struggling) and financials. This is the reflation trade showing you where to be. Next week I am going to make a spreadsheet on what to buy during each market regime.
Yields are moving higher. Look, we talked about the Fed in our subscribers report this week. It is incredibly important to sit on your hands during Fed day. Mainly the reason is because we don’t know how the market will react to the short term news.
At the moment the trend is up and commodities are strong. This is pushing yields higher. Be patient more will be revealed.
Everyone is freaking out about this bitcoin pullback and the outflows in the ETF market and so on. Once again we can not predict where we end up or when a trend ends. This is a 17% pull back which is normal for this asset. Make sure to have your exit strategy in place and wait patiently for your stop or exit signal to get hit. We are at major resistance. This should be expected.
When lumber moves up or down it has a tendency of continuation. We are long lumber and we will keep you updated but this is a major band squeeze break out signal. This trade has a 71% win rate in this specific asset which is very high win rate for a long term trend following strategy.
Copper is the second most important thing to watch. It gave back 3% this week after a major move last week. This is normal but be careful if we see more follow through to the downside.
Oil is the most important thing to watch right now. Slightly up this week. Fed week is just a bunch of noise. Wait for next week to really get a feel for where this market is heading.
Also Kevin Green and I just did an interview on the Fed. I will post that this weekend so you can know what we are thinking.
Stay informed. Stay resilient. Against all odds.
Warm regards, Jason Perz
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