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I am working on a really exciting new enhancement to Signal2Noise’s quant stack that will help me lift my strategy game to a new level. The hours are flying by, but I am making good progress. Stay tuned.

If anyone reading this letter knows someone in the FX and/or Futures space with an exceptional track record. I have an allocator who I have worked with for years who is looking to allocate institutional amounts of capital. The criteria he is looking for are quite simple but bloody hard:

If the above rings a bell, be in touch.

I noticed this divergence in breadth between the S&P 500 and the Nasdaq. If you look at the S&P 500, it is looking strong, with the cumulative 52-week high-low line at ATH (all-time highs), with the price chart nearly at an ATH. What I found interesting is that the Nasdaq cumulative 52-week high-low topped years ago and is falling hard. I think the reason is the rally has been so concentrated in a few stocks, the Magnificent Seven, with many others not doing so well.

Let us chalk this down to another weird anomaly and keep a watchful eye.

When the biggest money managers in the world sound the alarm bells that the debt is just too much, you know you need to listen and plan accordingly. We have been hearing for more than a decade now that the debt is too much, and things have been supposedly fine. It reminds me of the boy who cried wolf.

Ray Dalio is another, along with Jamie Dimon from JP Morgan and even Elon Musk, to name just a few of the big hitters voicing concern. This chart by Bravos Research highlights just how large a portion of the US GDP is going to debt servicing and a good reason why Moody’s yesterday downgraded the US from AAA.

Meanwhile, interest rates in China continue to drop.

And even more astounding is the Swiss 5-year bond yield is now negative.

I wrote this screener a long time ago to look for fading momentum. The idea is that the long RSI should be above 60 to highlight a long-term trend, and the short RSI should be below 60, signalling fading momentum. While the table of returns for 1, 3, & 6 months doesn’t suggest this is the best timing model, it still highlights the fact that momentum is fading. Most global stock indices are triggering a signal; I just chose a few to give you a feel. I guess my overall theme is that this current rally seems to be running on fumes.

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