Katie Stockton’s technical indicators show concerning weakness in stocks, with breakdowns at April lows and no breakouts, warranting a bearish short-term bias and hedging strategies.
The market’s bullish sentiment is fragile, with investor polls, the VIX, and junk bond demand indicating a bullish reading close to extreme levels, making it vulnerable to negative headlines.
Katie’s models suggest a likely downside movement in stocks, potentially catching many current longs by surprise despite Wall Street’s optimistic outlook.
Defensive sectors like consumer staples, real estate, healthcare, utilities, and energy are oversold and flashing counter-trend indications, suggesting a defensive sector rotation may resurface soon.
Fairlead Strategies’ portfolio has moved to a 25% risk-off position, including short-term and long-term treasury positions, gold, and a small cash allocation.
When the S&P loses 15%, Katie’s TAC ETF aims to lose only single digits, offering a more favorable risk-reward profile for long-term investors.
Katie’s team focuses on trend following and technical analysis, using indicators designed to eliminate noise from headlines and smooth price action for a mathematical approach to market analysis.
The team analyzes ratios like the gold-silver ratio in the same way as price, using technical indicators to identify opportunities and relative performance rather than relying on historical correlations.
Katie is bullish on precious metals, favoring gold for its long-term uptrend and good momentum, and silver for its intermediate-term resistance level breakout.
The team expects yields to move higher in the long term, with the current range sideways to lower due to a cyclical down move, but long-term indicators gradually showing improvement.
Semiconductors are used as a leading indicator to time long-term entries, as they are long-term oversold and have higher beta compared to major indices.
Katie advises investors to respect the long-term loss of momentum in the market, as it increases the risk of big drawdowns and creates a higher risk environment.
Technology has allowed for more flexibility in educating children about finances, with apps enabling partial stock purchases and real-time market tracking.
Katie’s parting advice for retail investors is to focus on risk management and maintain a long-term perspective, avoiding overreaction to short-term market movements.
The US’s entry into the Israel-Iran war was motivated by a combination of factors including regime change, dominating headlines, and aligning with winners, influenced by conflicting information and internal divisions.
Israeli attacks on Iran’s nuclear facilities were a response to the Iranian nuclear program’s progress, intended to pressure the US into action and address Israel’s national security concerns.
The US’s limited strike on Iran’s nuclear facilities aimed to pressure Iran into negotiations but failed to achieve its objectives, highlighting the limits of air power in imposing defeat.
The conflict has potential to destabilize the Middle East and spark a wider US-Iran conflict, with significant economic and strategic consequences for the region and world.
The US and Israel have different strategic imperatives, with the US seeking an offramp while Israel aims to weaken the IRGC as its center of gravity.
Iranian response to US strikes is likely to be performative to deescalate, as they cannot afford to provoke a full-scale conflict but must show some form of retaliation.
The Israeli theory of victory focuses on weakening the IRGC and ending the nuclear program, giving them time to work towards their goals rather than immediate regime change.
The American perspective prioritizes reducing exposure to risks except for dealing with China, reflecting their position as a global power with strategic outlook beyond the Middle East.
Iran’s strategy of exploiting the Israeli-Arab conflict for imperial ambitions by supporting Hamas and Hezbollah has maxed out and is now failing.
The worst-case scenario for the US in the event of Iranian regime collapse is a contiguous shatter belt from Afghanistan to the Eastern Mediterranean, affecting regional stability.
Israeli air force superiority over Iranian airspace is detrimental to the regime regardless of faction, with Israelis hoping their actions will trigger internal change.
While the Iranian regime is morally and politically bankrupt, alternatives offered by foreign actors are not liberation but collapse, emphasizing that bad government is survivable, but no government is not.
The BRICS institution is expanding to 19 members, including major commodity powerhouses, potentially forming a bipolar world against the collective West.
BRICS is becoming a commodity superpower, with new members responsible for 50% of global oil exports and significant food production capabilities.
China plays a larger role in BRICS, coordinating with Russia to project power towards the Global South and challenge Western competitors.
A BRICS common currency linked to gold is in development, with one unit defined as a weight of gold, potentially challenging the US dollar’s dominance.
BRICS has established a $100 billion contingent reserve arrangement and a New Development Bank, mirroring the IMF and World Bank respectively.
The strength of the US dollar is driving BRICS countries to conduct transactions using alternative currencies, facilitating the bypass of US sanctions.
The BRICS currency, defined by weight rather than value, will float on the dollar-denominated gold market, making BRICS countries “free riders” while dollar investors maintain the market.
Local currency settlements and barter operations within BRICS are becoming more prevalent, bypassing US sanctions and isolation.
The BRICS expansion is occurring alongside other China-led formats like the SCO and Belt and Road Initiative, indicating a significant global system transformation.
The US sanctions policy, a key tool of geoeconomics, is inadvertently strengthening BRICS as countries like Russia and Iran find ways to circumvent restrictions.
A potential global system transformation is anticipated in 2025-2026, with the BRICS currency linked to gold as a possible alternative to the US dollar.
The US political landscape’s dysfunction, including potential impeachment proceedings and a new president in 15-16 months, could significantly impact global economic policies.
BRICS holds 100 meetings annually, covering diverse issues from trade to women’s rights, indicating a comprehensive approach to global governance.
The BRICS formation appeals to the Global South due to the colonial past of Western powers, creating a perception of alternative power structures.
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