It’s Time To Get Back On The Uranium Bull… [Dirty Dozen]

“You can make a good living selling hype, but you can get rich by buying truth.” ~ Larry Hite’s book “The Rule”

In this week’s Dirty Dozen [CHART PACK] we look at potential sell signals firing but contrast that with neutral-to-slightly-supportive internals. We then discuss the ongoing rotation we’re seeing across sectors, another long setup in BTCUSD, and a bottom in the Uranium pullback, plus more…

1. No new primary signals triggered last week though our weekly Nervous & Numb signal is a hair’s breadth from triggering a sell signal.

2. N&N’s current reading sits at 1.96 (yellow line) and a sell signal requires a reading of 2 or above.

3. The SPX tends to see below average returns with greater downside variance following a sell signal. But the N&N by itself isn’t a perfect timing tool and needs additional context.

4. The Qs broke down from their coiling 2 week wedge on Friday. It’s in a Bull Volatile regime where heightened volatility (hence the name) is to be expected.

We dramatically reduced our risk last week after being leveraged long all year. We haven’t seen enough to turn outright bearish. We’re more neutral to slightly bullish with expectations for greater chop in the near-term. So we’ve been adjusting our book accordingly.

5. We’re seeing some negative divergences in our market internals (ie, high vs low beta, QQQ vs SPY, etc…) but overall they’re in neutral territory according to our aggregate oscillator.

6. And one of my go-to internals (LQD/IEF) broke out to new highs last Friday after being in a sideways range for the past 4-months. This suggests that the overall backdrop is still favorable to risk assets, albeit one that’s deteriorating slowly at the margins. And we’re likely seeing some rotation away from high beta (tech/growth) into real asset plays (commodities, materials, etc..).

7. The BofA’s Bull & Bear indicator inched up a 1/10th of a point from last week but remains in neutral territory.

8. We can see signs of rotation in our returns heatmap below. Oil and gas with the best performance last week and improving relative momentum over the past month and quarter as well, while semis starting to lose some steam.

9. Here’s the latest CoT speculative positioning on a 6-month oscillator basis. GBPUSD and silver have the most crowded large specs at the moment. While heating oil, Soybean & bean oil, and the Nasdaq 100 have the lightes.

10. We got stopped out of our long BTCUSD position last week. But we’ve now seen a pullback reversal to the midline which gives us a good place to put in a buy stop right above Sunday’s highs (stop right below its lows) and see if the market pulls us back in.

11. NFIB small business survey shows businesses are becoming more concerned about poor sales (white line on top chart) which suggests a deceleration in the labor market (orange line = unemployment rate) (h/t @renmacllc).

12.  We took profits on our uranium holdings back in early February when we saw the technicals start to deteriorate amidst a backdrop of retail euphoria. Both have since improved in the bulls favor and we remain extremely bullish the sector for fundamental reasons.

The latest price action provides us with a good entry point to get back in with large size and small risk.

Thanks for reading.

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Brandon Beylo

Value Investor

Brandon has been a professional investor focusing on value for over 13 years, spending his time in small to micro-cap companies, spin-offs, SPACs, and deep value liquidation situations. Over time, he’s developed a deeper understanding for what deep-value investing actually means, and refined his philosophy to include any business trading at a wild discount to what he thinks its worth in 3-5 years.

Brandon has a tenacious passion for investing, broad-based learning, and business. He previously worked for several leading investment firms before joining the team at Macro Ops. He lives by the famous Munger mantra of trying to get a little smarter each day.


Investing & Personal Finance

AK is the founder of Macro Ops and the host of Fallible.

He started out in corporate economics for a Fortune 50 company before moving to a long/short equity investment firm.

With Macro Ops focused primarily on institutional clients, AK moved to servicing new investors just starting their journey. He takes the professional research and education produced at Macro Ops and breaks it down for beginners. The goal is to help clients find the best solution for their investing needs through effective education.

Tyler Kling

Volatility & Options Trader

Former trade desk manager at $100+ million family office where he oversaw multiple traders and helped develop cutting edge quantitative strategies in the derivatives market.

He worked as a consultant to the family office’s in-house fund of funds in the areas of portfolio manager evaluation and capital allocation.

Certified in Quantitative Finance from the Fitch Learning Center in London, England where he studied under famous quants such as Paul Wilmott.

Alex Barrow

Macro Trader

Founder and head macro trader at Macro Ops. Alex joined the US Marine Corps on his 18th birthday just one month after the 9/11 terrorist attacks. He subsequently spent a decade in the military. Serving in various capacities from scout sniper to interrogator and counterintelligence specialist. Following his military service, he worked as a contract intelligence professional for a number of US agencies (from the DIA to FBI) with a focus on counterintelligence and terrorist financing. He also spent time consulting for a tech company that specialized in building analytic software for finance and intelligence analysis.

After leaving the field of intelligence he went to work at a global macro hedge fund. He’s been professionally involved in markets since 2005, has consulted with a number of the leading names in the hedge fund space, and now manages his own family office while running Macro Ops. He’s published over 300 white papers on complex financial and macroeconomic topics, writes regularly about investment/market trends, and frequently speaks at conferences on trading and investing.

Macro Ops is a market research firm geared toward professional and experienced retail traders and investors. Macro Ops’ research has been featured in Forbes, Marketwatch, Business Insider, and Real Vision as well as a number of other leading publications.

You can find out more about Alex on his LinkedIn account here and also find him on Twitter where he frequently shares his market research.