1/25/2025

I am raising cash.

I am convinced the market is at an inflection point in 1Q25 where the interest rates have risen significantly since the US presidential election in early November. The 10-year yield is up +5.53% and SPX is up +6.5% since November 1, 2024. Cash is now yielding 4.33%, the 10-year yield is 4.62%, and the 2-year yield is 4.272%.

This move in yields hasn’t been priced in to equities, and the big risk is the 10-year yield heads to 5.5% clearly hasn’t been taken seriously. Tactically I’m short a tiny bit of the S&P 500 via $SH.

I’m already max long in crypto so that’s my beta. I don’t imagine getting more than 1 good buying opportunity in 2025.

The trades I’m eyeing for the immediate- to medium-term involve shorting equities and buying 2-year treasuries. This may also coincide with shorting the 10-year treasury. The cash I am raising from selling equities will fund the long $SHY trade. All new income will go to $SHY.

I don’t own any $SHY yet. I would open a position if the 2-year yield got to 4.5%, or when the daily and weekly RSI get overbought. The last time that happened, you could have locked in a 2-year yield of 4.8-4.9%.

Weekly Charts for macro assets. DXY, Yields, Equities, Gold, Bitcoin all look vulnerable.

Monthly chart for macro assets. Long-term trends are nearing inflection points in the DXY, Yields, Equities, Gold, and Bitcoin.