Pro Macro: Flash Update – May 27, 2022

Published on: May 27th, 2022

How to think about the turbulent crypto markets and another trade recommendation in bonds…

Comments

  • WM
    William M.
    27 May 2022 @ 20:35
    Good stuff Raoul, you are sticking to your guns and thesis. I am down 50% on the ETH and despite the fact that I fully took this into consideration when purchasing it is VERY HARD to stay calm. All the other stuff going on out there doesn't help. You are certainly taking a pasting out there, from some former friends also! I just cant follow you on the bonds though, i feel sure they will bounce, but the accelerating debt and likely heavy defaults coming soon for all over have me worried. Finally, I note that RVT has taken a huge swing over to the DEFI NFT etc side of the fence in the past year or two. After TERRA LUNA (and Remi's total wipe out), I hope you guys at RVT consider carefully all the hype on the channel. I am old enough to make and live with my decisions. I suspect some younger folks are not going to handle their losses well. My best!
    • RP
      Raoul P. | Founder
      27 May 2022 @ 21:04
      Thanks William. Bear markets and recessions are hard on everyone and people tend to express their fears and insecurities during them which is totally understandable. Default risk via the failure of the DeFi protocol or the currency is very similar to buying EM bonds in local currency terms. When defaults happen is shocks people for a while and spreads more fear and doubt. But, it is how bad borrowers are forced to become better borrower and lenders learn that no risk is free. It is a hard lesson to learn but everyone needs to learn it. All yield has risk - either default or denominator.
  • LA
    Lysander A.
    27 May 2022 @ 20:45
    I feel better after reading this. I'm not selling ;). Thanks Raoul.
  • AJ
    Alexander J.
    27 May 2022 @ 20:52
    Thanks Rahul, may have been asked before but which TV script do you use for Demark?
    • RP
      Raoul P. | Founder
      27 May 2022 @ 21:01
      DeMark v3 but I mainly use my Bloomberg but TV seems to be ok
  • TK
    Tahsin K.
    27 May 2022 @ 20:54
    Hi Raoul, Thanks for the update. Enjoyed reading this and the context was helpful. Regarding TLT, I'm not really comfortable using futures at this time. What would you say is the next best alternative at this point as I'm not in the TLT trade yet? Just buy TLT outright, or calls? What would be your recommendation for strike price and duration on the calls?
    • HM
      Harry M. | Real Vision
      31 May 2022 @ 14:13
      Very interesting. The MI2 guys are having a very "animated" internal debate about fixed income here. The short/medium term case is starting to be quite bullish. The problem we have is that we still dont see a peak in inflation. Makes it tough to be bullish longer term but wont stop a rally from happening here and now.
    • TK
      Tahsin K.
      27 May 2022 @ 21:04
      Thanks for the response. Agreed regarding the timing for calls, which is why I'm trying to better understand your recommendation for TLT calls in the last flash update. Trying to follow through on the thought process for suggesting calls there considering the high vol, instead of outright buying TLT with stop-losses. Even if you're wrong on timing, you can just hold the TLT and they will eventually rally. I would appreciate some elaboration on the thought process.
    • RP
      Raoul P. | Founder
      27 May 2022 @ 21:00
      I think that calls add a layer of complexity - I,e you need to nail the timing but give you the benefit of leverage. You could look at something like Dec 130 calls but vols are quite high which lowers the payout somewhat.
  • GD
    Graham D.
    27 May 2022 @ 20:55
    Raoul, As you'll know BTC has historically outperforned ETH during bear markets and this trend has repeated during the recent downtrend; in fact it is currently accelerating. I understand you have a multi-year time horizon and expect ETH to outperform BTC in the long run, but what is your view on the idea of swapping ETH to BTC now with a view to swapping back to ETH when the market looks more healthy? Do you think this could reduce short term risk as well as perhaps increasing long term returns?
    • GD
      Graham D.
      28 May 2022 @ 09:31
      Thanks for the reply Raoul. As you alluded to in the piece, managing your emotions can be a challenge during these drawdowns and I think I'll sleep that little bit easier right now being BTC heavy rather than ETH heavy.
    • RP
      Raoul P. | Founder
      27 May 2022 @ 20:58
      Ive been surprised how well ETH held up in most of this bear move so for ETH to give back some should be normal. Im not really trading my positions so I wont finesse the trade but understand if you think it works for you
    • TK
      Tahsin K.
      27 May 2022 @ 20:57
      It was apparent from his update that he regrets doing such types of short-term moves in the past. Considering that his view is long-term, such a swap would probably not make sense to him, nor should the short-term eth underperformance risk matter if the time horizon is long-term rather than a few months or 1 year.
  • AS
    Andrew S.
    27 May 2022 @ 20:56
    I'm sorry, I have no idea how DeMark numbers work. At which number do I double down on ETH? Are the bigger numbers or smaller numbers the buy signal?
    • JJ
      Jay J.
      31 May 2022 @ 19:03
      That is not at all how that works champ, price action dictates the indictors signals not the other way around. When the current setup completes the countdown can very well play out for all we know
    • AS
      Andrew S.
      28 May 2022 @ 01:05
      Apricate your time on clarifying this for me
    • RP
      Raoul P. | Founder
      27 May 2022 @ 20:57
      You want a confluence of green 9's and red/pink 13's. they suggest that we will hit a low in the next 3 to 4 weeks.
  • AH
    Anthony H.
    27 May 2022 @ 21:08
    Awesome Raoul. Thanks for the detailed write up. Love this type of content and your psychology.
  • MF
    Michael F.
    27 May 2022 @ 21:14
    Thoughts on adding 6J futures/calls to your portfolio? Demark counts line up nicely, vol is reasonable, traders are short
    • MF
      Michael F.
      27 May 2022 @ 21:31
      yen
    • RP
      Raoul P. | Founder
      27 May 2022 @ 21:24
      6J? Eurodollars?
  • jG
    james G.
    27 May 2022 @ 21:17
    Kind of needed to hear that.. just a pep talk to reassure me that I am not the only idiot out there who has round tripped the crypto trade and has decided that for better or worse I am holding on. I look at the chart, carve it up and have a reasonable conviction it is headed down, but if I sell it then I dont know when I would buy back in, or if I even would buy back in. So I am where I am. Feel better now. --- until it drops to 21K and then I will sit lotus position and practice breathing ---- I own all my outcomes. I had some Luna, after it went to zero I took a really good look at why I got in and to be honest it was the fear of missing out. Good lesson. I thought I had learned that one before but I guess I needed a reminder.
    • RP
      Raoul P. | Founder
      27 May 2022 @ 21:24
      Thanks for sharing your story James.
  • NP
    Nick P.
    27 May 2022 @ 21:24
    thanks for the update! awesome stuff! its worth noting to anyone that is looking to take a starter or add to smaller alt positions, make sure to glance at unlock schedules. p.s. i totally agree with you. the sentiment right now is so vicious (i know you know :/ ).
  • JR
    Josh R.
    27 May 2022 @ 22:34
    Thanks Raoul. What do you like most about eth long term? Ie. Web3/automation potential, tokenisation of assets, yield etc?
    • RP
      Raoul P. | Founder
      27 May 2022 @ 22:44
      Just the adoption effect it currently has and the fact that it is a brand way to play the rise in multiple applications of blockchain technology and smart contract.
  • JS
    John S.
    27 May 2022 @ 23:14
    Excellent explanation of your positioning in crypto. I agree and have followed the same strategy since 2014. It is also why all the recent bullshit from Keith McCullough has become increasingly juvenile and tiresome.
    • RP
      Raoul P. | Founder
      28 May 2022 @ 01:45
      Time horizons matter...
  • BT
    Bill T.
    27 May 2022 @ 23:51
    which month for bond futures, front month? Sept22 futures?
    • RP
      Raoul P. | Founder
      28 May 2022 @ 01:44
      Front month and roll it.
    • AA
      Alberto A.
      28 May 2022 @ 00:08
      Bill you can just buy the bond futures straight up contract: /ZN /ZT. The calls are much more trickier because of the timing and volatility. Hope this helps
    • BT
      Bill T.
      27 May 2022 @ 23:52
      and could eurodollar futures be similar or perhaps safer way to play the same theme?
  • AA
    Alberto A.
    28 May 2022 @ 00:05
    Thank you Raoul. Good pep talk but I have to be honest. Your 'video' flash update was much better than this 'report' flash update. It was more detailed into what it might happen during the next 3-5 weeks with clear charts explaining your rational. This report is just a pep talk for people who got into crypto and feel like shit because it is the first time managing their emotions from a very volatile asset. Nothing wrong with that but it is the wrong pro macro target (in my view). In the past, I have quietly said this or suggested that the pro macro tier doesn't feel like a paid subscription (now) as all your 'content' we can see it for "free" whenever you do a flash update or just talking to some other medium, people or interviews. Some examples: "Free update" on your macro framework mentioning everything related to the exponential basket. Prior to that you made call on bonds (TLT calls) which I heard you in several mediums. You just mentioned the 2-10 years bonds you started to have a position in the 'video' update. And there are many more examples. Besides the most important thing which is the rational. I have the option of not saying anything or provide no feedback and just cancel my subscription and continue to listen to you for 'free' but we will all lose. I truly enjoy RV (more before than now) and that is the reason why I am providing you with honest feedback. Maybe you think is BS and believe is ok and continue to do what you are doing. Fine. This comes from a former global marketer at heart that knows how difficult it is to win mind share but how easy it is to lose it. My 2 cents. Enjoy you weekend!
    • YC
      Yi C.
      2 June 2022 @ 07:05
      I get where Alberto came from. I've also been a big fan of RV since 2016. However, I have to say I really love this piece of Flash Update by Raoul. It spoke to my mind directly. I find the analysis incredibly valuable, straight to the point and relatable to me and I can imagine that to be the same to many other readers here. On the other hand, I also think it's necessary for other non-pro RV followers to be kept aware of the bullish framework and not give up on crypto. Arthur Hayes sums it up nicely about adoption (in this case bitcoin) with his dark humor "we know that in order to create circular self-sustaining pockets of economic action that use Bitcoin as the sole payment method, we must infect as many minds as possible with our memetic narrative."
    • JJ
      Jay J.
      31 May 2022 @ 17:55
      Tough crowd
    • AA
      Alberto A.
      28 May 2022 @ 03:16
      My comments were never about the audio; I was fine with that even though I do care about production values (I'm a former marketeer). I do care about first the content and the insights (the what and why). Then about the trade (the how). That is precisely my whole point but I guess I'm not coming across clear. Maybe is my because English is not my first language. The comments about you and Julian take them as you want. I feel you will add more value discussing each others point of view and stressing the differences. You are polite to agree then stating is just different timing which is not. I respect your POV. Otherwise I would not be a subscriber since 2014. I have my own investment framework and enrich them with several people I hear with more experience in the field as yourself. I hope you get my points without being defensive. Looking forward for the rest of the year. Good luck. Cheers!
    • RP
      Raoul P. | Founder
      28 May 2022 @ 03:04
      I have seen the comments. 1) Julian was on holiday. He gave his precious free time to MI. The audio wasn't great but he tried. He didnt need to do it. 2) It is the analysis and depth that you pay for. The EA basket has not been released to others in the main part 3) imagine how GMI client might feel with the same mindset as this was an idea I gave them. However there is zero pushback because it is the analysis they are after, not the trade. 4) You think that COIN or ARKK arena going to work, that is fine. I dont need Julian to agree. We have different views and different time horizons. I do enormous research - months or years on my views. I am not a trader, I am a bit picture macro investor. I think I am right. I have done the work to suggest the balance of probabilities are in my favor. I could be wrong but my hit rate on bit themes is well over 80%, with a proven track record. Again, I can be 100% wrong too! Im cool with that. You dont have to follow my ideas if they dont suit your framework, that is all good and admirable. You just need to use them to asses your own odds for your own framework. That is the magic of MI
    • AA
      Alberto A.
      28 May 2022 @ 02:31
      BTW...have you seen the comments in the Pro Macro insiders talk? I also provided feedback there and it seems other people feel the same....thanks for answering on this one though...
    • AA
      Alberto A.
      28 May 2022 @ 02:12
      That is precisely my point. But is ok, I'm not going to get argumentative. From my many years at corporate I learned the hard way that receiving feedback was precious! if you are open to it. Cheers. Enjoy your weekend.
    • RP
      Raoul P. | Founder
      28 May 2022 @ 01:44
      The reports prive real in-depth analysis to back up ideas. Trade ideas are nothing without analysis. you guy pay to get my inner understanding and thought process. Without that it is much less valuable.
  • ML
    Michael L.
    28 May 2022 @ 01:05
    Many thanks Raoul, timely and on point, as always. Appreciate hearing the historical experience, context and psychology - helpful as have been having number of the same thoughts circling around in my head (re holding v selling, exit vs re-entry, vol, etc.) but took a similar view as just 'writing it off' in my head, either it will play out and be an incredible trade or something will look back on and consider, but given long-term time horizon, thesis, adoption, etc. will hopefully be happy we had a crack! All the best to you and the team, enjoy the weekend!
    • RP
      Raoul P. | Founder
      28 May 2022 @ 01:42
      Thanks mate
  • NR
    Nathaniel R.
    28 May 2022 @ 09:24
    Hi Raoul, Do the issues with Tether concern you? The recent questioning of the CTO by George Noble which is available on YouTube was quite concerning (I know he has been attacking you in Twitter as well).
    • PP
      Percy P.
      29 May 2022 @ 18:01
      Some bright side: Tether cut commercial paper holding by 17% in Q1, and continue the cutting into Q2 - that sounds like prudent and responsible management to me. Additionally, the volatility of USDTUSD actually went down despite all the NYAG stuff (probably has to do with the ramp up of total stable coin supply across different brands). I also suggest that you chart USDC_SUPPLY/USDT_SUPPLY spread chart on tradingview or glassnode, the chart suggest that USDC is catching up at a record pace. Now: whether or not one claims the systemic risk spilled over from USDT to USDC is an entirely different topic. Despite everything above: I do want to see the flow/changing hand/circulation of USDC among overseas crypto participant to take some of the burden off of USDT.
    • RP
      Raoul P. | Founder
      29 May 2022 @ 01:59
      Not really. I first dug into Tether in 2018 when I was very concerned but Im less so now and there are alternatives that people can switch to in seconds...
  • JN
    Jared N.
    28 May 2022 @ 14:48
    One thing I've done to remind myself of the long-term vision is created a simple forecast of my crypto holdings (I do it for my full net worth too). This helps me keep a long-term mindset and make more informed long-term decisions. When I look at my forecast (which I set at 33% annual compounding) of my total crypto holdings I can't help but feel comfortable.
  • JM
    John M.
    29 May 2022 @ 00:58
    Hey Raoul, Curious your thoughts on energy here? It doesn't seem to have broken, but you seem to be still getting a recession signal?
    • RP
      Raoul P. | Founder
      29 May 2022 @ 01:58
      Yes, Im concerned it rolls over but not high conviction yet
  • SS
    Scott S.
    29 May 2022 @ 15:26
    Thanks for your continued guidance. I see the next few weeks as the perfect opportunity to trade BTC into ETH. I notice that we've broken ascending support line on E TH / BTC from .07 and now resting around .06 What level do you think we could get to capture the most ETH? .05? Also, where are the voices talking about how ETH could be the "next bond" with the coming merge. Coinbase did the math and says the proof of stake should create a yield between 9 and 12%. Do you agree with this assessment from the many sources