By coinnews 
00:00 Speaker A
Michael, thank you for joining us. Uh l- let’s just start with the the markets today, Michael. You know, uh we did take a breather of course, as Jerry was pointing out there. This is after the S&P 500 has enjoyed a a recent real run. Uh we did have Trump officials, they were kind of making some media rounds today, Michael, some suggesting trade deals could be on the way. But But talk to us about what you’re seeing in the markets now, and what you see ahead.
00:47 Michael
Well, I mean, the simplest way to describe what we’re seeing right now is a rebound off of the lows from last year. It is being manifested in the form of people buying broad indices, which helps to explain the breadth components that were being highlighted by your colleague. Um if you press a single button and you buy a single ticker and you pick up basically all of the stocks, they’re, of course, all going to go up. Uh we’ve seen an explosion in orders that have come through levered long positions. These have a much higher multiplier. They’re effectively mechanisms for people to put far more money to work than they actually have. Um and so I actually think this is quite interesting. To me, this looks extraordinarily like a bear market rally that’s just pushing its way back up to the 200-day moving average, which is exactly where we’re petering out.
02:06 Speaker A
So how do bear market rallies, if that is indeed what it is, how do they t- tend to play out?
02:15 Michael
Well, they tend to play out extraordinarily violently, because people have gotten themselves short on the other side of it. And so they are positioned in a situation which as mar- markets start to go up, they start to lose money. Or they have removed their positioning and thought that they will step to the side effectively allowing this to play out, and then as they see the rally begin, they’re forced to come back into markets. This very much feels like a victory for the buy the dip crowd, but again, it is failing right at that 200-day moving average, or at least it’s giving some indication of it. Um the economic data continues to deteriorate. It’s not quite as bad as people had expected. In particular, the employment numbers are a little bit better than we had seen. But this is just a very clear byproduct of a market that is largely frozen. Employers have spent the last 5 years trying to find these employees. When faced with uncertainty tied to economic policy coming from the Trump administration, their immediate reaction is, “Let’s just wait and see,” right? Perhaps it’ll be unwound in a tweet. And I really think, unfortunately, that that’s what we’re seeing play out. Until people start to lose their jobs, that money’s just going to continue to flow into those broad indices, and it’s going to continue to support the type of price action that that we’ve seen. The minute that starts to change, it could reverse itself quite meaningfully.