Raoul Pal & Julien Bittel: Macro, Crypto, and Market Signals

Market PMI and Economic Signals

• 📈 Market PMI data is showing a stronger rebound than expected, with recent regional PMIs significantly higher than anticipated.
• 💡 This positive economic momentum is seen as a driver for various market indicators and is expected to continue into the summer months.
• ⚠️ The unexpected strength in PMIs has caught many off guard, as the consensus was for a recessionary downturn.

Financial Conditions and Commodity Trends

• 📊 Financial conditions are closely linked to true inflation, with recent data suggesting an uptick in inflation.
• 📉 The relationship between financial conditions and global M2 money supply is being analyzed, with potential implications for market trends around August.
• ⚠️ The dollar's recent move higher is noted, and its future direction is considered a key signal for upcoming market phases.

Cryptocurrency Technical Setups

• 💡 Solana (SOL) levels have collapsed to below 50, a pattern that historically preceded significant price increases (10x and 100% gains).
• 💰 Bitcoin (BTC) shows a 13 daily signal, but its current strength is being weighed against rising liquidity and economic surprises, suggesting a potential flag pattern or a corrective phase.
• 🚀 Ethereum (ETH) continues to look strong across all levels, with an inverse head and shoulders pattern suggesting potential for further upside, possibly after a dip to around $2,300.

Equity vs. Crypto Positioning

• 📉 Bitcoin dominance has peaked and is expected to fall, signaling the potential start of an altcoin season, especially if it breaks below the 61.5-62 level.
• 🏦 Institutions remain significantly underweight equities, with the most underweight position since May 2023, indicating potential for strong FOMO (Fear Of Missing Out) as markets make new all-time highs.
• 💡 The current market chop is attributed to overbought conditions and profit-taking, with expectations for a strong June and July followed by a more complex August.

Sector and Asset Outlook

• 📈 Tesla continues to show a strong chart pattern, similar to ETH, with potential for further upside after breaking through resistance levels.
• 🚀 Rocket Lab is performing beautifully, having reached all-time highs and showing excellent long-term prospects.
• ⚠️ Ten-year yields have been stagnant on the weekly chart, with daily signals suggesting a potential move lower, mirroring patterns seen in 2017.
• 💡 ETH is expected to outperform Bitcoin and other cryptocurrencies later in the cycle, with Solana and Sui also showing strong potential for outperformance over time.