News

April 2021

A New Way to Start Your Day and Trade

April 6, 2021TradeSmith Editorial Staff

Today, we’re starting a fantastic journey together. Our Chief Research Officer, Justice Clark Litle, has some very big plans for Decoder. He’s committed to taking our products at TradeSmith to a whole new level. And that means that Justice will no longer be writing TradeSmith Daily. Don’t worry. Justice isn’t going anywhere. He’s still out in the desert, bringing you the best insight and recommendations on the planet. I’ll check in with him a few times a week and get

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March 2021

The Archegos Blow-Up was a Big Bank Bamboozle

March 31, 2021John Banks

The more we learn about last week’s blow-up of Archegos Capital Management — a family office that behaved far more like a gunslinger hedge fund — the bigger, stranger, and fishier it looks. A number of things about the blow-up don’t make sense — unless you factor in actions and motivations like market manipulation, shady dealing, and possibly even straight-up fraud. At this point, we expect to see shareholder lawsuits against the banks that lost billions in the meltdown (and

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The Crypto Asset Adoption Path is in the ‘Knee of the Curve’ — as Visa Newly Confirms

March 30, 2021John Banks

Bitcoin continues to follow its own narrative, and the broader cryptocurrency space along with it. (We note with amusement that, at the time of this writing, Bitcoin continues to press against all-time highs in the $60,000 area, even as tech stocks turn red and the broader market finds itself gripped by a new market structure event — the fallout from which is not over yet.) Bitcoin’s increasing ability to ignore market-moving headlines of the bearish variety comes not because crypto-oriented

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Last Week’s Market Structure Event Was One of the First Popcorn Kernels to Pop

March 29, 2021John Banks

On Feb. 26 — less than a month ago — we explained why risk levels were elevated for a “Market Structure” related meltdown event. A few weeks on, the danger has only grown. As we said in the piece: A market structure event is major price dislocation — like a meltdown or a flash crash — that happens for reasons unrelated to investor sentiment or a long-term fundamental outlook. Market structure is a reference to the way investors are positioned:

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The Suez Canal Jam-Up is More Fuel to the Fire for the Bullish USD Outlook

March 26, 2021John Banks

One of the world’s largest container ships, greater in length than the height of the Eiffel Tower, is stuck in a narrow canal. It is stuck because the ship ran aground on the sides of the canal. High winds blew the ship off course, causing it to drift sideways until its ends were firmly lodged in the sides of the canal. As a result of this, the canal waterway has been blocked. The blockage means that, until the ship is

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The Time is Right for the U.S. to Aggressively Confront China

March 24, 2021John Banks

A general tone of conflict with China is escalating now — not just in respect to China versus the United States, but China versus Western allies as a group (with the United States at the forefront). This is ominous news for Western companies with significant business exposure to China (like Apple and Tesla). It is ominous news for countries with significant supply chain exposure to China (there are far too many to list). Plus, it is bad news for emerging

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Confrontation Between the U.S. and China is Beginning to Heat Up

March 22, 2021John Banks

Relations between the United States and China are on a downward slope, and tensions are on an upward slope. This has been true for a while now, enough so to fuel talk of a “new Cold War” between the U.S. and China, alternately known as “Cold War 2.0.” The original Cold War played out between the United States and the Soviet Union, beginning shortly after the end of World War II and lasting until the Soviet Union’s collapse in 1991.

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Europe is Facing a New COVID Nightmare (With Negative Implications for EUR/USD)

March 17, 2021John Banks

On Feb. 17, we said America is Winning the Vaccine Race. A month later that assessment has proven spot-on. While the United States administers more than 2 million shots per day, nearing 3 million, Europe is descending into a new COVID-19 nightmare. The situation looks dire in Europe, with a “third wave” of COVID now sweeping the continent. Italy has entered a third national lockdown. Poland — the EU’s fifth-largest nation by population — is considering a new lockdown as

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Food-Price Inflation Could Trigger the Next Global Crisis

March 16, 2021John Banks

If we had to identify a likely cause for the next global crisis, it would be food-price inflation — particularly in emerging markets and developing world countries. The current situation looks dangerous and could easily become dire. When stock markets crash, people get upset. But when food prices become unsustainable, people starve — and then they riot, and even seek to overthrow governments. A global food crisis unfolded in 2007-2008, related to falling world-food stockpiles and sky-high oil prices (the

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R.I.P Bond Bull Market , 1981-2021

March 15, 2021John Banks

Something momentous happened on Friday of last week. The greatest bull market in history likely came to its end. We are not talking about the U.S. stock market, but the U.S. treasury bond market. Before discussing what happened, let’s quickly revisit why the bond market is so important, and the way that interest rates work. Stock market valuations and price-to-earnings multiples are largely a function of interest rates. When interest rates are falling over time, multiples tend to expand as

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Things in the Stimulus Bill: Free Health Care, Pension Fund Bailouts, and UBI for Kids

March 12, 2021John Banks

The American Rescue Plan Act of 2021 — or American Rescue Plan for short — has been signed into law. You can read the text of the legislation here. The American Rescue Plan (we’ll call it ARP) is far more than just a $1.9 trillion stimulus bill. It is a transitional moment, and quite possibly a paradigm shift — a structural change in the model — for Americans’ relationship with their government. Thanks to ARP, President Joseph R. Biden could

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The Pain for Tech Stocks is Only Just Beginning

March 9, 2021John Banks

The bursting of the tech bubble has taken down the Nasdaq, but left the Dow intact. This has created the greatest divergence between the Dow and the Nasdaq since 1993. March 8 was “the first time since 1993 that the Dow rose and closed within 1% of a record,” Bloomberg reports, “while the tech-heavy gauge was down more than 10% from its high.” As we’ve explained at length in these pages, silly-season tech valuations were a byproduct of the implied

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