A massive bearish shooting star is appearing on the quarterly chart of #SPY / #IWM The tail of the shooting star tagged the peak level reached during the Dotcom Bubble (depicted by the black line in the chart). It's likely that this ratio has peaked and is about to roll over. We may be at the start of what will be years of large-cap underperformance relative to small-cap. This does not necessarily mean that the Russell 2000 will rally from here on out, instead it's a warning that the large-cap stocks that comprise the SPY have a lot to lose in the coming recession -- even more than already hard-hit small-cap stocks. #SPX / #RUT / #smallcap / #mag7

The #Fed is preparing to pivot back to monetary easing right as #war begins to disrupt global supply chains.

Decentralized Autonomous Organizations (also known as #DAOs) have immense potential to disrupt Wall Street and the current multinational corporate system. One of the biggest leaps forward will come when the means of production becomes increasingly controlled by DAOs. Wall Street is hardly prepared for a future where control of production is #decentralized. Rather than owning shares in a corporation that can be traded and controlled by #WallStreet, equity ownership of a DAO can be established through asset tokenization, built using smart contract logic, which eliminates the need for Wall Street to serve as a middleman for transactions or as the custodian of assets. Decentralization is already underway, with decentralized #finance protocols like #Uniswap and #AAVE already issuing tokens that in turn allow for decentralized control of their treasuries. Since these frameworks are built, in large part, on the #Ethereum network, #Ether will be increasingly demanded over time as the De-Fi space grows by orders of magnitude over the coming years and decades. Most legal systems do not provide sufficient infrastructure for the formation and existence of DAOs. Thus, inevitably, DAOs will come at odds with centralized governance. Yet, it remains to be seen how decentralized organizations can effectively be stopped. Certainly, #CBDCs will become an important tool.

This is a terrifying chart of $AAPL A gravestone doji is forming on the log-scale quarterly chart of the ratio of #AAPL and the risk-free asset (a 10-year U.S. Treasury bond). This gravestone doji is forming right at the +2 standard deviation of the log-linear regression channel formed over the entire history of this ratio. From a conceptual standpoint, what this chart indicates is that there's far too much optimism in the market about Apple's stock for the yields on the 10-year Treasury to be as high as they are. Indeed, earlier this year, there was more fear in the market about a default on U.S. Treasurys than a default on Apple's bonds. This should never happen. A private company, no matter how great its business model, does not have the power to create money, as does the federal government. Therefore, no corporation's bonds should be perceived as safer than a U.S. Treasury bond. Yet, this is effectively what this chart is illustrating is occurring right now. In so much as this ratio has reached its highest standard deviation from the mean ever, the market is far too optimistic about Apple's stock price when there's so much fear about Treasury bonds (and the U.S. Treasury's ability to repay its debts). Since the U.S. Treasury bond underpins the global financial system by serving as the (theoretically) risk-free asset, there's never an instance whereby extreme volatility on Treasury bond yields won't eventually transmute into increased volatility for riskier assets, including stocks. Very rarely do you see a higher timeframe chart this extremely over-extended on a log scale. A chart like this is something one would expect to see at the end of a supercycle because a reversal on this timeframe could last for many years. While it's certainly very possible that Apple's nominal stock price may continue to reach new ATHs, this chart is as worrying as a chart gets from a long-term perspective. I'm worried about the many investors getting trapped at this supercycle high. Too many people believe that the central bank has achieved a soft landing and that the #Fed will cut rates. Too many market participants are wrongly assuming that a return to monetary easing will cause tech stocks to balloon in price again, as happened in 2020-21. The coming recession will be much different. This time around, when the Fed cuts rates, inflation will quickly resurge causing central bank monetary policy to enter a period of whipsaw (where rates are cut and hiked erratically due to stagflation, similar to what happened in the 1970s/80s). Although the Fed will indeed begin increasing the money supply dramatically in 2024 (it actually already started to do this), be cautious in assuming that this money will flow directly into tech stocks. Instead, the newly created fiat currency will increasingly flow into commodities as they continue to take up an increasing share of the total money supply. Commodities will take up more of the money supply because of rising conflict, deglobalization, economic protectionism, climate change/the effects of a transition to sustainability, and aging and less productive global demographics. I hope that time proves me wrong because if I'm right, a lot of people are going to be very disappointed about Apple's real performance in the years ahead. #AAPL / #Apple / #QQQ / #Nasdaq

Recessions and volatility spikes tend to occur when the SPY/TLT ratio plummets. Right now, the #SPY / #TLT ratio is printing a bearish shooting star all the way up on the quarterly chart (each candlestick is a 3-month period). Note how high this ratio has risen. It's nearly double the peak value reached in the lead-up to prior recessions. (The red-shaded areas highlight previous U.S. recessions). Never has the S&P 500 been as overvalued as it is now when compared against the 'risk-free asset' (long-duration U.S. Treasurys). In fact, the S&P 500 is so overvalued that the sell-off in 2022 merely brought the Shiller PE Ratio down to about the same level as the peak before the Great Depression. What concerns me the most about this SPY/TLT ratio chart is the unprecedented confluence of higher timeframe charts. The ratio is about to begin oscillating down on the monthly, quarterly, semi-annual, and yearly charts at the same time. My conclusion is that the coming recession will likely last quite a long time, or that it will come in waves as occurred during the stagflation of the 1970s (when several recessions occurred within the span of about 10 years). Although it's easy to believe the proposition that a soft landing has been achieved when the VIX is 12 and the SPY is near an ATH, be aware that higher volatility will ensue from the record-fast rate hiking cycle. There is always a long lag between when interest rates rise and when the broad economy is impacted. Many charts continue to confirm that strong stagflation is coming. While I am a stock market bull over the long term, I remain convinced that an economic storm is coming.

I feel sorry for those who post: "Bitcoin is going to CRASH!" They haven't yet discovered that Bitcoin is hard money, and that a crash in the price of #Bitcoin can only happen if fiat currency, which is backed by nothing, is your unit of account. They fail to realize that Bitcoin's 5,583,371,195% return against the dollar since 2009, represents the dollar crashing in value. If Bitcoin's price temporarily comes down against the dollar in 2024, what's happening is that the dollar's ongoing crash against Bitcoin is taking a temporary respite.

My stock market top indicator triggered this morning. At the time it triggered, the indicator reached the extremely rare red level. Every time this level has been reached in the past, substantially higher volatility occurred in the following months. As for methodology, this indicator uses regression analysis on a volatility-adjusted stock market indices average. The red line is the mean. The highest level ever recorded was at the Dotcom Bubble peak when the value reached +2.1. Earlier today it reached 1.5, which is the highest level since 2017. With low volatility typically occurring over the holidays, the indicator may go deeper into the red as we head into January. However, volatility typically increases in mid-January, and I would not be surprised to see some kind of significant sell-off as we enter that period. #SPY / #SPX / #SP500 / #Trading

If you had held GBTC since its inception in 2015 instead of Bitcoin, you would have lost approximately 63% of the upside gains that #Bitcoin had during that period. This is in large part because of the high expense ratio that Grayscale charges #GBTC investors (2% per year). This is why we shouldn't get too excited about Bitcoin spot ETFs -- if the expense ratios are high, investing in Bitcoin will mostly enrich the financial institutions offering the ETF. This is more true for Bitcoin than for stock market or bond ETFs because Bitcoin does not pay a dividend that could offset the expense ratio. While the SEC may approve Bitcoin spot ETFs, it could also impose heavy regulatory compliance measures that increase administrative costs and drive up expense ratios. This in turn could diminish the effect of investing in a Bitcoin spot ETF over the long term.

Bullish Divergence is occurring on the daily chart of the VIX Bullish divergence on the #VIX implies volatility may soon increase, which of course, is bearish for the #SPY on the timeframe of the divergence. However, it is unusual for volatility to move substantially higher near the holidays when volume is muted. From a seasonality perspective, volatility typically increases beginning in early-to-mid January and generally tends to trend higher until about mid-March. #SPX / #Volatility / #Trading / #SP500

#SPY gapped up at the open, pushing the daily RSI over 80, the highest in over 3 years (since September 2020).

The Fed has a problem. When it mentions "end of hiking cycle" this happens. $GOLD / #Gold / #XAUUSD / $GLD / #Fed / #FOMC

Today, the S&P 500 experienced an extreme event. During the #FOMC press conference, the #SPX briefly exceeded the Bollinger Bands' +3 standard deviation on the daily timeframe. This event rarely occurs, and only occurs during extreme market optimism. The #VIX did not confirm the higher move-up as it created a higher low over yesterday's trading session while the #SPX created a higher high. The last time this type of divergence occurred was 6 years ago in November 2017, about two months before a significant #volspike (VIX went to 50). The current S&P 500 environment remains consistent with the end of a business cycle when the Fed stops tightening and the market believes a soft landing has been accomplished because the ensuing recession has not yet started. More often than not the #SPX reaches new ATHs during this period. So far in December, the VIX futures term structure remains in deep contango and the yield curve remains deeply inverted, both of which further confirm that we're at the end of a business cycle. An economic #recession is likely to begin in the U.S. by the end of 2024. It will likely be stagflationary with inflation remaining high even as demand continues to cool.

In the digital age, the emergence of smart contracts has created the ability for governance to become decentralized to a degree not possible previously. Smart contracts -- through their algorithmic immutability -- mitigate the problem of corruption, which has plagued centralized governance since its inception. No longer must personal biases impact the output that some input receives. Yet, smart contracts are not without their own vulnerabilities. Each time a smart contract vulnerability is exploited, this act -- however benevolent or malicious the actor -- improves upon the underlying design of the smart contract, thus making it more secure. In so much as Bitcoin, Ethereum, and other decentralized protocols are displacing centralized fiat currencies, the decentralized protocols that are built upon them are displacing centralized governance structures, from decentralized social media (Nostr) to decentralized organizations (DAOs). Some might argue this is the natural progression of human evolution. However, is there ever a case where total decentralization can be detrimental?

After using #Nostr for several weeks, one thing that has taken me by surprise is how there are very liberal and very conservative people on here, and yet they both share a sense of community and don't spend all day posting content against each other. Despite differences in political persuasion, they find common ground on here. Now that I've seen this, I better understand how dangerous centralized control of social media is -- where algorithms continuously drive inflammatory content to users to keep them addicted to the platform. I find it ironic that a censorship-resistant platform is largely devoid of much of the inflammatory content that's present on censorable social media. One may have thought the opposite would be the case.

A lot of people fail to realize this, but the price of Bitcoin in U.S. dollars is, in many ways, a real-time chart of de-dollarization. The price of Bitcoin only goes up (when priced in dollars) because people are trading in dollars for Bitcoin. Those who trade dollars for Bitcoin with no intent to sell that Bitcoin for the foreseeable future ("#hodlers") are, by definition, abandoning the dollar. Furthermore, the #LightningNetwork is creating a major market of #V4V exchange in which the dollar is no longer the unit of account. The unit of account is Bitcoin. People are increasingly exchanging goods and services for sats, the smallest unit of Bitcoin. This is de-dollarization.

Look closely at these charts. On the left is 150 years of U.S. #stock market performance. Currently, the stock market is pressing against the +2 standard deviation of a log-linear regression channel applied over its 150 years of data. On the right is the U.S. #GDP growth since 1947. It's barely hanging onto the -2 standard deviation of a log-linear regression channel applied over its 76 years of data. Never before has the stock market been so deviated above its long-term mean while GDP so deviated below its long-term mean. Perhaps what's so surprising about this chart is that GDP is barely clinging onto its -2 standard deviation, but the market perceives GDP growth as strong and resilient. What we're dealing with right now is a massive asset bubble that is being caused by excessive currency creation by the central bank. Asset bubbles tend to only get bigger. However, they also become increasingly hard to sustain over time as increases in the money supply result in increasingly smaller gains in productivity. The ultimate consequence is higher inflation, though central governments obfuscate this fact and use obscure tactics to delude the public into believing inflation is much lower than it actually is. This is unsustainable, and it will eventually come to an end. In the meantime, get ready for many years of increasing inflation. Those counting on deep deflation will be deeply disappointed in the years ahead, as the only thing that will reliably deflate is one's wealth in the face of a perpetually increasing supply of new fiat currency.

As we approach the close of the year, it's important to remember that the 10y/3m yield curve is still inverted. It has been continuously inverted for over a year, which is the longest period of continuous inversion on record. What this is likely warning is that not only is a #recession coming, but that it will likely last a long time. It's always during the phase between when the central bank stops hiking rates and the start of the recession that it feels like a soft landing has been achieved.

The median price of a house in the United States is about to fall back below 10 #BTC

Seeing how governments abuse social media both to promote propaganda domestically and to sow division among their adversaries abroad is why a decentralized platform is critically needed. The governments that most heavily rely on propaganda to feign their legitimacy will also be the first to try to ban Nostr... But they will soon discover they can't.

The fiat system will die once workers demand #Bitcoin for their labor.