Hi YXI friends,

Today we bring to you a new format for our daily analysis. After extensive feedback from our subscribers, it is clear that we need to double down and focus on 3 key areas on a more frequent basis: Macro/ TLT, Bitcoin, and Magnificent 7 stocks.

Therefore, I will try to make daily updates on these three core areas but with varied content and angles across the week. We are also introducing quantitative modelling for each of the instruments in the coming months, bringing our subscribers a measurable edge over the rest of the market.

Table of Contents

• 1. YXI Daily Dashboard

• 2. TLT

• 3. Bitcoin

• 4. Magnificent 7

  • Apple

  • Amazon

  • Alphabet

  • Meta

  • Microsoft

  • Nvidia

  • Tesla

• 5. Opportunistic Setups

• 6. Trade Updates And Monitoring

• 7. Notable ETF Flows

• 8. Notable Seasonality Patterns

DISCLAIMER: This newsletter is strictly educational. Any information or analysis in this note is not an offer to sell or the solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice and nor should it be relied upon to make investment decisions. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note's date of publication and are subject to change without notice.

1. YXI Daily Dashboard

YXI Dashboard: April 7, Pre-Open

The macro landscape is one that in absence of tariffs and DOGE, we are seeing a strong labour market (latest NFP +288k) with inflation stuck sideways.

Tariffs and DOGE have created an economic headwind, at least temporarily. This is due to US businesses racing to import before tariffs are set (driving net-export lower, therefore lower GDP) and pausing on hiring, borrowing, and M&A activities. Consumers also feel greater uncertainty in the months ahead. This is not to mention the current market crash that drives household wealth lower, which in turn sours consumer sentiment in a vicious cycle.

GDPNow estimates that Q1 GDP was -2.8% - two consecutive quarters make a recession. Truflation’s live inflation estimate puts inflation at just 1.46% YoY, well within the Fed’s 2% goal.

SPY, QQQ, IWM, and all of the Mag-7s experienced huge sell-offs on Friday. SPY was 6 standard deviations lower against the 1-year daily volatility, meaning it should only happen once every few million years. Of course, this is not true because the past 1-year doesn’t represent the whole universe. But the last time this magnitude of sell off happened was in H1 2020.

Overall, the market was in a risk off regime, as TLT came in green (and has been higher since the start of the selloff).

2. TLT

YXI TLT Signal (New, Beta Stage)

Today’s Signal: Mildly Bullish for the Coming Week

We use Machine Learning to assess the macro conditions for TLT, by incorporating various macro drivers against TLT’s historical performance on a 5-day forward basis. This is a proprietary quantitative model unique to YX Insights.

The model is subject to regular update and tweaks. However, I will share my data as I see them from now. Overtime, we will have these quantitative signals available for BTC and all of Mag-7 stocks.

Here the signals are sorted into 4 categories.

Over the past 1000 trading days, when the signal was “mildly bullish” or “strongly bullish”, the model was correct 57% of the time. This is compared with a 52% of the time TLT was actually positive over a 5-day period. It is an edge that compounds substantially over a long period of time, like the House in a Casino.

FOMC Projection by Fed Funds Futures

The Fed Funds futures market is projecting 125bp of cuts in the next 12 months, i.e. 5 × 25bp cuts.

This is a significantly dovish shift from the 2 cuts priced in at the beginning of the year. The market is betting a Fed put, which Powell deployed in 2019 pre-emptively against economic slowdown in the first Trade War. And that Trade War was only with China, whereas today the US is embarking on a Trade War with the whole world to establish a New Trade Order.

Fed Liquidity In Expansion Mode

Fed Liquidity continues to improve due to lower Treasury General Account levels and lower QT operations from April.

This provides a tailwind for bonds, i.e. prices higher and yields lower, all else equal.

2Y10Y Spread (https://www.tradingview.com/x/opVuIPeo/)

The yield curve, 2-year vs 10-year spread (aka. 2s10s), is bull steepening. This means yields are moving lower, with the front end moving lower at a faster rate than the long end. This signals that the market expects more cuts from the Fed in the near-term, a sign of low confidence by the traders about the economy.

It is actually reaching a critical technical level right now. The latest rally could be a wave C that is about to reach the termination zone. If the green box resistance zone holds, we likely see yield inversion again. Going past the resistance, the 2s10s spread is likely in an impulsive move up and can reach as high as 120bp.

US 10Y Yield (https://www.tradingview.com/x/iOCZxckK/)

The 10-year yield moved below 4% on Friday. This is technically very stretched for a wave v, which is why we got a large bounce today.

US 30Y Yield (https://www.tradingview.com/x/JFVrMu2i/)

The 30-year yield has more room lower technically, with the current wave (v) at “only” 123% extension of wave (iv).

TLT (https://www.tradingview.com/x/BVqXODOH/)

TLT saw a sharp reversal today. But I do think there is one more leg higher to complete wave v from here.

USO (https://www.tradingview.com/x/sIciyej2/)

USO broke my previous support level. I am now following the previously “alternative” bearish path in oil. This means the January spike was a wave B high. Wave C could reach below $50. This is more in line with our fundamentals assessment - there is an oversupply of oil into a weaker global economy.

3. Bitcoin

BTCUSD (https://www.tradingview.com/x/wKTnbSct/)

Bitcoin failed to break above the resistance, whose chance I previously put as 50/50. Now it is entering the green support zone in wave 4, over the 50% but under the 61.8% retrace of wave 3. This to me is a must hold zone for Bitcoin’s bullish cycle to continue.

RSI is showing positive divergence here, where RSI levels are rising against falling prices. This is a typical bottoming pattern.

4. Magnificent 7

Today, we focus on the 3-year valuation metric for the Mag-7 names, their correlations with the 10-year yield, and their price technicals.

Why the 3-year look back? It’s because most of them are trading well below the lows of the 1-year look-back, so the 1-year charts are no longer meaningful right now.

We refresh these valuation charts once a week.

Apple

Valuation and Correlations

23x NTM PE is still expensive for a single digit growth company. However, it is now at the early 2023 level, when the bull market last just got started.

AAPL (https://www.tradingview.com/x/vx3aPIZu/)

We had to redefine the chart, with last week’s capitulation being a wave c. We simply need evidence from the price action itself to determine the bottom. We want to see 5 waves up from here first.

Amazon

Valuation and Correlations

Amazon is trading well below its 1-year valuation low and now approaching the negative 2 standard deviations of the past 3 year.

AMZN (https://www.tradingview.com/x/JMqWioZ1/)

Again, we had to redefine the chart here, with the wave c now entering 100%+ region of wave a. It has to hold above the August 5th low from 2024 to remain bullish on the larger degree.

Alphabet

Valuation and Correlations

Alphabet trades well below the -2 standard deviations of its past 3-year range. Just 16x NTM PE feels low, but its EPS growth estimate for 2025 is 11%. This is still above a PEG of 1, but you can argue for a market giant in AI (and Search, Streaming), this is a favourable opportunity.

GOOGL (https://www.tradingview.com/x/vZwmMc3V/)

GOOGL’s technicals do not look great. The current trajectory points to a sub-$130 price target for wave (C). GOOGL’s P/E will be in the low teens by then.

Meta

Valuation and Correlations

Meta’s valuation has held up relatively well in this selloff, now trading near the median of past 3 years. It is a faster growing company than the ones we covered so far.

META (https://www.tradingview.com/x/wdeyFSTG/)

We had to revaluate our chart for Meta as well. The capitulation is close to a termination zone of wave c of 4.

Microsoft

Valuation and Correlations

MSFT (https://www.tradingview.com/x/kOvs0PuR/)

MSFT followed through our previous bearish call, with wave (v) of C at 2.618 extension of wave (iv). This, I suspect is the low of the wave 4. From a grander view point.

Nvidia

Valuation and Correlations

Nvidia is now trading more cheaply than ever, asking for just 20x NTM PE for 50% EPS growth in 2025. This is very attractive, as I don’t think the AI cycle is over.

NVDA (https://www.tradingview.com/x/YZ0UQwWP/)

Nvidia, in hindsight, performed an expanded flat in wave (4). This mean the wave b high was higher than the starting point of wave (4), and the wave c low is lower than wave a.

Wave b ended with just 3 waves up, which at the time felt like a wave 3 waiting for wave 5.

Tesla

Valuation and Correlations

TSLA is now trading still expensively given its lack of EPS growth. The stock entirely relies on Musk pulling off the Robotaxi (coming June in Austin) and Humanoid Robots.

TSLA (https://www.tradingview.com/x/GcKBCsGx/)

TSLA made a new low today, which invalidated the previous "bottoming call”. But the lower low came with a rising RSI, showing positive divergence.

5. Opportunistic Setups

In this section, we will share high conviction setups from time to time, whether due to valuation (mean reversion), price technicals, or macro. The covered names spans across financials, software, energy and consumer.

Nothing from today, but we will ramp up this section as opportunities come.

6. Trade Updates And Monitoring

BDC Sector Downgrade

OBDC, GBDC trades were invalidated in this selloff.

FSK is still in play, hanging by a thread.

My thoughts on BDCs

For BDC as a sector, I personally am cautious because:

1) if recession materialises, we could see a lot of non-accruals; 2) we likely see a lack of M&A activities this year due to tariff uncertainties / recessionary fears, which will impact the deal pipelines negatively; and 3) market starts to price in more rate cuts, which are unfavourable to BDC returns.

If one still wants to get into BDCs in this context, ARCC, BXSL, OBDC, GBDC are my top picks for portfolio quality and yield.

BTC, C, CME

These are the remaining long setups we have currently that have not been invalidated.

C (https://www.tradingview.com/x/NyL2ma1J/)

CME (https://www.tradingview.com/x/B1pmPxZj/)

7. Notable ETF Flows

Recent Notable Flows (% of AUM)

8. Notable Seasonality Patterns

SPY April 7 - May 7 Seasonality Past 20 Years (white) versus 2025 (red)