Hi YXI friends,

What a day that was - Trump told the whole world to “buy” and announced a 90-day tariff pause moments later. We saw the most aggressive rally in SPY since…did you guess it…2008!

Today we have CPI coming up. We are using an ML model to predict whether the Headline and Core CPI will come in better or worse than consensus. If the numbers come cooler than expected, the Fed could get an excuse to cut more aggressively than its latest projections. But the bigger macro driver remains the uncertainties and market perception of the tariffs.

Personally, I don’t think we will get stagflation - we could get a recession that is deflationary, but on top of that, Trump can reverse the tariffs which would also reduce the price levels. This is unlike the Oil spike in the 1970s as oil prices are not subject to the impact of a single policy maker.

Table of Contents

• 1. YXI Daily Dashboard

• 2. CPI Preview, TLT

  • Who cares about CPI?

  • FOMC Projection by Fed Funds Futures (Pre-CPI)

  • TLT Price Technicals

  • YXI TLT Signal (New, Beta Stage)

• 3. Bitcoin

• 4. Magnificent 7

  • Apple

  • Amazon

  • Alphabet

  • Meta

  • Microsoft

  • Nvidia

  • Tesla

• 5. Opportunistic Setups

• 6. Trade Updates And Monitoring

• 7. Notable ETF Flows

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

This Dashboard is Pre-CPI.

The most notable moves are that

1) GLD is climbing significantly with risk assets, while TLT closed flattish. This would support the theory that PBOC sold Treasuries to buy Gold (maybe with a lag).

2) Stocks are up DRAMATICALLY after Trump paused tariffs for 90 days (except for China). SPY’s daily move had a Z-score of 11 against its 1-year volatility, which is the chance of 1 in 7.04 septillion if the 1-year history represented the true norm. Don’t know what a septillion is? That’s the point. (It is 1 followed by 24 zeros.)

The last time SPY moved up by over 10% in a day was October 28, 2008 - 11.7%.

SPY 2008 (https://www.tradingview.com/x/h0waGLm4/)

The market pushed higher in the subsequent week but ultimately sold off into December. The bottom only came in March 2009.

This is to say, yesterday’s rally could easily be a bear market rally, rather than a bottoming signal. Again, nobody knows for sure until in hindsight - stay buckled up!

2. CPI Preview, TLT

Who cares about CPI?

The macro environment has ventured way beyond the implications of hard data (e.g. Nonfarm and CPI) at this point. It is all about risk sentiment and momentum.

People will only attach the meaning of CPI after the market reaction. If CPI comes hot and market goes up, people will say “look we are not in a recession”. If CPI comes hot and market goes down, people will say “look stagflation!”. You get the point.

The only exciting thing for us is that I am now using a quantitative model to predict CPI. The model could be rubbish, but it’s interesting to see what it throws out and what the reality is regardless.

Market Consensus

Today’s CPI (MoM) YXI Model Prediction:

Headline CPI Above Consensus; Core CPI Below Consensus.

Now grab some popcorn.

FOMC Projection by Fed Funds Futures (Pre-CPI)

Goldman Sachs is not the only one to rescind their “Recession” call, although their research desk must be receiving a lot of “banter” from their clients and trading desks now.

The market has removed the strong probability of a May cut. Now, there is a 60% chance we get a cut by June, but still a high chance for 4 × 25bp cuts in 2025.

TLT Price Technicals

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

Unfortunately, I am not being helpful right now, as my read is low conviction for either direction.

I am primarily following the black path right now due to the 30-year yield chart. However, I would place the blue chart in comparison to show the alternative scenario if my primary view is wrong.

YXI TLT Signal (New, Beta Stage)

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