Hey everyone kevin here, so obviously we're suffering our second red day in a row here. It's also not that big of a red day i mean, quite frankly, it's down so far about point six percent. It's been down this almost all day. We had this almost rally that potentially went into close uh or into the close, but the question is what's happening because now this is the second day in a row of red.

Is this the beginning of potentially that retracement uh down to maybe a 38.2 or even a 23.6 on the qqq? Are we going down to 351 338 and then could we come back after that uh well, for me, i like looking at trying to figure out okay. Why why is the market even so fussy, today, uh and yesterday, and selling off like this, and one of the reasons for this, could have to do with portfolio rebalancing now? I know this one sounds boring. It is the last day of the quarter. It is a trading day today is the last day of the quarter, it's march 31st, but take a look at this.

Most funds have a typical stocks and bond portfolio. I guess i shouldn't say most funds, but a lot of funds, especially pension funds, have a typical stock and bond allocation of 60 40. That means 60 stocks and 40 bonds, well muni bonds, uh, since the beginning of the year down like six percent. If you uh shorted tlt with me, which is the 10 plus year treasury bond etf, that thing's down like 14 since mid-december, so if you shorted it, you made lots of money right this this.

This is bad, so bonds have obviously gone down, and we know that we've had some pretty incredible rallies in stocks from feb 24 times or march 14th times we're kind of nicely up from there. We've gone up somewhere in the neighborhood 15 to 16 percent on the nasdaq, which is pretty incredible in a short period of time right. So, at the same time that, in a very short era of time you have seen stocks go up substantially to where indices are moving 15 and the 20 plus year bond funds down 15, well, you're, literally having the opposite happening in these portfolios. For a lot of pension funds, so what does that do? Well? That actually means you end up with some kind of portfolio that looks more like 80 stocks and 20 bonds.

That's a problem, so you got to rebalance. So what do you got to do by the end of the quarter? Well, you got to end up buying and going shopping for bonds and when you go shop for bonds and bond prices, go up, yields come down and when you need money to go, buy bonds. What do you do? Well, you sell, what's been performing, which is stocks, so you sell your stocks to go, buy bonds and to see if this is potentially true. I suppose we know that the indices and a lot of stocks have been read yesterday and today.

In fact, we're read across the board here on the indices not substantially, which makes sense, because there really isn't any kind of new fear catalyst right now, but look at this, let's see if bonds are also down. Aha, no surprise, they're, also down. In fact, the 10 year was up at 2.5 up until gosh, i would say, like four or five days ago, look at that it's over here at 2.5, just on the 24th! Well, look at that the last week of the quarter. What do we got? Probably that rebalancing happening so, in my opinion, this this is actually a good thing, because it means the market isn't overly fearful about something crazy happening in the market, like oh, no yield, curve, inversion or whatever, which technically the 10 2 has not inverted yet, and i'm Watching this thing, like a hawk okay, but you look at it right now.

It's still 3.4 basis points off. It got within half a percent of inverting, but i have not seen it cross that zero, yet uh at least uh uh, at least on my shots. When i zoom in and and i wan na know, you know, i don't wan na put my head under a rock, but this is here's another good one. Okay, here's our five year break even another day here in a row where we're getting this drop in uh.

The spread between the five-year treasury and five-year tips - it's just a way of measuring the market's expectations for inflation. This is a good thing, so this overall i mean i'm seeing good news now. There are some other things going on that i want to talk about as well uh, but one of the things that i definitely want to look at is btc now btc is either reacting to this rebalancing in the market or it's forecasting the stock market mess. Now some people think i'm crazy when i say that, but i actually like using btc more than i like using futures to determine.

What's going on or what's the market going to look like tomorrow and yesterday, one of the things i said is if we fall under uh 46, five we're probably going to have a red day and when we did we're at 45 seven and we're almost a thousand Points below that this right here is about that 38 retracement line. We really hung on to that 38 retracement on btc, uh and uh right now. I've got a separate. This is not part of retracement, but i have a support line that we're kind of bouncing around on over here at 45.7.

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Okay. So in other news, kathy wood bought matterport on like the 24th, which was really cool. She bought like 365 000 shares, which is really awesome to see because i've been a big fan of matterport. Obviously it's just kind of collapsed in valuation.

I got out of matter report for a while and then i'm back into matterport. Fortunately, i was able to lower my cost basis and make some sweet tax moves by doing that, but hey look still sucks, especially because you've got the sec coming after specs for potentially a non-good faith, estimates and b bad incentives and keep in mind. This is going to create a cloud over spec companies because they could get punished and spack investors could get punished even more. Specs are things like i hate to say it.

Matterport tattooed chef, uh, not pound here by the way, palutear uh did a direct listing. Uh sofi is another spack right, open door. A lot of these companies are spacks that that uh, we, you know - we've seen come to the market in just the last couple of years here and the sec is going after them, not necessarily the ones that i just mentioned, but they're. Definitely looking uh and uh.

The thing about the spax is you really have these like perverse incentives, because, like let's say i wanted to do a spec i'd be like yeah. I want to do a spec uh. If i raise 100 million dollars to go, invest in some company that we're going to merge with or whatever i could take a 20 commission on that, which first of all, is like an insane commission. 20 million dollars like that's insane just for picking a company.

But if you don't pick a company within two years, you get zero. So you have this choice like pick a crap company or any company or get zero so like. Hopefully, you find a good one, but if you start running out of time and you need to just yolo pick a bad company whatever, and even if the stock drops 50 percent you're still up more than if you had zero. So specs have kind of this weird thing going on uh another.

You know: we've got some good news coming out of putin, uh and ukraine. Obviously this is necessarily helping the stock market, because i really think this bond rebalancing is a disaster today. Uh and you do have the jobs report coming in tomorrow now this is going to be a big deal, because goldman sachs and jp morgan are both asking for uh, basically begging the fed to do 50 basis. Point hikes two times in a row uh if you're coming up in may and june.

Fortunately, we don't have to deal with the fed for all of april, but we will have to deal with numbers that are coming out from the fed and uh. The big thing tomorrow is going to be the jobs report. We are expecting to have a jobs report. Come in of 490 000 uh, that's changed in non-farm payroll and the unemployment rate to drop about point one percent and the average hourly month over month, earnings to move up about point four percent or 4.8 percent into list.

If this comes in hot okay, big important thing to pay attention to, if that month over month, comes in too hot, it's going to increase the chance of that 50. Bp hike probably have another red day tomorrow. If that a month over month comes in at expectations are somewhat soft. Well, then, tomorrow could be an interesting opportunity for the stock market, because what you will have, in my opinion, is less of that selling pressure from pension fund, rebalancing so less selling pressure, and i think today you probably have less buying pressure for stocks, not just because Of the pensions, but because people are wondering uh, oh, what's that jobs report going to look like tomorrow, what's that month over month, wage growth going to look like how worry do we have to be about the wage price spiral? And so once we get the certainty of that report and quarter rebalancing is over.

Maybe maybe we could actually see some green again because really, if we're looking for bad news to have the market go down, we need we need more bad news, there's not a lot. I mean putin's not cutting off gas to germany. Uh troops are leaving chernobyl. You know, you've got uh um putin's really is trying to still prop up the you know his currency, his rubles, but you know whatever things just aren't that horrible right now.

Don't get me wrong, i have the greatest empathy for what's happening in ukraine, but i'm saying globally: uh yeah, okay, so tesla's shut down through saturday, but uh hey. You know what that's a minor issue for tesla and i'll. Do a tesla analysis in terms of the impact i think for for that for tesla uh, but we'll get through this and ports are still moving in china uh right now, at least you know those shut down, then we're gon na have more supply chain fears, but Otherwise, i'm i'm optimistic uh. I do think it would be natural for us to also take a little bit of a breather here, so there's also that potential for the market uh and uh.

But for me i'm long on april, i'm long on april. I'm optimistic if we get to euphoric levels, i will flip-flop though, and i'll probably start selling uh calls against my positions. I don't necessarily have to sell the shares. I'll probably sell calls, but we'll see certain things.

If they run too much, i will sell uh now. One of them that i will say is just been killing. It has been end-phase uh, just absolutely killing it yeah, that's one of those where i mean look at it. It's up another three percent today, on a red day, uh.

This is one where last time it ran to like 280 dollars. I mean don't get me wrong. I freaking love the company. Mp, material has been killing it too, but, oh, my gosh, you know we're well over 50 retracement on end phase, we're at new highs on mp materials and at some point you know, there's always that chance of rebalancing a game but hey i'm in this, and i'm Not hedging myself against end phase yet, but i'm definitely watching it.

You can see the qqq right now, actually a little bit dropping into the close here again. Funds do their trades a lot of their trading at the close, wouldn't be surprised to see some more pain going to the close, hopefully not, hopefully, that trading is over. We go back to some green uh, hopefully starting tomorrow, we'll see all right folks, we'll see in the next one check out ftx via the link down below bye.