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VRA Letter: Near Term, Overbought “War Risks”. Q1 Extraordinary Earnings; Economic Growth is Surging. We’re Living in Special Times.

Good Friday morning. Our generational bull market resembles a tale of two cities this morning; short term overbought with continued medium-long term bullishness (in the extreme). Our primary market leaders, the semis and tech sto ...

Posted On May 15, 20263 MIN Read
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Good Friday morning. Our generational bull market resembles a tale of two cities this morning; short term overbought with continued medium-long term bullishness (in the extreme).

Our primary market leaders, the semis and tech stocks, are trading at extreme overbought on steroids (EOBOS), our most overbought levels on the VRA System…AKA where bad things tend to happen. This isn’t actually new, as we’ve been at or near these OB levels for two weeks. The issue today is that our war theme risks of rising rates and oil are hitting levels that have previously resulted in a risk-off mode for equities (again, near term only).

This morning oil is above $104/b with 10 yr yields hitting their highest levels in a year; 4.55%. We’re now well into the zone where Trump and Bessent have taken action in the past that have brought down tensions with Iran. The question that matters most today; are we about to resume military action against Iran? The meeting with Xi has not…to our knowledge…produced...

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