👀 Data breach at Alpha Capital, Hedge Funds are Selling, Bitcoin Mean reversion mania

Hey guys, it’s Kieran! I hope you had a great weekend and are looking forward to another week in the markets. Lots going on, so lets get straight into it.

📢 Prop Firm Industry News

Alpha Capital Group appear to have had their backend breached, exposing 240k records of client data. The firm have dismissed this as “fake” however it is very likely that this is real and this data is now for sale on the dark web. This is a developing story, so there is potential for further escalation. The firm are obligated under UK GDPR laws to disclose to clients if their data has been breached, however due to the general unprofessionalism in the industry they are likely to try and just sweep this under the carpet. Safe to say though, if you have an account with them you can consider your data as breached and you should change all your passwords.

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🕜 Economic calendar

Here are this week’s red folder news events. It’s a very busy week of economic releases particularly in the US. US CPI (inflation) numbers drop on Wednesday the same day as the FOMC press conference and on Thursday we’ll get the US interest rate decision along with PPI and Unemployment claims. Expect volatility.

📈 The Macro View

New all-time highs in the S&P500 last week. The Goldman Sachs sentiment & positioning indicator records the 2nd highest reading in Q2. Equity markets are still grinding higher but as I showed last week this rally is driven basically by Nvidia alone. Still far from an extreme reading and certainly no reason to short but prepare for all eventualities and keep Nvidia on your watchlist!

Hedge funds selling Momentum & Growth stocks. JP Morgan report that the basket of "12m Momentum" longs have seen some strong and consistent selling in the past 2 weeks. Nothing crazy, and probably good for the overall health of this rally but when the big players are selling, we must remain vigilant.

Capitulation in precious metals longs. Silver was down -6% & Gold down -3% on Friday in response to increased interest rate expectations off the back of surprisingly good jobs numbers. These eye-watering moves were likely magnified by systematic trend followers (CTAs), who have built a boatload of long positions during the recent rally, being forced to sell.

Metal futures are green this morning so this might have been a flush on weak hand longs, but further downside in precious metals will likely see more of these magnified moves. Stay risk managed if trading the metals this week!

Bitcoin - mean reversion mania. Bitcoin's great range continues to hold. Trading low timeframe momentum breakouts continues to be a costly strategy. If you are long, manage the downside effectively, as a test of the range bottom near 60k is still very likely. Trading Bitcoin (and metals!) is never an easy ride, so trade with conviction, but risk management ALWAYS comes first!

OK guys, I hope you enjoyed this week’s newsletter, stay safe out there and i’ll speak to you next Monday!

Kieran

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