Weekly Alpha Report: 01-09-2025.
The market is in a holding pattern, waiting for the next catalyst from the Federal Reserve. This is the boring part. Good. Boredom is where discipline is forged and the groundwork for the next high-conviction move is laid. While first-level thinking gets anxious during these periods of quiet consolidation, second-level thinking uses them to assess risk, check emotions, and prepare capital for deployment.
With September rate cuts fully priced in, equities have minimal room for positive surprise and are more vulnerable to negative data. This asymmetric risk reinforces our expectation of a cooler September for all risk assets.
Crypto is front-running this cool-off. As detailed last week, Ethereum's new All-Time High was a validation, but the subsequent consolidation is the more critical phase for analysis. This is a standard, high-probability feature of a healthy bull market, designed to shake out weak hands and establish new structural support.
We believe this rally has 2-3 months until risk assets top. Our objective is to generate returns during this final phase while strategically positioning for the longer term.
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