traditional assets: US equities softened, with a marked increase in selling pressure. This reversed the tentative buy signal generated in last Thursday’s strong bounce. This see-sawing of technical signals has been going on for several weeks now. As long as there are no signs of a genuine, capitulation driven sell-off, we advise remaining underweight equities and overweight government bonds (we believe we are at or have passed peak inflation, so bonds show value here).
crypto: the fallout from FTX continues, various stories doing the rounds about other exchanges not able to cover investor monies, FTX bankruptcy is a total mess with apparently not even enough funds to pay administrators and lawyers. For those who are comfortable with DeFi and who have their own cold storage wallets, activity can continue (e.g. yield farming on Uniswap v3), however for retail investors who are not familiar with DeFi, we expect activity on centralised exchanges to collapse. It’s simply not possible to trust any of them (including Binance, despite their short-sighted “business as usual” statements). It is unlikely to resume until firm and clear regulatory measures have been taken, and this will take a long time.
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