Ignore the Headlines. The Charts Are Screaming Bull Market w/ Caleb Franzen

Quick Overview

Caleb Franzen asserts that investors should remain bullish and continue allocating capital to risk assets like Bitcoin and technology stocks, despite recent pullbacks, because the underlying macro environment, characterized by low corporate bond spreads and decelerating M2 growth, historically supports an uptrend, making current dips opportunities to buy before the market inevitably sets new all-time highs.

Key Points: Caleb Franzen maintains a bullish stance, advising investors to exploit pullbacks by allocating capital to risk assets like technology stocks and Bitcoin. Historical analysis shows that prior instances of low corporate bond spreads (e.g., BAMLCOA0CM chart) and decelerating M2 growth preceded bull markets, suggesting current conditions support continued uptrends. The technology sector (Magnificent Seven) and Bitcoin are showing exceptional strength, making new all-time highs even as broader market sentiment wavers. Franzen emphasizes that true bull market confirmation comes from sustained production of higher highs and higher lows, which is currently present across major indices. The Chicago Fed's National Financial Conditions Index making new multi-year lows confirms financial conditions are generally supportive of risk-taking. The current environment favors risk-on assets, evidenced by High Beta outperforming Low Volatility, contradicting typical bear market behavior. Investors should focus on controlling their emotional reactions (fear/greed) rather than trying to perfectly time macro events like Fed policy shifts or geopolitical tweets.

Context: This is an interview between John Gillen of Milk Road Macro and financial analyst Caleb Franzen, founder of Cubic Analytics. The discussion centers on current market conditions, particularly focusing on whether the recent pullback in risk assets like stocks and Bitcoin signals a shift into a bear market or if the underlying bullish macro trends remain intact. Franzen uses several charts to illustrate his points, comparing Bitcoin's market cap to global M2 growth and examining financial conditions indices and bond spreads to support his optimistic outlook for risk assets.