Meta Strategy Trading Portfolio – Probability Map Update.

Let the Breakouts Begin!

With a break above a major falling trendline a significant technical hurdle was taken last week. Positive market breadth and a new quiet volatility regime have been broadly supportive for this move over the last weeks.

This goes hand-in-hand with a change in the fundamental narrative: The perfect combination of rapidly falling inflation, while avoiding a recession, is seen as a more and more probable scenario.

But those recent green shoots have a high probability of remaining temporary, as immaculate disinflation is a very narrow path to walk. Any deviation would bring us back to the recessionary bear market scenario.