Weekly Market Positioning + 1 Actionable AI Prompt
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What happened this week?
What a rollercoaster this week. Trump’s escalating tariff war sent markets into a tailspin as China retaliated with a staggering 125% tariff on US goods, briefly pushing the S&P 500 into bear territory while Hong Kong suffered its worst trading day since 1997.
Yet through this chaos, BTC showed surprising resilience, falling just 10% when the S&P dropped 12.14% over four consecutive red days. Wednesday brought an unexpected twist when Trump announced a 90 day tariff pause, triggering an explosive rally that sent the Dow up 3,000 points and Bitcoin surging from $74K to $83.5K.
By Friday, Bitcoin had climbed back above $83K while the 10-year Treasury yield spiked to 4.5%, prompting Fed officials to signal their readiness to intervene.
The question remains: temporary calm or early signs of stabilization?
How am I positioning?
Trump and Bessent have made it clear that 10-year yields are their primary concern right now, and those yields are getting seriously stressed….and furthermore behaving abnormally. This puts Trump in a bind – he needs to ease up on tariffs to calm markets during what’s currently the biggest month of bond refinancing.
US 10Y yields – this is what is moving policy!
Long term, some form of tariffs will remain IMO. This makes a V shaped recovery unlikely. Trump can’t completely reverse course without looking weak, so I expect he’ll reinstate tariffs after the refinancing crunch passes. The US actually has more staying power than China due to the Yuan peg. Remember, Bessent was the strategist who helped Soros break the Bank of England – he understands currency pressure points.
Earnings season will IMO bring aggressive downward guidance revisions. The “E” in P/E ratios is about to get hammered. I anticipate significant layoffs as companies use the tariff situation as political cover for workforce reductions they’ve wanted to make anyway. Hedge funds have been pressuring the MAG7 to cut headcount for years, and tariffs gives them the perfect excuse.
It’s important to remember that downturns are never linear. Expect messy bounces that resemble recession patterns. In reality, we’ve been in a recession for three years, just masked by QE and unprecedented government spending.
On the crypto front: my read is traders this weekend are trying to front-run Trump news this weekend about China tariff concession since crypto markets trade 24/7. By Monday, I would bet we see rebalancing of risk assets with allocation moving from crypto to equities. Tuesday is tax day, which typically triggers selling pressure (see below analysis). I’m actually tempted to initiate a short scalp position next few days, but again we focus on the fat pitch opportunities primarily here.
I don’t like being bear-holed (bears sound smart, bulls make money :)). The scenario that invalidates this bearish outlook would be QE or direct Fed intervention. However, the longer this bounce continues, the less likely such intervention becomes.
My personal action items for this week:
Equities look significantly more attractive than crypto right now. You’ll get altcoin-like bounces with equity-like risk profiles. That’s where I’m monitoring more heavily to play.
I’ll consider trimming some of my Robinhood (HOOD) position if we see a strong rally.
Crypto plays depend on if we get extreme moves. While I’m considering a short scalp position as mentioned above, we’ve already experienced a prolonged downturn, making timing increasingly difficult.
My current capital allocation strategy is minimum 50% cash when feeling bullish on a mid to low time frame and 80-90% cash when feeling bearish until a stronger thesis emerges. Capital preservation is the most important thing here.
1 Actionable AI prompt
I used Claude to conduct python based analysis on if there is any statistical significance in price movements around tax day. No code necessary!
My exact prompt and a few tips:
PROMPT 1:
I am looking to conduct robust statistical analysis on if there is genuinely statistically significant negative returns around tax day or not for bitcoin (april 14 to april 16). I have a full list of daily prices for BTC attached. First I need you to give me the April 14-16 returns by every single year. Then give me the average return across all years in the dataset. And calculate the average return on non tax day periods.
Create data visualization with advanced GGPLOT2 package for the above analysis. Conduct cumulative return analysis and time series of tax day returns with bar charts.
Some tips I have for doing data analytics with no-code AI:
Make sure you upload clean and easily readable data alongside prompt in CSV format for Retrieval-Augmented Generation (RAG)
Be specific! The more specific the better results you will get.
Use multi-chain prompts. It will get you cleaner results.
Claude generally is the best for quick and dirty data visualization
Results:
Summary Statistics
Average Tax Day Period Return (Apr 14-16): -0.20%
Average Non-Tax Day Return (all other days): +0.22%
Average 3-Day Period Return (non-tax periods): +0.44%
Statistical Significance T-statistic: -0.61
Approximate P-value: 0.54 (after correcting the computational error)
Based on this analysis, while Bitcoin does show slightly negative returns during tax day periods (-0.20% on average) compared to positive returns during non-tax days (+0.22%), this difference is not statistically significant.
