Is Peace Bearish? (The Cestrian Circle Newsletter)

Last updated on May 6, 2026

DISCLAIMER: This note is intended for US recipients only and, in particular, is not directed at, nor intended to be relied upon by any UK recipients. Any information or analysis in this note is not an offer to sell or the solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice and nor should it be relied upon to make investment decisions. Read our full disclaimer, here.

Analysis by Alex King, CEO, Cestrian Capital Research, Inc.

Today’s Market On Open note is a free, no-paywall edition available to everyone who reads our Cestrian Circle newsletter.

Before we get started I want to highlight the remarkable performance of our SignalFlow AI Growth algorithmic service. If you’re unfamiliar with this, it is a couldn’t-be-easier-to-use signal service that chooses its top 3 ETFs at each close, from a shortlist of $SMH (semiconductor), $XLK (tech), $IGV (software), $GLD (spot gold), $GDX (gold miners), $SPY, $QQQ, $GBTC (Bitcoin) and $ETHE (Ether), or cash. If the model thinks that the market is fragile, it fails over to cash. By design it is built to limit drawdowns. Also by design it is intended to press on the gas when the market is in risk-on mode.

Users receive a simple signal each day at the close in a dedicated Slack channel. If there is no change in holdings, the signal is: No Change. If there is a change, the signal will say something like, sell $XLK, buy $IGV. We also provide a discussion channel so that you can ask questions and raise points as regards the service - the model author Prof. Jay Urbain, Ph.D and myself both live in that channel all day every day.

You can use the signal many ways - from a piece of background research for your own analysis to trading it mechanically. Personally, I trade it mechanically. When I started using it, I allocated an amount of capital to the algo service, and I have never added to nor withdrawn capital from that allocation, simply rotated it through the ETFs as the signal has proposed. If the holding in (eg.) $XLK has grown by the time the signal says (eg.) sell XLK buy IGV, I sell XLK and use all the dollars received from that sale to then buy IGV. The signal prints at the close each day; you can either trade at the following open, or you can trade in post-market hours (most brokers support this now, and we deliberately chose ETFs that are highly liquid and have tight spreads even in post-market trading hours).

Here’s how it has performed. The future may be different to the past, of course, but nonetheless, here’s what the model has achieved to date.

I love this service. Because not only has it achieved remarkable outcomes so far, it also provides that background analysis saying that momentum is strong in sectors A, B or C, and that is likely having an emotion-free quantitative analyst helping to make decisions on single-name stocks too.

The algo’s recent run by the way came from going long semiconductor, tech and the Nasdaq just before the market started to move up in early April. It has stayed long and strong in those sectors and it has, as always, done so without fear, second-guessing, or worry. Which means so too have I and its other users.

You can learn more about SignalFlow AI Growth, here.

If you have any questions whatsoever about the service, you can email me personally at alex.king@cestriancapital.com .

Now, the market. Since war has been so bullish - is peace dovish? Let’s find out.

US Government Bond Outlook

US 10-Year Yield

Bonds are so hated right now that I cannot help but think they will rally hard soon enough. And that, as always, will take everyone by surprise. I would expect the 10yr to keep falling for a while if hostilities are suspended or ended in the Gulf, and I would expect Fed policy to further push down the 10yr in the coming months.

Longer-Term Treasury Bonds (TLT / TMF)

Long-Term TLT Chart

No change.

Short-Term TLT Chart

No accumulation down here just yet.

Short-Term TMF Chart

Note - Leveraged ETF. Read the fund documentation if you are considering using this instrument.

Ditto.

Disclosure: I will start accumulating a long $TLT position at the New York open today. Starting very small. Baby steps.

Commodities Outlook

Gold

In recent days I’ve noted that gold has been holding over the 50% retrace in this chart & stated it was a bullish look in my view. Today there is a concerted move up.

Disclosure: I am long $MAI and long $GLD

Oil (USO / WTI / UCO)

Larger Degree (USO)

Smaller Degree (WTI Futures)

Continues to move down off of the highs. The big drop reflects the Rubio announcement of course.

2x Levered Long (UCO) / Short (SCO)

Note - Leveraged ETFs. Read the fund documentation if you are considering using these instruments.

Oil shorts are finally getting paid this morning!

Disclosure: I am long $OBE and long $SU.

For algorithmic signals in oil, gold and other commodities, learn more about our Commodities Algo Service.

Crypto Outlook

Bitcoin

I think Bitcoin can go higher, but I would expect some trouble at the 200-day.

Ether

Hard resistance right here - if Ether can turn this $2415 level into support it can go higher - next resistance the 200-day which is quite a way to go yet, as you can see.

Disclosure: I am net long $ETHA, long $SBET and long $BMNR.

US Equities Outlook

Equity Volatility

Tail risk insurance continues to cheapen.

Disclosure: Long OTM Vix calls for July.

S&P500 / SPY / UPRO

Larger Degree

Our Bully O Bull target is near. Then we can re-assess.

Smaller Degree

A bullish look in the short term too.

3x Levered Long / Short ETF - UPRO, SPXU

Note - Leveraged ETF. Read the fund documentation if you are considering using this instrument.

The correction will come, and when it does, $SPXU can be your friend (as can $SH if you prefer the lower-octane experience). But today the correction has yet to happen. Remember the old line about more money being lost preparing for corrections than in corrections themselves.

For algorithmic signals in the S&P500, consider SignalFlow AI Long-Only For $SPY.

Disclosure: Long $SPY and long $SPXU as a hedge; if SPY makes a new high, the SPXU position will stop out.

Nasdaq-100 / QQQ / TQQQ

Larger Degree

QQQ $750 is on deck I think. Then, as above, we can re-assess.

Smaller Degree

Sunny uplands ahead, for now. When the QQQ heads back towards the 8-day SMA (red upward sloping moving average line) we can see how it behaves. But bullish for now.