The Information reports that Sequoia Capital has issued a warning to its startup founders, detailing a series of moves that should be taken to avoid a “death spiral.”
“Its latest warning to its portfolio companies takes the form of a 52-slide presentation, a copy of which was viewed by The Information. Sequoia described the current combination of turbulent financial markets, inflation and geopolitical conflict as a “crucible moment” of uncertainty and change. Sequoia told founders not to expect a speedy economic bounceback akin to what followed the start of the pandemic because, it warned, the monetary and fiscal policy tools that propelled that recovery “have been exhausted.””
Sitting here in Silicon Valley today, where one bedroom shacks still fetch $1.5 million despite sliding tech stock prices, it’s not hard to imagine that the worst is yet to come.
Futures are up modestly this morning, with our analog still on track.
continued for members…
The key remains getting ES up over its 3.618 Fib. SPX is already there. Both are within a few sessions of seeing a bullish 10/20 cross. And, ES has clearly broken out of and backtested the red TL from the 4/21 highs – actually a channel.
I didn’t draw the path to ES 4170 as the bottom of a rising wedge, but it’s certainly turning out that way.
COMP’s bounce has been more anemic so far. I show its bounce target as the intersection of its neckline and SMA50 (like ES and SPX.) But, it’s not at all clear it’s going to reach it.
VIX is keeping its powder dry, but is well positioned for a drop to either of the two targets – with a drop below the SMA200 as the big gun which could be pulled out if necessary.
Likewise, currencies remain in position to help out. USDJPY is very close to a reversal – likely at 125.84 – which could really help stocks if the bounce begins to wane.
EURUSD is probably just about played out, with 1.0792 looking like a top.
And, DXY looks likely to reverse somewhere between here and 101.41.
Gold and silver are going nowhere fast, with downturns waiting in the wings.
And, BTC is hinting at a long-overdue breakdown. Not sure about the timing, but it’s not a great sign for the bulls that it has failed to retake even its SMA10.
Oil is up over 2%, while gas is flat.
continuing…
Comments
2 responses to “A Crucible Moment”
Volume is anemic but breadth is superb. Looks like we’re headed to the Target but could also head to the 50-day moving average where a lot of these bear markets stop in their tracks.
Indeed. In fact, my original model assumed the 50-day would reach the target around June 3. We’ll need to see things slow down a bit for that to come to pass!