Projects
![]()
No projects found
Investors
New
DAO Treasuries
DATs
Lend / Borrow APRs
Chains
Categories
Spaces
STOCK MARKET TALK
Recorded: March 20, 2025 Duration: 2:01:09Space Recording
Short Summary
In a recent discussion, market analysts highlighted the ongoing trends in the crypto space, focusing on the impact of macroeconomic factors such as the FOMC meeting and potential tariff changes. With Bitcoin experiencing a notable decline and discussions around market psychology, the conversation emphasized the importance of monitoring emerging trends and investor sentiment as key indicators for future crypto investments.
Full Transcription
Yn ystod y cyfle, mae'r cyfle wedi'i ddod yn ystod y cyfle.
Mae'r cyfle wedi'i ddod yn ystod y cyfle.
Mae'r cyfle wedi'i ddod yn ystod y cyfle.
Mae'r cyfle wedi'i ddod yn ystod y cyfle.
Mae'r cyfle wedi'i ddod yn ystod y cyfle.
Mae'r cyfle wedi'i ddod yn ystod y cyfle.
Mae'r cyfle wedi'i ddod yn ystod y cyfle.
Mae'r cyfle wedi'i ddod yn ystod y cyfle. Mae'r cyfle wedi'i ddod yn ystod y cyfle. Good afternoon.
What is up everyone?
Welcome in to So on spaces. Happy Thursday, March the 20th and
We've had a lot of movement in the market. I don't know if a whole lot's changed. Obviously we had FOMC yesterday
We had a huge rip in the morning that has been a fade all afternoon and we are sitting around the market
I almost gave March Madness score updates
instead of market update right here. So let me make sure I have that pulled up.
I got the first upset right Creighton. You got Creighton?
I did. I only have one other upset today and I need Michigan to lose.
I missed that one. I need to look and see what else I have. I've got Wisconsin. I'm
watching right now. They are up in the second half, but yeah, I've been watching March Madness. Honestly, I've probably paid
more attention to March Madness than the market and the market pretty much, it looks like
everyone sold their positions when that first tip off happened this morning. And it's just
been a slow trickle down throughout the afternoon. QQQ is down 0.57%. S&P is down 0.4% right here.
IWM also down 0.55 and the Dow just slightly, slightly red.
Mag seven, Tesla has been all over the map today.
It is red.
Nvidia and Meta are both green.
Everything else is pretty much within 1% red
across the board there.
And yeah, that's what I see.
Crypto had a little bit of a pump last night
that has since faded.
Bitcoin since last night down about 3.5%.
And we have a great panel today.
So I'm excited to start throwing this around
and start getting some thoughts.
Evan, anything from you before we go to our panelists?
I got nothing smart to say today, so no, I'm good.
I appreciate the self-awareness there. So let's start throwing it around. Brett, let's go over
to you first. A lot of times you get pushed down for some reason, or I don't get to you early in
the space. So let's switch it up. Let's go over to Brett first today. No worries at all.
I'm usually happy to listen to other people's takes on the markets before weighing in with
any of my own thoughts.
But yeah, it's an interesting week here, especially we're in a triple-witch exploration and we
had the Fed yesterday yesterday as you mentioned. So it's just kind of a lot
of moving parts, both from a perspective of sentiment and from purely mechanically driven
price action. But maybe we can push together a rally here in the next one hour left today
and then we have tomorrow. So it's the S&P for me sitting at technically speaking
Fairly key level 5650 was has been a big line in the sand for me
To be honest with you going back about six months or so is pretty stiff resistance in over the summer
I think it was late September might have been early October, but
Some of that time frame late Q3, early Q4,
we had a nice breakout and we held that level for months.
We had a nice run up over 6,000.
So 56.50 to me was a key level.
And we pulled back after those February highs,
we knifed right through the gap fill from the elections,
like 57.80.
Made a stand at the 200 day for a minute, but shortly rolled over and broke 56.50.
And now we're just kind of struggling with that level now and last week's high.
So for me, I would like to see a bigger rally.
Of course, naturally, I would like to see a bigger rally.
I do think we're oversold on a lot of, you know, a lot
of different measures, whether that's breadth or seeing kind of a washout in sentiment.
Some of these sentiment numbers are, you know, the worst we've had in the last 25 years,
among the worst we've had in the last 25 years, not actually the worst, but very, very low
sentiment. It's been a difficult environment, you know, And I think Chair Powell kind of sort of alluded to that yesterday, not necessarily speaking
on the stock market specifically, but just generally speaking, the sort of economic outlook
at this moment.
Everyone, I think, kind of stuck to the word transitory that he used yesterday because
of flashbacks from 2022.
But for me, the word of the day was uncertainty.
He mentioned it so many different times where forecasts are uncertain, economic outlooks
are uncertain, companies, consumers.
At this point now, I'll just say investors.
There's a lot of uncertainty here.
That makes it really difficult to just make forecasts
and for the market to price things in.
The market loves certainty.
It does not.
It hates uncertainty, loves certainty.
So from that perspective, from an investor's perspective, it is difficult.
But I think going back to the equity markets, psychology plays such an important role.
And I think really, especially since COVID, it feels like investors seem to think so much
more in extremes now. And what I mean by that is they expect these extreme moves up when they're
buying, especially something like a growth stock. And even now on the downside, it's like if things
start to move lower, the default thinking seems to be going to like,
oh, we're going to a bear market,
because we had one in 22,
we had one in right in the start of 2020.
It doesn't always have to be these extremes.
It's pretty, I wouldn't say common necessarily,
but like a 10% correction, which is what we're in right now,
10% pullback is,
not necessarily every single year we get it, but it's kind
of routine. I mean, the average entry or pullback on the S&P for the over the last 50 years
is like down 14%. So to me, I'm trying to think in a world where I'm not being pulled
by extremes either like an extreme that we're going to be bottom from here and rocket back
to all time highs, but also not, you know, Amazon's going to lose two thirds of its value, like the last bear
market. So I'm kind of trying to find somewhere in that middle ground where, hey, maybe we
bounce around in this down 5% to down, you know, maybe 10, 12, 15% off the highs. And
we just sort of chop around and try to figure this thing out. Because the truth is, you
know, at this moment in time,
at least, things haven't completely unraveled. We're seeing a slowdown in growth. There's an
expected slowdown over the next few quarters, but the whole thing's not unraveling. If you look at
leading indicators for the labor market, which in the consumer is the lifeblood of the US economy.
The jobs market is the driving force behind that, Add behind the consumer and you know what the play market labor market hasn't completely fall apart when we look at the retail sales we've seen you know some positive numbers at least came out of february one after we got us kind of a scare in january.
And it's not to say that there's not pressures in the job market cuz there's a lot of shakeups going on the federal level and that's not to say that inflation isn't a worry because it is pushing stretched consumers
to the edge where they're really struggling to keep pace with the increasing costs. But I think
if you kind of look at things as a whole at this moment, it's not as good as it was a few months
ago, thus the pullback, but I also I'm hesitating to rush for the exit and consider it a panic on
my part. So that's just kind of how I'm trying to view the market the exit and consider it a panic on my part.
So that's just kind of how I'm trying to view the market, trying to keep a level head.
I'm obviously hoping that we can have a nice, at least an oversold bounce and give some traders
and investors a chance to rebalance and move their equities around a bit. But that's kind
But that's kind of how I'm doing things right now from a bigger picture perspective.
of how I'm viewing things right now from a bigger picture perspective.
Yeah, Brett, thanks for kicking us off there with those thoughts. It is interesting that
the pendulum seems to be swinging harder than it did before. I thought that was a very, very
interesting point there. All right, we just lost Evan. I was double checking to make sure what happened there.
I want to make sure we get everyone up on stage here. In the meantime, let's continue
around the panel. Matt Caruso, great to have you joining us this afternoon. Would love
to get some of your thoughts around the market.
Yeah, sure. Thanks for having me back. I thought, you know, it's easy to always kind of dunk
on the Fed and, you know, they made some pretty rough calls in the past, like I think the whole inflation is transitory, like the previous
guest was just talking about.
But I think there's a lot of positives to kind of take away from the Fed meeting.
And we have to watch them closely because right now, so much of the uncertainty is driving
from like all the tariff policy and the rest.
And you know, of course, like I find, you know, it's human nature, but the tariff discussion has also been wrapped up with
politics. So like as an investor, I try as much as possible to take my politics out and just think
of really what, you know, I think the repercussions will be. But apart from all of that, the only other
person in the room with the kind of power over the economy that the president has is, you know,
the Federal Reserve Chairman, which is Powell. And I thought he made so a few interesting things. I
know they did the tweak to quantitative tightening,
which they say wouldn't be a big change
in their general plans, but I thought in the short term,
that was, it was helpful to see that the quantitative
tightening was gonna be cut back,
because that's really, I think,
still been having a heavy weight on treasuries.
But a few other important things that I noted was,
they mentioned that in their forecast
for what they thought was gonna be lower growth and higher inflation, which is like a stagflation, which is bad
for stocks.
If you say that's the forecast, it's not a good thing.
But what I thought the positive was that through the Q&A, he noted, Paolo, that in their assumptions,
when they came to that forecast was that they were figuring that there would be the maximum kind of counter,
I don't want to say counter attack, but counter positioning in terms of tariffs, in terms
of reciprocal nature. So basically the US is going to go up with their tariffs and other
countries are going to reciprocate and we're going to have this high tariffs around the
world. I think that's like a, I think it's a worst case scenario, to be honest. Like
it's not my base case that all the tariffs go on
April 2nd, there's retaliation and we ramp up and we just stay there. I think a deal, even if it's
not a perfect deal or if it's not no tariffs, there's going to be some kind of deal struck.
So I thought as a trader, you always want to know where your worst case scenario lies and then from
there things only can improve. So I thought that was a good thing that, you know, the feds outlook had kind of their worst case scenario
kind of priced in.
And also I thought another positive from the fed as well,
which prevented him from being too hawkish was kind of like
the prior guest mentioned that well, as well,
he was saying how a lot of the concerns that people had
that all, you know, inflation expectations are going up.
Like I think he noted as well, which was important was
a lot of that can be political.
A lot of that is news line, a lot of that is news-driven, headline-driven. If you looked at the recent
expectation surveys for inflation, pretty wild. They broke it up by Democrats and Republicans.
If you ask Republicans what they thought about inflation in the future, they expected 0%
inflation, whereas Democrats expected 6% inflation.
And so that we ended up with an average somewhere in the middle, which just shows,
you know, I think both sides are, you know, if you go by the average, I think both sides are wrong.
I don't think we get zero. I don't think we get six. So I think the fact that Powell kind of looked
past that, that was kind of what you're saying, it's a transitory. This time, last time I thought
it was a transitory call was way off the mark. but this time in terms of, I think, expectations,
I think if we can get to a state
where there's a negotiated settlement on tariffs,
I think all the political pressure comes off,
I think the sentiment kind of comes off.
So you set the stage for if a deal is made
or when a deal is made or whatnot,
I think it provides a lot of good upside.
So I thought the Fed response was a net positive
from what we had in the past, but of course, you know, April 2nd is around the corner. And so there's
going to be like the normal headline driven stuff. But some stocks are definitely trying to put in
some kind of a bottom like whereas the markets were weaker, you can see already a lot of stocks
are trying to push off their lows, which is a good sign. And this is when we really kind of go stock
by stock and you look at, you know, who is resisting the downtrend, what are the new themes going to be coming out of this?
And once that sentiment swings from what is almost like apocalyptic sentiment, which is
surprising, I think that we get really good upside.
Because I think in the end as well, whether you like the idea of tariffs or not, if the
end result is that it results in lower income tax, if that's used to finance lower income
taxes,
then I think there's a benefit there,
which I think people again are not looking at,
which would be a positive.
And so just like right now in the worst of times,
everyone just focuses on the worst case outcome,
then the pendulum swings and everyone starts to look
at just the best case outcome.
And that's what causes these dramatic market swings.
So I don't know if the bottom is in,
because again, I think there's gonna be a lot
of uncertainty around the April 2nd tariff implementation.
But I think just keeping an open ear for what would be any kind of small resolution, I think
then the balance, the asymmetric move is to the upside versus the downside once that happens.
Appreciate those thoughts, Matt. Great to have you up here. Thank you.
Appreciate those thoughts Matt great to have you up here. And as always on these spaces, if someone says something that you agree with or disagree, throw up a hand jump in to the conversation feel free to respond open dialogue is always great on these spaces we encourage
that.
In the meantime, I do want to continue around this great panel we have today, and bring Larry Thompson into the conversation.
What's up guys?
Everyone hear me all right?
Sound great Larry, how are you?
I am good, I'm good.
Thanks for having me on.
I'm going to take a slightly different approach than the first two guests.
Shout out to Brett and Matt.
You guys have some good insights.
I tend to approach the markets from a more technical perspective. I love
Right incorporating what the Fed has to say and kind of the big picture orientation of that
But I mean if you look at the charts, right the charts are kind of saying exactly what
The words right that have been spoken or saying right look at the queues look at S&P 500
Just you can look at them queues look at s&p 500 just you can look
at them on a basis of just looking at uh intraday and looking how it's been a sell to rip market if
you look at the s&p or the queues against the five day moving average there's a sell to rip market
and we're starting to base a little bit uh shorter term which is great to see right you'd love to see
right the first thing
to do to stop going down is step one. And then you have to start going up. But I think when we talk
about human psychology and right people overreacting, underreacting, I would just take this time when the
market is messy to look at the market two months ago from a technical perspective and
understand that stuff that's occurring right now is not new right what happened
at the beginning of the year is there was an anchoring bias of year-to-date
year-to-date year-to-date year-to-date all I saw on Twitter was people you know
showboating year-to-date returns in January and mid-February and they weren't including
what occurred in December which was a sell-off and then everyone just forgot
about December and then at the beginning of March you had three-month returns
that were flat and you can look at the S&P 500 right it was trading in this
range from 600 to 580 and then we broke down out of that range and so part of me
bringing that up is just like I think price
knows a lot of this information and price is gonna give us a lot of this insight in advance to what
The general public is gonna think because I believe price moves first. I believe there's information in price
And so just taking a look at that. I understand that it can be normal for pullbacks to occur
Just taking a look at that, I understand that it can be normal for pullbacks to occur,
but you can also see them coming. I don't think it's as difficult as it may be geared towards maybe
financial advisors and other things, but look at the mags, right? Look at the S&P 500 from a percent
above the 200 day, right? It's like 40% of stocks are above a 200 day, but that's been decreasing way before the start of this year. And so I think we came into the year
with bad breath in the market. We came in with making new all-time highs, but if you look at
net new highs on NYSE or NASDAQ and S&P 500, new highs were choppy and they weren't consistent and how you make money in a market is by
persistent all-time highs not sporadic all-time high
So once we had that failed breakout, I just think now we're in a we're in a short-term downtrend
And I think it's in the market is guilty until proven innocent, right?
The only mag-7 stock above the 200-day moving average is
Meta and Meta looks okay, but like Amazon today is getting rejected and video isn't fighting against its 200 day and so I just I
Think right. There's not a lot of room left on the bone to the short side, but
I'd be prepared for it, right? I would be prepared for stocks that are getting rejected at their 200 day. That's not bullish
Right forward looking returns over the next 12 months one year is great, right? So the bar to be bearish is very high
But we need to follow through in the market. We have two updates Monday Tuesday
We're not seeing any more type of follow through in the price action
Financials look good outside of that the three months, the best sectors have been energy,
healthcare, and materials in S&P.
The three bottom sectors, communications,
discretionary, and tech.
And so to me, it's prove it.
Like prove it to me the case to be bullish in the market.
I think you have good risk reward against 560. Brent brought up a great level, 565. I think you have good risk reward against 560. Brent brought
up a great level 565. I think you have great risk reward there, but MAG7, if you look at the ETF MAGS,
MAGS can't be below 50. This ETF makes up 30% of the entire stock market of S&P 500. You can't have the MVPs of the market
on injured reserve, right?
We're basketball, right?
You can't have the best of your star point guard injured
and expect to win and make it to the final four.
We can't have mags below their 200 day
forming this dare flag, right?
Between 48 and 45.
This is a consolidation with RSI below 40.
Those tend to resolve down, right?
Mags is in a 20% draw down, right?
22% draw down.
And so I don't think because of the concentration
in the market that this is a unique time, sorry.
This is a unique time because of the concentration
in the market.
I think you have to pay attention to those mega- using mags or using just those seven stocks and think hey
Every other time we rebounded right concentration in the market has not been this high historically
So breath might rebound but we need the mag seven to rebound in order for the market indexes to go up
So for me, it's's the market S&P 500 I'm talking about specifically,
is a guilty until proven innocent.
Last thing I'll say is if you are looking for opportunity,
I think there is some opportunity within financials.
I think there is opportunity to take low probability swings at the market,
meaning the environment is not ripe to be long. It's also not ripe to be short. So you can take low probability swings at the market meaning The environment is not right to be long, right? So and it's also not right to be short
So you can take low probability swings, but I would just in those situations like against S&P 500 560
Right get out if we get below 560 because we're just at these critical junctures. Look at meta against 600 Amazon against 200
We're at these critical levels that are along with moving averages that I just think
we need time for this market to prove that it's going to get back in this uptrend because I
Don't know if anyone on this call wants to argue with me
But why would you be buying mags here like look at the mag 7 other than the fact that
Over historical periods of time these things have recovered
But what trades there right to me it looks like a bearish trade if you want to take a trade. So those are just kind of
my thoughts. I'm not panicking, right? The time to panic was when the S&P 500 broke below 580.
That was your level to get out. Now you have to endure the ride because as your other guests have
said, for the market to go down another 10%, there would have to be something pretty significant.
But in order for us to also go up, you have to get the MVPs back on the field.
So enjoy March Madness, enjoy the nice weather.
I live in South Carolina.
It's beautiful today.
And just wait for these things to kind of play out because it's low probability
trading environment right now.
Who's your team there, Larry and March Madness?
I'm a Maryland guy.
So I grew up in Maryland but I also root for Clemson.
So Maryland and Clemson are my two teams.
So there you go.
I think that Clemson game is about to tip off here pretty soon actually in a couple
minutes.
I'm sure you've got that on one of your monitors over there.
Great thoughts, Larry.
I appreciate you joining in.
And if Gav was up here, he would love to hear the Maryland.
He's a Maryland guy as well.
I believe he's a little bit busy today.
But anyway, yeah, thanks for those thoughts.
Larry, I want to keep going around the panel.
Let's see.
Chris, I know we had you on earlier space,
but we'd love to see if you had any thoughts around the conversation thus far.
Yeah, well, I actually saw that the AI, so the American Association of Individual Investors, they have put up a sentiment service since 1987, I believe. And for the first time ever since they started,
so that's each week, it was a bullish sentiment was below 20
for three weeks in a row.
So I think that I'm not so sure if all the bearishness is actually warranted because if you know the
history of the AAII survey, you know that it's a perfect indicator of the country.
So the opposite always happens. So I'm not a short-term investor or trader,
but I'm not sure that if you look at it historically,
usually a month later or so, three weeks to a month later,
the market does the opposite as the sentiment
of the individual investors.
So I think that this could be a ball pushed on the water, which jumps up in a few weeks.
I'm not sure about that.
And to be honest, I don't really care that much.
Yeah.
Chris, you're you're
Robotting a little bit on your mic there I'm not sure if it maybe you're in a bad connection spot or not
I got the gist of the most of it there at the beginning, but it was robotting there a little bit
Okay, I will leave it all come back in all right
Perfect. Yeah, we'll get you right back up in the meantime. Let's let's keep going around
Perfect. Yeah, we'll get you right back up in the meantime. Let's let's keep going around
Spartan we've got you on stage again today. See if you have any thoughts around the conversation
Yeah for sure. So, you know, I was on yesterday talking about
The market one of the space. Oh
Canadian that was
Well, I am Canadian so we love it all
I'm gonna can say to Canada, just so you know.
Yeah, well, hey, they called the snap election going into, I guess, April 28.
So we'll see what happens here.
It would be interesting for sure.
But anyways, guys, let me kind of get into it.
So I'm mainly technically based.
I obviously keep an eye on what's going on fundamentally based.
But I think this is
probably the hardest time to try to predict anything from a macroeconomic standpoint.
Just stuff gets changed so quickly. There's things that are thrown out. You know, it's
real. There's a lot of uncertainty there. So I always defer to price action. Price to
me is the best indicator of what's actually going to happen. It usually gives you a hint
before things actually occur.
I think price never lies, yada, yada.
Now, with that being said, I've noticed a couple changes
in the last, I guess, 24 hours.
Trading the SPY, I found that today especially,
a lot of the dips are being bought up.
I'm trading it almost like a bullish tape
where I'm able to take longs off of,
and this is intraday, by the to take longs off of, and this
is intraday, by the way, longs off of any sort of dip on support level one. It's been
working at a very high probability today, which has been good. This morning, we had
a nice little rally, got rejected again at the 13 EMA on the daily, which is what I use
as the short term trend indicator. Now, that's a massive level going forward. And right now,
that is around, I'll just let you guys know, it's 5.68, 67.
So I'm going to be watching that level tomorrow.
This week, you have some pretty good consolidation that's occurred.
If we can get back above that level, then I think the market can turn in the short term
and continue this little bounce.
But with that being said, there's a lot of things that need to happen.
The MEG-7 is still mainly all below their, you know,
EMA moving averages in the short term on the daily,
but a lot of them are testing it.
So I think you're at an inflection point
from a technical standpoint where you need to wait
and be patient, especially in the swing side
or the longer term.
I think it's a really difficult position right here,
unless you're day trading
or like short-term 24-hour swing trainings or just trading strictly
relative strength and relative weakness
I think you're gonna find that the the risk award or the probabilities
I guess of taking setups here is gonna be a little bit lower
It's almost like a 50-50 shot in my opinion on a lot of these names now with that being said
There's there's some you know performers. I love gold. I mean, you know trading a lot of these names. Now, with that being said, there's some old performers. I love gold. I've been trading a lot of gold-related assets. I'm on this little small one right
now, NGLD, which I did post a thesis on the last few days, which is up nicely and it looks
like it's breaking a low. It's got some room higher.
I'm going to be watching some of these into the Canadian election if you guys are kind
of unsure how our market works here,
not that I traded a lot, but there's a lot of mining names that are trading at like 0.5
and one multiples.
So depending upon what happens, there could be a tremendous opportunity there.
Warren Buffett said that it's one of the most undervalued markets in the world, but it's
broken liquidity wise.
So it's something to watch.
Gold miners?
Sorry?
Gold miners? No, just the actual.
So Canada's majority of our stock market is mining based.
So there's a lot of mining names that are undervalued.
And it's going to be a decent watch going forward.
A lot of them are cross border traded as well.
Some OTC, some NYC AMX.
There's some on the NASDAQ even. And it's worth taking a look at lot of them are cross-border traded as well, some OTC, some NYC AMX, there's some on the
NASDAQ even. And it's worth taking a look at some of them. I think there could be potential
opportunity. But we'll see, of course, you probably would need a change in complete leadership in
Canada for them to become attractive. So it's worth a thought. It's really outside the box.
I'm pretty familiar with the space, just being here and rubbing shoulders with a lot of these guys. So it's something that
I'm watching for. But anyways, kind of going back to the market here, guys, I think you
got to be patient. We're going to get direction, I think, in the next two to three days. You
don't have a confirmation in regards to direction right now. I think you've got to watch the
short-term technical indicators, of course. from a macro standpoint, watch the headlines.
That can change things quite quickly.
But you know, at this moment in time, from a long-term perspective, I'm kind of waiting.
And I want to see what the Meg-7 can do in the short term, see if they can reclaim some
of these technical EMA support levels, or they get rejected at the trend and they continue
lower.
I think semiconductors, we need to keep an eye on that as well because that was one of the biggest drivers
for the Qs and for the tech side of things going forward and obviously that has a direct impact on
the overall market. But yeah, I mean that's kind of the overall thoughts right now. In short,
watch the short-term technicals, see if they reclaim or not, and then I think you can start
to position yourself after that.
Yeah, the technicals are definitely interesting. You look at a daily chart on Spy or QQQ, either one,
you see a lot of upper wicks
underneath this 200 day moving average,
but you see maybe a little bit of a support line
forming underneath this.
So it would be interesting to see how this continues
to play out, of course,
all the large option expiration tomorrow will be
rolling off and rolling out down up whichever direction they go with that.
Continuing around here this afternoon, great discussion so far. Ariel, let's get
some thoughts from you today please sir. Yeah thanks for having me and you know
kind of to build upon what I heard Larry
talking about earlier, the reality is,
if we exclude Saudi Aramco,
because they're not traded here in the United States,
I mean, Metta is hardly holding onto its 200 day.
I mean, Berkshire Hathaway is the only name
that's in an uptrend effectively.
Because if we go down the list,
TSMC and Broadcom and Lilly, Tesla, they're all also under the 200 days.
So, you know, from a technical perspective, you know, the biggest
companies in the world, effectively, all of them in the top 10 are all below
their 200 day moving average.
And so, you know, could we get an oversold rally?
And then that probably does feel like a strong bullish rally because these names,
the top 10 carry so much weight for individual indices. Absolutely. But I think, as I mentioned
on Tuesday, the real job is you have to start to say to yourself, even while the market's been
going down, what's been holding up best? And somebody mentioned it earlier, it has been gold.
Recently, it's been crude oil names. You could just look at something like Chevron or AR, EQT,
LB, WMB. I mean, there is not a lack of crude oil stocks that have really giant bases. And your
best trends are born out of big bases and that's just
How it's always been and and it's you know
even when you think about gold and it broke out of a 10-year cup and handle last year and
Effectively this time last year
It's been in an uptrend for a year now. So
You know when things build big technical bases
It's it's what where your big trends are born from and I am not of the opinion that
you know
stocks that have been on a thousand or thousand percent run over the last 24 months like an Nvidia in a group that's
Effectively been doing nothing for the last year. If you just look at the SMH is where you want to be
Right. It's like any earnings leader
They they go for you know, quarters, 18 to 24 months,
and it's done its job.
A Palantir is up 1000% almost still,
and it was even up more than 1000% in a two year period,
when it was up above 100.
So I think the tech trade has played itself out, at least for the time
being, and there's just too much technical damage to just think that these are the places
to go back to. It's never usually the case that for any bullish cycle, it's the prior
cycles leaders that continue to be your leaders. It's new stocks. And you want to ask yourself, even during this
small little bounce for the ES or the SPY for some people over the last three, four days,
what are the stocks that are rebounding best? Maybe something like Spotify potentially.
But again, it falls into, it's just kind of this lone wolf, right? It's like for me, I'm always sitting there thinking to myself,
what group is getting the most love,
not just what one individual name is getting the most love.
And that's usually how you're going to find, you know, what institutional,
uh, you know, headphones, you know, what they have an appetite for.
And if it's gold miners, so be it, right?
If it's gold stocks, so be it.
If it's international stocks, so be it.
And in the meantime, the United States stock market
has had an absolutely beautiful run
after its 2022 correction.
And there would be nothing wrong
with it just going a little lower
or having an oversold rally and then rolling back over or having an oversold rally
and then just going sideways for a few more months.
But I think it just, even kind of from the sentiment
that I'm gauging, just from engaging with people on Twitter
is they're all still in the mindset of it's a viable tool
and they're looking at prior leaders versus
you know kind of looking at you know the what's next in the market.
So for me that is where my attention is it's in the what's next it's not I'm not interested
in stocks that have made a thousand percent move and are in groups that are weakening
like semiconductors.
So you know yes I'm not sitting here claiming
that Nvidia is some bad company,
but if you missed a thousand percent run
in the last two years
and now you're just trying to buy the dip,
at some point that you get punished for that, right?
If you're too late to the party, you get punished.
And groups fall off, right?
It's happened with, whether it be Solars
or recently Home Builders and, you know, again
even some semiconductors and you don't really have many
great from a technical perspective, many great charts
in that space.
So, you know, you've got Broadcom hardly hanging on,
you know, you've got Nvidia living under the 200.
And again, it's not just an Nvidia, it's effectively all the other Mag-7 stocks,
with Meta even effectively reversing its entire move
this morning where, oh, wow, it looks great.
It's opening right around 580
and it shoots all the way up to 610
and then it gives up effectively the entire move.
And again, this whole notion that you have to fall 20% to be in a bear market.
I think that that's completely lazy and silly.
I don't know who ever came up with that arbitrary number that first we have to go down 20% for
me to finally get negative on the market.
Just a month ago, when the market was down 2% and 4%, you had stocks and
growthy names, these little bit more like on the euphoric side, just getting absolutely obliterated,
your Oklos of the world and your IONQs of the world and even your Palantir.
of the world and even your Palantir.
And it wasn't even just that, it was also your app, Loven's.
So really the list was countless on stocks
that were down 30, 40, 50% in just a few days
while your indices are only down three, four, 5%.
And so again, I don't understand the arbitrary number
where we have to go down 20% first
to finally get negative on the
market. In fact, you're probably already late to the potential short in the market. And then people
will be like, oh, you got to be careful shorting it now. We're down 20%. Well, it's like if you are
interested in maybe shorting things that have gotten up into the nosebleed sections, you know, you're already late to the party.
And then that's how you get yourself caught, you know, being too negative
when you're down 20%.
Um, but again, there, there is really no right answer.
The right answer for me personally is to focus on what groups have the
best technical setups and then within those technical setups, which
of these individual names have the best fundamentals?
And then that is what will cause up some appetite for a particular name in an uptrend that an
institution can go to and say, well, they've got some accelerating earnings and sales,
and they're in a top, there's 197 industry groups.
And so if you're focused on the things in the top 40
and not on the things that have gotten too cheap,
you're gonna save yourself a ton of headache
because if you're looking at the things
that have quote unquote gotten too cheap,
you're also then looking at the things
with the most overhead supply.
And you're kind of just fighting the trend
versus just trying to figure out
where's that money going to next and then being involved in that.
So that's kind of my thoughts here.
Ariel, real quick before I go over and try Chris again, we've heard you, Larry mentioned
this as well.
You mentioned this, the leader of the market for a long time.
We had mostly Mag-7s, right?
They were our clear leaders.
Is there a leader in this market right now?
And if so, who would it be?
I don't know that I can single out what one individual leading stock would be.
And that's because, I mean, if you're going to just say from a technical perspective,
it's Berkshire potentially,
it's Warren Buffett when everybody's laughing at the man that he's sitting on $300 billion
in cash, it looks like Berkshire.
Is any stock underneath the 200-day moving average considered a leader?
That's normally where your downtrends begin.
You got to just think about it like this. Nvidia got over its 200-day moving average going into 2023, effectively right at the
ends of 22, going into 23.
It didn't even whiff it.
It didn't even get close to getting below it or touching it or anything for two full
years.
And then you break below, and then it's weak.
It just hasn't done anything.
And then again, you can say Nvidia is a leading stock,
right?
It's institutional quality.
They're a great business.
They print tons of money.
They're in the right sector for the future,
et cetera, et cetera, et cetera.
But again, what more could we really ask for
from an Nvidia here, right?
It's $118 stock.
It's a $3 trillion market cap.
I mean, are we just hoping that,
I mean, again, at this point it's gone up a thousand percent
in two years.
What more are we hoping for?
Are we hoping for another hundred percent?
And then it's a $6 trillion company, right?
And so it's like, we're like scraping the meat off the bone.
We're at bone marrow at this point.
And I just see money rotating into
whether it's Chinese equities, something like Pinduoduo look kind of nasty in the morning,
and then has nice follow through today on earnings. So is it maybe Chinese equities?
Is it gold miners? Is it oil stocks? I mean, people might be saying if Chevron breaks out of
this weekly base, it looks like a huge two-year
weekly bull flag and it trends up for the next four weeks, people might be saying ExxonMobil
and Chevron, et cetera, are the new leaders. And again, money just rotates from one place to the
next. And I don't want to get caught up in the stocks that are already behemoths and that aren't
acting well. It's like you can get a little bit of money leaving
from some of these mag seven, mag 10,
10 largest companies in the world.
And it can go to the other 493 stocks in the S&P 500.
And if you just even overlay like a spy with your RSP,
you can kind of see that the RSP
is starting to outperform a little bit, right?
And that makes sense, right?
It's like money can go to these other places.
I think that that's healthy.
But to answer your question again in short, I don't know that there's any one particular
leader.
Again, there are great companies, but from the only thing that's going to pay you is
price going up.
And I don't know that there is a quote unquote leader
right now, maybe Berkshire, you know,
I know none of us are buying Burke A, you know,
maybe Burke B.
So, you know, that's fine.
But then again, what other groups look strong?
And, you know, from my perspective,
it's some Chinese equities, some international markets,
some gold and gold stocks. Now that's getting a touch extended. Copper looks pretty good,
crude oil stocks. They just got the most amount of big bases. And I think that, what do they say?
I'm sure all of us have heard the old adage, the bigger the base, the higher in space.
So if we just focus on what's got the biggest base
and there's a multitude of setups,
I think that that'll put our eyes in the right place.
Appreciate that take there, Ariel.
Chris, let's throw up the half court shot
and see if we got a better mic connection this time.
I hope I think so because I can hear you better as well.
There we go. You do sound much better. Yes.
I wanted to give you a chance to finish your thought earlier before we go over to logical Sam.
Well, yeah. 20% was bullish.
That had never happened before for three weeks in a row. I think a new one came out this week and it was just above it.
But just like mid-January, it was still like 43 or something.
So sentiment is really bad.
And if you know the AAII survey, it has a near perfect track record of predicting the opposite.
So if individual investors are very bearish,
it often means that there could be a rally, usually
like three, four weeks later, something like that.
I also heard something that I really like that, you know, why should we arbitrarily have to wait like 20% to call the bear market.
I even up for the other word in more correction as if you know the market was completely wrong before and should be corrected. It's, you know, a really strange word. And I saw an interesting stat from Michael Batnick last
week. The market was down just under 10% at that moment. So talking about the S&P 500, but the
So talking about the S&P 500, but the median stock in the S&P was already down 18%.
So that also says something about arbitrarily.
Why do we take the average and not the median stock?
So there are lots of things there that you should look at with a bit of skepticism.
And I think that indeed there's,
I don't see too many positives right now from,
the big companies, et cetera.
But the main thing right now,
and that's probably why so few people,
individual investors are bullish, is indeed that uncertainty.
Everything can change with a tweet or something.
I think that maybe that could be positive as well.
Maybe the market will rip in three or four weeks.
I don't know. And we'll have to see because things can change extremely faster
nowadays even more than before because of the algorithmic trading, which has increased a lot,
of course, but also because so many individual investors trade, they they didn't have the means before or it was just too expensive
So I think that there are many things that and and of course we should not forget the ETFs which
Play an important role in the market as well. So I think that the moves we see are more extreme than they used to be and
You know, it's it's it's great for me as a long-term investor
If the market drops
You know, I'm always happy to buy a bit more and you know, I'll make money from that in the long term
So that would that those were my thoughts and I'm happy that the mic worked
Yeah, great to have a clear connection there. Thank you for getting your
thoughts in. Logical, your hands up. Let's go over to you next. Yeah, I just wanted to say I really
liked what Ariel was saying. I agree with all their thoughts, essentially. Why are you going
to run out and try to, you know, buy what was the previous leaders when a lot of this big tech is
looking very heavy? I've been talking about that for some time.
I got out of Amazon 230 to 40.
You know, there's a capex cycle happening there.
I'm not necessarily bearish mag seven, if anything.
I think they look fine, but clearly going to be somewhat dead money, you know, unless
we get a rip rally and economies all fine.
But right now I think that the risk reward really isn't there.
Semis obviously look heavy. It's kind of like guilty until proven but right now I think that the risk reward really isn't there. Semis obviously look heavy.
It's kind of like guilty and feel proven innocent right now.
So just in terms of like the capex cycles, cause you know, if these mag seven,
they're hyperscalers, the customer, they're the customers of these semis.
And you know, if their stocks are starting to plummet, then they can pull down
their capex spend.
And I think that's kind of why there's a lot of uncertainty around, uh,
Nvidia right now.
And so, yeah, they're really tied to that capex cycle.
But yeah, I mean, I think you want to look for what is working and where is the next
narrative.
And I keep beating the drum on this one.
And look, I've been talking a lot about biotechs.
If you look up ARQT, which is my largest position, I've talked about on the space a hundred times
in the last one month. It's up 26% I mean it's at like new 52 week highs just retesting them and wants to push higher
I think focusing on FDA commercially approved biotechs with real revenues real growth
They're basically not they're not even you know biotech anymore their healthcare at this point
And there you're getting like the growth out of them not like some sort of you know
Slow growing Merck or something like that. So I think there's going
to be some really big winners in that space. Another one, spray, ARS Pharmaceuticals, they
reported today, I've talked about this, this is another commercially approved name. They
have essentially a replacement product for the EpiPen for bad allergic reactions and
it's not a
needle it's a nose spray. I know these sound like boring businesses but
that stocks up 24% today on the back of good earnings. The plan is in
place to be able to have a successful launch around that product and you know
what the stock had 30% short interest it was the most crowded short. It doesn't
make a lot of sense to me. I think what it really symbolizes is the confidence and I would even say arrogance of a lot of
market participants to be able to continuously short biotech companies into extremely unreasonably
low valuations. And when you have such low valuations, you don't need a lot to go right
for the stocks to work from there. So you kind of have this double buying pressure of they are nobody's longs and they
are somebody's shorts.
So you have double buying pressure there on the hint of any good news.
Another one that was up quite a bit this week was Regenexx Bio RGNX.
Let me see what that one did this week.
It was up 13% this week. There's another company
called Sarepta SRPT. They essentially had some bad safety data come out this week. But
Regenexx Bio is essentially coming up with a competing product. And when you're trading
at 50% of the cash on your balance sheet, like the market cap is
half of the cash they have in the bank, you don't need a lot to go right for the thesis
to work.
And I think that that's what's happening in biotech land is you just have these unreasonably
low valuations and you're getting exposure to a place in the market that is not so tied
to the US consumer.
And if we start seeing, so one, they're going to keep seeing trials progressing.
That doesn't matter about where the consumer is.
Two, they're going to have sales.
If you need medicine, you need Arcutus biotherapeutics, their cream for psoriasis, you're going to
need their cream. So they're growing
60% quarter over quarter. That's not going to stop if the consumer slows down. So you're getting
that healthcare exposure. And yeah, I mean, I'm not even talking about being long some random binary
situations where it's like, you know, 80%, you know, 500% up 80% down if they fail
a trial, like I'm not talking about that. There's a lot of good businesses, but you
have to find them. But the good news is that there's a ton of them. And so it's a really
good sector that's basically in its worst bear market for the last ever in history.
It's the worst bear market for the XPI, still down 50% or more from the 2021 lows. You could argue it shouldn't have traded up there.
But I mean, this sector has absolutely zero flows.
And if we do get interest rates to come down,
which seems like that's gonna be the path over the next year
and maybe even accelerated at some point,
more than people's expectations,
you're gonna get a lot of reinvestment
back into the industry.
I think that's kind of why the sector has been left for dead
is because look, if you have 10 billion in the bank and you're Merck or you know, Abbe or whatever,
you know, you're collecting a lot of money, you're getting a lot of income on interest sitting in
T-bills. But once those rates come down, and you can't just get that risk free rate anymore,
you're going to have to look for other opportunities of growth and use of that capital.
So I think that they're going to start looking for more organic and inorganic growth opportunities.
And there's a lot of assets for cheap right now.
And so we're starting to see a couple of acquisitions
pop up here and there.
I've been a little bit early to this thesis.
I thought rates would come down sooner, but they have not.
But it's one of those things, it's kind of a when not if.
And you're really getting paid pretty well
I think to wait because right now the valuations are very cheap
But if that thesis starts to take hold then I think a lot of the deals are gonna be gone
so not to say it's a FOMO thing, but it's more like
you want to be I think a lot of what the market misses is it's about positioning and
Right now there's nobody long in those names so I'd rather not be
you know I think some traders will say okay like I want to be long the thing
that's working and riding that moment and that totally makes sense but I'm
more interested in finding value where I can find it and where it makes sense
over the next year or two I've been pretty good at that and yeah I mean this
is clearly working in a very choppy market. And so I, yeah, I think it could be a sleeper.
I've been talking about it for a while.
If you think about like, like I actually exited my, this is a different point, but
I exited my China longs today.
Obviously PDD having a nice day, but K-Web not so much.
I think that, you know, that trait has also gone from contrarian to consensus.
And it doesn't mean that consensus won't keep doing
very well from here. But now the positioning is not so easy. I think that we've filled
kind of the valuation gap there a little bit. And when the queues are down 10, 15%, but
K-Web is up 30, 35%, that's a 40, 50% spread. know the valuation gap really is different but
obviously you have a fiscal stimulus package there that's like a bazooka so
you know that that economy and those stocks can keep winning from here but
it's just like you know what was contrary in three months ago is no
longer so yeah I think maybe something like a biotech or a healthcare is gonna
continue to be a winner in this market, especially in a slowing economy.
Larry, saw your hand go up there and first off, I do want to apologize. I just realized I picked McNeese State over Clemson in my bracket here, so apologies for that. But saw your hand go up,
I want to get you back into the conversation here with whatever thoughts you have.
Clemson's getting crushed, so it might have been a good bet.
But to be fair, I saw a hype video on McNeese State with them walking out with like a boom with whatever thoughts you have. Clemson's getting crushed, so it might have been a good bet. But, um...
Well, to be fair, I saw a hype video on McNeese State with him walking out with a boombox
that was in my algorithm.
I got sucked into the hype.
I don't know.
We'll see if it works.
Hope it doesn't, but either way, it's funny.
The one thing I would just say about the biotech, congrats.
I would say one, my name is HostileChart, So I just want to push back a little bit all respectfully
but if you pull up that rgnx chart, it's done this 20 times and
then
Gotten destroyed
It's popped and gotten destroyed popped and gotten destroyed if you zoom out to like a weekly chart. So
maybe like
Congrats, like i'm very happy you did this. I would just say for people who
right might not be familiar just zoom out on those charts and understand that
the person who just spoke probably has a really good risk management process in place.
And of course the story sounds good when the stock's up you what 50% in two weeks, but the stocks been up 50% in two weeks seven or eight times over the past
Five years and it's down
85% from its all-time high so I just want to provide a little context around that for listeners
Obviously the person who just spoke understands it and trades it well just
Understand that like it is an uphill battle for those types of names
But it's awesome
when you're able to catch those moves. The second thing I wanted to say about AAII survey, yes,
it does mark bottoms well, but a lot of things mark bottoms well that aren't bottoms. So every bottom
involves people panicking, but not people panicking isn't every single bottom in the market. Because
reality is, if we have political uncertainty, and I'm just being double-advocate a little bit here,
but if we have sentiment in the gutters, and we have political uncertainty, that means bulls
are drawing up. And you need bulls to to buy stocks for stocks to go up over the
long term.
So short term, yes, there can be a positioning battle, but like you still need bulls to then
come back into the market.
And that's why these failed breakdowns happen a lot is because you get people off sides
and then you get followed through to the upside.
So in technical world, we refer to it as like right a fake out
Or a bearish failed breakdown whipsaw whatever you want to word it oops pattern if you're Larry Williams guy
But at the end of the day you still need bulls to come back to buy those stocks
And if people are just gonna sit on the sidelines, that's not bullish
So I would just yes if you're a 30 year investor sure buy here
But I would just also you need these things to prove it to you to do it
Someone made a good point about right bull market correction terminology
As a technique technician one of the beauties we have is we actually look at what makes up these things and we can actually
Speak with a lot more nuance and certainty to what's occurring versus S&P 500 is only down 10%.
Why are people panicking?
Well, MAG 7 was in a 22% drawdown two days ago.
The average NASDAQ stock, NASDAQ 100 stock, was down 21%, which if you're a news outlet,
that's a bear market.
So if the NASDAQ 100's average stock was in a bear market, the MAG 7 were in a bear market,
just playing devil's advocate here,
what makes us think then that the rest of the market
isn't gonna follow?
I hope it doesn't, but just the random thought.
And then last thing I wanted to talk about was
Ariel brought up a great point about rotation.
Once again, being a technician, the beauty of it is
we can just look at what makes up the S&P 500. If there is a stealth bull market, meaning some breath improves, right?
So the number of stocks goes up and, but mag seven kind of continues to pull the market down.
We could have what people refer to as a stealth bull market where stocks underneath the
surface are going up, but the indexes are lying.
So I really recommend if you don't understand breadth,
learn it, right?
Take this time when the market is messy,
not to, I don't know, pickle on bears or pickle bulls,
but take this time to learn a new concept.
I'm 29 and the last bull bear market we had,
I took time to get my CMT
and now it's just paid numerous
rewards to me. So I would just say take time to learn those types of things. Take time
to understand that. Well, nine out of the 11 sectors of S&P 500 can be up and S&P 500
can be down, right? So just understand that. S&P, so semiconductors make up 11% of the
S&P 500. Software makes up 10% of the S&P 500. Those two sectors alone make up 11% of the S&P 500. Software makes up 10% of the S&P 500.
Those two sectors alone make up 20% of the S&P 500,
which is greater than the bottom five
or six consecutive sectors combined.
So just be aware that you can have stocks
underneath the surface doing well,
but just don't necessarily think that means
the S&P 500 has to do well because the Mag-7
is such a large lever of that system.
But that's just kind of what I wanted to add to the conversation. Play little devil advocate
and just also provide color to some great points people were making.
Before I go over to StockSniperLogical, I want to give you a chance to respond to some of that.
Yeah, I mean look, you respond to Regenexx bio, but I didn't hear a response to ARQT.
I mean, that chart looks like it's absolutely breaking out.
Let me pull it up.
Sorry, let me pull it up.
I'm sorry.
I didn't hear the first one.
ARQT, beautiful base.
You're right.
Against 15, that's a great-looking chart.
That's a number one position for me.
So sure, I should add a little bit of context.
Regenexx Bio is still a clinical trial biocompany,
and it is still in phase three trials.
But the thing about this stock is I wasn't long 80% higher.
I'm talking about if we're looking
for leaders in this market to come from this point forward.
It's what I'm trying to say is, look,
I'm a fundamental investor at heart. Obviously,
I'm not going to size a pure biotech which has still speculative risk of not getting
FDA approval. I only size those as 1% to 2% of my portfolio.
I said your risk management was probably way better than most people. I'm complimenting
you. No, no, no. I'm good. I, I'm good. But I just wanted to call out like, here's the reason
why I highlight a name like Regenexx bio and why I think it's really important to understand
like valuations and fundamentals as well as the technicals. I get that maybe from a technical
basis, it hasn't really been a great trade for the last year. And that's fair because,
you know, beta readouts have been far in the future.
But this is a company that has three phase three
trial readouts over the next year or so.
One of them is partnered with Avvy.
They're getting a milestone payment of $200 million.
I mean, this stock trades at like 400 mil market cap.
They're getting that by the end of H1.
They just got 110 mil payout from their other partner on one of their other phase
three trials. There's just so many ways to win in this environment. And I guess the point
I'm trying to make is, yeah, of course, I wouldn't belong to stock at $20. But when
you're buying it at six, seven, eight dollars, and it's at 400 mil market cap, and they have,
it's eight dollars, but it has $14 of cash for share on the balance sheet.
There's just a lot of ways to win, especially when they don't just have one phase three
trial, they have three. And again, I still only would, you know, size this as a one to
2% position until we get FDA approval. But for a lot of these names like spray and ARQT,
you know, they're commercially approved. So I'm okay taking a 5, 10% position in these
because they have real revenues.
They don't have the speculative nature
of getting FDA approvals.
I think those are gonna continue to be the leaders.
So yeah, I mean, obviously size these things differently
based on the opportunities that the point I was just making
was that a lot of these are priced for nothing.
Other way, I wanna jump in really quickly.
Micron earnings out, BEPs beat revenue,
forward guidance above expectations.
For the most part, stock was moving higher initially.
FedEx earnings also just came out.
I haven't gotten all the numbers in front of me.
MU up about 5%.
FedEx initial move is down 3%,
so waiting for some of those numbers in front of me.
You need to know.
Yeah, just wanted to close that up and pass the stock snap.
But the point was just like, you know, where do you want to be in this market? And I want
to have little US consumer exposure until I'm able to figure out, you know, what the
outlook of the economy is going to be. And I'm just saying that biotech and healthcare
offers you that you're not as exposed. And obviously, these charts, yeah, I'm bottom
picking a lot. And you could have said that for the last year or so. But I think we're at a peculiar place where, you know, these cash flows are not going to be disrupted with a slowdown in the economy. And the again, the assets are being traded at very negative enterprise values, which is like unheard of if you look at the rest of the market.
the market. I love this ARQT chart. It's great. My number one position, man. Super happy with
it. Yeah, it's a big time grower, very good market that they're in. They can... TD Cowan
came out last week and said they can 6 to 7x their market share.
And that's just given their current indications, current addressable market.
That does not include Canada expansion, which isn't as big as I think one day they
can get Europe expansion.
This doesn't, this gives us $0 value towards their pipeline, which they have
apparently somewhat promising data coming out.
It's still very early in their
early trials, but they have an alopecia drug in the works. But yeah, you don't even need that.
You don't, that's all optionality. I think just based on where they are currently, I mean,
just, just take a look at it. It's really great.
Looks like FedEx missed EPS and beat revenue is what's happening here. That move is still moving lower and Micron is still moving higher.
Alright, Stocksniper, let's get to you.
I wanted to go over a bunch of earnings numbers but...
How many what's happening with Nike coming up in a couple minutes?
Four fifteen is the time those numbers should be out.
Yep, with Nike we got $4.99 implied move.
Alright, stop. Say it again. Get excited. I want you pumped up for these numbers we got coming out.
$4.99, 6.88%. Previous reactions, minus 0.21%, minus 6.77, minus 19.98, minus 6.9%. Since the last report, Nike is down just about six percent open interest is at one million three hundred thirty four thousand significantly
lower than the last two but don't worry we got a skims partnership now I will
say that was not the best energy I've seen but I'll give you I'll give you a
pass because I know you're still a little jet-lagged yeah next week we need
we need the full sniper earning season two three weeks away the the 11th and then it's the April and the 17th of April is when Netflix and I think that's kind of
you can also soften to the next part of it.
All right I mean I guess I'll jump in here and use this segue so I think a lot of a lot of good
conversations from the panel today I'll start off by making some general comments on the broader
market I'll make some comments on the leadership conversation and then I'll touch on, I don't know, eight or nine individual stocks that I think are
symbols of relative strength. I think Larry who checked out the ARQT chart earlier might
like some of these as well. So I'll start off with some general commentary, go into
some individual names and then we can go back to the panel
and have a broader conversation for the last hour here.
But, start off with technical structure.
I like to keep it simple.
I've been trading a long time,
I've tried all the fancy indicators,
I just use price and volume.
And, you know, for me,
I try to model every correction that we head into based on three
to five of the most recent corrections and use that as sort of historical guide.
But you know, you can't be exactly by the book with those sort of things.
So we look at this market and obviously we're below the 200 day.
The last three times we were below the 200 day was August 2024 correction, October 2023
correction, then obviously the 2022 bear market.
The last two instances we had V-shape recoveries back to the upside August 2024, October 2023,
I think six or seven green days in a row to bring us back above the 200 day moving average
and then new highs and all the major indexes within two to three weeks of that.
So that's been the picture of recovery for at least the last two technical corrections,
which coincidentally both also fell roughly 10%.
This one we fell, I think, at the intraday lows 10.2%.
Last correction in August 2024, I believe it was 9.7 and the one before that was 10.6.
I might have those two numbers flipped,
but all around 10%.
And we've seen those V-shape recoveries.
This time we have not seen the same enthusiasm
on the recovery, on the daily chart that we did
in the last two corrections.
We've seen hesitance, resistance
up against the declining daily
90MA, which is a new characteristic that we did not see in the previous two corrections.
And a frankly, a failure to quickly recapture the 200 day with successive green days. We've
had off the lows, green day, green day, red day, Green Day, now another Red Day today. So I think that that's at the very least price indicating to traders that there is more indecision
in the markets during this correction than there was in the previous two.
So I think that's a simple takeaway from price that you can make based on what we've seen
so far.
We're not out of the woods today.
We failed to reclaim that declining 90 ma
We actually had a fight for it into the clothes with Bulls and Bears for those that were watching that price action on the s&p 500
In the last five ten minutes or so there was an attempt from the Bulls to capture that declining daily 90 ma
Into the end of the week, which would have been a positive sign. We failed to do that
Obviously, we're still below the 200 day as well. So
Technical picture does not look great,
but obviously these things can change
within three or four sessions.
I mean, people are gonna be singing a much different tune
if we reclaim the 200 day on high volume next week,
it's gonna look more constructive.
On the contrary, we go back to the lows next week
and break back below that 550 spot
and you're probably headed for a lot more downside.
So, I think this market remains a choppy environment. I think somebody I think
Larry said this earlier that this is not an environment for high probability trades. I agree with that. I think environment matters a
lot more than setup during moments like this. So I would agree with that. I think if you're going to be taking long trades
especially in this environment you need to have a tremendously high conviction, a really, really clean technical setup,
and obviously excellent risk reward management
in this sort of environment.
Because otherwise you're probably
either gonna leave money on the table or get bagged,
neither of which are fun things to do as a trader.
So I think conditionally,
you have to continue to remain cautious
until you see a
Reclaim of the 200 day and I really think you got to keep it that simple I think people who are trying to be more complicated about the technical picture here are probably taking extra unnecessary steps
You know once we reclaim the 200 day moving average you can get more constructive on the markets until then
I think you remain cautious and I think that that's a pretty
simple way to handle it for new traders that are confused
by all the noise and all the analysis that they see on a day-to-day basis.
I put out a tweet today to just exemplify to people how tricky corrective moments in
the market can be.
And I just referenced 2022.
And I'll pin the tweet at the top for people that
want to go take a peek at it but if you look at the swings in the market in 2022 you'll find that
there was a lot of bait and switch there was a lot of bottom calling there was a lot of top calling
and it was really really hard to time you know unless you were just net short the markets from
the beginning of the year and held onto your hats during the counter trend rallies, then you probably did pretty well.
But if you were trying to time your shorts or take hedges on and off or try to catch
bottoms on individual stocks, unless you're just like top 0.1% trader, you probably had
a very, very hard time doing that in 2022. In the first three months of 2022, SPY fell from 459 to 402.
That's a 12 to 13% drop.
Then we jumped from, we jumped to 438.
That's almost a 10% rebound.
Then we fell back to 393.
That's another 10% drop.
And then we jumped back to 443.
That's a 13% jump. That was from January to March
of 2022. 10% up, 10% down, 10% up, 10% down. Now, is that going to happen again? I mean,
obviously it's not going to be, you know, there's no exact analogy where we're going to be like,
oh, it's going to happen exactly this way again. But it is interesting to note that, to say, hey, look, counter-trend rallies
in these type of environments are normal.
They don't mean that stocks are gonna end the year higher,
and they don't necessarily mean
that stocks are gonna end the year lower.
We fell all the way down to 26% drawdown in 2022,
ended the year down 20%.
So yeah, there was a little bit of kick
at the end of the year, but it was still a brutal year for equities if you were net long the entire time. Now, are we setting up for
a similar environment? Well, so far, the price action is indicating that it's more similar
to early 2022 than it was to the last two corrections. That's all we know for now. Is
it going to play out that way? I don't know. I'm not gonna make a call that we're gonna have a repeat of 2022 just yet. But technical conditions are
weak and and they need to improve rapidly. Now on the leadership conversation,
I know there was a lot of back and forth about that. I always find this
conversation to be confusing to me because we have this talk talk good traders and bad traders alike have
this talk every time we get a market correction like hey where the new
leader is gonna be you know who's gonna replace the mag-7 I'll give you my short
opinion on that no if you look at the market of the last 20 years, really 20 to 25 years, leadership has been in big tech, broadly, period.
Okay, in bull markets, that's where the money goes. Now, is that going to change? Is there going to
be some new world order in which world-leading technology stocks are less interesting than
they were 10 years ago? I mean, maybe. I won't say that's an impossible scenario. Do I think it's likely? Absolutely not.
I think what happens is during these corrections, people are like, oh, where is the money going to go?
But in reality, what you end up seeing is in the very early stages of these corrections, you see what looks like rotative action.
And if you go back to August of 2024, it was, it was just a little bit of
a soft rotation, V-shaped recovery, back up the highs. People forgot about the August
2024 correction within like two months. Okay. When you go back to August 2020, sorry, October
2023, same thing. You saw this little bit of a blip in outperformance and staples, healthcare,
these same categories, energy, at the beginning of
the correction, then as the selling bottomed out, those names lost their quote-unquote two or three
week leadership position and it was back to big tech. I think that's probably going to happen again
when the market resumes its uptrend. I don't think when the market resumes its uptrend, people are
going to be buying Pepsi and Coke instead of Big Tech. So I don't think
market leadership sustainably is going to change. I think it will return to Big Tech. The question is,
how long will that take? And are you going to try to catch falling knives here with many of these
Mag-7 names forming bear flags, many of them below their 200-day moving averages, that's probably
not a great setup to attack here today. Does it mean that the MAG-7 are done? No. That
would be stupid, in my opinion, to say. And I also think that because of their weighting,
they go hand in hand. You're not going to get index performance, and vice versa. You're
not going to get MAG-7 performance if the index is don't perform.
And so, um,
I think if you're a broad based investor who only taps popular mega stocks,
sorry, interrupt Nike earnings just out EPS, 54 cents being expectations of 29
cents revenue, 11.3 billion being expectations of 11 billion initial mover
move is up 4%.
Yeah.
So I think if you're an investor that only trades popular stocks with market
capitalizations, over $500 billion, you're going to have a hard time finding
stocks that work in this market.
Because when the S B 500 is heavy and the NASDAQ are heavy, like, you know,
you're buying Spotify and Netflix and meta and hoping like to make nice bounce
trades on those stocks. I
Personally don't think that's the place
To be looking at this juncture now three in three weeks could that change could all these names recapture the 200-day moving average
It look fantastic. Absolutely technical pictures can change quickly. They can change in a day. They can change in a week
So you have to be open-minded to that but where we stand today, no, I don't think it's a tremendously promising short-term
opportunity.
Do I think that means that the leadership is going
to shift away from big tech?
I don't think that's going to happen
on a sustainable basis.
Maybe over a few months, maybe over a quarter,
you get a handful of new leaders.
But broadly speaking, I don't think that's going to happen.
And keep in mind, from 2009 to 2021,
the street was overweight tech for that entire 12 year period and tech outperformed for that
entire 12 year period. So don't underestimate the duration for which and
the enthusiasm for which tech stocks can last because it can last a long time and
so can the performance for those names. Like tech is the sexiest industry, will
remain the sexiest industry. They accomplished and innovate and invent the most things they get narrative premiums
on the stocks from you know shareholders that that find the products and the company in
the story to be sexy and promising in a forward looking manner.
And I think that'll continue to be the case again in the short term probably not but in
the medium to long term I don't think you see a displacement in big tech as leadership. What else am I going to touch on?
Oh yeah. So, you know, I think if you're looking in those mega cap names, I think you're going to
have a hard time finding spots of strength in this environment. And so, you know, understanding that
for me personally, my focus to kick off the year was mid cap stocks.
And I think if you look at the performance in a lot of mid cap stocks, they have been,
I don't want to say immune, but have handled the index volatility far, far better than your major
tech names, your mag seven names even have been much higher beta to the downside than these mid cap names.
And so for me that's been the place to be this year.
I continue to build a basket of mid cap exposures.
I have several now.
I'll touch on a handful here.
So first I'll touch on my aerospace and defense mid cap basket.
Now all five of these names that I'm going to bring up have very strong charts in a market environment
that has been deleveraging broadly.
That basket includes Embraer Jets, ticker ERJ,
which was actually down today about 8%
on the Air India deal going to Airbus,
but it's up what, 50% year to date, Embraer Jets.
Kratos, ticker KTOS, got pummeled
on the defense cutting announcement.
Stock fell like 15%.
But look at the recovery in that stock over the last two weeks.
Off the 200 day, ripped right through all the moving averages and is setting up for
an amazing longer term setup on a five and 10 year look on that chart.
Looks great.
And to me, me Kratos one of
the best mid cap defense names in the world because they're exposed to
practically every next-gen technology missile defense drones autonomous planes
everything that's in like the new age of defense Kratos has their arm in that in
each of those categories in some way they also have a subsidiary called
Florida turbine technologies which some people might not be familiar with. But I think they're going to get a four to
five X on Florida Turbine on their investment. It's like one of the most important engine
companies in the world for supersonic jets, which are becoming a more robust point of
interest lately. Boom Supersonic has done some great work lately and reinvigorated investor interest in that category. But Kratos, the Canadians
look great. Look at Mercury, ticker MRCY. Look how strong that chart is in this
market. Sitting above the 921 EMAs, 921 EMAs actually pointing to the
upside on this name MRCY. This is another name that's engrossed in missile defense, engrossed in hypersonic
and supersonic flight. You'll find that all five of these aerospace and defense names
I'm going to mention, they're all mid caps. They all have super strong charts. They're
all above their 921 EMAs. And they're all in relatively the same areas. To me, that's
the market telling you something. To me me that's the market pretty clearly identifying that these are a
beneficiary of this new world order trade that we've seen in Q1 of this year.
That's kind of how I'm defining it and I think the price action is confirming my
opinion that these names are beneficiaries of that. Right? Look at DRS.
Another name of the basket. I opened this one March 7th. So two weeks ago, the
stock's up 15% over those two weeks. Market has clearly been struggling and chopping around
during that two week period. This thing has just done nothing but gone up off the 200
day moving average. And you look at DRS all time, this thing does nothing but go up in
general, right? And we're headed now, what looks like back to a retest of this 38 level on DRS,
after which you could get even a further breakout here. So Leonardo DRS, another name.
SARO, Standard Aerospace. Look at that chart. Really, really strong chart. Newer IPO,
cupping out of the lows above the 9 and 21 EMAs. Again, how many of these big stocks
that we spent the first half of the session talking about
are trading above their 9 and 21 EMAs?
The answer is few, if any, especially the tech names.
And so I think finding these areas of strengths
is maybe harder to do in this market environment,
but it's certainly possible, right?
So there's five mid cap aerospace and defense names all strong in this market environment, but it's certainly possible. Right? So there's five mid-cap aerospace and defense names, all strong in this
market, not seeing any sellers in this market, and all trending higher, even
when we do get mild green days. Okay? Now I'll bring up some non-aerospace and
defense names. Look at CoreCivic, ticker CXW. They're a border servicer. They work
with Target Hospitality, who recently got a cancelled deportation contract renewed
They help with detainment deportation at the border look at core civics
Cxw look how strong that chart is popping through the 50
earlier this week
You know 9 and 21 EMAs pointing to the upside, 100 day pointing to the upside, well above the 200 day.
Looks great. Looks strong in a market environment like this.
And has the narrative tailwind as well, just like those aerospace and defense names.
I also have a couple financials. These are SMIDCAP financials.
Look at Bright House Financial Group ticker BHF okay
this got a 72 target $72 target from Raymond James earlier this week with a
very very strong note Bright House Financial has been consolidating for five
years in this 40 to 60 dollar range so building a base for five years is it
gonna break out of the base I don't know worth a stab for me in this market
environment especially with a relative strength. So I'm long that
name as well. We get a break above 60 on this thing. I think it can get explosive, you know,
especially if you get past those 64 highs. You look at HRTG, Heritage Group. Now this
is a small cap finance, small cap insurance. But look at them. Insider buys recently. Look at the chart popping
up here well above the 9 and 21 EMAs. And this thing I think is also going much, much higher.
So, I don't know, there's names in this market. I just named 10 mid cap names that all have very
strong charts that I own all of them and I think they all go higher.
You know and the beauty of a lot of those names I just mentioned is just look at their performance on the red days in the market.
Look at how those stocks have traded when the S&P 500 is down a percent and a half.
The answer is they've traded very well. Many of them have been green on those days and the ones that haven't been they go down
0.5, 0.6, six point seven percent on a day where your
Mega tech stocks are down four or five percent of pop.
So I think you know the the price action in both directions for those names is very, very compelling. So yeah, if you're looking at MegaCap and you're looking for new leadership and you're
saying where is I going to get that new leadership in these MegaCap names, you know, is the money
going to go from Amazon and Tesla to Coke and Pepsi in the sustainable long run?
You know, can you make a trade off longing those consumer staples on relative strength
or buying some of these unloved health care names that
have gotten a bid recently in this corrective action.
You can absolutely make a trade on that.
I'm not discouraging anyone from making a trade on anything.
But is leadership, and I'll put that in air quotes, going to transform in the market because
we had a 10% correction in the S&P 500 and a bear market in the MAG 7?
Every time that's happened, the dip has been bought,
and when markets resume their bull market behavior, those stocks get bid up unequivocally.
And again, unless there's some new world order in which no one's going to buy tech stocks
anymore, then maybe these things are done and they saw their highs. But I don't think
that's the case. I think at the other end of this cycle those names will be leaders once again, so
bit of a long one there but
Touched on ten or so individual stocks touch on my general market thoughts. So that's where I'll end it
I know we got Jeffrey and Kevin up here. So I'll let them get into it as well
Yeah, if anyone has any thoughts on that one, anything that Stocktalk was talking about
there, feel free.
Jeff, how are you doing today?
Hey, man.
Sorry I'm coming in late.
Got a lot of stuff going on today in the home front, but driving right now.
So just a few thoughts.
Just caught the end of Stocktalk there.
Yeah, I think the techs will be the future and will be brought up again but they're definitely
along with the market probably going through some chop and vol through this post-election
year but we had that Ides of March bounce that I talked about in the St. Patrick's Day
trade kind of coincided.
It kind of remains to be seen if that can hold.
Triple witching week or quad witching week which run right now
has been leaning bullish over the years but the week after and the end of quarter Q1 has
been rough. It's been taking some mean hits over the years. News flow is kind of touchy.
We've got the April 2nd tariff deadline and technicals are a little precarious right here.
My old 5670 number on the S&P support seems to be proving to be a bit of a resistance,
which was that last July peak.
And as I said last week, it kind of brings those September lows into play around a 5,400 level, unless, you know,
unless that March 13th low around what, 55.20 can hold. Interestingly, you know, I was popping
around while I was having a little lunch before and I saw a gunlack on the, I think it was
CNBC or whatever. So when he comes out it's usually probably near a low.
So just a little anecdotal observation on Jeffrey Gunlock there, the Bond King or whatever they call
him. My cycles, the post-election year and the aggregate cycle show an uptrend after the end of
March and May and even into July unless we can't find
some traction here.
I'm still expecting some weakness in Q3.
And other than that, I just thought I'd let you guys know, I don't know if anyone noticed
I launched a new podcast last week.
My first guest was the legendary trader Larry Williams.
What's the 83?
Just going to be 83. Great chat with him.
Just went through a few market looks
and then had an interview with Larry.
Recording it Fridays after the close
and then release it over the weekend.
This week I'm gonna get into some Bitcoin
outlook updates with a guru there.
So check it out.
And that's kinda what I'm looking at right now.
Appreciate you, Jeff, as always.
Feel free to jump back into the conversation
if there's anything you wanna bring back up
and definitely people should check out that podcast.
Appreciate you as always.
Thanks, Devin.
How you doing today, sir?
Doing pretty good.
Good to have you back on the space.
Did you get any thoughts on the conversation?
Anything Stocktalk was talking about, Jeff, or just what you're watching this market?
Well, yeah, I mean, I think Stocktalk made some good points there.
There can be longer periods of time
where regimes shift in our performance
in staples and healthcare compared to tech.
So, I mean, it just kind of just depends
on where we're at in the cycle.
We just don't know that, right?
So we got to go into,
we have to kind of look in the past and say,
hey, what's been able to provide us alpha?
What has the best trend?
And tech has the best trend,
communication services has the best trend and tech has the best trend, communication
services has the best trend. But things do shift, you know, for a year or two years,
even more than that, right? I mean, if you kind of look at the run up in the mid to late
90s, even early 2000s, for that matter, energy was kind of like the mega cap. It was like the hot sector that people cared about.
Tech did as well, right?
But it had a boom bust cycle and energy
was able to kind of hold up.
So it's just a weird, it just kind of depends.
I don't know if we're at that transformative phase
where you see something that's completely new
or reinvigorating for a particular sector.
Now, you could make the case,
it could have made the case, or could have made the case,
that could have been healthcare.
If GLP-1s hit at this point in time,
like right now, and GLP-1s were the jam,
I do believe you probably would have seen
a massive rotation out into healthcare.
But I do believe that if you look at some
of these health insurance stocks,
they've been beaten up, They have some regulatory issues,
but they've been actually holding up
pretty much almost this whole time here.
So those are, and technically they actually
look pretty decent.
So like UNH is of the world.
UNH is kind of expensive,
but if you kind of go out in a little bit of time
and do some spread trading,
there's might be some alpha there.
S&P 500, we
continue to reject between this 5704 and 5730 level. There is a gap that is there. We've had,
what, three days this week, Monday, yesterday, and today, where we wicked up, but we weren't able to
close within that gap. And that gets really close to that 200-day moving average. So that being said, I still believe
that we should have a counter-trend balance here,
I think, longer term.
And I always want to preface this,
because as soon as we get a balance,
it's 4%, 5%, 6% to the upside.
Everybody's going to be like, well, KG, you're a bearish.
Hear me out.
Five weeks in a row, us being down is something
that's not, that's very not, it's not common.
So I'm kind of going back with that trend and saying,
hey, four weeks down, fifth week should be a green week.
I thought we would see a little bit more in the tank
to the upside and it just has not happened yet.
But if I look at the daily chart,
obviously the 200 day is gonna to be the area of resistance,
but MACD is about to cross tomorrow most likely if we kind of open up at these levels or even open up
another 20 points, 30 points higher. MACD is in a bearish formation right now if you're looking
at the daily, but the fast moving average is actually hinging and it literally is about to
cross like tomorrow. So knowing that cross, I keep that on the radar to say, Hey, that could
be short-term bullish, uh, for the market.
For now.
Um, the other thing I was going to say is the daily on the 20 period moving
average and the 200 day moving average, that probably will cross tomorrow as well.
If not Monday, there's only about a 20
Point spread it was about a 41 42 point spread yesterday
So you can kind of see the increments there so we will get that cross usually that cross coincides with a counter trend bounce
Making that official first wave and then failure later. Vol does come down after tomorrow.
Opex Fridays are actually, let me not say this.
Last five years, Opex Friday has not been like bullish.
I think we've only had one green day over the last five years,
but the red days have not been like aggressive down days,
like 2%, 3% down days.
Anything can happen tomorrow.
I think we will see some intraday swinging.
You have some rebalancing in the SP 500.
You have some of those mechanics,
some options, premiums kind of rolling off.
So I think intraday, hopefully it's gonna be decent.
And once again, I'm kind of looking for a follow through,
potentially even a follow through week for next week.
And then I'd love to see this kind of trend.
I'd like to see this kind of ABCD pattern like really kind of play out technically.
I think we're in that first wave.
If we go up once again, 5%, even if you say 7% to the upside potentially.
And then once we get more development on that 20, 200 day cross, I think we see failure.
I think the first short zone is going to be that 200 day cross, I think we see failure.
I think the first short zone is gonna be
that 200 day moving average.
The weekly chart, we're getting close to crossing
over that zero line for the short term moving average,
which is still bearish, monthly still looking bearish.
I still think high dividend or high yield dividend stocks,
low beta is still like the place to kind of hide out in.
Performance, we always have to talk about performance too,
because it gets thrown out here.
Relative performance means that it outperforms something else.
Doesn't mean that it doesn't go up,
that it goes up.
I think relative performance wise,
if you're looking at it from a portfolio standpoint,
lower beta, you're not going to have the alpha to
the upside if this is the bottom. But you have a little bit more defensive in nature type of
positioning. And then also, once again, that yield side can give you a little bit of strength there.
Crude, I kind of commented crude look like, I think crude could probably hit up to the least $70.
We're getting fairly close there. So hopefully that comes to fruition. I think
their geopolitical risk is still underpriced there and tomorrow should be a fun time. So
I'll kick it back. Oh, and then yield markets and equities, they're on completely two different
pages. Let me, there's this whole thought, especially since like COVID yields lower,
equities higher. That's just how the market is.
And that's not really,
it depends on what type of cycle you're in.
If you're in early cycle,
early cycle of a new bull market, right?
New expansionary economy, early cycle, mid cycle,
late cycle behaviors once you get towards
the contractionary side or the trough side of the economy.
Right?
And so when you're, when you want to see an early cycle, the contractionary side or the trough side of the economy.
When you want to see an early cycle, hey, things are going to get better, you want to see yields moving higher, people selling treasury assets, people selling debt assets,
buying into equities, a little bit more risk on. Then when we have risk off, people go into
treasuries and then sell equities. When we have this situation where equities go up
because yields are going down,
that's really kind of being like,
hey, we like want to see a cut.
We're like thirsty for a cut.
And I don't think these cuts necessarily
are like bullish right now,
especially with that summary of economic projections
that we had yesterday.
I don't see anything outside of the balance sheet runoff,
which they should have been doing, but outside of the balance sheet runoff, which they should have been doing,
but outside of the balance sheet runoff situation,
there's nothing in there that said,
oh man, the Fed thinks that it's a very bullish economy.
In fact, it's more stagflationary in nature
if you're kind of looking at the projections
and the adjustments there.
So the yields market, yields moving lower,
kind of getting closer to area support of 4.15
is a little bit kind of concerning to me an area of support of 4.15 is a little
bit kind of concerning to me. I think they're calling the Fed's bluff while equities are
probably still under this. Hey, yields lower. Let's try to ramp higher. I just don't think
that's actually a healthy environment for us over the long term. But who am I? So I'll
kick that back over.
Kevin, to your point about the bond markets calling bluff on the Fed, and I agree with
you, even yesterday, post Powell's comments, the probability for three cuts jumped by 15%.
So clearly the markets are in some way, shape or form concerned about the economy.
And I don't know exactly what that
concern is yet. But I think we sort of talked about this yesterday when we were talking about
the base case for tariffs and how that could be very different on April 2nd than what the
market thinks it is today. I think that's one upside risk. I think another upside risk is,
you know, in my opinion, and
again, this is all opinion based because none of us know for certain ever exactly why the
markets are selling on a given day. But if we take the weight of the data and the weight
of the narratives at play, in my view, it's not just tariffs contributing to this. I think
part of it is also
this idea of what Bank of America brought up in a note a few weeks ago which I tweeted out but I
also referenced here on our spaces which was a note about a US government recession in other words
a dramatic drop in fiscal spending I read a curious note over the weekend from Truist
spending. I read a curious note over the weekend from Truist that where I mean
they didn't reference Bank of America but the fact that Truist put out the
standalone note in the weekend to me says they were sort of responding to
Bank of America's note but Truist came out and said Doge is the nothing burger
and I thought that was probably the most interesting note of the week because two weeks prior to
that, B of A said Doge is going to create a fiscal recession where US government spending
drops to levels that haven't been seen in 20 years.
Do I think that that's a bit of a dramatic take from B of A?
Yeah, I do.
And so does Truist. And Truist said, look, Doge has actually made, contrary
to what the organization claims, Doge has actually made very few real cuts in a budget
saving standpoint. A lot of the cuts they've made are simply cuts to pre-allocated contracts
where that money isn't going to be magically returned to taxpayers or
Magically eliminated from the budget. It's likely just going to be reallocated or added to
budget reserves for whatever department that contract was canceled so
True is making the argument that there's actually not this much of a shift as people are are seeing in the media
You know, I think the phrase they used was,
there's more cuts in the media
than there are actually in the government happening.
And I think that's a good way to put it
because this is a lot of times
how narratives get carried away.
As people read social media posts or whatever
and they're like, oh my God,
the government's cutting hundreds of billions of dollars in spending. How is this going to affect the economy when in reality?
It's more like a couple of billion in cuts and maybe a couple of tens of billions in
canceled contracts which don't actually help
Directly balance the budget if you will.
So, true is saying that's not gonna happen
and that it's an insignificant.
Like every day we get,
I'm gonna take Leo out right around this time.
So I think that's another upside to this too,
is that, you know, maybe,
or Doge ends up being a nothing burger
and on top of that all,
you get maybe a softer
base case stance on tariffs come April 2nd.
I was counting the days, at least nine floors up.
Sorry, Melinda.
Yeah, I was gonna kinda, yeah, so that is true, right?
The canceled contracts, I mean,
the money has already been allocated,
which is where this, we won't get into the politics, this is where the constitutional side of it goes in, because
Congress allocates money for a particular project, but then the executive branch cancels the project,
you know, who actually has the authority, right? So we'll see how that is going to play out in
courts, for sure. We'll see how that all plays out.
The fact that they may not spend the money,
that does actually, that will have an impact though, right?
Like if I allocate a hundred billion,
we're not spending a hundred billion.
I keep a hundred billion in the coffers,
that a hundred billion in the coffers
still doesn't go into the economy, right?
So I think near term, short term,
it will be a little bit of an impact,
but there is like this notion that eventually
at some point in time, they won't be able to do that
and sustain that outside of potentially losing power, maybe.
This is all a new political experiment,
but in what, 2026, we'll have midterms, right?
So the thought is like, hey, what's going to be like the the
messaging back to those districts that are seeing uh impacts within their community um are these
congressmen especially when you're looking at the house uh still going to kind of uh stand up for
these potential cuts right and then we don't we won't know that but it'll be interesting um
i think if you're kind of looking at the tariff
impact, tariff impact on inflation will be immediate, and
then it will eventually should, it should eventually dampen
demand, which would then be deflationary. I think the big
wild card here is that you're talking about a lot of spending
and new projects and on shoring. But that on shoring is not gonna happen overnight. It's not gonna happen next year
And honestly, it's probably not even gonna happen a lot of it
The majority of it is not gonna happen by the end of Trump's second term
Which is actually very interesting strategy for a lot of these companies a lot of these companies can say yeah
We're gonna we're planning to spend
hundred billion dollars on XYZ project and say, yeah, we're planning to spend $100 billion
on XYZ project over the next four years.
Well, let's just say you want to build out a data center.
It takes like a year, a year and a half
to just get the land, get it marked out,
get all the approvals in place,
get the resources and the tech,
and everything in the infrastructure
just put together itself, right?
Like just the resources to put these structures up.
And so a lot of these companies and these CEOs,
if they're smart and they wanna get on the good graces
of the president, they can come out with these very big,
grandiose plans to onshore here in the United States.
And they can stall out,
cause a lot of these CEOs, they don't have a timeline.
Some do, but most of the bigger ones,
they are pretty much set in their seat for now.
And so they can kind of stall out.
And so it'll be an interesting type of strategy
that we see.
But over time, I do want to say this too, right?
Cause I'm not a fan of the tariffs.
I'm not a fan of all this,
the Doge stuff and the way that they're going about it. I'm not a fan of all this, the Doge stuff and the way that they're going about it,
I'm not a fan of it, but I will say that eventually the market will digest and move forward.
Anytime that we have any fundamental change in the United States as far as the economy
or what have you, culture or what have you, we get an impact, we assess what the impact is going to be, we change, adapt,
and we move forward. And so I don't think that we should also be like fear-mongering,
like, hey, like the world's going to come to an end economically because of what's happening.
It's just going to be an adjustment that we're going to have to just make. And then once we have
that adjustment being priced in, equities will continue to move forward,
because of the pricing mechanisms.
So short term, I think you will see some headwinds.
I think we are seeing those headwinds.
I don't even think that you're seeing even remotely
the impact in any economic data outside of sentiment.
And there's a battle there with sentiment data too.
Does sentiment lead hard data?
Some people will say it leads hard data by three months,
six months, up to eight months, right?
So eight months from now is the sentiment
that we saw from the University of Michigan
really going to be reflecting the kind, who knows?
Who knows, right?
We just got to play what we got.
You have to trade what we have right now.
But I wouldn't kind of, I think once again,
if we're talking about trading,
you just got
to look at what the outperformance is doing.
The no, the one that the stocks that are not on the headlines each and every day right
now, and they're boring.
I'll continue to say it until saying it for last month.
Those are the stocks that you probably want to keep your eye out on is is Pepsi is Pepsi
going to be the one that's going to bring
it home to retirement in 20, probably not, right? Probably won't. But it could give you
a little bit of cover. Now, Pepsi is kind of having a little bit of a pullback, but
some of these stocks will give you a little bit of cover in the near term until we kind
of figure all this stuff out. So that's how I kind of look at look at this whole market.
And I'm, I'm actually kind of interested in how commodities are going to do. You know,
you saw copper, I think right now, like, if you kind of look at risk reward, I think it's
about a short and long, but you got to kind of acknowledge the fact that it is making
a nice little base, but it usually does and usually triple tops. So we'll see, like copper could be a thing. Gold, I did not expect
gold to sustain here. And on the 28th, so next week, Friday,
what? Next week, Friday is when first notice day on this gold
contract is going to go into effect. So then you'll start
seeing these delivery notices ramp up again. Do we continue to
see this repatriation of gold hitting the
market? Right? And if that's going to be the case, gold is going to continue to move higher.
If you don't see it, I feel like it's going to drop off. So gold is another one that you can't
really fight that trend, even though I'm very surprised. I feel like gold is kind of way
overstretched here, but it's a market that people continue to to go into silver is a tough one
I would say silver coming back down to
3226
Let me get you this press over real quick
3260 3260 for gold iris per silver. I'm sorry. Looks like a decent buy zone
Silver generates on more on tacticals than gold does. So if you're a technical trader,
silver is like really fun to be able to trade.
And then natural gas,
I didn't think natural gas is gonna stay
where it is right now.
I don't wanna say one thing,
there's been a trader that has been popping natural gas
at around what, six o'clock,
six o'clock, so five o'clock, no, 7 o'clock, 7 o'clock Eastern, somebody bids
up nanny like 20 cents, which doesn't sound like a lot, but because that's $2,000 per
contract, right? So it goes up to like $4.20 and then it fades during the day. So I, you
know, I've been kind of like trading those pops, or not trading the pops, I've been trading the fades,
and that's been a decent one,
but it hasn't been able to break $4,
which I think is completely ridiculous
that natural gas is sitting at $4 right now.
Yeah, LNG expansion is ramping up,
or exports are ramping up,
but not to the effect that you have a $3 differential
between prices this year and last year around this time.
Seasonally, we're completely blown out to the upside.
I'm looking for a massive collapse in natural gas, but it hasn't happened yet.
But that's another trade.
You're a commodity person.
You can use UNG as well.
UNG, like the options kind of suck.
But if you look at doing diagonal spreads,
you can like counteract some of the theta burn
because the premiums are a little
bit expensive. So that's another area too. So I'll kick it back. I just wanted to highlight
a couple of places that I've been looking at lately that have been doing pretty decent
as far as the trading action.
Appreciate you, Kevin, as always.
Kevin, I did have one question for you actually. I don't know if you saw this stat and full the Or indirectly or directly coming from the government? Yeah. Yeah, so it's going to be indirectly. So consults and consultants.
And it's like 2 to 1 ratio.
I think it's like 1.63 to 1 ratio, government employees
and contractors.
And then you ought to also understand too.
Because I think people are, especially right now
and actually over the last year because of the political season, when you're looking at the government jobs or the employment number
that has government under it, right?
Like, hey, here's how many jobs we're adding for the government.
That's state and federal.
It's not just federal.
A lot of the job growth that we have seen have come from state government jobs, not
federal government jobs.
So it's a little bit of a misnomer when you read it and it's like, whoa, man, like 60%
of the growth was from the government.
We got to pare that back.
And it's like, well, it's like the government, you know, it was like the state of Alabama
and Texas and Cali and what Massachusetts, right?
These bigger areas, Illinois is another one too.
Especially when you have toll roads
and things of that nature, education systems,
those education workers, teachers
fall under that purview as well, right?
So like it is true,
but I think if you kind of look under the hood,
more of that job growth has not been on the federal side,
it's been on the state side.
That's been reflecting a lot of the state data we've seen.
And which is one other reason why we're seeing
a lot of distortion and readjustments
when it comes to the BLS data that we see,
those massive revisions that we have in August,
I think we had another one in February, the February release, the February date that we
released it, which was January print, also had those revisions attached to it.
But yeah, teachers, those that are working on the roads in the state, you name it, right? Social workers, policemen, firefighters,
those are all put in that same bucket of government
in the reporting.
Now, politically, you can come out and say,
well, look at how many government jobs are there,
but like a lot of it's state-driven
and not actual federal workers.
You know what I'm saying?
Does that make sense?
Maybe maybe.
Yeah, it does.
Yeah, it does.
I mean, I, I, I,
He cut out there for me.
Okay. Yeah.
Give him half a second.
See if we get the Mr. Talk of the stock back.
I think he's in the shop.
But it is what is actually very interesting is that you are starting to hear a lot of
states that want to have their own doge type of program, you know, and purge.
So you know, even the state level government jobs are maybe potentially at risk as well.
It won't be as robust, right?
And probably won't be as, you know, as talked about, but something to kind of
look into, I mean, if you, if you don't see the states like Florida implement
something like that, Texas, California, who New York, uh, those are the main
drivers of job growth as far as the States.
If you don't see them in those States, it probably will be somewhat minimal, but that
is also something that's hit the political arena where a lot of state governments are
looking at having their own Doge departments. the That damn Trump Tower that Trump Tower elevator gets you
No, yeah, sorry, I heard mostly you said I appreciate that I think
Yeah, you're you're definitely right about the majority of the growth coming on a state basis because the very superficial research I did showed me that as well
I didn't I didn't deep dive it so you provided a lot of details there that I didn't know.
But what I would say is isn't that sort of concerning for states like Texas and other
Republican population center states, even though there aren't many of them, if they decide to like, you know, do their own doge
programs or follow suit on the federal government with regard
to like reducing overall headcount, reducing overall size
of government or spend of government, that could be a
potential major headwind to job market growth, right? If it does
turn out that way.
Yeah, that's why I think you probably missed that. Like, if
you don't see a type of like, state doge departments that are
being ramped up in Florida, California, Texas, New York,
those are kind of the main ones, you can maybe say Illinois too.
But that's, you know, they're not gonna, they're not gonna
stop spinning. I'm from Illinois. And I know they're not gonna stop spinning at all. And they're not gonna stop spending. I'm from Illinois and I know they're not gonna stop spending
at all and they're not gonna cut anything.
In fact, they'll probably just inflate it even more.
But it could have an impact.
The thing with Texas though,
is and you're gonna hate that I say it
because I think you're from Texas, right?
You're in Texas or whatever.
Right?
Okay.
Yeah, Texas needs to actually spend more on infrastructure or get on the national grid. That's
I would love to see that because they do. If they can get on the
national grid or spend more on infrastructure, I think a lot
more people would go there. And then you got to have like, I
don't want to start talking about state. I think there needs
to also be kind of a little bit more of a defined level or an easier
way to calculate property taxes because that's where you get screwed, right? You don't get the
state income taxes, but I've heard just horror stories of people that have bought 500,000,
$600,000 homes that they got built first year. When they got built, they only had the land taxes,
which is usually the case, right? Next year, okay, they're paying a tax bill. And then the land taxes, which is usually the case. Next year, they're paying a tax bill.
And then the next year, this is obviously four years ago, five years ago, when you guys
are super booming right now, back then.
But then the next year, they go from $4,000 in property taxes to paying up to $17,000
on a $550,000 dollar six hundred thousand dollar home right like the ratcheting up of that has been something that is very unique for the state.
I have two rental properties that I sold in Kingsville because of that exact reason because
the property taxes are ridiculous so yeah I mean I've seen it firsthand property taxes are stupid
in Texas that's probably everyone's least favorite part of it.
But I mean, we do have no-
That's where they make up for no state income tax though, right?
Yeah, we have no state income tax.
And we also have pretty affordable cost of living in our major cities.
Like, you know, like the place I stay in Dallas would be, you know,
maybe 10 times more, maybe five times more expensive in New York City
or in Los Angeles
or any of the other major cities.
And Dallas is a pretty bustling city.
We have an NBA team, we have an NFL team,
we have major concerts, events.
Do you still have an NBA team?
Okay, fair point, fair point.
Yeah, I mean, I don't watch them anymore since Luca left.
But yeah, I mean, look, Dallas is like a major city
and DFW Metroplex is like one of the fastest growing
Metroplex in the country.
So, you know, I think Texas does have a lot of promise
but I agree with you on all the points you made.
We need way more energy, infrastructure investment.
Our grid is fucking terrible.
I think like any Texan you would talk to
would complain about the grid.
And property taxes are terrible too.
But you know, there's trade-offs with every state, I guess.
Yeah.
And then I think Cali on the flip side of that, Cali's probably gonna, you're not gonna
see as much robust spending in Cali.
You know, people like look at California and they're like, oh, like Dems.
But like, it's not like that.
It's kind of like Colorado.
I feel like it's so funny when you're outside of Colorado, everybody's like, oh dude, like that's just like a liberal place and stuff
like that. It's like, nah, dude, like we got Boulder and we got like Doug, we have Boulder,
we got Denver, and we have the Springs. But outside of that, everything is actually more
like libertarian out here. And Kelly is starting to get that way. If you kind of look at the state
house that they have and these elections, they're getting a little bit more contentious authoritarian out here. And Kelly is starting to get that way. If you kind of look at the state house
that they have and these elections, they're getting a little bit more contentious
and more split, right? A lot more competitive races. And so you might actually see, start seeing a little bit more of a fundamental shift when it comes to California's policies in general, as well
as spending. That will have an impact. I mean, no one knows when that's going to actually happen,
but that's another state that I'm kind of keeping on the radar here.
But if we kind of go back to the fact that, hey, are we going to spend less,
at least probably this year or the threat of that?
Yes.
Is less money going to enter the economy?
Yes.
Is that going to cause a deceleration when it comes to the growth of money?
Yes.
And that then leads to lower liquidity.
Yes.
Lower liquidity leads to more volatility. People, lower liquidity leads to more volatility.
People may be pulling back spending.
Yes, like the economic cycle here,
I think the writing is on the wall.
I think the biggest question mark is how long does it last?
And then if we do go too far,
because I've never seen a government,
I don't care who it is, Republican, Democrat,
I've never seen a Fed,
I don't care who's at the helm of it,
actually predict and do these
things right. Now this might be the first time in history that we do see this right, but most
oftentimes they're going to get it wrong. Is the desire for fiscal spending going to be there
in a year from now or two years from now if we do get a situation for it? And I don't think that's
that, I don't think that's going to be there. That's the biggest risk that I see. That there's not gonna be a major appetite
for any type of fiscal spend
to get us out of recession,
which is usually how we do get out of one
or an economic slowdown.
Let's not even call it recession, economic slowdown,
which is usually how we get out.
That and the Fed doing QE,
and honestly, it almost sounds like they wanna really
pull the QE card yet,
but who knows, they're to change on a dime.
So I know we're up at a time here, so I'll kick it back.
Sorry for taking the chance to go straight to QE.
If we get any kind of weak labor print headed into the next meeting, you know, I mean, they're
pretty close, right?
What is the, what is the reduction at now from 25 billion?
Yeah, 25 to five. But if you look, if you look at it, 25 billion on runoff guys, is like, what,
not 30 30% of a 10 year auction. It's like 30% of a 10 year auction. It's not really I mean, it's not I mean, the market kind of
like rah rah about it, but it's not that much. And 5 billion is not that much either. Right? That's more of a symbolic statement more than anything. But that runoff, in my opinion, if you're
talking about on a month-over-month basis,
it's not really that much.
When I was running fixed income and a trading desk,
we were popping off billion-dollar orders
for desk all the time, right?
Like, it's not that billion dollars, $20 billion
in the grand scheme of things compared to the liquidity
and the amount of
notational value in our treasury markets is kind of a drop in the bucket in my opinion.
Meaningful but not enough to really do any major, major damage one way or another.
I really appreciate everyone here.
I'm going to have to cut in because we do have a hard stop at 5 p.m. right now.
We have another show coming up after this little VC show coming from the Wolf account.
I apologize to Sam and AJ for not being able to get to your hands.
They're both fantastic followers and should be following them along with all the other amazing speakers.
Kevin and Ariel and Stocksniper.
We really appreciate all of them. They're fantastic.
If you guys enjoyed this conversation this week,
If you guys enjoyed this conversation this week, make sure you're following the hosts of the spaces.
make sure you're following the host of the spaces.
Myself, Stocktalk, and the Wolf team
are combining to bring this to you guys.
And we have a lot of really amazing speakers
who come on and make this fantastic.
So all we ask, follow the speakers, follow the host,
and that's great.
We appreciate everyone.
Like I was just saying there, there's
going to be, if you're interested in the VC space,
we have a show that's going live right now.
Um, follow speakers.
Appreciate you all.
We'll be back same time, same place.
Stock sound spaces.
3 PM Eastern on Monday.
Have a great one team. Yn ystod y cyfle hwn, mae'r cyfle hwn yn ystod y cyfle hwn. Mae'r cyfle hwn yn ystod y cyfle hwn.
Mae'r cyfle hwn yn ystod y cyfle hwn.
Mae'r cyfle hwn yn ystod y cyfle hwn.
Mae'r cyfle hwn yn ystod y cyfle hwn.
Mae'r cyfle hwn yn ystod y cyfle hwn.
Mae'r cyfle hwn yn ystod y cyfle hwn.
Mae'r cyfle hwn yn ystod y cyfle hwn. Mae'r cyfle hwn yn ystod y cyfle hwn.
