Transcription
It is Sunday, February 8th, and this is our insider access briefing. So on Friday, we we got what we were expecting. We expected this not to last and to see an inflection point. Support uh was charted out at about 6780, almost perfectly bounced off that. Then going into Friday, uh an absolute surge move is one of the the biggest moves we've had in a single day in quite some time. And you could see that just comparatively looking at the the chart that we have in front of us. Even I keep going back a little bit uh and really negated a lot of the the recent losses here, at least offsetting the last couple days, closing us out at 693230, which effectively puts us back in all-time high territory. Keeping in mind that just until last several weeks, the idea of close at 6900 was new all-time high territory. And so we're back there to challenge all-time highs right in that zone.
But uh markets really um really doing what we expected for January. And well for for January, February, and as we lean into this uh through this first quarter and even to a greater extent for 2026. And something that I I called for was this is going to be a very different year. It's going to be a trader year uh with some good hold opportunity. So, it's it's going to be flush with opportunity, but it's not going to be any up and away smooth action. Um, or perhaps uh two-faced year with a single binary story defined in the year that was tariffs down then tariffs straight up after the uh the fear had subsided. It's going to be a much different year with a lot of ups and downs, a lot of surges, a lot of gaps, and a lot of volatility effectively. And that creates opportunities. And that's uh one thing we've done is seized on those opportunities.
But if you look at the pattern we've seen as of late, it's a lot of chop and volatility uh particularly here in February, just opening opening the year or opening the month uh rather, just right up pushing on to all-time highs, having a peak and then gaps down and surge back up. Keep in mind that we're only a few sessions into February. And this is the kind of action that we've seen. We've covered quite a bit from um peaks up at just under 7,000 to as low as 6780 and it's just a few trading sessions. So, I think we're seeing that chop right now and um I think that gives us opportunity and probability of pushing up to to all-time highs, but I wouldn't say we're out of the woods in that it's up and away here. I think that we do need to see some additional stability and a little bit of follow through to to feel good about pushing into the higher highs before we we have that turning point, which as I've noted, my feelings were would be into the later portion of the quarter.
Now one thing that was positive, I would say on Friday, and something that we wanted to see was just a broader based move. And this is something I highlighted during the week when I was saying, look, it's not something where you need to panic this week. I know that the markets are showing red and there's a lot of there's always a lot of hoopla. There's always a new headline because headlines chase events in in the rears, meaning they look in the rearview mirror and they tell you what happened. And that's sort of the news. It's it's an interesting uh way of approaching things, but it's not very predictive, nor is it very uh descriptive or or or of any utility. And so my note was, look, we've had a lot of days where breath is looking good and it's primarily a move down by tech. Breath surging on Friday and of course um we're seeing what we've continued to see is new highs, new all-time highs in the S&P 500 equal weighted, and these are positives. This shows a broad-based move in the markets. We were held back only by technology. That's something that I highlighted last week and what I said was typically the way a market behaves as we get a downturn is not one where we see the equal weighted index crush up higher and breath look really really fantastic. It was a tech story uh with the loss leader being software. And what we're seeing out of tech is we saw a good surge up.
Now I want to narrow in on that as to why I think that we need to see a little bit more followthrough is the mag 7 is kind of in the bottom territory here. You can see we we're still working under uh a recent trend that was only violated for a short period of time. Uh but really looking at this bottom area where we had lows in November. So it's the quarterly lows and um really aligning back to the gap up in September and just sitting where we are. I'd like to see a little bit more followthrough, a little bit more upside um from a cap weighted perspective in order to to feel that maybe we can achieve something better than 7,000 because even if we push up to 7,000, that's that's not something where where I'd say look, we want to be really aggressive from here. 60, 70 points on the S&P. Um that's not a great deal. I'd like to see be able to see 7,000 with some uh additional push towards 7100. And I certainly think it's possible as we we do have a uh a big week in terms of data and events here. And I'm going to pull up the calendar as something I just want to touch on before um we start to move ahead.
And so what we have this week that we're really keeping an eye on is well first of all we have a you know a one-two punch, a heavy one-two punch is the arguably the two most uh focused upon reports of the month are the jobs report and CPI report. And we have both of those two days apart here, of course, because of some delays with the partial shutdown to the government. We have the employment report that lands on Wednesday. I think that gets a little bit more focus here, uh, simply because of the trends in employment have been have been downwards. And we're already into an area that is of concern to the Fed. Um, and then we saw the recent challenger report with job cuts, and that's something that I I discussed last week. So, a spike. Obviously, a lot of that was caused by Amazon, UPS, the breakdown of their deals thereof, but still something to keep an eye on. I think the market's going to be very very focused on this because this could this could set up what one could at least assume will be Feds having their hand forced uh in the near future and whether the cohort of under Chair Powell wants to do it or not or wants to hold off and just have this sort of um spat back and forth with the president, economics aside for some reason or monetary monetary policy be darned. um you can just rest assured that the incoming chairman will be all the more aggressive um and if we we do see continued weak prints and something to keep an eye on.
Also, Chair Powell has said he roughly deducts about 55 to 60,000 jobs off the top of what he sees on the employment reports. He he has said that um that is a a quote of his because the numbers have tend to come in inflated and then been adjusted down. So even if you take the estimates here of 55,50 on previous reports and such um that puts us a flat earn a loss through the eyes of chair pow according to his own words. Uh but again, he he hasn't seemed um focused on on additional cuts as of late. CPI CPI is still important. CPI needs to remain in a good place. We're going to have more on this as the week proceeds and uh you know, if there are specifics and opportunities, we'll obviously discuss that. CPI needs to stay on trend in every bit of high frequency data that we have suggests that the numbers should be falling um and at least holding strong. We get some over year-over-year comparables, but overall in aggregate inflation is doing very well. Uh we expect that to continue to be a surprise if not because the major markets are coming down. The high frequency data suggests that it's coming down. We see real estate numbers softening. Um so I I think that we're lined up for some good data. The only surprise could be on the employment report, which is still a little bit wonky in terms of how it's being calculated. It'll be interesting to see if there's anything anomalous that comes through as a result of this most recent partial shutdown, um, which last week resulted in us not receiving a report at all.
One other thing I want to touch on moving into my least favorite portion of uh market coverage and analysis is politically tied. And I discussed this last week and it's uh pertaining to the the Epstein files and so on and so forth. Again, I tied this into just into politics and things I I dislike for for even more reasons to dislike this entire situation. I think it's very bipartisan. Um I won't get into what uh Jeffrey Epstein was doing. I think we're we're all very uh aware, but as it pertains to the markets, staying focused on the markets. Last week, what I said is I think it's it's creating a lot of noise, but it's not something that's really going to impact the markets. I think that now as we're progressing, there is a risk of some very high-profile individuals um getting having some exposure here as some of the redactions uh come off the page. And uh it's been been rather interesting to see who in the financial world has been tied into um the the events that were orchestrated by Mr. Epstein and whoever he was collaborating with. So I do think there's some risk. I think there are going to be political hearings. I think there could be some mask-off events or name redactions and some of those individuals may be uh rather prominent within the business world, within the markets and that's something that we need to keep an eye on or even in the political sphere. And I think that could have a little bit of a shakeup effect on uh on the market. So, we're keeping an eye on that. Hearings are going to be important. My understanding is um the Clintons will be deposed or questioned in in the near future. I know there's some back and forth on that. Um and and I think others will follow. I'm not predicting any individuals or suggesting anybody is guilty that, you know, hasn't been uh convicted of such or anything along those lines. What I am saying is I think we're getting to a point where more names are coming out. There seems to be high-profile names connected from here to Kazoo, wherever that is. Uh as it pertains to this individual um and a lot of them in rather prominent positions within Wall Street. So uh if we get there and it seems like we're trending there, I will keep everybody updated, but I think we could see a little bit of shake up of the markets. Uh we've already seen some prominent individuals politically resign as a result of this and that is just um in in recent history.
Moving along in the markets. Uh obviously sector-wise, you know, we saw sectors do well, XLF, XLV. So, it was a broad-based move as we discussed. Um narrowing in. We talked about on Friday a flyer trade on Microsoft as we got down to that 390 um 391 zone. You can see here bounced off trend, got a close, got a a great open here, just about 42, about 12 points, and that was just a even as we pulled back here, great quick swing. That's what we're talking about. That doesn't make me bullish on software. So, I just want to reiterate. Saw it as an opportunity. Called it out. Added it in at about 230 as we were crushing down. Got into this low zone for a potential swing here into open as a zero DTE play as well. Worked out on the Friday. Uh but it doesn't change my overall thesis on software. And in fact, when you look at the kind of beating that software has taken as of late, um, and just how strong the market rebound was, this is actually an underperformance relative to the rest of the markets. Uh, so to me, it's underwhelming. It's not a sign that, hey, software is back. It's going to crush up to an area, move up to an area that's attractive to short or it's going to lift the markets. What we're looking for from software was stabilization, stopping the bleeding so as to stop negatively impacting the overall markets. And I think we see that um you see the same here and then what I said I noted was even moving into support that doesn't make Palantir attractive. These these trends and the trend lines as I said with uh IGV I'm throwing them aside because the fundamental story to me was far more powerful and I I you know my view was that the markets would be much more bearish than they had reason to be. And I explained this last week and why that supersedes any sort of technical pattern. So the same holds for a lot of these different securities. I think Palantir will give us an opportunity. But this is why last week I I highlighted the zone and and you know simply wasn't ready to take action. So the Microsoft idea, yes, bullish on that very short term, managed to hold trend, just not something that uh I'm ready to to deploy on or approach more aggressively.
Now, um something we discussed rather, you know, uh frequently and in depth was we we also saw sort of a red line red line in the sand, if you will, for uh Bitcoin and a great surge off of uh 60,000 recovering up to 70. We almost touched uh we touched up a little bit higher today. We're over 72,000. You can see much of the same with Ethereum. So, I think that's positive. Shows some of that stabilization. It was 1750 here. I did have that highlighted previously. I think it might have even bounced to 1750. Exactly. We'll find out in just a moment. Uh I believe the number was very close to that. So the low was That's right. It was 174850. So right down into that, if you will, red line zone and here back up to about 2171. So showing some stability. You can see a little bit of that as well in the metals, gold and silver. So that speaks well to the risk appetite side of things in that sort of bounce. But keeping in mind it is one day. We want to see some followthrough coming up this week. And as I said, there's quite a bit for the markets to be looking forward to uh this week. So I I think that could help shake us out of this sideways choppiness, up and down. Again, that's that's leading to a lot of good intraday and swing opportunities, but just set to set the better course for the markets, which I am anticipating. We are leaning bullish and we do think that we can get a little bit more stability to push higher to break all-time highs to get us to an point before a greater pullback.
As it pertains to intraday opportunity, well, we also had both Tesla and SPY as ALOS and great moves here, you know, just under 685 about 68480 crushing up uh to almost 687. Really smooth move there uh about three points and then as it flowed to the rest of the day, obviously to 692. So, one signal giving us the up and away on the markets. And speaking of Tesla here, uh, down at about 40760 and just a very smooth ride up to 412 and change, even here almost uninterrupted 1150 and obviously peeking out 414. So, both signals um really just up and away and and obviously the the tailwinds on the market that was the trajectory of the markets for the day as well. So, we have a lot coming up this week much like last week. I expect additional opportunities. We see the way that the markets are unfolding. is very much in line with what I projected for 2026 and we will continue to attack when there are opportunities.