Transcription
It is Sunday, February 1st, and this is our insider access briefing. So, a little bit of a different visual to start our briefing this evening as we almost always start with the S&P 500. But I know that one of the topics that is on the mind of most traders and investors, institutional and otherwise, is what's going on with gold, silver, and cryptocurrency this weekend. So, that's where I thought I'd start.
So, we're going to start, uh, primarily we're going to look at the metals. And I've made some commentary on the metals, uh, as of late and effectively our strategy was to ride the momentum. And something I said frequently was, from a technical standpoint and from, you know, all the different viewpoints we could take here, we were overextended on both gold and silver. However, the approach was, you know, if you're working short-term, longer-term, up to 10% allocation in the portfolio, that holds. But shorter-term, the the view was the approach would be to adjust your stops up and just ride the momentum because this was indeed a momentum trade. And I continued to say that and I explained in December, momentum trades move down as quickly as they move up because you have that hot momentum and when the rug gets pulled out. That's why we saw a lot of gaps as fund managers and various professionals tried to adjust their portfolios to get a win into December. It led to a lot of surges and a lot of gaps down and a lot of gaps back up.
And so our our our strategic view and approach to trading the metals has been a little bit different than what you hear in a lot of the hoopla online and then, you know, gold's replacing the US dollar and this is what's happening. We're going back to the gold standard and sell your savings and get a vault and buy some gold, so on and so forth, right? And our approach was, this is overextended, play the upside in terms of the momentum trade, the momentum move here. So, um, I think what we saw here is some deleveraging and a move back down and it's not overly surprising to see a sharp profit take and and a surge down because it creates a cascading effect. So, the same way that you you think of a short squeeze that I've explained where people are forced to cover and we get a squeeze and something drives up. You can look at this as a deleveraging event and that's going to be thematic for some of our discussions here. On both gold and silver, you start to see some profit taking. Uh, you get a lot of the last in, first out and and there has certainly been a lot of last-in traders who are just trying to jump on or ride the momentum towards the end and what I've said in the last week or two is the reward to risk to get in recently, I I felt that it was not a, you know, not a good reward to risk because we'd extended so much. So my words were, look, this isn't somewhere I'd open new positions, uh, to attack this this current move up, but I would adjust my stops up and play the upside. And that turned out to be sage because this is a sort of time-tested lesson. And you could just understand if you understand the basic fundamental mechanics, understand that we were stretched. It is a momentum move and fundamentally, you know, so a little bit too fast, too far, uh, too far, too fast rather, that you would start to see a little bit of a pullback. So, so that's been our approach and we got a pullback.
But I do think there's there's a few things to look at here because the question becomes, okay, great. Strategically, we're we're on par. What's next, right? It's always a, what happens tomorrow? Don't worry about what you did from yesterday kind of thing with the markets. And I think that's the, you know, that's what we have to focus our our sights on is what is next here. Well, I will say this. I don't think that we're going to see gold or silver come crashing down to, you know, the low 2025 levels and drop another 20% in the near term. Um, I think there's there's a variety of things to to discuss here. First of all, uh, some of the the reaction to gold and silver, it's healthy profit taking and you get the surge down because it's, you know, there's deleveraging, profit taking and a lot of panic selling and there's last in, first out and a lot of chasers in this and that's something that I cautioned against. Of course, you also see with the appointment of Kevin Walsh or at least the impending appointment of, um, Kevin Walsh, the nomination, you've seen a a sort of revival in the US dollar. And you can see that how that's inverse from a risk standpoint to some of the assets that we're going to be discussing. But you can see how that's had an inverse move to, uh, what we're seeing in metals here and the surge up in the US dollar. I think that will cool down. We've gotten back to a technical level. I think we'll start to slow down on this front. I don't think the idea is that we're we're getting back to catch up to 99 or break 100, so on and so forth. But this has been one of the reasons we've seen some adjustments here with metals, with cryptocurrency, so on and so forth.
So my expectation is, I I think we bounce out. I do think we'll get a bounce. So if you're if you're a trader, it's something that I I will be looking at. I do think we'll get a bounce, uh, as we sort of find our our footing with with gold. I think there could be a little bit more downside. Uh, something I'll keep an eye on for those who are looking to trade it shorter term. I think we'll get a little bit of a bounce, but then, um, I think we'll just get a little bit of a slowdown, barring any major geopolitical or economic events. So that would mean a little bit of sideways chop after a bit of a bounce, um, and some up and down. So it's not going to be the red hot portion, but there's a connection here to crypto that I want to talk about.
So the theme for the weekend or at least the conversation for the weekend has been what's going on with crypto. So crypto has been stripped down to at least Bitcoin, and you could look at Ethereum as well here, has been stripped down to a a technical level itself. And so I want to expand here and move over to the daily chart. I think that'll serve us better. Maybe we can actually do a bit better than that and go over to, uh, the max daily. Let's see here. Max one day. Okay. So on the max one day, you can see there's a technical marker here. It's 74,509 and you know, in change. Let's just say 74,500. You could see that was a technical resistance. Technical resistance. We got a surge and a gap up. Came back down to test it. Made a move up. And now we're nearing that technical point. We're sitting a little bit higher than that, but I would call that the the technical support point here. So, I think we're actually finally closer to a bit of a bottom.
So, what the heck happened with crypto? And I have an article about this and I'm going to be discussing, um, Ethereum to to an extent as well. And just, I'll, I'll pull up Ethereum really quickly before we start to dig into it, cuz as Bitcoin goes, crypto goes and that means Ethereum as well. You can see a similar technical pattern. This, and if this sounds like what I was describing when the markets had a technical move down, we were able to exploit it quite a bit and we had a lot of fantastic traders just about 10 days ago on the Greenland issue where I was pointing out that everything's drawn down to a very precise technical standpoint. You can see basing support for Ethereum move up back to this base of support around 2170. We're going to put it at 217150. Back up, cut, undercuts for a short period of time, comes back up, finds support, and we're getting back down to that 2170, 2150 to 2170 range. Uh, and I do think that support is is very close for crypto and for Bitcoin. And I want to discuss a little bit more in depth here.
So to do that, um, and to explain what's going on right here this in this past couple days. Yes, there is a bit of a risk-off on the macro here. Uh, there is some impact from Kevin Walsh being nominated. There's certainly some impact from the potential, uh, escalation in Iran. The president continues to post updates and all of them seem escalatory. Um, but I want to start at October 10th. So October 10th, we had a major event and it was a major deleveraging event. So we had the quote unquote Black Friday pivot, right? So there were tariffs announced. There's some geopolitical items and there was a big liquidation event. So as as fear hit, we had this, I think the best way to explain it to everyone, you can call it [clears throat] it's almost like a margin call deleveraging event. Um, you know, inverse of a short squeeze, explain it however you'd like. And you see that from that point was we started crashing and we had a massive liquidation event. And that was on, um, a handful of different wallets because they had what is an automated deleveraging. And so you could just think of it as, let's say an automatic short call, um, or a margin call. You could look at it that way and which you can also see the creation of an automated covering which would lead to a short squeeze. Right? So imagine something along those lines trying to equate it for those who are not familiar with the term, but we got an automated deleveraging event and so a lot of these long positions got liquidated. You often hear about that in crypto and this was sort of the way that the cycle worked out for those who prefer visuals. Now, who was part of that major exchange, exchanges, uh, Binance, Bybit, Deribit, right? And that was a major item and you saw a big drive down and the fallout from that was we had a few days where the market, where crypto was looking for some stability and then we started to pick up noise in terms of a government shutdown and we moved into a government shutdown, which was a, you know, a kick in the stomach for crypto, something I discussed at the time. Now, um, crypto was actually, both Bitcoin and I would say Ethereum as well, while we had discounts on the tariffs, it was what I described at the end of the year and going to 26 as a lagger and, you know, probably the the disappointing trade of the year, uh, at least in my books, was the disappointment was the performance of crypto and Ethereum underperforming what I projected them to perform, underperforming our expectations, um, experiencing this ADL Black Friday type event, uh, and then being hit by the government shutdown and something I was explaining as we move through, as I said, it's going to take a little bit longer to recover than others and has continued to just face speed bumps and go turn along sideways, um, until this weekend and I think this deleveraging is kind of moving along in line with a bit of the risk-off appetite that we've seen for just a variety of items. What's happened with the metals, what's happened in what's happening geopolitically, uh, so on and so forth.
So where does that leave us right now? Well, the gold and silver crash has reduced risk appetite and it's a byproduct, of course, like I said, you see the the rise in in the US dollar, uh, and it spilled over to crypto, which now, as a result of a partial, uh, government shutdown, faces continued slowdowns and I think that's a little bit frustrating, uh, just fundamentally for crypto holders because we we just started to recover from the government shutdown. We're starting to make some progress. There's a little bit of pushback as we know, uh, from exchanges, from Coinbase, in terms of how we're going to flush out regulation going forward and we were still making progress. There were conversations happening and now I think that gets delayed a little bit, but I don't think that, first of all, it's a partial government shutdown and I think there there's a lot more progress happening earlier. I think both parties recognize the last shutdown was was very painful and it will not be a good thing. This is something I discussed. I felt that it would probably happen as time went on, um, but my take is that it won't be a record-setting shutdown and it won't escalate, um, because both parties recognize it's a loser, right? People are frustrated. You can't do it again because everybody's going to get hurt and you're you're playing Russian roulette with the midterms at that point. So, I don't think anybody wants to be tied to that. So, I think there's some frustration. There's some spillover from what we saw with, um, with gold and silver, but I think that we're closer to a bottom here and this is a support line and support zone, at least pricing-wise, in terms of market appetite that I would keep an eye on.
There's the one other major thing that I think is important to note here. So, gold and silver actually, I believe the surge upwards had a negative impact impact on cryptocurrency. Let me explain why this has been such a red-hot trade with both gold and silver that I think it's sucked all the air out of the room. And what I mean by that is it's picked up a lot of the traders, a lot of the crypto traders, a lot of the people who are hedging on crypto and looking at, uh, you know, potential debasement trade and leverage and dollarization, um, so on and so forth, a hedge against volatility. A lot of those people moved over and started putting their money, including some institutional players, at least components thereof, and professionals started moving over to gold and silver. They looked at it and they compared the two, and it was just working so much better. It's performed so much better, uh, in the last several months, right? I'm not going to look at the 10-year history. We know crypto's gone parabolic. Bitcoin going from pennies to thousands of dollars to hundreds of thousands. And the same thing for Ethereum. But if you look at the way these trades have worked, let's just say since last year, since May, you take silver around $28, 28.50 to 109. You take GLD, our ETF here, and let's just say that we're we're tracking that, uh, since earlier in the year, um, let's just even say around, let's say around May, 297, and we move up to 508. Well, then you compare that to crypto where you had a lot of traders and the action just hasn't been as hot. We did get that down period, um, 68, and we spiked up, but the last several months, right, since October in particular, it's just been an ugly period. So as this happened, as this was moving down, and the same thing on Ethereum, right, past couple months, similar looking chart, it's just an ugly chart. So a lot of those same players looked at the past couple months on gold and silver and thought, this is looking a lot cleaner, this looking a lot cleaner, looks a lot better. And then you start to second guess and you have those conversations about, well, this is a hard asset. Um, this isn't as effective for me. I don't like what's going on here. So on and so forth.
Now, I think that I think that there's some opportunity here and I want to place a bit of a focus on Ethereum. So, I do think that we're nearing support for, um, for gold, but it is a good reminder, sorry, for Bitcoin. It's a good reminder that Ethereum has a little bit better support, at least institutionally. They're rebuilding their settlement layers using blockchain, uh, specifically using, uh, the Ethereum layer. So you get major players, and I've shown some charts about this before. Players like BlackRock, they've launched tokenized funds, uh, such as BYDL. I won't try to pronounce it. I know some people do on Ethereum, which has grown, it's representing billions in market cap for fixed fixed income, uh, and showing how it can be a reliable sort of settlement backbone for institutional-grade transactions and there's over 35 institutions with banks, asset managers, I think there's some payment networks that are actively working on Ethereum for tokenized finance, leveraging for stable coins and and bonds and DeFi applications and so on and so forth. Um, and so I think that's that's a big positive and that kind of that rollout is is a positive. It's not universal. Um, some are using Stellar, some are using other protocols, but Ethereum has a pretty clear lead in building that infrastructure. Um, and I think that's going to be to prove to be positive. And I think overall, there is, uh, we're near a a bottom point here.
So, I wanted to cover that first and dive right into it and sort of have a little bit of a, uh, a different pace to this just because I believe it was a pressing question across the board and obviously, uh, these are interesting times. We talked about 2026 being hypervolatile, even more so having more ups and downs than, um, than 2025. I think 2025 was while it was hypervolatile, as I explained in the 2026 outlook. So, this isn't the first time you're hearing this from me. 2026 was more of a 25 was a more of a binary item. It was the idea of tariffs on off. Did you get it right? And then the markets just took off. Whereas I think this year is going to have a lot of geopolitical twists and turns and ups and downs from the, you know, what's going on geopolitically in terms of tensions in the Middle East to what happened in Venezuela to, uh, the midterms are coming around to the Supreme Court rulings to, you know, the next Fed chair with Kevin Walsh being, uh, nominated, so on and so forth, and it's going to be even more than that. That's why I said it's going to be a much more volatile year. Um, so look at the S&P 500. But I do expect that we open down a little bit. Maybe somewhere it's going to be somewhere in the 6,800s. And I think we got have a little bit of support here. So I do think there is still an opportunity for a bounce. So it's sort of a, it's a buy the dip sort of perspective, but, uh, I want to to break that down. So I I expect downside in the first quarter, uh, as we progress to the later portion. That's part of the 2026 outlook. I think it might be premature to to look for the bigger move down here. Um, but there are some signs bubbling up and I want to talk about those and break down earnings and some some other items. So, it's a jam-packed video tonight.
One of the signs that I've pointed to is the push in consumer staples and you know that I posted about ideas like Coca-Cola and MT Bank Corporation and MT Bank Corporation, not so much on the consumer staples. Um, but looking here with Coca-Cola and XLP and just the consumer staples pushing up, I said I do have concerns about that occurring at the same time as you're looking at technology trying to find its footing and specifically some appetite returning to the Mag 7. You can see we've sort of, um, topped out here, at least temporarily, and I think that's just something that we need to look at and pair that with some of the the risk-off sentiment recently. Um, but I think that the positives have been Nvidia, at least in terms of trend. Friday was a little bit of a weaker day. Nvidia has found its footing and Apple finding its footing. Now, where I expect continued weakness is going to be in IGV. I think that software continues to be weak. Now, I, we're getting close to a support point and from a technical standpoint, you can see it's pretty clear. Um, I think that, you know, my my take on software has been dead on this far this year. I think I think there's going to be points where we get bounces like I called this was a temporary bottom. It's going to be a bounce and then it'll be back to the short for you again. I think that's approaching maybe, uh, perhaps not immediately, but I think that somewhere around, uh, trend, there'll probably be a little bit of a short bounce, but it's not something I want to get long on. It's just that's more of a note for active traders who are trying to, uh, catch the action. I think software is going to be weak through the year. I've said this, uh, at every turn. I think it's, you know, it's almost ad nauseam at this point. I've put up charts and graphs and how software is performing so poorly, poorly. I've made the fundamental case in explaining cannibalization of software market share by AI and given some use case scenarios that I I think are applicable and are only going to become exacerbated. And I know there's the contrarian traders who felt like, nah, it's not going to happen. Well, they've been wrong, right? So I will note the bounces. Um, but software, I think is going to continue to be a drag. The positive for the markets, for the overall S&P 500, is right now software is putting a big drag on the markets. Right? This is Microsoft heavy cap weighted name and Microsoft just getting hammered. And so that is putting a dent in what we're seeing on the markets. Obviously, 430 was the close. You can already see that 424 is what we're trending to. This is what we have in the after-hours for Microsoft as we push towards an open. So, uh, there's a lot going on.
I want to talk a little bit about earnings and some of the names that are that are coming up here. One of them that we have is actually Palantir. So, Palantir, I mean, you can you can chart it so many different ways. Um, you could look at Palantir is maybe holding its trend. You could look at this as a, you know, the head and shoulders patterns and all that sort of thing. I think that we're getting somewhat close to some support, but as you'll see here in the calendar, and I I created a hybrid calendar, Palantir earnings coming up. Uh, that's not an earnings call that I would challenge. Obviously, last week we were we were dead on. In fact, I leaned bullish on Meta and bearish on Microsoft. Fun, fun little fact for everybody, um, is that I believe that is the first time in history where we've seen a large divergence between the two. Typically they move in the same direction. So we were bullish on Meta and bearish on Microsoft, um, whereas conventional logic would say they're moving the same way. Just another reminder that historical data doesn't doesn't mean that you have a prediction for the future. They'll move different paths based on on their fundamentals. And we didn't like what we were seeing with Microsoft. We've been negative on Microsoft. Uh, and I leaned, uh, leaned bullish on Meta this week. Palantir, not one that I really want to challenge, and I'm also kind of neutral on AMD. Alphabet, I think is is kind of extended in terms of, uh, price, just for the short term, but I'm not overly concerned about what's happening in the near term. I think Alphabet should do fine. Uh, it's the long term. I like Alphabet for the year. I continue to like Alphabet for the year, and I would say I lean bullish on on Amazon.
In terms of the actual underlying data that we have, and this is interesting, we're spread out where Monday through Thursday, we've got a big earnings call on each day of the week. Uh, we've got some ISM data, some inflationary data. Um, job openings. So we're going to see Jolts come on Tuesday, and then I would almost skip just right ahead to Friday where the US employment report. So, US jobs, it's going to be interesting to see and and hear what we get from jobs this week and and keep an ear out for what commentary we might get from Kevin Walsh because we now do have a shadow chair, and every day that passes, every week that passes, that shadow chair is closer to assuming his role, assuming that he, um, moves past the nomination and is the the presumptive next Fed chair, which I believe he will be. I don't know. No, no reason to believe, um, he will do more than just get grilled in Congress. I think that it'll move through. Kevin Walsh is our next Fed chair. So, this is what we're looking ahead to for the week. Um, again, leaning bullish on on Amazon and, uh, for the year, bullish on Alphabet, but neutral into the call. Uh, somewhat neutral. I think that semis have talked about semiconductors. I think semiconductors probably have a good month ahead in, um, in February. Obviously, that's been a hot runner for us as well from the previous idea on semiconductors where I said that I felt it was going to have a semis would have a hot January. I think that, you know, there's still probably a little bit of progress to be made in February, but I do think that semiconductors top out and maybe have some rockiness ahead, um, as some some supply and and some demand questions come up, and that will sort of coincide, probably front-run, but it'll coincide with with the market pullback.
Last item for tonight. I know it's been a really busy night and we're going to have a really busy week ahead. We're coming out with a lot of new features for, um, for for Discord and for intraday trading. I'm hoping to demo some new features, uh, this week. I said, uh, I was looking at potentially doing that last week, but what we did is I actually accelerated something that I felt we could use last week, and our trade helper feature pushed back a little bit so we could just divert some attention. We've been tinkering with Tesla algorithm for quite a while, uh, and I like the opportunity that we had, uh, on on sort of the zero DTE setup with Tesla, and so that's what we went ahead with. So you can expect that late week, we'll start layering in more than one stream at the same time. So you can pick and choose in terms of the SPY, um, 691 just caught these little surges to 694 and then just under 693, bottoming out at about 690. You know, this signal kicked in a little later as the momentum was going. This one's solidified a bit later as well, but, uh, and both solid signals, then then it was a quiet day on SPY after that. So that was a good day on SPY, but how's this for a debut on Tesla? An absolute just face ripper, as they say, move, obviously starting at 425, got the reiteration signal at 428, and Tesla just absolutely ripped to 439. So yeah, fantastic, and particularly on a zero DTE time frame. Um, that that was a hot one. Tried to differentiate the charts just to give you a little bit of visual diversity. Uh, went with different color pattern here. We're going to look at maybe getting some different sounds whereas so it's not the same chime for both. That way, if you're following one and you're waiting for an audible alert, um, you know, you don't get confused because an alert goes off and you think, well, which one just went off. Obviously, you should be able to see the arrows. It's not hyper complicated in that regard, but just quality of life improvements. We'll look at that. Uh, then we are working on the trade helper, and we're actually looking at a couple of other potential live algos that we can fit into the mix. So you may be seeing more than just Tesla and the S&P 500. Like I said, uh, we're going to jam the Discord with with more and more and more value as we go through the year. There's a lot of really cool plans, um, for some some really fun upgrades. And as I said, everybody who is an insider right now, you were grandfathered in.
All right, guys. Uh, longer video tonight, but we had a lot to cover. That's it. Have a great night.