Transcription
Heat. Heat. Hey, hey, hey. Heat. Heat. N. CTM. What's going on everyone? Hope you're well and doing great as we get ready for today's session.
Yesterday, we we during yesterday's session and I had the bears in the background lurking. I said, "Watch out because over the next several days, it's basically has the potential to dictate what happens with the market." We had the MAG 7 earnings yesterday. That was a massive, massive signpost we needed to see, we needed to read. And then we have, obviously, over the weekend to see whether or not we have a further escalation sending the price of crude above 120, or we're able to see actually some type of negotiated arrangement.
Powell had a different take on that yesterday. Okay, Powell said that actually the next 30 to 60 days could change things. And you know what? I'm going to have to hat tip to Powell. And that's probably a much better assessment. He's actually giving a 30 to 60 day timeline to find out whether or not this was just a one-time offshock on energy prices that are going to return to normal, that this resilient economy is going to be able to to absorb, or whether or not this is going to have significant, long-lasting macro consequences.
We did see, let's talk about Bitcoin first and then we'll get right into the capex spending, the AI, the parabolic run, or the top that is in right now. I have the bulls today because the bulls defended, the bulls defended yesterday. However, we're going to keep flipping back and forth until we have some type of of traction of what we think is happening. And Bitcoin here, right? Coming in for the the massive breakout and so far in for a retest. Real, I mean, it's nice to see a little green. It's nice to see Bitcoin in the green today, but it's going to have to resume above here and above the top end of that resistance in order for people to not only take a breath, but you would see, I think, a lot of people at that point fig thinking that there are strong and significant signs pointing to the bottom is in. Way too soon to call that right now. We're in the midst of a breakout retest. We got to see whether or not we're able to confirm that retest and resume up out of it.
I like this view which is showing the the breakdown, right? You can see the the breakdown and then the breakdown now coming in for a retest. And again, it m it it matters. Is it going to be able to to resume down or not? If it does, you'll see that it's able to make the confirmation out off of the retest of the low. This was the low. This was the retest. It's happened every other bare market against gold before. And this time, if it's able to to resume out of here, that would be the first sign that indeed there's a stronger probability that the low is in. We were there at the bottom, at the at the bottom, saying, "Look, it looks like this is the potential to be the retest of the bare market." Our next signal would be a confirmation above the trend line break. And gener usually, you guys have seen the data that that gold bull markets then lead to bitcoin bull markets. A different perspective than a lot of people have looked at.
Oh, today we see intervention in the Japanese yen and the Bank of Japan has went ahead and bought JPY, bought yen in order to strengthen the currency. Look how it just fell right into the trend line we have. And I'm gonna come to the daily over here. Let's take out the daily. And I mean, is that all they have? That's the question. Did they just burn money? We talked about in the past that 160 level and how important it is and that we would normally see verbal intervention as we reach that level. They went further than verbal, actual buying of yen. And look, m maybe they're going to act in the market again. Maybe they'll break this trend line. And then we'll watch what that means to people's positioning and and whether or not there's any further carry or maybe they just I was gonna say something. Maybe they're be deemed a little bit inappropriate. I was going to hold but filter that out, come back. Maybe that was maybe the low is in here and you know what, maybe they they'll try again. But if they lose that 160, how quickly will the yen begin to devalue? That's the question. That's is it definitely worth watching at this level. Again, if they start tightening, if they get their rates to 1% and continue above, then maybe there's going to be something there. Right now though, it's a fight. It's a fight. It's a fight. And the situation in Iran is not helping Japan at all as they are energy dependent.
Just a quick check in over here on the price of crude. Currently, contract rollover. Is that the pressure today? Um, maybe. Am I reading anything into this? No. This is all dependent on what happens again over the weekend. And I think that we see most of action. Oh, 7% on the on the old mouse. We're getting mo most most we see a lot of action occur uh over the weekend. And whether that is, you know, selected strikes or actual negotiation, I think we're about to find out. We see a lot of posturing during the week. Heats up today and tomorrow into the weekend. So big, big, big, big weekend coming up from my view. Maybe Powell's right. Maybe we got more time than than I see.
What's going on here with the NASDAQ? Let me just go ahead and just show it to the weekly chart. And still worth watching. Again, something that would be concerning would be to see over here as we make new all-time highs for that to be faded. A bearish engulfing pattern might be the first sign. Right today, we are seeing off of the capex uh confirmation of 2026, the bulls actually defending. And check this out over here. We got some I'm going to move this over to the side so you can read for 2026 capex guidance after last night. Google is going from spending $180 billion to $190 billion. Google's earnings were spectacular. Google's uh cloud earnings very, very good. And I mean, Warren Buffett got it. He He invested in the right company at the right time. My man knows how to pick winners. I'm gonna give him that hat tip as well. Look at this. Powell and Buffett getting a shout out. Crazy today. Microsoft also $190 billion. Amazon roughly $200 billion. And Meta raising money today. Metat trying to raise $25 billion today and they're looking to spend $145 billion combined, around $660 billion from four companies in one year. Wait until we see wait until we see Anthropic IPO and then have a war chest to spend. By the way, I heard OpenAI in the last three months has secured enough compute as per what their expectations were to 2029. I'm sorry, got something choking on something. Um, intense. So, we got I mean, Nvidia's down today. Last I checked, at least, Nvidia was down, you know, a few percent, down 4%. It it seems like the spending is going to continue. Nvidia earnings, don't forget, they don't they're not grouped in with the Mag 7. They're a few weeks behind. We'll be looking forward to that uh to come. But like their spending, there's no signs yet of anyone pulling back and it seems that the race is actually intensifying. So that one worry about whether or not we're going to see any companies pull back in spending, that's not realized yet.
Energy is that the issue? Remember we we showed those videos of of Leopode and uh people were like, "Oh, that's not real. That's AI because he's like an AI." The guy is like, "Talk about artificial intelligence." Uh he has obviously, you know, fired by OpenAI for raising moral concerns, starts his own fund, and so far that fund is doing absolutely spectacular. I like to hear anything he says. But he's also he's also using a lot of leverage when things are going up. That works out well. Again, Buffett does have a massive track record, a long track record. Leopode, new talent out there, starting to go. Uh, is this Meta? Are you talking about Meta? Um, I mean, guys, I I heard an interesting stat yesterday about Meta and if they hadn't uh and and rightfully so, guys. So a lot of people talk about uh remember like IBM, the leader in in computers and and IBM today, I mean, you know, and a lot of companies, a lot of a lot Xerox, I mean, whatever the the list goes on and on. Um, I saw yesterday that DXYZ was up pretty substantially. Not sure what type of news was the catalyst for that. If anyone knows. OpenAI. Okay, very good. Very good. I mean, listen, I felt very very um it was good news to hear that their last raise was what was it, $124 billion that you know, with that money they were able to secure a significant amount of compute actually again, what their estimation was what they would have by 2029. I think that puts them in a pretty powerful place. Remains to be seen the ramifications of the lawsuit. I mean, I I likely AI continues as a for profit. Likely Elon maybe gets a stake in it ahead of the IPO. Uh that's the one question. Are they going to be able to IPO? Is OpenAI going to be able to IPO this year? Is it going to come before or after Anthropic's? There's only so much money out there and a lot of people looking to grab that money right now. Maybe maybe they'll print.
Um, bulls defending. Where we at? Let's go. And want to bring up a couple of different charts with you. We were looking at the capex spending, right? What else? So, let's jump over here and look at a few charts together. And there we go. Let's start over here. And a lot of people are focusing in on the concentration risk. If you look in the past, you could say that, you know, you had the Nifty50. Uh, and during the Nifty50, you could see the concentration risk got up to 40%. During the the tech and telecom, again, that it got up to 41%. You go back into the 80s, that was the.com bubble bust. I mean, guys, there there is one significant difference between the.com bubble analogy and today's analogy, and that is that these the MAG 7 are putting up tremendous amount of earnings, tremendous amount of earnings. That wasn't taking place back during the dotcom bubble. Now, there were significant amount of companies with displaced PEs during the dotcom bubble, and there also are today. And you could point to things like Tesla and Palantir and wonder, are those PEs that are really, really high, are they warranted or not? And and you can make the case that that potentially they are or they're not. And I think it really is dependent on, you know, whether or not for in Tesla's position, whether or not, you know, Elon is able to go ahead and and roll out the robots and move from actually a car company into a robotics company. We're going to find out. Um, and then you also have back in the 19 late 80s during the Japanese boom, you had also a high 44% concentration. Today we're looking at AI uh with a 41% concentration. A lot of people are are rightfully getting concerned, right? And you could look at a chart like this and you could say, well, it's it's not so much the concentration is is the issue. Yeah, that's you want to watch that, but actually it's about earnings. And as long as they're putting up, likely the trend continues. You have to watch for when all of a sudden earnings no longer are being put up, and that's likely when we see the end to the run. Something to watch out for.
Other people are talking again about the um the last time that tech had a a 20% move. And look even here though, look on the left of the page uh right above that little guy in the corner, and you can see that look at the massive move that in the in the right before the Great Depression in the roaring 20s that was put in, right? This is I'm eyeballing it, but it's it's about another 90 to 100% move up. I mean, that's a lot on table over here. It was very close to the top the last time there was a 20, but there was also a a nice run up. I I can't really eyeball that and tell you that what it is. That's obviously maybe some type of warning, but it's not indicative of a top.
Other people are talking about the uh, you know, and and we heard Stanley Drailler talk about this. Fast forward 18 months earlier. And 18 months earlier, Draco Miller's like, "We're we're about to hit a lost decade going sideways for 10 years." That hasn't materialized. You know, it's been actually a roaring bull since. And now is the And I hear a lot of people talking about sideways to come, sideways to come. Maybe whenever you never know. And that is where our meme knowing when to be in the markets went out and on what side means everything, especially as people enter into retirement. If you were to enter into a bare market and like for investors, for traders during, you know, 2000 through 2010, there were there was massive opportunity. You could see the chart right over here. You had this caught this caught almost everyone off guard, and because it was vicious. It was vicious on the way up. Drunken Miller talks about losing an enormous amount of money buying the top, and it was because everyone around him was making so much money, and on the way down. Most retail investors who during the boom made like a real fortune, most of them lost it all on the way down. They were unprepared. This J this decade taught Gen X, baby boomers. It taught them a valuable lesson that Gen uh Gen Z um, I just so bad on the on the on the generations uh the millennials that they have not experienced during their lifetime. It has actually been basically straight up with the invention of 2020, the the March of 2020, I should say, and then obviously the the bare market of 2022. Um, I think that really, really frames a lot of people's ability to navigate the markets. But you remember for years looking for green shoots, green, and then there was a strong run up into the 2007, 2008 top, again, Great Financial Crisis. Is that the plenty of opportunity for people like you? People who pay attention, people who are focused, people who are dialed in and navigating the markets for those that are just listen, I had my money in my retirement account and no one ever told me to to to sell. No one ever told me to to get safe here. No one ever told me to get on the sidelines. I didn't know that was a thing. It could have massive consequences. Massive consequences. As well as if this thing continues up and people are left behind, that also has massive consequences. A lot of people, they were very, very it was it was max fear just rolling back a month ago, and a lot of people were were you very, very frightened. The move up, massive move up caught a lot of people by surprise, and now people are saying once again, obviously, there's a lot of concerning factors going on. Uh, concentration risk is is one of them. Uh, it just doesn't seem right is another. And then other people are like, well, I thought five years ago the markets were well, well, way overvalued, you know. Um, this is I I mean, it's hard. Could could someone push back about arguing with this now whether or not this is where it breaks anywhere up here or if it were to break down over here? But you could see uh we got Crypto Hubs alts taking a look. S&P 500 looking like it's under a parabola and it checks out. Looks looks good to me. I like this chart over here that's presented.
This is now we covered we're covering the bear case. Yesterday we had the bears lurking. No one's getting comfortable, but at the same time, there's two sides here. First, what number one, the AI buildout continues and continues in massive force. Now, there are concerns. Are they going to be able to pull off like which is basically a like a miracle, but are they going to be able to pull off all this spend and then turning it to seeing actual income and ROI? And are they going to be able to see that like the amount of productivity that other companies are experiencing from this technology is helping growth to accelerate further, and then just in time for the automation of the humanoids, of of the robo taxis are obviously before our eyes being rolled out uh and that's going to grow at an exponential rate. Are we going to come to a point where, you know what, they were actually able to pull it off, or is there going to be a lot like.com bubble? Here's this like this new thing, the internet. It's real. We don't know what it is. Turned out the internet was a massive, massive productivity boost for everyone, and that's what AI seems to be. There is the time in between, but what's different this time is that A lot of these companies, they understand that if they want to be here tomorrow, they have to be able to evolve and adapt today. That's why Zuckerberg is spending so much money. He knows that he becomes MySpace if he does not adapt to what's happening. And you have to give it to him. You can't always hit a grand slam on the metaverse. Obviously, he struck out big time, but he was willing to take a risk. He was willing to do whatever it takes to make sure that his company is a part of the future. That's what he's doing today. Whether or not they'll be successful or not, I was I was going to say if they didn't if they didn't have all that spend, that their their market cap would be an extra trillion dollars they spent over the last year. That's insane. However, that's that's short-term thinking. Again, he wants to make sure he sees this technology. He understands network effects and I bought it to you and I told remember when Google bought bought YouTube for a billion dollars. It was like a billion dollars. They make now like seven, eight billion a quarter, right? So bulls on the future, definitely cautious and concerned. All it takes is one quick snap and things could change rather quickly. We saw that down over here. Right over here. We were I told you I I was leaning into the MAX seven. I thought they were well overbought. It was and is been a massive spring. Caught a lot of people off guard. It could work the other way just as quickly. We have to watch. We can't get comfortable. Obviously, this is very concerning. We'll continue to watch what happens here with long-term yields. 10-year breaking out is something that could derail this current market, as well as and will be the cause of that would likely be continued uh elevation of of crude prices. And listen, we I I can envision a world where we wake up on Monday and crude is trading above 120. I could also envision a world where crude is trading back down to 80. That's the situation we're in.
Yeah. So ma exactly the Great Financial Crisis, the banker bailouts left a massive mark on millennials because they saw how unjust the system was. They saw a lot of their parents affected by the situation as they will too were coming out of of university and trying to find a job in what was a very difficult job market. There's no doubt that the 2008 uh Great Financial Crisis and more so what what were the protests going on there on Wall Street, you know, I I forgot the name of the protests were going on, but that were that was millennial driven. No doubt that they were affected by what happened over there. Yeah. And and the beauty of that and all the the beauty of that the beauty of that was that people learned the injustice, the injustice of the federal banking system, of of understanding that I mean, again, I I've talked about that was my first red pill ever when I came to understand the Federal Reserve banking system and what it was, what really what opened up my eyes was that day that President-elect Obama went to meet George Bush Jr. in the White House. And I remember them walking through the garden together. They go through the nice French doors and then they come out and George, President Bush Jr., Georgie is like, "Listen, Obama asked me if I would release the second half of the banker's bailout, and of course I'm I'm going to oblige and we're going to release that, right?" I was like, "These guys working on the same side. These guys are just completely and it's the side of the bankers."
All right, y'all. Conversation continues. We're going to we're going to make sure that we take it all in, adapt, and stay in front of it because futures matter because of it. Have a beautiful day, everyone. I'll see you all back here tomorrow and on the inside. God bless you.