The Compound and Friends - JC's Revenge

Episode Date: January 17, 2025

On episode 174 of The Compound and Friends, Michael Batnick and Downtown Josh Brown are joined by TCAF Legend JC Parets! They discuss luck vs skill in the market, the best performing asset of the 21st century (so far), risk-on indicators, JC's big short, the breakout in bank stocks, Bitcoin's consolidation, and much more! This episode is sponsored by FP Alpha. To learn more about their tax planning solution for advisors, visit: https://go.fpalpha.com/compound Sign up for The Compound Newsletter and never miss out!: https://www.thecompoundnews.com/subscribe Instagram: https://instagram.com/thecompoundnews Twitter: https://twitter.com/thecompoundnews LinkedIn: https://www.linkedin.com/company/the-compound-media/ Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Josh Brown are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. The Compound Media, Incorporated, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here https://ritholtzwealth.com/advertising-disclaimers. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: https://ritholtzwealth.com/podcast-youtube-disclosures/ Learn more about your ad choices. Visit megaphone.fm/adchoices

So we lost two legends today, David Lynch and Bob Uecker. Yeah, man. Just a bit outside. Just a bit outside. Well, you know, Roger Dorn was over the century. Was it Roger Dorn? The Seppliff Hellpips? Roger Dorn?

I think so. David Lynch was a strange, strange man. Buddha Jumbu. Uh, JC, that was, that was messed up. We did that kid. That cold, that cold. Have you gotten, have you gotten that? That cold called you. Have you gotten that before?

Yeah. Oh, you have? Yeah. You're on a list? You're just a beaut, you pick up. No, I usually am nice. I'm like, listen, good luck. You and I were in that seat not so long ago.

No, you're looking for, you're looking for new ideas. He sucked. He sucked. He was weak. Want to baby him? How would you, how how would you pitch Michael strategy as a cold call? Because whatever he did was like he he did the ticker okay. But like he didn't ask a confirming question. You have to ask it. So no he did. He said how would you like to make 300% in just a few short months?

He didn't phrase it that way. Yes he did. Yeah he did. That was pretty good actually. How few short. It didn't phrase it that way. Yes he did. Yeah he did. That was pretty good actually. Half few short. If it didn't land with me. No, you have to be like, hello, Juan Carlos? And they say, yeah, it's me. You've got to ask a yes question right off the bat. Did I catch you at a good time?

That works. Did I catch you at a good time? That works. You have to get them in yes mode. Why say no when it feels so good to say yes? No, but you, so, so you, but you kind of messed with him so he didn't get a chance to get into his rhythm. He's like, are you pulling my leg?

So then he's like, okay. Name of the company is MicroStrategy. What did he say? Ticker symbol, M-S-T-R. He started with a ticker symbol. But then he was like. No, the best part was he gave us a ticker symbol. He was like, M for micro, S for seaweed, or something?

Weak sauce. It was weird. Weak sauce. Weak sauce. And then he's like, instead of saying, I trust you've heard of the company, he didn't do it. That's what you have to do. Let me ask you a question.

Is an overwhelming amount of demand for a stock bearish, Jasey? Not historically. No, but do you know why you have to ask the person, I trust you're familiar with the company? Why? Because if they are, then you've built affinity with the person and they want to keep talking. And if they're not, they feel stupid that they've never heard of it.

And then they really want to listen to what you have to say. So it goes like this. Hi, this is Juan Carlos Peretz. Did you just sprinkle a little accent? Yes. That was like a little accent? Yes. I was like a little accent. I almost rolled my R and my L. No, but the name of the company I want to tell you about is Michael's Strategy.

I trust you're familiar with the name? Yes. Of course you are. Why wouldn't you be? Because you know what's going on in the markets. You're a successful businessman. While you may be familiar with the company, what you might not be aware of is a major catalyst coming up in the next two weeks

Grab a pen. I want you to take down some notes and I'll walk you through it Let me know when you're ready and then your person says I'm ready. So you need to get those confirmations along the way. Yes I'm ready. Okay. I agree. Yes. I hear you You have it has to get that kid never because you need a running start and you kept f**king with him. You're like, hold on one second, I'm going to the bathroom. I can't believe that's still a thing in 2025. Dude, he's in 1185 6th Avenue.

Who is? The guy that cold called you. Oh, you looked it up. I looked up the firm. Can you get me one that's not floppy Johnson? This is like. Wait, Vanguard's at 1165. Yeah, it's not Vanguard.

What is this? 1185 Avenue of the Americas is like, um, you know where that is? Radio City, no? Yeah, it's Rockefeller Center area. It's like a California pizza, like all limp, you know? Anyway, the stock is $365. Yep.

Let's say he took you to the mat and closed you. How many shares would you have done? First time out with a new broker. 100 shares. 100 shares. That's my rule. That's my rule. And then I put it on a spreadsheet

and I keep track of how you did. You know what's crazy about pitching micro strategy is that thing moves up and down 20 30 points in a day Imagine the renegs if like Bitcoin has a rough week. Mm-hmm. You could end up with like Five people reneging on you. Yeah, that's a bummer. I bought my cross strategy and the clothes on to on Monday unironically Michael cold cold himself and uh and closed himself first time I've ever bought the stock really. Yeah, I got the caterpillar What does that mean? You bought Caterpillar? Okay. Rotation.

Rotation. Rotation. Ooh, Cat does look good. Is this still a Bellwether? Yeah. For what? Yeah. Industrials.

Yeah. Yeah, of course. Still the biggest one? I don't know if it's the biggest I think GE is the biggest Did you see what they did with dear today dear? No, you like this stock Are you half historic flat forever? Ooh, ooh, it's not breakout watch pull up dear J. Say, yeah No, I know on their way out the door the FTC sued them For six billion dollars or something because the way those tractors work now,

you can't repair it yourself. So you're forced to pay a service contract where, and most of the stuff that goes wrong is goes wrong with the onboard computer, and Deere can access it remotely and fix it for you. Or- Who's fixing a Deere tractor by themselves? No, like if something goes wrong with it,

you almost need like software support. Cause they're just rolling computers at this point. Buying Alcoa? So the FTC says- Materials look like garbage, don't they? Says it's unfair. Oh, Michael. But they do.

I'm not buying Alcoa. It's a poor market, I don't know if you heard. What, higher lows? What do you like about this? That it's gonna go higher. I could sell it at a higher price than where I buy it. Which name? Which name? Alcoa.

No. Does not look good. All right, I guess we'll see what happens. We don't do Alcoa here. Oh no, okay. Remember Kenny used to trade Alcoa. Whatever goes up 300% in the next several months. Kenny used to trade Alcoa earnings.

Kenny Glick. Yeah, and you called it the Iowa Caucus of Earnings or did he? It's the first one. It used to be. It's not anymore. It used to be. Because it originally was alphabetical. So Alcoa is AA. So it was Agilent and

Alcoa were the first two reporters. I don't hate it. It's got higher lows but like there's so many better-looking charts. The problem with this is if you're wrong on the trade and you stick with it then you own basically a metal company. Here's what I like about this trade. It's aluminum. If it rolls, the stop is so obvious. I guess we'll see what happens. It's a stop right under the recent lows at 34. Same as Caterpillar, same trade.

I gave Mike... But the charts don't look the same. You're saying they're moving on the same shit? What are you saying? Yeah. Pull up a UI. I gave Mike this breakout on Tuesday. I gift wrapped it for him.

Yeah, did you buy it? No. I gave it to you, I said. Look at it. It's up again today. I can't buy this chart. Sorry. I did this for you. Are we flipping the book Long China or what? What are you buying? Long communism short capitalism. FXI.

It doesn't look terrible. Yeah, I dare you. No, I got a Chinese software stock that probably doesn't even make software, but it doesn't matter, right? My favorite story about that is Fahmy. That's a biotech stock? I thought it was a semi, huh? Who cares? Dude, we made like seriously like 400% on C Limited and the entire time Sean thought it was a shipping stock.

Yeah, makes sense. What is C Limited? It's like the Amazon of Singapore, but Sean thought it was a shipping stock. Yeah, makes sense. What is C Limited? It's like the Amazon of Singapore. But Sean thought it was- He thought it was like vessels? Yeah, cause he was buying, I mean, it was like one of the best trades of, I think two years ago, not last year.

The entire time he thought it was a shipper. Like we were taking profits, he's like, wait a minute. Can I say one thing? The Amazon of Singapore, I thought it was a shipping company. Dude, that's a real tech, that's a real technician who literally doesn't even know what the stock is. That's hardcore. I respect it.

He doesn't care. He just likes it. We like it. It's not what I do. It's not what I do, but I respect it. Yeah. Because that's the real, if that's the real discipline is like, it's on price. Yeah. I'm not going to talk myself into the fundamentals. I can't. Because if price violates, I need to sell it. I don't need to fall in love with it.

Yeah. You just change the story. Can you do that? Do what? Can you just buy us a chart? Yeah. But Sean's not buying a chart. Sean is buying a stock that he knows that we like.

Like, we put on the common. And then. So he's going by. Yeah. So he's buying the option on a stock that he knows that you guys like. So wait, do you hate this? I took a flyer on the the zeros this week rates. No, I don't hate that at all Thank you. I thought you might not hate it. What's the rationale on the zeros because the most sensitive move?

No, because here's the thing. I think that I just think the rate story went too far number one So do I number two all I am is stocks I don't have any offsets so in the event of something unforeseen, these are gonna rip. So I like that. The problem is, though, there's a positive correlation between stocks and that bond right now. I don't know, right now, fine, that could change.

Well, but I'm saying, right? Like, aren't we still locked in that paradigm where higher rates negative for stocks? Listen, I'm not gonna apologize for liking duration. I wouldn't say it's a positive correlation, but I think it can be moving forward. You like duration? Yes.

Thought you might. You're a gentleman and a scholar. What? You think bonds rally? Yeah. So do I. Why? Because I think rates go down. So do I. But you don't have like a... We're all aligned! You don't have like an economic reason for that. You're looking at price.

Do I usually? No. That's my point. Yeah, no. I think the dollar falls. We're in the same place. I think the dollar falls, too. I think the dollar falls.

We're in the same place. That's why I think it's Franco. Yeah. You buy any Homies? No, but Homies are trading like industrials. So I bought Caterpillar, which is like buying Homies. I own Home Depot. Because industrials...

Homies don't trade like consumer discretionary stocks. They trade like industrials. And Strasa has a really good theory about that because the homies don't sell to the consumer. They sell to businesses like industrials do. So that's his theory as to why they don't. Yes and no. Depends on which.

So XHB has William Sonoma in it. You know what I mean? Yeah, but trades exactly like ITB. Oh, they're close Okay, I'll put both of them over there. You wouldn't be able to know tell me which one I wouldn't be able to tell you which one. Jc I own HD and Sherman Williams Did you just tell me the material stock suck? You're telling me that you're busy about Sherman Williams. It's a home builder It's the largest material stock or second largest. Sherman Williams is not a home builder. He's so f***ing paid.

I know, I know, I know. But it's in the home builder basket. It's way more of a rate stock, housing stock, than it is a material stock. It's not a material stock. It might be classified as such, but it's not a material stock. He stole that pointing thing from me. But he doesn't do it right.

I do it hip hop, where I'm like he's like this there you go that's it no not a gun we don't do the gun Sherwin Williams is the only material stock in the Dow Jones industrial But I'm saying there's still time to get in, Jesse. Stop pitching you shitty stock ideas. Sherwin-Williams is shitty stock. It's the second largest component of the materials index. That's right. Whoa, whoa, whoa.

Stop the clock. Here's a word from our sponsor. Today's show is sponsored by F.P. Alpha. F.P. Alpha just released a new tax planning tool available to individual advisors. Achieving scale in tax planning is one of the most challenging and rewarding business lines we are seeing in wealth management today.

The tool is designed for advisors looking to balance limited time with valuable insights on a client-by-client basis. To learn more, go to go.fpa.com slash compound for all the details. ["The Compound and Friends Theme"] Welcome to The Compound and Friends. All opinions expressed by Josh Brown, Michael Batnick, and their castmates are solely their own opinions and do not reflect the opinion of Ridholtz Wealth Management. This podcast is for informational purposes only and should not be relied upon for any

investment decisions. Clients of Ridholtz Wealth Management may maintain positions in the securities discussed in this podcast. Yeah, it's no serve. All right, we're starting the show. Ladies and gentlemen, you are now rocking with the All-Planet. Yeah, it's no serve. All right, we're starting the show. Ladies and gentlemen, you are now rocking with the all-time best investing podcast.

We are heard around the world. We've heard from listeners as far as Sydney, Melbourne, New Jersey. Melbourne, right? Not Melbourne. Melbourne. What? Melbourne. I got Melbourne. What? Melbourne. I f***ed that up. Melbourne? No. Alright.

Ireland, Canada, India, tons of stock traders in India. I know you know that. First time. Fans around the world. First time listeners, long time listeners, last time listeners, sorry. We do our best. Welcome to the show. This is the Compound in France. Now it is fourth year of operation.

I'd like to welcome back fan favorite. I think this is your 75th appearance on the show-ish. Ladies and gentlemen, Mr. J.C. Perez. J.C. is the founder, chief strategist for All-Star Charts, a technical analysis research platform for hedge funds, RIAs, family offices, and individual investors. J.C., welcome back to the show. Good to be here. With me as always, my co-host, Mr. Michael Batnick.

Michael, say hello. Hello, hello. All right. Michael said something wild to me a week ago today, and I haven't been able to stop thinking about it. And I would like for you to help me and gang up on him. No, you might agree with him actually. I really don't know. I don't want to move the goalposts for what you said. This is what I think you said.

Okay. We were talking about Nvidia and long-term winners and like 10 baggers. 100 baggers. Nvidia is 100 bagger for me. Okay, so we're talking about whether or not people that own Nvidia over the last 10 years got lucky or if they're skill involved in that. And my comment is of course there is. It's not.

Of course there is what? Of course there's skill involved. You can't have a stock go up 100X over the course of eight years where it's been cut in half multiple times, it's been downgraded a thousand times and you stay with it. You can't say there's no skill. It's not trading skill. It's something else. I feel like it's emotional temperance. And to me, that's every bit as impressive as somebody who calls himself a consistently profitable trader and

Routinely like beats the market every quarter with their it's it's two different things But one is not less impressive than the other to me. Michael's like now. It's a lottery ticket You don't get credit for owning a lottery ticket. I Don't see it that way. I would love to hear what you think. I mean, listen, at the end of the day, I think for some people it was a lottery ticket and they did get lucky. Right. In other cases, they know things about the semiconductor space that you and I and Michael will never understand. Right. We don't live in Taiwan. We don't, we, we know about like basketball. Okay. Maybe, you know, but hold on.

But is it a lottery ticket? No, but hold on. But then there's the, if you're long the market, right? And the S&P 500 is the greatest momentum strategy ever because it's buying more of the best ones and kicks out the worst ones. So as Nvidia is going higher, you're buying more. You have more exposure. But at the end of the day, and so all those people are in Nvidia for different reasons. Doesn't make them dumb or smart.

They're just in and that's the strategy. What I want to point to in Nvidia is the relative strength, right? The relative strength has been there. So it just goes back to the cream rises to the top. Uh, if you remember Nvidia broke out relative to the rest of the market. So Nvidia broke out on an absolute basis in the spring of 23. People were still telling me that we were in a bear market and this was just a bear market rally this was just a bear

market rally and all that bullshit. Remember that? But video is already breaking out to all time highs. I guess. He won't answer your question. But I guess. All right. So back to you.

If somebody says, I don't know anything about the stock, I'm just going to randomly buy it. And if I get lucky, I get lucky. And then they end up holding the stock that triples. That's a lottery ticket. Okay. If somebody says, I'm buying Nvidia specifically because one day machine learning and augmented reality and the metaverse and virtual reality and AI

will require the type of processors that they dominate in, that's not a lottery ticket. I didn't say that was. The person called their shot. So I guess the question then becomes like, how did you end up owning this stock? Like did somebody just say buy Apple and then you bought it and forgot about it? There's no skill there.

Like you got lucky, fine. So I think it comes back to like why somebody bought it and why they held it. So listen, yes, yes, I don't disagree with anything you just said. I think it depends on why they bought it. So listen, I don't disagree with anything you said. I think it depends on why they bought it. What you described is valid, that skill. If somebody's strategy is, hey listen, I buy 30 of these, you know, flyers a year, I buy sub 10 billion dollar companies or whatever the number is, and some go to zero and some 100x. That's a sound strategy if you implement that. But he, but... That sounds lottery-esque to me though. Yeah, okay, but that's a sound strategy if you implement that but he but that sounds lottery esque to me though

Yeah, okay, but that's a strategy going into it If you're just like I don't know I like I bought six of these stocks and something worked like I don't think that's that's not Skill it's not repeatable There's no so I was so we agree what I was saying I don't I don't give people credit for sitting through an 80% drawdown And then the stack happened to work because here's what I know from JP Morgan's Eye in the market our friend Michael Semblis wrote a piece called the agony in the ecstasy and let me quote Michael More than 40% of all companies that were ever in the Russell 3000 index

experienced a Catastrophic price loss which we define as a 70% decline in price from peak levels which never recovered. How many? 40%. So 60% don't. So if you know that four in ten stocks experience a catastrophic decline from which they never recover, then I don't really give you credit for ones that happen to recover. You have it backwards. You deserve even more credit.

No. Yes. No. Because you lived through a catastrophic decline and you stuck with it knowing that those are the odds against you. You get even more credit for that. If you knew the odds, you wouldn't invest this way. Invest which way? By sticking with catastrophic declines.

So I don't think you deserve credit for sitting through monster drawdowns. So from my perspective, you should get even more credit for the catastrophic drawdowns you survive. Yeah, I get it. And if you add to your position in those drawdowns and stick with it, and then the stock works, you are a good investor. So, I don't know about that. I think sitting through a hundred bagger and sitting through the drawdowns that you will get is impressive. To have the fortitude, the stomach to sit with that. That's impressive. But that's not skill.

So I do think it's skill, but it's a different type of skill. It's the skill of thinking long term and controlling your own emotions. Yeah, I respect that. It's hard. It's hard as shit. I can't do it. These are the best stocks in history. Costco, Nvidia, Apple. Old Dominion. This is great.

Yeah, why hate on Old Dominion? Was it one of the best stocks in history? Okay. Monster Energy is the best out of all publicly traded stocks now. I think it's the biggest return Over the last like 20, 25. From IPO to where it is.

Nvidia might have a beat now, but it's in that list. This shit is hard to do. After COVID lows, the biggest winner was Alpha Metallurgical. I don't even know what that is. It's a coal stock. Yeah, it is hard to do. So I think it's a skill. It's not the same skill as Steve Cohen.

It's not even the same sport. It's not the same skill as somebody who is consistently beating the market. I'm not going to die on this. It's hard. It's hard to measure. It's hard to quantify the same skill as somebody who is consistently beating the market. I'm not gonna die in this though It's hard. It's hard to measure. It's hard to quantify it requires something listen at the end of the day It's a bull market. It has been for years. Yeah, people are making money. It doesn't make you smarter or dumber It's easier to make money when stocks are going up. It's harder to screw it up That's just what it is. Yeah, which discipline has more inherent luck involved I mean, that's just what it is. Yeah.

Which discipline has more inherent luck involved? Buy and hold, long-term investing, or trading? I mean, I don't know enough about, like. Bad question. What do you think? Because there's no luck in buy and hold. It depends what you're buying and holding. You're holding index ones.

There's no luck in buy and hold? If you're buying and holding index ones, that's not luck. No, you pick two stocks to buy and hold. Oh, luck, yeah. Yeah, that's luck. Yeah. In, right?

In, in, uh. I mean, I think it's on a case-by-case basis., luck, yeah. Yeah, that's luck. Yeah. In, right? I think it's on a case-by-case basis. In the year 2000, you picked two stocks to buy and hold. One is Hewlett-Packard, one is Apple. One is flat. I know, but who actually does these things? Nobody does this. Nobody lives this way. Okay, how much luck is involved in trading relative to luck involved in long-term? Wait, let me answer this for you. I think it depends on the person. Hold on, right? Like is Eddie Elfenbein who picks 10 stocks? Is he getting lucky? No. No, he's skilled. Right? Okay So some people are skilled and some people are lucky. You can't be a lucky trader for that long Eventually your luck will run out. That's right. That's right. If you make money over a period of time, a long period of time trading, you're skilled

Yeah, because otherwise your luck runs out. Yeah, that's right. That's right. So if you make money over a period of time, a long period of time trading, you're skilled. Yeah. Cause otherwise your luck runs out. Yeah, that's right. So right, you can have a lucky year not knowing what you're doing. You can have a lucky few years. And you can make a lot of money because your strategy is great in bull markets

and then it comes to bear market and you're wiped out. Exactly. You know what's so funny? I got all these like emails at the end of 2021 or the middle of 2021, all these like pitches, like this trader made 500% during the pandemic and used the money to help his community save the rec center or whatever. And they want me to have them on the podcast. And a couple of them I picked

up the phone and I'm like, all right, dude, you're 21 years old. Sounds like you have a cool story. There's no way any of these people are still trading consistently profitable. There's no way any of them have had a better year since 2021. That's an environment where 95% of stocks go up 30%. Well, as a matter of fact, it was actually the greatest 52 week period in the history of the United States stock market. And just before that, you had the largest inflows into money market funds, and we haven't had

that many inflows until last week. Yeah. That's wild, right? That monster inflow last week? There had to be one big account this week. I don't know what these people are so scared about. No, it's not, because retail and institutional. I think that's people moving money

into their brokerage accounts. I know, but what are they scared about? Because they don't invest this year. I think that's a play on investment. What if they get anybody to buy a house? No, no, no, no. The institutions are not buying houses. But what if they are?

They are not. Blackstone? Nope. But where do they move the money from? Stock funds? Or from a checking account? Paychex, paychex. No, these are institutions, bro.

Retail investors don't matter. Completely irrelevant. Institutions, real institutional money flow. Institutions buying money funds. Yes, more faster than at any point since April of 2020. But why? Right at the beginning of the greatest two week period. Why would they be doing that?

Well. Cause they're scared shitless. The entire Trump rally just got unwound. But why not buy bonds, if you're looking to get conservative? Bonds, I think, screaming buy. I don't know why they did that. I'm just telling you that they're scared to death, which is great, we're buying stocks.

This is a scared market and what's interesting about it is we're like 3% from all time high in the S&P. You have the AII chart? Yeah, you know I do. It's wild to see that level of fear given where the indices are. But this happens every time we pull back 3% to 5%, people get super scared. It doesn't happen every time actually

That's good actually that was a good one right it doesn't have it every time actually hasn't happened in over a year So it feels like it happens every time there's a five simple that people get scared scared scared, bro let's start here scared the first two weeks of the year big tech stock sold off and Tell him why. Tell them why. Hold on. Big rebounds in healthcare and energy. And when I looked at it, I said, this smells like my little portfolio rebounds to me.

There's no fundamental reason why people are bullish all of a sudden on healthcare and energy. It's just like those are the things that went down the most last year. There's no more tax loss related selling in those stocks. So they were able to levitate a little bit when the calendar turned over. Tech is the opposite. People have monster gains. The NASDAQ went up 35%.

Some of these stocks doubled and nobody wants to do a sale on December 21st and then pay taxes in April. Everybody rolled those gains into January this year. And I said the same thing last year and I still think I was right. So I don't actually regard the first two weeks as being indicative of anything, but a lot of people are saying like,

okay, this is the first correction of 2025. This is the first correction since whatever. Do you see it that way? Or what do you think is going on here in the last couple of weeks? German DAX just closed at all-time highs. They don't pay U.S. taxes. And they don't have any technology stocks either. I mean it's a bull market. I've studied every bull market in history and it's quite obvious that the common theme there is that investors who own stocks make a lot more money than the investors that are selling stocks. And that is very consistent so that's in bull markets we

want to be buying the same thing I just said noise that we balance trade that I think I'm so what you're saying is exactly right what you're saying is very consistent with bull markets as well we call the sector rotation you call it a rebalance but we're saying the same shit yes we're gonna look at the new lows list which is non-existent and the reason it's non-existent is because every time a group of stocks are close to breaking down to a new low they come in and buy them. Yeah. That's why the new lows list isn't expanding. That's interesting right. And you want that rotation in a bull market. Of course and then you

got these people they're like oh JG you're not looking at the charts. It's like yeah bro I'm the one not looking at the charts. Yeah, bro. I'm the one not looking at the charts. If you're going to accuse anybody of not looking at the charts, it shouldn't be me. So people are looking at the lack of new highs and people are looking at the new highs. How about the lack of new lows? How about, you know, like, yeah, where are they? How about consumer staples are making all time lows on a relative basis?

Like people are like talking about like, oh, sector rotation isn't working. Are you kidding me? Are we looking at the same market? Like... Yeah, by the way, sector rotation last year worth great. Financials shot the lights out. Mm-hmm. We just saw earnings reports from these companies that justified the entire rally. Mm-hmm.

They are... I don't know if you know this, last year, the major six banks, Citi, JP Morgan, Bank of America, they returned $100 billion to shareholders last year in the form of buybacks and dividends. Not bad. In the form of fiat. That is the highest level of capital return, I think, ever to shareholders.

By banks. Banks. Yeah. So the fact that they were at the top of the list with communication services makes perfect sense to me. That's a rotation. Financials were not a good trade in 23. They were an amazing trade in 24.

That is sector rotation. That's what the books are. Remember one time you were on the show the dollar was a wrecking ball? It's not really wrecking shit this time. Kind of interesting. Well, a little bit. I mean a little bit, but not nearly to the extent

it was in 2022. Shall we? Let's do it. Well, a little bit. I mean, a little bit, but not nearly to the extent it was in 2022. Shall we? Let's do it. Let's start the show. I want to do 10 year treasuries, dollar, all that stuff. He's acting like you didn't bring the charts. Good. Everything you're talking about, I have a chart for.

The six bags, I got an equally weighted chart of those six bags. All right, let's f***ing got you, bro. No more foreplay. I just want to give a throwback to episode 75 of the Compound and Friends. This is January the 6th of 2023. Shout out Compound and Friends, come a long way since then. That was the bottom.

So the market already bottomed six months earlier. The S&P bottom, the Nasdaq bottom two weeks before. So this was in January, this is the first week of January of 23, so it's two years ago if you recall. Stratton was sitting right here, remember? And we were looking at Wall Street sell-side strategists with consensus that S&Ps were gonna fall in 23. Yeah. For the first time this millennium. 100% chance, 100% chance of a recession.

What a chart. So. Oh yeah, probably. Yeah. That's, that was the consensus. 100%. So for the first time this millennium, Wall Street consensus was that S&Ps were actually going to fall in 23. Let's see what happened. So the Nasdaq doubled.

You know, thanks Wall Street sales side. I like to say that I played a role in this. Yeah, I did. I did too. Yeah, I made a lot of this. Yeah. I did. I did too. Yeah, yeah, yeah. I made a lot of money. This is crazy, though. You almost never see the Wall Street consensus strategists

No, never. Never. Ever. Have an average target for the S&P that's below. I mean, that's wild. It never happened. Was anyone banging a gong like, guys, this is it. Yeah, us.

I mean, we did. Yeah, us. I mean we did but like. We were here. Episode 75. But none of the other strategists said wait a minute. What they're gonna dunk on all themselves? I don't read Wall Street strategists. But are you nervous now that we're on the other side of that? No because it's less valuable when they're all bullish because they're always bullish. It's when they're bearish that's like what the f***.

That's a good point. You know what I'm saying? Yeah their job is to be constructive. So they think the like, what the f***? That's a good point. I agree. You know what I'm saying? Yeah, their job is to be constructive. So they think the stock market's going to go up. Great, it's a bull market. There's no signal there. The strategists, like, if you actually break down that role,

one of their main jobs is to have an outlook that's constructive enough that business can get done at the investment bank and be in accordance with what the bank is telling its clients so they don't have to be permaballs but they certainly shouldn't be like... No, they travel in packs, they travel in herds because it's safer that way because even if you think something very different than the rest of Wall Street you can't say it for the most part

because you're probably very much overpaid and you probably shouldn't have that position anyway and if you go out on the limb and you're wrong you're probably very much overpaid and you probably shouldn't have that position anyway, and if you go out on the limb and you're wrong, you're f***ed. So you better be right. And what if you go out on a limb and you're right, you're a celebrity for six months? Maybe, yeah. That's pretty much what you've been out of it. Or longer, yeah. Because you're not being paid two and twenty for the returns of a fund.

It's not worth it for you as a sell-side analyst to go out and reach, right? So, right? So the strategist is there to be somewhat constructive. So when they're all negative together, that's crazy. And again, I'm not hating on anybody in particular, or the industry, we have the data, so we just know, right? And so it's not like one strategist or that strategist is at a consensus. If they're all bearish, like you flipped the book long,

right, as we did, obviously. So that's really the lesson, right? That's really all it is. So just take the other side, particularly when they're bearish. Now let's look at current markets. So here's the S&P 500, and it just looks like an uptrend to me,

breaking out of a multi-year base, higher lows, higher highs. As long as we're above 560, I don't see any reason to be- Have we had enough of a retest? A retest of what? I don't know, whatever went on last week, it had a negative day on Friday,

big down day for almost every stock, it wasn't that much, but, so you don't want to see us retest 560? No, I don't see a problem with retesting, but if we break 560, I think that would be the first crack in this market, right? Like all these people have been fighting in the bull market the whole time. I have no idea why. This would be actually the first crack if we were to break below that, but we have it.

And if you look at the others... So this is on this 560 on the Spy, 5600 on the SPX on the index itself. Look at the queues. The queues retested that 500 level to the penny. Textbook. Textbook. But, Jasey, doesn't the sentiment flip make you more constructive?

Yeah. Like, if people were like, if nobody gave a shit about the pullback, then you say, oh, that's a little weird. Well, we know for a fact that sentiment is not a headwind. The question is, how much of a tailwind is it? And I think we'll get to it. It's been a tailwind this whole time. Well, we just, we reset.

Yeah, I love it. In fact, last time I was on the show was in August when you had that volatility spike and you got the sentiment reset. Remember, AAII investors had the, or newsletter writers had the biggest decline in bulls since the 87 crash. Wow. Yeah.

And what happened since then? You have to rebuild the wall of worry. Yeah. Exactly. There have to be people that get priced out of the market and chase it higher. Yeah. And the only way you get that is when you shake the tree. Yeah. That's right. So you got to shake the tree every once in a while. I totally agree with that. Yep. And the Dow same thing. Dow looks a lot like the NASDAQ. You know there's your 42,000. About 42,000. Look at how textbook these pullbacks were. Yeah. So the S&P never quite got there,

but the other two did. Okay. Yep. So 42,000 on the S&P, 500 on the Qs, and 560 on the Spies. Those are the levels. Okay. So if we're above these levels of support,

it's business as usual. Buy your favorites, look for trends. All that stuff. All the good stuff. Okay, you see a sector down four days in a row, blindfold yourself, just buy it. I don't know about all that, it depends on the sector. But again, the laggers, see, we've been in kind of

like a range-bound market. So what's happening is that breakouts are failing and mean reverting, breakdowns are failing and mean reverting, right? So you kind of have this sloppy mess. So it's about rotation. So like, you know, when we're talking about buying Alcoa or buying Caterpillar or buy... do they look great? No, but they're pulling back to support. This is where we want to buy these types of names in these range around markets.

We've been using Todd's own charts in year three of a bull market, which I know you've seen these charts. Like there is some shopping consolidation, which I think is totally normal after two 20 plus percent years. Um yeah you know after two big years every single time we've had two years above 20% stock markets gone up again the third year every single time. Yeah no it's just not as uh what is it called when you like the when you mix like all the composite is not quite as straight up into the right? In your story. There's other factors.

We'll get into the post-election years, but post-election years used to be bad years, and then since the 1980s, post-election years are actually the best years. I love that you do that, instead of just looking at the entire average. Because the entire average could really cloud things. Yeah, things changed.

And Jeff Hirsch, shout out Jeff Hirsch. Shout out to Jeff, editor of the Stock Traders' Omniac. His theory is that in the old days, presidents used to be able to get things done quicker. And since like the 1980s, things are harder to get done early on in their term. So there's less bad things they can do, which historically they do early in the term.

And then they make everybody happy towards the end, going into their own election. My opinion is that this time will be different. It always is. I think you're about to see a flurry of activity with effectively no real resistance whatsoever anywhere in government. I think this is going to be the exception that breaks the paradigm that we're talking about. Next chart. Next chart.

Next chart. So we're looking at individual investors, right? So I don't know if this is exactly right, but the way I think about this group is like, think about 300 boomer Republicans in the Midwest. It might not be exactly like that, but it's pretty close to that. That's who's answering this survey.

Yeah, in my head, the way I view this, whether that's 100%, I know for a fact it's not 100% accurate, but that's how we view this group. Upper Midwest or Southern Midwest, because it's a big difference. Upper Midwest. Yeah, Wisconsin.

Boomer Republicans. Yeah, that's right. 300 of them. That's right. That's how I look at this. Packers fans. Yeah, sure. Making the most bear That's right. That's how I look at this Packers fans. Yeah, sure Making the most bearish they have been in over a lot of guys named Clyde. Yeah, sure. All right All right Why do they oscillate this quickly?

Well, because they're individuals individual investors and they're the most this is the most erratic of all of the polls Which makes sense because they're individual investors. So this is the one that moves the fastest. Yeah. And it's the most bearish it's been in over a year. But also... But it's wild how fast they go from bull to bear. The stock they're more likely to own, Apple, has gotten whacked in the last week. Maybe.

Oh, you think there are specific stocks that are... And by the way, it's been falling for months. So it's not like this just got bearish last week, it's been falling for months. So it's not like this just got bearish last week. This has been falling for months. But the point is, is that individual investors, particularly at extremes, we want to take the other side of them and they are the most bearish they've been over a year. I counterpoint to what we just said about the boomer Republicans, because if you look at like inflation survey sentiment data, they're super positive on that. So if this is merely a political survey, which all surveys have become, this would not be happening.

So that invalidates our thesis a little bit. Of what? Of who's in this survey? Yeah. Well, when they do small business comp, like who do you think owns the small businesses? When they do certain surveys, it's like a code word for saying old, rich, white. Yeah. So that's not this. That's not this. I think it is. I look at it like that. When they do certain surveys, it's like a code word for saying old rich white. Yeah. So that's not this.

That's not this. I think it is. I look at it like that. Whether that's right or wrong, looking at it that way has been really helpful. Yeah. Well, just right. Having that picture in your mind is better than no picture at all. The point is, these aren't fund managers.

That's really the most important thing. No. If it would be fund managers, it would actually be even more bullish. Yeah. Because if the fund managers were this bearish, then now we're really talking, right? Because those matter a lot more than these. Alright, so look at the next one. So now we're taking, we're taking the individual investors and the newsletter writers, John, if you want to throw up the next one. So these are, we combine individual investors and newsletter writers. So this is Investors Intelligence and AAII,

combining them both, and look at the average bears, most amount of bears since November of 2023. Oh wow. Spiking and obviously the bulls continuing to collapse. So newsletter writers, individual investors, super bearish, and then the next one. Why? That's what I want to know,

I don't know what they're so scared about. So in the middle of a bull market, right? Don't the newsletter writers skew bearish all the time? No. Because that's the point of the newsletter? No. Or it's not like that? Why do I think it's like that?

Because when you think newsletter writers, you think perma bears. Yeah. Because they have those. But that's not the sentiment for all newsletter writers. No. It doesn't go that way. No. Okay. Maybe it's just because those are the most famous of the newsletter writers are Like the cranky old bears that are like gold people, right? Is that why I think that I?

Just think that you think the newsletter writers are Permabares, but you write a newsletter. You're not a perma bear true true. I don't know who's calling blogs now, but you know I don't know who's I don't know who's in that survey. We call them blogs now, but you know. I don't know who's in that survey. Who's in the- Like which newsletter writers would be in there. You can look it up, so- We have a lot of trust in it. Yeah, yeah, yeah.

Investors Intelligence goes back to the 1960s. Yeah. So the guy, he originally created this in the 60s because he's like, well, when the newsletter writers are all bullish, it's a great time to buy stocks. When the newsletter writers are all bearish, it's a great time to sell them when the newsletter writers are all bearish it's a great time to sell them and quickly realize it very quickly to his credit he realized it was the

opposite and so the rest is history I love it yeah and then here's the composite that we create Josh loves this so we combine what they're saying and what they're doing and we're back in the middle there's nothing extreme about sentiment sentiment is like like Josh says, right? Middling around, right? Right down the fairway. Right down the fairway. So time out.

So you're adding those two sentiment surveys, throwing in a third, then you're putting in VIX, equity puts a call ratio on two different timeframes. That's right. And so now, it's not just what people are talking shit about, but like how they're actually trading. That's right. I love this.

That's a really great way to think about the market sentiment. And your point is we're in no man's land. There's no signal, because it's right in the middle. Yeah, listen, there's no, so we know that sentiment is not a headwind. Yeah. And so the question is how much of a tailwind is it?

Not much. We need to get worse. I don't think so. Really? I don't think so. Really? I don't think so. You're happy with it right here. It's not so much that I'm happy with it, but like we're buying stocks and sentiment is confirming

that we should be buying stocks. Like we would be buying stocks whether sentiment was like this or not. Sentiment is just confirming that that's probably a good idea. Okay, all right, love it. All right, and then, so last week, we had the largest flows into money market funds since April of 2020, which was the beginning of

the greatest 52-week period in the history of the United States stock market. We just got the same thing last week. Let's give people the numbers. Among taxable money market funds, government funds increased by $47.45 billion. Prime funds increased by $15.4 billion, tax exempt money market up 3 billion. So total money market fund assets increased by 66 billion dollars to 6.92 trillion in one week. Yeah. That's wild. 22 billion from retail. 22 billion from retail and double that from institutional. That's a lot of money. Yeah. So it's not just retail because they're buying a house or whatever. Yeah, yeah, yeah, yeah. That's pretty notable. And this is public information. The Investment Company Institute publishes this once a week.

But now you can't go the next step and say this is cash on the sidelines because people really flip out when someone says that. They don't like that. Because they say like, okay, it's cash on the sidelines so they buy a stock but somebody else has to sell that stock to them So people really get mad when you insinuate this amount of money building up in money. I don't It is cash on the side. I know it is It is cash on the sidelines, but the implication is not that it's gonna take the market higher as it comes in Because you need a seller can because there's but there could be it's buying pressure Let me tell you something and I could Because you need a seller too. But it can, because there's buying pressure.

Let me tell you something. And I can tell you for a fact. I think that we do as good of a job as anybody aggregating sentiment. There's other people who do a great job. I think we're right in there with them. And I can tell you for a fact that it's imperfect. It's flawed. It's incomplete.

We know that. And I think we do as good a job as anybody. And we know that it's not perfect. So like we can go back and forth. It's really about bringing it all together. Individual investors are scared shitless. Money's flowing into money market funds faster than it has since April of 2020. Right? Like it's bringing it all together in the middle of a bull market with sector rotation, consumer staples, next charge on making all time lows on a relative basis, all time lows, sector rotation, this is bullish sector rotation.

What the are these people looking at? Trolling me on the internet about, oh, JC is even looking at the charts. JC looking at the charts. Of course I'm looking at the charts. I'm drawing for you. This is something, this is the market voting that there's no need to be defensive right now, right?

When they're selling staples and buying anything other than staples, that's a risk on sign, not a risk. Okay, so you wouldn't look at this as a contrarian then? No, this is confirmation. This is one of those things that you wanna see. This is what you see in bull markets. You want this as confirmation. Yeah. Okay.

They're selling the staples. They're selling the staples on a relative basis. If shit was about to hit the staples. They're selling the staples on a relative basis. If shit was about to hit the fan, they would be buying the staples on a relative basis. They are not. Yeah. Okay. That's a good one. I like it. So, again, they're going into money markets. Individuals are scared. Newsletter writers are scared. Staples are confirming that they are all wrong.

Right? You know what I'm saying? So, they look at the next one because it's like, well, Jay Z, you know, the leaders are driving and the Kennedy guy with the things, you know, right? You know, like people are saying that the canned goods, that Kennedy's gonna be like, whatever. Wait, what?

Oh, the packaged foods companies. Kennedy ain't gonna be there for more than 10 minutes. I'm just telling you what they're telling me. All right. I find it hilarious too. That's what they're saying. They're like, oh because of Kennedy or whatever. So then here's the market cap and then the equally weighted version doing the same thing. Go back, go back, John. See? They're doing the same thing. So it's not just a market cap weighted basis on an equally weighted basis, same shit. So it's not just like

Coca-Cola. Colgate. Right, it's the whole group. That's right. So this is confirmation of your confirmation. That's right. Okay, I like it. Right? Okay, so next chart.

So then if there's real stress in the markets, you're gonna see it in credit. Because the stock market in America is a measly $55 trillion. The bond market is more than double that. So if shit is gonna hit the fan, you're going to see it in credit because they have nowhere to go. One of the things that we hear counter to that point though, is that these days, the

publicly traded vehicles that own junk bonds or high yield bonds, they have their pick of some of the highest quality junk bonds we've ever had. Like the signal might be broken from this at least. That's like the Kennedy thing with the staples, you know? I'm just pointing out... Yeah, that sounds like nonsense. Bullshit. I'm just pointing out it's the least junky junk that we've had in the publicly traded debt markets in a long time.

Josh isn't saying that, he's making up what other people are saying. He heard, right? He's hearing about people doing that. Voices in his head are telling him. Wait, you haven't heard this? No. Are these the same people that were in Greece and Italy last time we were here? No, they're saying the real junkie shit is getting funded by private credit off market.

What's left in public markets is better than what used to be traded on public markets. I'm just telling you, this is the argument. Maybe, but the fact that this is doing that at the same time that Stables are doing... This is what my imaginary friends tell me. The ones that were in Greece and Italy. We had somebody on the show explain this to us. Who was it? You don't remember? No.

Okay, I don't either. The point is, if shit's gonna hit the fan, you're gonna see it in credit, credit spreads are literally making the tightest they've been this entire cycle. Confirming what staples are saying, and the individual investors, and if you go to the next one here, the OAS spreads, so these aggregate all your things. So all your different types of high-yield bonds, all your different kinds of credit spreads, the double B and the Cs.

So even the worst credit. All the spreads are doing nothing. Tight like a dolphin's bubble. So like, you know, dive into any of the ones you want, same shit. This is like the 50-tweak low list. Like, can we at least wait until there's one stock on it? That's right, nothing. Like, on credit spreads, can we wait for one wiggle even?

That's right, that's right. We're not even getting that. Zero. Okay, that's good. Again, so it's a weight of the evidence, right? It's not just one thing. All these things are saying it's a bull market for the people who forgot that it's a bull market. Yeah, I think a lot of these spreads also are like an expression of sentiment,

which is bullish even in fixed income or has been. Like just nobody's really worried about a recession anymore the way that they were 18 months ago. the way that they were 18 months ago. Like it's just, it's, it's not, it's not, uh, in the realm of possibility for most big bank economists. Like they're not even writing about it. Um, they're not even writing about it to say, we're not going to have a recession. It's just, it's like out of the lexicon right now. So I think that's, I think that's, uh, this is an expression of that sentiment.

So before the NASDAQ doubled, they were saying 100% chance of recession, and then the NASDAQ doubled and now no recession? Yeah. Are you guys paying, are you guys at home, you guys are seeing how this works? Yeah. Taking notes. You guys like the wine? I love the wine.

It's fantastic. What is it again? So it's 100% tempranillo. This is a gran reserva from Rioja. Bro. What are you saying? The grape is tempranillo. The region is Rioja. And it's gran reserva, which means that it's aged longer than the other Riojas. It's delicious. So this is in Spain. You got that?

The grape is different than the type of wine. It's the... Sure. I love it. No, but you know what I mean? The wine is not named for the grape. The wine is named for the region. Is it sparkling?

I don't know. I don't know wine. No, I didn't say anything that's sparkling. In the old world, they, it's by region. So like, a burgundy is pinot noir. But they don't call it pinot noir, they call it burgundy. Or whatever region, the Jevish number 10 or something like that. So this is a Rioja, and in Rioja they make tempranillo.

Which is the grape. Right. In the new world, it'll say Cabernet Sauvignon. It's fantastic. Yeah, it's pretty, it's pretty badass. Yeah, this is a 10 year old vintage Gratis erva. This is this is real deal gracias de nada Can I repay the favor with the ticker?

Okay, let's keep moving. Yeah. No, well you you were just talking about the new lows list Josh As usual it's almost like you know what chart is coming next Obviously the new 52 week lows list is non-existent. So there's nothing to see there. Uh, but so before scale, is this the number of stocks on it? This is the percentage of stocks in the large cap, mid caps and small caps, making new one month lows. And we have yet to see any sort of expansion whatsoever.

We talked about this in August after the volatility spike, how you had the VIX triple, yet no expansion at all in the new Lowe's List, right? It was a fugazi pop in the VIX, right? Remember? Yeah. Oh, this is just because index funds are distorting the market. I've been told.

Yeah, yeah. It's because of the Trump. Can we... ETFs. Okay. So next chart. So now we're looking at consumer discretionary versus consumer staples. These are what buy side, long only fund managers that can't go to cash.

They're in consumer discretionary. They think the market's going up. They think shit's going to hit the fan. They go into staples. They can't go to cash. This ratio on an equally weighted basis making new all time highs discretionary versus staples. Bullish. Discretionaries are breaking out relative to staples.

To all time highs. If you go to the next chart and zoom out. So active managers are not looking for defensive plays in the market yet. Quite the opposite. Okay. Just consumer discretionary continues to make new all-time highs. And by the way, when you study every bull market in history,

consumer discretionaries tend to do well in bull markets, just like consumer staples tend to do poorly. Which is what you would expect. And that's what's happening. Yeah, okay. And then here's your chart, Josh. So this is the equally weighted index that we've created of the biggest six banks

breaking out above the great financial crisis size to new all-time highs, finally. Wow. I mean, this to me is like one of the most bullish charts. Why are you flicking me off? I'm sorry. This to me is like one of the most. You're like this to me.

Because people don't like randomly double their position in Citigroup. Like you have to feel really, Citigroup still sells below book value. They basically, they're going to have the, all these companies have the shackles taken off as far as C-car and how much they can return to shareholders. What's C-car?

Like the regulation of how much money banks could return in the form of buybacks and dividends. They've had to get approval from the Fed since the great financial crisis. I haven't looked at a chart in Citi in ages and if Citi and Wells Fargo are breaking out like this, just buy stocks. Right. Yeah. JP Morgan, Goldman look great, fine. When Wells is working. That's right, and Citi.

That's right. Wells and Citi are, they look like biotechs that just got like a great clinical phase two, whatever. Can't be bearish. Cannot be bearish. It's hard to be bearish. It's hard to be bearish. By the way, go to the next slide there.

If you guys are interested in the charts, go to getthecharts.com and get all of the charts that we discussed today. I love that. Get the charts.com. Is that you own that now? Ofs. All right.

Such a great ticker. It's a great, it's a great, it's a domain. It's a URL. I'll call the ticker. Yeah. Domain. Get the charts.com. Okay.

So on balance, there's enough fear in the market that sentiment is not a headwind. It's maybe even a tailwind, but not an extreme tailwind like 2022. So the question is, what's the catalyst? What's going to take stocks higher, J.C.? Rates. Right? RFK. Dollars.

All right. So this is important. The dollar has been ripping for, I don't know, how many years? Three years? Many a year. No, not that long at all. Oh really? If we would zoom out, if we were to zoom out. No, the dollar's been ripping for three months, four months.

No, no, no, no, no, no, longer term though. The dollar's been going up with stocks. It's a secular bull market for dollars. I mean it's been sideways for like three, four years. Okay. Yeah, yeah, yeah, but it bounced off those lows, as you can see here. Epic ripper.

Let me ask you this. Are you not impressed with how well stocks have held in and crypto have held in and other risk assets despite the dollar ripping in your face? I'm saying. Yeah, we were told it's usually much tougher than that. That's right. Okay. So if this backs off just a little bit.

And then here's the thing. The dumb money is betting on a rising dollar to an extreme. How do you measure that? Looking at futures market and positioning by commercial hedgers and specs. But there's dumb money in futures markets? Of course. The small speculators are the dumbest money. Yeah, of course.

What business do speculators have speculating on dollars? The large speculators are hedge funds. The small speculators are just mom and pops. But they're buying dollar futures? Yes. Come on. And holding them or just trading it? The CFTC reports it every week, bro. In fact, they're the most short euro that

they've been in three years. Commitment of Traders. Yeah, Commitment of Traders report. Okay. Yeah. So right now... These are people that like really believe in the Trump trade and like they really believe like the budget's about to get balanced and all this bullshit that we know is not really gonna happen I don't I don't know about all that. Well, that's like that's what's no I mean that makes sense to me But just in general when you look at the currency futures positioning the dumbest money is betting now that the dollar is gonna rally These are Eagles fans

JC is this bottom is this bottom in the dollar core the the election? J.C., is this bottom in the dollar, the election? No, it was before. Just before though, when it looked like Trump had a really good shot. Yeah, probably, yeah. Okay, if we just saw the entire Trump trade unwind in small caps, why would this Trump trade remain intact? I mean, I don't know what a Trump trade is, but- It's a thing where people have an irrational level of confidence because we have a new president coming in.

It doesn't matter that it's Trump. It's just, I mean, small caps look great. I think small caps make, I think small caps make new all time highs this quarter. Okay. Even though they just round tripped the whole election rally. I agree with you, Jason. They're hanging in there. Yeah, I mean, yeah. Okay, good. Yeah, yeah, yeah. I think small cash make new all time highs this quarter. All right, so, but you think the dollar might be peaking. Well, look, go to the next chart. So, speculators are actually the most net short they have been since the beginning of the COVID rally, right, where they were all buying dollars. Short the Euro.

Short the Euro, now. Now. So speculators, biggest short positions in years since the beginning of COVID or like the COVID rally And the euro just retraced exactly sixty one point eight percent of that entire rally Is there anything magical about a dollar euro parity so there's about 101 euro to the dollar There's nothing about this level that would be the reason it would bounce off I mean it depends like if you're here to make money, no. If you're a journalist, yes. Okay. So the fact that we might be bottoming at euro dollar parity is coincidental.

I mean, we're not. We're bottoming at 102. Yes, I guess we're not quite there. Yeah, yeah, yeah. I don't think there's anything there. Okay. But this is almost two thirds of the dollar index. What are the ramifications for investors if the euro bounces hard here? Uh, small caps make new all time highs, footsie and, and euro stocks should have a decent rally on the heels of that. Yup.

Emerging markets, uh, China, all of that. Yeah. Apple maybe. I think, I think the strong dollar has been a tailwind to giant tech. I had one. I'm sorry. Uh, I mean, just stocks in general. Yeah, no, you're probably right.

You're probably right. But look at the different components. So the same way that we do the same way that we talk about it's a market of I had one, I'm sorry. I mean just in stocks in general. Yeah, no you're probably right. You're probably right. But look at the different components. So the same way that we do, the same way that we talk about it's a market of stocks, it's a weight of the evidence, it's a sum of the parts analysis in the stock market, it's no different in the currency market. What's the Euro for the dollar? Is it like 60%?

Yeah. So look, keep going, watch. Go one by one. Swiss franc at support. Buy. Wouldn't this be a perfectly logical over? I buy. I buy this stock.

Watch, keep going. I don't believe in triple bottoms. British pounds. Yeah. Right. How about Swedish Krona? Absolutely. All at support. Look at Aussie. Down at support. And then here's Euro with a bullish momentum divergence potentially with crazy positioning looking for an unwind. And then look at the next one and this is what we were talking about before. So there you go. Okay, so let's pause here. 10-year yield versus the dollar.

It's almost the same chart. They're dancing together. If I, I could have switched the colors and I wouldn't have been able to notice. Okay, so if you think this correlation holds and you think the dollar is peaking and possibly on its way to an unwind. And Michael's bond trade works.

Yeah. So I think Michael's going to nail that. I think so too. I have like been very vocally, publicly saying that I think this run to 5% is a complete head fake. There's no way the economy is the thing driving it. If you tell me they're unloading bonds in China or whatever, I wouldn't know. That's above my pay grade. I would just say, I'm very doubtful that the economy is so amazing that they're now going to take rates above 5%.

Maybe I'm wrong. I just, I agree with what this chart is saying and what the trade Michael put on. Yeah. Yeah. I think, but the dollar hasn't broken yet. That's the whole thing. Right? So all of this is like hypotheticals. We don't know what's gonna happen. Is this causal? The dollar in the ten year? Yeah, same thing. No, not as it correlated. Is one causing the other? Or? Probably. I mean they don't

look exactly the same for no reason. It's not a coincidence. Don't race drive dollars. Sometimes. They're positively correlated now, they've been negatively correlated a lot throughout our careers. Really? Yeah, it's not a permanent correlation. In fact, this is actually a new correlation relative to the rest of our careers. Get the fuck.

Yeah, okay. Yeah. We like new correlations. Okay, so all right, so that's really important. That's important information if you're out there taking risks because this would be a pretty big trend change. Yeah, we start breaking 108 on the dollar index now. Now things are great. So then here's the other side. So speaking of correlations changing, the dollar and oil over the last several years

have been moving together. I am not convinced that that's going to stay around forever. I don't think that that's sustainable. So when we see oil and the dollar moving together, if we're looking for an oil breakout here, is the dollar going to break out with oil and the dollar moving together, if we're looking for an oil breakout here, is the dollar going to break out with oil is the question, or are these correlations going to come off? And I think the answer is they're probably going to come off. Energy stocks next? Because I'm long oxy.

Yeah, look, inflation. I think oil and energy stocks are both repping here. Well, inflation is moving with it, right? So this is what the bond market thinks about inflation, and tips are making new 30-month highs relative to nominal yielding treasuries, so inflation is hitting new highs as oil is breaking out. That makes sense. The only part of that that doesn't make sense is why would we think the 10-year comes down in that environment? Why would we think that the 10-year comes down in an environment that

inflation is going up? Yeah, because then you're worried about the Fed not cutting rates this year, and the yield curve not really moving as much as it would otherwise. Yeah, if inflation picks back up, the tenure's not going to come down. Okay, but it can stop going up. Yeah. I hope it stops going up. I think it's not going to reaccelerate. Who's in favor of higher interest rates?

Who does it help? Net interest margin. Like a steeper yield curve with our banks. Bonds, bonds, short sellers. I know, but like real people I'm saying. Real people with those short bonds? Come on. No.

All right. Very profitable people have been shorting bonds. I don't know if you've noticed. When you look at individual oil equities, are you like constructive there? Yeah, very much so. Go ahead. Next chart. And then look at this base.

Dude, I think this is one of the fattest pitches in the market right now. What are you on? I'm Baker Hughes and that stock is just battling high. Are they still counting their rigs? Remember that? Yeah, it's less than... The rig count was a big deal in 2017. I like Oil Field Service better than...

I own the IEO also, so I own all the producers in morning TF. OAH looks not that great. IEO is like the American... it's 20% Conical Phillips, basically. It's those types of names. And then I like the, I like the oil field services names. They all look pretty good to me right now. Yeah, I mean, listen, this is a group.

I mean, listen, if you believe that we're in the midst of a commodity super cycle, which I believe that we are, then I have a hard time believing this isn't gonna break out. You see a lot of good setups when you look through the energy stocks? Less so the energy more so all the other commodities okay but if we're not gonna have a commodity super cycle without energy participating. Okay what's the what are the best looking commodity sectors in the market now? Precious metals. Okay. Right. That makes sense. Yeah I mean they've been they look

great precious metals. So go go. This is an interesting charge. So this goes back to the beginning of the century. Best best performing asset this century. Wow. Is gold. Wait, what else is in here? Real estate outperforming the S&P 500. That's wild. Isn't it? Yeah. Even even with the great financial crisis. Even with the great financial crisis, like relatively early in the period. All right, so you have IYR. EFA is international stocks developed, mostly Europe and Japan. Yeah, Japan and Europe a lot. Okay. IEF. Bonds.

Ten year, seven to ten year bonds. Yep. And IYR is real estate. Yep, REITs. You don't have international fixed income on here. I do not. Would you like to know what they're doing? Not please. Honestly, the worst possible investment anyone could have made. And I'll tell you why I know that. I know that. But I just looked at my kids 529 last night. He's in a target 2030 Vanguard, New York

state 529 fund. So we just bought one ticker. We bought it when he was born in 2009. The 2030 right now, so he's got five years left to go before that thing comes due. He'll be in college in three years is the way we targeted 2030. It's like 20% international bonds. The 10-year average annual return is zero percent. It's unbelievable. It's unbelievable.

It's literally one of the worst investments in the world. I can't think of anything worse. Because not only do international bonds not pay a ton of yield, because most of those economies are on life support, but then you have the negative dollar on top of it all. So I just looked at it and I'm like, this may be the worst target fund because I don't know. It definitely didn't start out that way. Like when I first invested in it, it was 2009.

There's no way it was 20% international bonds. So as the years have gone by, it's gotten more conservative and I just never bothered looking at it. But I looked at it last night and I was like, oh, no, no, no, no, no, no, this is no good. I whacked the whole thing out. Did you? Yeah. Are you capitulating?

No, I'm going 50% US stocks, 50% cash. And in the next major event this year, let's hope it happens tomorrow, I'll go 100% stocks, which is the only... China? Chinese stocks? Yeah. And then when he's a year away from college funding, that's when I'll go conservative. It's too early to be as conservative as this target date fund got. Alright. Alright. So, anyway. Alright. I still got 14 years, so I got time. I'll call you when the time comes.

I'm glad you didn't bother with that asset class because it would have been a flat line straight There you go. That is that is the zero see the zero line there would have been zero so it's gold right so gold bull market Copper is right with it when you study all the when you study all the commodity super cycles ever gold and copper don't really move That far apart gold's already been making new all-time highs. I think coppers next copper to seven. Do you follow that? Do you know what's good the the only equity play for copper knows freeport looks like trash does it FCX? Yeah, I like it. You don't like report. Yeah, I do. No, you don't okay. Well, you like it right here I like it for the same reasons we bought our koa. I know you don't like this chart You said the same thing about our koa and I bought it

So obviously... No, he probably would. By the way, understand it. Understand that the reason we bought Alcoa and Caterpillar has... 99% of the reasons have nothing to do with the charts of Alcoa and Caterpillar. I get it. I get it. Alcoa looks way better than 3.4. Alright, now look at the gold.

How about this? Is this a good? It does. That looks great. Yeah. So, gold to $5,000. Why gold to $5,000? Because you got to get to $5,000 before you get to $10,000. Yeah. I think this is like a secular bull market for gold. That's right.

I wouldn't fight this. Yep, so gold to five, maybe eight to 10, and then silver to 100, right? Oh, you bullish silver. So if you think gold is going to 5,000, silver's going down? No, no, no, no, no, definitely not. It's just a question of which, silver is going down? No, no, no, no, definitely not. Right? It's just a question of which, it's just a question of if nothing has really changed,

then this should go faster. Yeah, I mean, like if Bitcoin is gold, silver is micro strategies, you know? Right? You know what I'm saying? And speaking of the devil, so there is Bitcoin taking a nice little breather at the 161.8% extension on the base. If you're a bull, if you're a Bitcoin bull, this is perfect. It's basing right below the record high.

What else do you want? And do you think it's a coincidence, Michael, that it stopped going up at the 161.8% extension of that entire base? I do. Michael doesn't believe in Fibonacci. All right. So we'll call that a coincidence. But coincidentally-

How long do you think this needs to consolidate for a long- I mean, nobody really knows, but coincidentally... How long do you think this needs to consolidate for... I mean, nobody really knows, but like if you had to guess, do you think that it's going to spend a long time under $100,000? It's not so much how long I think it's going to consolidate. It's the faster it breaks out from this consolidation, the more bullish that behavior is. Oh, really? Of course. Like you want your...

So it takes a whole year, then it's not as bullish as if it happens tomorrow? Correct. Right. You want your flags high and tight, like a military fade. High and tight. Do you agree with that? But I thought it was the longer the base the higher in space? Yeah, but these aren't bases. These are flags, bro. That's the base down there. What's the difference between a base and a flag? What's the difference between a base and a flag?

No, for the audience. And Duncan. Hey, Duncan. Hold on. Don't you want to know? I'd love to know. Okay, so? The base... What are we doing here? No, no. This is good. This is good. Hold on, don't you want to know? I'd love to know. Okay, so. The base. What are we doing here?

No, no, this is good. This is good. The base, you know, you call it all kinds of things. When a technician says this stock has a really nice base. The saucer bottom, as Edwards and McGee would call it, the Kardashian bottom, as we would call it, just a big base. It's bowl shaped. Bowl shaped, that's right.

And there is a thing that Michael just repeated, which is technicians like to see a really long bowl shaped base. Yeah. Because that's a lot of pent up potential buying once it's all out. Get Louise Yamada on the show and she will tell you that the bigger the base, the higher in space. The flag is the cup on the handle. Okay. Now how does that differ from the flag? A flag is just a consolidation. So a base is like a reversal pattern. It's like a, you know, in this case, it's like a continuation pattern of a longer term. It's not going up, but it's not going down. Yeah. I mean, it's a base, a flag or a pennant is just a tight consolidation within an ongoing

uptrend. So the stock rips to 20, falls back to 18, hits 20 again, falls back to 19, hits 20 again, falls to 19 and a half, hits 20. How many times do you do this? That's a flag. That's right. And then it breaks out. Okay. Right? We don't know it's a flag until it breaks out, but that's my point. The sooner it breaks out, the more bullish development is. So you don't want to see a flag run on for a really long time because... It's probably not a flag. Then it's not a flag. That's right. Okay. Okay, so I want to get international here before we hop. We talked about industrials, we talked about aluminum.

Here, go back real quick to that aluminum chart. So this is the chart that Michael doesn't like. I love it, obviously. This doesn't look like a chart that you would like. Why? I don't dislike this. We're seeing sector rotation. And this retraced exactly 61.8% of the entire rally.

I think I've heard of this index. The D-SAL? The Dow Jones Aluminum Index? This is not on your home screen? What's in this? Alcoa? Right, what else? It looks just like, if you look at it... You know, that other one.

No, it looks exactly like aluminum futures. Look at aluminum futures and overlay, they're exactly one. No, it looks exactly like aluminum futures. Look at aluminum futures and overlay, they're exactly the same. I think British people call it aluminum. Did I just make that up or did they really do? No, you made it up. Okay, so here's the deal. So this is the, I just wanted to throw in China just to remind Michael that it still has not broken out above those 1989 highs.

Japan. Yeah, Japan. Hasn't broken out yet. So it got there a year ago, stopped going up after literally going up for 15 years. Coincidence. Coincidence. Right. Okay. Next chart. So then this is a really interesting one because the S&P 500 has continued to make new highs, but relative to China, it has not. Oh, that is interesting.

China actually, shout out China, outperformed the United States last year. So did Israel. Wait, China by what measure? FXI. The FXI... Outperformed SPY. I guess that's not really, that's not the Shanghai composite. It's large cap. Thank God.

That's like large cap Chinese securities that trade in London. It's a very specific subset of China, but fine, good enough. It looks exactly like the CSI 300, which is the S&P 500 of China. The FXI trades exactly with it. And that did better than the S&P? The FXI is the Dow as the CSI 300 is the S&P 500. Oh, okay, fair.

So the Dow and S&P 500 moved together, even though they're totally different. Hold on. Same as this. You're telling me the FXI was up more last year than the S&P? Yes. Does anyone else know that? Everybody knows that. Okay, I didn't realize that. And Israel. Wow. If you look

at the Tel Aviv 125 index outperforming the S&P 500 and then if you look at the Israel index fund EIS also outperform the United States. Yeah. Three countries that outperform the US last year was Argentina, OVS, China, and Israel. No India? No. Huh. Single rotation out of India into China and then what a coincidence that we're seeing this outperformance as soon as the economists suggested that the US and the dollar were the envy of the world. I mean they are. If you look at the next chart this is when the good folks at the Economist decided to put this this magazine cover of the dollar going into

outer space, rocket ship dollar, after 15 years of outperformance by the S&P 500. Well listen, I love the idea of there being another market that comes along big, whether it's EFA or EEM. I love the idea of the S&P getting outperformed this year. If we have a flat year for S&P and all of a sudden you get like this 15-20% rally for overseas stocks. And if the dollar rolls? I think it's great for the industry, for the money management industry. And if the dollar rolls, there's a catalyst.

I would love to see that to be the outcome. So I got a couple of charts here and then I got a really interesting short. So these are Chinese stocks. This is a bubble chart showing the percentage from New 52 Week High over, so the best ones are over on the right. And then you've got the 100 day rate of change on the Y axis.

Look at that leader really standing out. This is KC, next chart, Kingsoft Cloud. KC, this is a $2 billion Chinese software stock. Look at that base. What I love about it is how it even sounds fake. Oh no, I hope it is fake. Yeah, right. No, I agree.

The faker it is, the faster it can go up. Believe me, I'm not reading the filings. I mean, you can be looking at a five, six, seven bagger here potentially. Word? Yeah, word, dog. So if we're above nine, I like it long below it, leave it alone. And then here's the catalyst for China. We just got the biggest momentum thrust

in the history of Chinese equities. Best week ever, best day ever, best two day period ever for Chinese equities. This was at the end of September. You're not worried that you have a lot of it back? No, because we know from experience very consistently that these momentum thrusts very consistently happen at the beginning of bull markets, not at the end, which is why we're buying this pullback in China. If you're like just a regular person not working on Wall Street, not a trader, is the easiest thing to do just grab some FXI? That's right, that's what we did. Because it's like, I don't know if it's the highest quality, but it's the biggest Chinese companies. You's what we did. Because it's like, I don't know if it's the highest quality, but it's the biggest Chinese companies. You know what we did?

And if China works, that will work. We bought call options in FXI with three different orders, all at different prices. So that if it didn't break out and it took longer, we'd get knocked into those prices. Does that have any Chinese tech giant exposure? Yes. Does it have like too much or not too much? Yeah, I mean, listen, it's cap weighted, but it looks exactly like the CSI 300 like exactly and then if you look at the biggest components of FXI you're looking at 10 cent is 9%

Alibaba's 8% Melchuan is 8% JD.com is 4% those are all tech. Yeah You're 33% discretionary 30% financials 17% communications 5% tech 33% discretionary, 30% financials, 17% communications, 5% tech. Okay. So if somebody wants to get Long China for this kind of like relative breakout, absolute breakout. There are a lot of ways to get Long China. This seems to be the simplest to your point. I'm guessing it has the biggest market cap or K-Web.

One of those two. No, I think I think FXI by a lot. You mean the management, right? Yeah, what did I say? Market cap. Well, same thing. So, FXI actually only has seven billion. So you actually might be right.

I think K-Web is bigger. K-Web is five. Oh, okay. I think the hedge funds would be more likely to trade K-Web because it should move more. but for an investor that doesn't just want the tech exposure, they would look at FXI. Yeah. K webs got K webs got a higher beta. Not, not by that much.

I mean, it's one four versus one flat for FXI, but it's higher beta. What I think the market might be sniffing out is that, uh, Trump and she are probably going to get along better than the rhetoric makes it sound like they would. I don't think there's a disrespect there between the two of them. I think they both want to do business. One of them has to pretend that they don't. I totally understand that.

But I think that's what the bullishness is about. I don't think there's any fundamental real change in China or anything like that. I think that your audience, the audience of The Compound and Friends, is sick of this like raw raw f***ing bullish bullshit and they want some shorts. That's what I think. Do you think that that's true? No, but let's go. Let me see that Rioja.

Just be careful with the shorts because it's a really tough way to make a living. Actually shout to, shout to Nate Anderson who this week, I guess, retired from professional short selling. That guy, that guy did like miraculous shit as a professional short seller. Probably on Earth. What's his name? Is Nate Anderson? What's... From Hindenburg, Riss. Hindenburg.

Nate Silver? No. It's Nate Anderson. I don't know his name. It's Nate Anderson. I don't know his name. Alright, whatever. That guy was like knocking down frauds and scam artists and like fearless. Really?

Yeah. Going up against billionaires, going up and... Shout out Nate. And won most of his fights. Alright. And he's retiring? He basically wrote a letter like, guys, this is it. I'm going to wind down. I've done everything I set out to do. Well, if you uncover a fraud,

it goes up 10x. Right. Yeah. And then you get paid by the SEC also, right? Yeah, exactly. This guy has pretty good business. No, but you get sued. You get sued by everybody. You get counter-investigated because you're going up against really well-capitalized people who are angry. Not just angry professionally, but personally. They've been humiliated. They've been accused of things. So they go after you. And they have big positions probably. So he's like, look, I did it. Right. I made money. We uncovered a ton of frauds. People went to jail. Remember the Nikola scumbag? Yeah, sure. Like that was him. Really?

He's the guy that said that truck's being pushed down a hill. All right. Shout out Nate. Shout out Nate. Anyway, so I wanted to preface any conversation about shorting stocks with it is not easy. It's not for the faint of heart. All right. So I hate to keep picking on the economists, but they just make our lives easier.

So we're going to go ahead and pick on them again. So this was in October the 24th. The everything drugs not just for obesity but addiction, Alzheimer's, the whole thing, the economist or the journalist at the economist. So now you're getting journalists to fade and economists to fade in one magazine cover. End of October early early November. Yeah, end of October. So let's see what's been happening in this particular obesity drug, you know. So instead of exercising and eating healthy, let's just take a drug, right? Like, what could go wrong? So here is Eli Lilly.

Looks like a massive top to me. This is not like a market bellwether like a JP Morgan or a Caterpillar. It's its own thing. Or like it's its own thing, right? This thing was ripping when stocks were not, right? This is not like a market bellwether like a JP Morgan or a Caterpillar. It's its own thing. Or like it's its own thing. Right? This thing was ripping when stocks were not. Right?

So like this thing. Would you wait for the break down? Yes. Okay. Yeah. I mean, listen, we've put. So time out. So time out.

The stock went from like $30 to $1,000. Yes. Okay. I think it hit a trillion dollar market cap. It's in a 30%. Oh yeah, almost. Okay. I think it hit a trillion dollar market cap. It's in a 30% drawdown now already And hasn't even really broken down yet. That's right. It's at 750 730 740 ish a share

This is one of the worst rounding tops. I've seen in a long time and The fundamental story is not that the drugs no good It's that it's so good that there are now 50 manufacturers coming up with their own versions. Maybe. Well, I mean, no, definitely. So the market cap didn't quite hit a trillion, hit almost 900 billion though. Which for a drug manufacturer is a big deal. And just for perspective, in 1980 was a small cap, In 1990 was 10 billion.

Got to 100 billion in the dot com bubble. Fell to 30. And then went from 30 to almost 900. Jesse, there's a giant gap back down at 470. But look at this. So you got the magazine cover telling you how great everything is. Like literally throwing a party. Go back to the magazine cover quick, Jon.

Like let's just focus on what's happening here. Right? Literally the syringe or whatever the thing is, is shooting out party favors. Yeah. Right? On the cover of the Economist magazine. And then if you go to the chart, just as it's completing potentially a massive top. And then when you look at it, Look at some data that, look at the placement of that. And then look at the Danish counterpart.

Oof. All right. So this was the biggest success story in the European stock market over the last couple years. Novo Nordisk. One of these companies makes Ozempic and Zepbound. The other one makes Monjaro and whatever the other one is. But these were like A and B. If you wanted to play the anti-obesity drugs. That's right.

Okay. This one looks way worse. This one already broke down. Megan, New 52 Week Lows as we speak. So when you got the magazine cover, it's its own thing. Novo's already rolling over. So a breakdown, a breakdown to New Lows, you know, call it 710-700 on the Eli Lilly. I like it short to zero. And then, all right. All right, so we got time for one more trade. I think you'll like this one. We got time for one more trade, John? We do.

All right. All right. All right. Okay. So, so Tesla was created. Turn the tech top camera on and turn his mic off. No. All right. What are we doing here? Tesla short? All right. So this is back in the summer. Okay. This is back in the summer. All the Democrats really upset with Elon Musk and just sentiment in Tesla was down. I mean, just everybody hated Tesla this summer.

We put on a very aggressive long, that worked out very well, but it was really just how well Tesla owned the libs, right? Like hardcore, squeezing their faces. No company on earth made more money for shareholders than Tesla in the back half of last year. Yeah, I think it had, did it add like $600 billion in the last three months of the year or something? It was some ridiculous number.

Crazy, crazy, absolutely crazy. Show the truck today. So then this is this summer, so again, on a relative basis, down to support. Everybody hated it. The Democrats hated Elon. Like this was squeezing the libs, right? So they say that you shouldn't kick people when they're down,

but that's actually the best time to kick them. So when they're most vulnerable is when we want to take advantage. And that's what happened. So the reason I preface with that. I'm just glad Duncan's laughing. Unbelievable. happens. So the reason I preface with that. I'm just glad Duncan's laughing. It's unbelievable. Hold on, the reason I preface with that.

Wait, wait, we gotta pause for a minute. I know you like electric cars. I drive a Tesla. And you drive a Tesla, but personally, like I also know you're probably not the biggest Elon Musk fan. Yeah. But you've like gotten over that juxtaposition of

I like the car but not the guy. Right. Okay. All right. What makes you extreme, whether Republican or Democrat, is if you are not mentally strong enough to overcome your political biases and let them influence your decision making in the market. That's what makes you extreme in my opinion.

Yeah, I agree. It's easier said than done though. 100%. And everyone's welcome to have their opinions, agree. It's easier said than done though. 100%. Yeah. And everyone's welcome to have their opinions, right? That's not what this is about. It's about finding the vulnerabilities of humans and taking advantage of that. And Tesla was that. And the reason I preface with that because I think the same thing's happening in Disney. Right? So we're in the middle of a bull market. By the way, here's Tesla.

Wait, I was about to be like, Tesla's not a short here. So you're not saying that. No, no, no, no. Okay, okay. No, no, no. We're short. Lily on the break. I just wanted to walk through the story of what happened last year in Tesla. When you did short it. No no no we bought it. Tesla very aggressively. So what are we talking about here?

So hold on I'm prefacing Tesla owning the libs because of what I- It's an allegory. Look at what's happening in Disney. Because I think the same thing is happening. Oh. I own it. Do you own Disney? I think it's going to happening. Oh. I own it. So you own Disney? Just like...

I think it's going to 150. Wait, do you own Disney? No. Just like Tesla owned the Libs, I think that the extreme Republicans, that Snow White's not white enough, and you know, all of the woke stuff. You think that this American institution that is Walt Disney, Dow component, $200 billion company is going to complete a massive 10 year top in the middle of a bull market? It might.

I own it. It doesn't look great. I think it's going higher. When was the last time you went to Disney? Last year. Well, so you might be biased by how old your kids are. Bro, they got some racket going on down there. I know, but you have three kids under 10.

$12 hot dogs. But you understand, like, you're very much in that Disney world. You're in that Disney phase of life. So wait, how are you playing options? Are you in the options market with this bitch? Common and options. Yeah, common and options. You buy the Disney, and then we'll just finish with the semi-conductors, because that's what people want to talk about. So semi-conductors just not completing any tops at all on an absolute and relative

basis not completing any tops. Does not look like a top. Why do you feel the need to say not a head and shoulders top? Because it was. Are people saying that it is? Because people are convinced because they read in a book once that a head and shoulders top is actually something that's bearish when it's actually the opposite. Head and shoulders tops in the middle of a bull market actually. It's a continuation pattern. Continuation pattern. And that's what I think we have here. It's not a doji.

What? I'm just joking with you. I think he's just throwing words like I love lamp. Wait. It's a continuation pattern. It's not the end of a trend. Right. Convinces everybody that it's a top because they read it on chapter two of some book. But it's not. It's the exact opposite.

As you say, but it's not. Yeah. Have exact opposite, as you say. But it's not. You ever meet Steve Nisan? Is that how you pronounce his name? Is it Nisan or Nisan? I learned that Steve Nisan has never been to Japan, and that just made me really sad. And so... Wait, is it...

I learned that Yokozuna was not Japanese. What is he? Jewish? Samoan. Really? Yeah. Oh, no shit. Blew my face. Fun fact. Fun fact.

All right, so I just wanted to walk through a couple of components. NVIDIA doesn't look like a downtrend to me. What is he? Jewish? Samoan. Really? Yeah. Oh no shit. It blew my face. Fun fact. Fun fact. All right. So I just wanted to walk through a couple of components. Nvidia doesn't look like a downtrend to me.

You know, this one, I still think it goes to 175. How about Taiwan Semi? You know, for above 200. I think you buy a lot of relative strength there. Does this trade with Asia? Or I know it's Taiwanese. No, it trades with Semi's. It trades more with Semiis than it does with the

region and it's very cap heavy you got Broadcom you got Nvidia and Taiwan semi and then the rest and the rest look like Micron yeah right why does AMD look so shitty I tried to buy it I sold it because it's not one of the big three right so this is when this is when technology started to underperform as soon as it got to those dot-com bubble highs on a relative basis and then look at the look at zoom in on that John right so I just don't think it's a coincidence that we got back there after 25 years and it stopped going up you know same thing as Japan can I show you a chart you can Intel holding on for dear life I'm not buying it

for the record I'm not buying it Nvidia Broadcom Taiwan semi If you want to be in semis, those are the ones. You're not touching this, right? Arm holdings? Not yet. Nvidia. All right, got it. Broadcom, Taiwan Semi. Only 80s Joel.

And then here's your high beta. So what's the catalyst? So dollar rolls over, you got credit spreads. Titus, they've been this entire cycle. If you get a breakout in high beta, by the way, 50% of high beta is tech that was polish another 15 16 percent is discretionary So we got a breakout here in high beta relative to low volatility off to the races And then here's your last charge showing the seasonality that we discussed

Yeah, if that breaks out what could be more constructive and then there's your seasonality chart at the end John What's even low volatility these days? You have some financial, some industrials, a lot of, a lot of stables. It used to be UTS. Right. Yeah. You got some UTS. Yeah. Remember it's S&P 500. All right. So JC, let's wrap up, let's wrap up for the folks, like the, the

outlook based on all the charts. So we're saying a couple of things. The dollar looks like it could roll. Hasn't yet. Hasn't yet. Could. The implication to that is 10 year yield probably should go with it. That's right.

However, oil may diverge and trade higher. That's right. Which would be really interesting. Yup. We're not so sure that Disney is going to fall victim to all the political bullshit. I agree with you. I think it already has.

Already has. And I think the Republicans get squeezed. Just like the Libs got owned. I think that's over. Iger is back in control. He just like wrote... Twelve dollar hot dogs, bro. He just wrote a check to like get back into Trump's good places.

Have you seen the Mufasa movie? Yeah, no. I didn't see it. Did you see it? Pretty good, bro. There's a live action. It's pretty good. I didn't see it. Did you see it? It's pretty good, bro. There's a live action. It's pretty good. I like the Lion King one. Did you know that Scar's name is Tucker? No. What? Yeah, his name is Tucker. Don't, no spoilers. They tell you like at the beginning of the movie.

Yeah, Disney had the biggest movie of the year last year. What was it? Inside Out 2. Oh yeah? The biggest box office. Oh no shit. It was like, was like a billion dollar movie Oh, wow, so alright. I I uh, I think we covered like well What was the other thing that we said we said uh, go to the seasonal chart and go to the seasonal chart Just to show that historically we're shorting Lily on a break below seven on a break. Okay By China old hire silver hire China copper copper and what else? Bitcoin's still consolidating. Bitcoin, buy the breakout.

Buy the breakout. And then if that dollar breaks 107, 108, that's it. If that dollar breaks, all those things work. Okay. Michael's trade works. Dollar versus Euro or dollar versus the basket or same thing? Oh, I think they happen together. Don't get cute.

I mean the Euro's going to, I mean the Euro positioning is the one that's the biggest extreme. Right. So go to the next slide there and just tell everybody where they can get the charts. Yes. GetTheCharts.com. GetTheCharts guys. GetTheCharts.com.

Why would you not get the, it would be irresponsible. It would be irresponsible to me. And then if somebody, if somebody ever asked me, JC, where can I get the charts? What do I tell them? GetTheCharts.com. Oh, I love it. Great ticket. You're like, you're almost like a genius. Almost. charts? What do I tell them? Getthecharts.com. I love it. Great ticket. You're like, you're almost like a genius.

Almost. J.C., Jeff, on the show today? Always. Always. Drinking good wine, good peeps, right? Did John, Duncan, did they get some wine? So, J.C., we're doing this new thing about what you're most looking forward to. John.

And I know, I know what you're most looking forward to. I already know. Tell me. Jimmy and Burtley getting traded. Oh, are we going to go there? Are we really doing that? Uh, I don't know. I don't know.

I don't know. I don't know. I don't know. I don't know. I don't to and I know I know what you're most looking forward to I already know tell me Jimmy About the getting traded. Oh We're gonna go there. Are we really doing that? It's not working. So No They kind of have their own big three on that team and he's not in it. Let me go heroes playing well Yeah, I mean, you know Jimmy I mean Jimmy how many kids does he have and baby mamas, and he's got Alamoni for days, and she's suing the baby mamas.

Yeah, but he also doesn't want to just sit there and collect the check. He wants to play. No, but fine. But there's something to that. Look at Tyreek Hill with the Dolphins, same thing. He had five kids this year. Five kids with five different women. This year. This year they were born. This year. Five kids.

This exit interview was incredible. But like when money's like a problem, like you start acting irrationally. We know. Hello. We know. Yeah. So you'll be fine. You'll be fine with that. Yeah. I like Jimmy. Anti-recon. Can I tell you something? Stop having f***ing kids! Can I tell you something? Jesus. f**king kids! Can I tell you something?

Jesus. Jimmy was tough against us in the playoffs. I never want, I would never want to face that team again with him, cause he just like, he was like playoff Jimmy. Yeah. And that, he was ridiculous. I hated him when he was with the Bulls. Hated him.

Yeah. And then he came to Miami. He's just a beast. When he decides to take over a game, he literally is one of the guys that could do it. Yes. That was really tough to watch. You watching my Knicks this year? No.

You're not watching at all? No. They're like one of the more fun teams to watch this year. Yeah. I know you're not a Knicks fan, but would you go to a game? Yeah. Only if they play the Heat. No. I've been to Knicks games with you when they're not playing the Heat.

Yeah. But they are playing the Heat, I think like in April. Michael and I saw their worst loss this year. I lost so much money. We lost to the Magic without their starting five. That's so bad. That's not as bad as the OKC loss, which they should have lost. No, it's way worse.

That's what I meant. It's worse. They should have lost to OKC. They should not be losing to Orlando. We watched that in person. The Knicks are four right now? We're at three. We're behind Cleveland and Boston. We're seeing... We watched that in person. The Knicks are four right now? We're a three.

We're behind Cleveland and Boston. We're inconsistently good, would be the way I would say it. We have weirdly bad games every once in a while. Yeah. But, listen, we're Knicks fans. Listen, you don't have Julius Randall anymore, so that's great. He's gonna be gone from where he went, too. What a bum that guy was for so long.

I was telling you guys the whole time. Yeah. I'm telling every Knicks fan that he sucks, pays no defense. And his face. And he sucks. Brunson. I don't like his face. I don't like the body language.

I don't like anything about him. Yeah. Well, they're gonna offload him now. Minnesota. I don't like anything about him. Yeah. All right. I'm sure he loves his kids. Guys, we want you to go to GetTheCharts.com.

Huge thanks to J.C. Peretz for putting on for our show, as he always does. Just an absolute masterpiece rundown of all the most important charts. What was the best chart? For me, I like the gold-silver thing, and I like the China thing. Wow, Josh, gold silver. Who are you, bro?

Oh, I just feel like that's an obvious bull. I like the obvious. I like the easy stuff. I like the Staples discussionary, equal weight. I mean, just chef's case. That's a trend. All right. That's it from us this week, guys.

Thank you so much for listening. Thank you to JC Peretz, John, Duncan, Nicole, Graham, Rob, Chart Kid, Matt, everybody who helps out on the show. Keith, who else? Who am I missing? Danny? Danny.

Barry? What about Barry? Barry, you want to give a shout out? Shout out to Barry. All right, guys, we'll talk to you soon. Thanks for that. Chris. Good night. Thanks for watching!