‘Watch Out 2026’: What Bitcoin's Meltdown Means For Stocks, Warns Trader | Gareth Soloway
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Anytime I ever take a the no-brainer trade, it's usually the trade I get smoked on. Bitcoin has a history of leading the stock market. And you can easily see that by just taking a look at the data, right? And then here we are again, 2025, October, we put in our high. We've seen a big fall on Bitcoin and the stock market is now starting to get weak. The technology is moving fast uh forward. Those chips are basically going to zero within 2 to 3 years. Gareth Soloway is back. He's a chief market strategist at verified investing. And we'll be getting his outlook for 2026. What's next for monetary policy from the Fed, what's next for stocks, Bitcoin, and precious metals, and he's going to be revealing his favorite asset classes for 2026. Stay tuned until the end when he reveals that it's not what you think. This episode is sponsored by Koshi. It's a fully regulated platform that lets you trade on real world events from economic data to political outcomes. Traders can put money down on their favorite teams, events, elections, and more in all 50 states, including California and Texas, and over 140 countries. Go to Kosi and use code lin lin or click the link in the description down below or scan the QR code here to get started. And new users can get $10 off when they deposit $100. More on that later. Gareth, welcome back. Good to see you again. >> Hey David, great to see you and thank you for having me back. Thank you for coming back. It's been a great uh year for uh for stock markets. Um well actually compared to some other assets, not so much like gold and silver. Uh but it's up and the question we have in our minds is whether that'll stay up for the new year. Now we're speaking today on the 18th of December. Huge update for the stock market indices. This S&P is up about 1.4%. The NASDAQ is up almost 2%. And today the CPI numbers came out. So, uh, headline CPI rose at 2.7% annualized, which was lower than the expected 3.1%. I guess that's partly why things have rallied so much this morning, given uh the lower than expected inflation numbers. That gives more room for the Fed to cut rates, I suppose, is what that implies. Yes, absolutely, David. So, again, number one is you can we can debate till we're blue in the face whether we believe these numbers or not. I find it interesting that the president had a prime time speech last night where he talked about how uh prices were coming down and everything's going great and then we get this CPI government data today that kind of reinforces it. But the point is is the market likes the data. It does open the door for the ability for the Fed to cut more. And really there was partially that factor and the other factor was Micron. Micron saved the day for the AI trade. Um we saw Oracle earnings recently. Those were nasty uh mostly because of the debt that they're taking on. Broadcom another two trillion or was2 trillion dollars after earnings. That stock has dropped 20% and so Micron needed to be really be a good number and with good guidance or the AI trade would have just collapsed. I think this is the beginning of that float up into year end where we see a float. But then watch out 2026 is not looking good on the charts. >> All right, we're going to get to the charts in just a minute. So uh tell us about um tell us about uh the tech stock sector uh in a bit more detail right now. Just yesterday I I received news that um uh Oracle who was trying to fund a $10 billion project was cut off by Owl Capital. So that contributed to its selloff which let the markets down. But uh tell us more. >> Yeah. And so and we've also had other news, right? I mean, there's been so many factors in the AI space that have deflated this bubble somewhat at least. For instance, we talk about the depreciation of these chips, how these hyperscalers are depreciating the chips over 7 years. So, they're marking down that loss based on seven years, but in actuality, these these chips because the technology is moving fast uh forward, those chips are basically going to zero within 2 to 3 years. And so, they're really increasing artificially their earnings. And I think the markets are starting to see through that. And then we have to talk about all these other factors. For instance, everyone apparently has a a hundred billion dollar plus deal with OpenAI. But how is OpenAI going to even go close to raising enough capital to complete these? And all of these factors, including Oracle's massive debt overload of $15 billion, have really caused investors to take a step back from the AI trade. And I do think that will continue, but we're due for a bounce. And in fact, let me show a couple charts here. Some really interesting charts. So, first off, this is your Oracle chart. And you can see, or excuse me, Micron. Micron, folks, right here. We see again gapping up today. It is up 10%. And that's helping get this AI trade back on track. But take a look at Oracle. Oracle's down 50% from its earnings two quarters ago, that massive move up. And so essentially what this is doing is it's discounting the risks that Oracle has taken on. The amount of debt, whether or not their backlog is a real backlog or just figment of their imagination. But look at this right down here. This actually has me bullish now on Oracle for the near term for a bounce. We filled a major gap going back to June of 2025. And so we should see some sort of technical bounce off of this. Throw in Broadcom. Broadcom still remains relatively weak, but look at the sell-off from this level here. After hours, it was $424. It's come all the way down to about $320. These are major discounts on major almost billion or over billion dollar companies. And this has really brought valuations down to where you should get a technical bounce at least for the near term. But it is not even close to being over, folks. These stocks are going to go a lot lower in 2026. Well, the Micron story is that it basically beat earnings. Let's just sum it up in one sentence. So, the fact that there's still such strong demand for AI companies and in Micron's case, AI demand soaring and in the last quarter, which is what this result shows, maybe the AI trade isn't over. In fact, it's just heating up. Gareth, >> it's possible. I mean, again, certainly the charts aren't telling us that and the actual data isn't telling us that. So there's no doubt there's a lot of demand for AI and AI products. But the problem is we're starting to see margin contraction and that's one of the reasons why we could all justify that oh let's pay up here for Broadcom. Let's pay up here for for Nvidia because they had essentially a monopoly on these chips. Now we have Amazon, Google getting into the mix. Heck, even Riven. Riven just recently said they're going to create their own AI chips so they don't need anyone's chips. And that's going to again push prices down. Again, contracting margin. And then you have to say, okay, well, if this margin, let's say instead of 70% is now 30, do these stocks need to be dropping by 50% before they match up to their current uh mechanics, right? And I think that's the big issue here that investors are going into. And I'd like to just point out some other issues with the AI trade is that even though data centers are being built out at breakneck speed, the question now we're seeing is how do you actually get energy? Where's the energy coming for from for these data centers? Because there's not enough energy to power them and the nuclear plants are 5 to seven years out. And so how do you actually get these online and that means that these chips could be being sat idle and losing value over time until that energy comes on. there's a huge risk to investors buying some of these hyperscalers. >> Okay. Uh let's come back to um individual tech stocks and uh the broad tech market in just a bit. Let me focus now on the Fed and the economy and what that means for markets. Take a look at my screen right now. Um I've got uh the Fed watch tool supporting the idea that the Fed will not cut rates. I started the interview earlier by saying that perhaps a lower CPI print may encourage the Fed to be more dovish no matter who's going to take over Jerome Powell um in 2026. But at least for January, the market is not pricing in a rate cut. This is from the Fed watch tool. This is Kawoshi uh prediction market and it's very interesting how traders on prediction markets are uh are anticipating events and there's a 72% chance on Kowi that the Fed maintains at the rate in January which is exactly in line with what the Fed wash tool by the CME is projecting as well 73 versus 72 uh a little bit higher than I thought after today's CPI print. What do you think is going on? >> Yeah, I I think reality is is that the economy again is not really falling off a cliff. So, the Fed again, they made it pretty clear in their latest statement that they are starting up this pseudo quantitative easing by buying 40 billion in short-term treasuries, but for the most part, they want to sit pat and see how the economy and the labor market pans out. Uh for instance, one of the Fed presidents just recently said just a day or two ago that he was concerned that that companies were not hiring because AI might take the place. But next year if AI is not living up to the task, then there could be a mass hiring uh going on and he's a little cautious about being too quick to lower rates if the economy is actually going to pick up steam in 2026. I don't think it will, but that is something that the Fed is looking at. And I also think we have to just realize is that these numbers for CPI could just be setting the table for the next Fed chair that comes in May. And that's where we get our 50 basis point cut potentially or at least a few 25 basis point cuts. >> Is there any scenario in which the Fed surprises us to the upside in which case they get cut more than expected and we have even more of a rally? >> So that there is but the the issue here is I don't know if it would result in a rally meaning that let's just say the Fed does cut in January. The only reason they're cutting aggressively um in January after not choreographing it is if the stock market has taken a massive hit or if the economy has really fallen off a cliff or there's a shock to the economy. And so ultimately any of those scenarios, you probably have a scenario where the the the market is not going up but falling and they're cutting because of those issues. So again, I would say that if the Fed is cutting, it's probably not a good thing in January. Well, let's just jump straight into your year-end prediction and I guess for this first quarter of 2026 as well. S&P 500 close price end of 2025. Traders on Koshi are predicting 57% chance. So more than half uh just under 7,000 points. So slightly up from here. People are feeling bullish. That's the sentiment right now. What's your sentiment? I would say I would say at this point we have a couple positive factors working for a year-end float. Number one, micron earnings. Number two, CPI data. Those are those two factors. We're seeing the AI trade get a little traction. That can lead the market floating higher into year end. The CPI data is going to calm people's nerves to let them feel like if things get worse, the Fed can cushion us by cutting rates. And then lastly, keep in mind that once we get to next week, we have a Wednesday Christmas Eve. So that's a dead day. Thursday the markets are closed for Christmas and then the next week you have New Year's Eve and New Year's Day, right? And so ultimately institutional money which is really the primary uh focus of selling uh they are going to be on vacation the next two weeks that leaves retail to rule the roost and that means neutral to upside as long as we don't see and there are some caveats here. What does the Supreme Court do about the tariff decision that should be coming out in the next week and then what happens with Venezuela, right? So, there are some potential risks there, but if everything kind of goes according to plans, float neutral to higher into the end of the year before January selling. >> Okay. And then what happens post January? Why is there going to be a selling? >> Yeah, great question. So, let's let's jump into the charts. And this is where the charts are beautiful, right? So, what we have here is a weekly chart of the S&P 500. And what we see is there's a trend line down here that marks the COVID low, the bare market lows of 2022, and then the liberation sell-off low. And amazingly, it it all aligns with you put a trend line connecting all of them. It perfectly lines up. And then essentially what you do is you use the parallel to your advantage and you say, "Okay, let's drag a parallel up to the bull market highs of 2021." And sure enough, that was right there. You can see a big sell-off on during the bare market of 2022. You zoom up to recent. What did we just do? We just tagged that. And the idea is we likely will see another rejection. So technical analysis is going with probabilities. And probabilities here show us that every time we're at the low end of the parallel, we get a major move up, right? Major move up, major move up. But also, when we're at the highs, we have a major sell-off. And that's the likely outcome here. You throw in here a chart of the QQQ. Look at this NASDAQ 100, which is obviously a majority of the Magnificent 7, 50% of of that is essentially the top 10 companies there. And we see that there was a trend line here that kept getting a bounce, bounce, and bounce and then broke. And look at how markets rallied but got rejected right here. And so this trend line is also major resistance. And while we could float up, you'd have to assume until proven otherwise that the markets are going to come down. So these are just some of the factors right now, but the charts are heavily favored towards limited upside maybe back to these trend lines versus the the the the risk factor is more towards the downside at this point in 2026. >> Which is leading which Bitcoin or stocks or is there no one leading the other situation at all? >> That's a great question. So Bitcoin has a history of leading the stock market and you can easily see that by just taking a look at the data, right? So in 2017 and December we had our bull market high on Bitcoin and four to six weeks later the stock market collapsed in January right so of 2018. Then if you go to the high in November at 69,000 we all remember we had a bare market in 2022. The bull market high on Bitcoin was November. Four to six weeks later the stock market the S&P topped out. And then here we are again 2025 October we put in our high. We've seen a big fall on Bitcoin and the stock market is now starting to get weak. So, you're precisely right on this is that we can use Bitcoin as a leading indicator for the stock market and it also points to more downside in the S&P in 2026. There was an interesting stat that I read recently which is that a lot of the stock market trading today versus let's say in the 80s is retail investing or trading uh versus institutional dominance back 40 years ago. And this is a stark contrast from the trend that we've seen in the crypto space where I believe, correct me if I'm wrong, Gareth, but I believe in 2025 and in to some extent 2024, a lot of the trading was done or investing was done by institutions flowing in to the space rather than more retail capital flowing in relative to 2021. So 2021 when there was a big bull rally um a lot of new retail investors got in especially after stimulus checks were given out not so much this time. So we're looking at the stock market being more and more of a play for retail investors and crypto more and more of a play for institutional investors. That is a generalization. It's not that simple. But again that's just simplifying it. Those trends, what do those mean for volatility? What do those mean for sentiment and ultimately price action going forward? >> Yeah. So, you know, it's interesting because I liken it back to the 1920s, right? And the roaring 20s is when you started to see retail really take note of the stock market. And there was this feeling that you could never lose and it was always going to go up in the 1920s and it led to the obviously the stock market crash in 29 and the Great Depression in 2022. Leverage was being used back then. incredible amounts of leverage. And what we've seen is, and we heard this after the financial crisis, how retail wasn't back in the market until we got to into COVID. And when everyone was home because they couldn't go to work because things were shut down, retail started to come back in. And we've seen the rise of Robin Hood and all of these other platforms that have allowed for investors, retail, to get involved. So, you're 100% right. But in my opinion, it actually probably sets us up for a bigger decline because of that. And then vice versa, in my opinion, you have crypto, which again was mostly retail and now is much more institutional driven. And again, still a lot of retail in there, but the big money is obviously coming in. You saw this big burst of that which helped early in 2024 drive Bitcoin. Now, we're seeing a little bit of a lull. I do think that does cushion Bitcoin. We don't probably get as big a draw down in Bitcoin as we saw in previous cycle moves, right? and we are at the four-year cycle. So, it's not a surprise that in 2025 we're seeing a top here. But my guess is Bitcoin doesn't have its normal 75% draw down like last cycles or the previous cycles. Instead, look for somewhere in the 40 to 50% draw down and then look for a base with institutional money accumulating. >> Well, that's still significant. Has a 40 or 50% draw down already started given how far Bitcoin has fallen from its highs? >> Yeah, you have to think it is. in Bitcoin here. If we look at the chart, peak to trough, we've already dropped 36%. Right? So, so my thesis is that if we look at the chart on Bitcoin, we're likely, and this is something that's happened in other cycles is we're likely headed back to the high of the previous cycle at 69,000, right? And so, if we do that right there and we bring it up kind of this becomes my zone of 69,000 to 74,000. And if we do a draw down from the highs into that range, we're right in the midst of that 40 about 45% draw down into that support. And so that's kind of what I'm thinking is going to happen here. Now listen, if the stock market really collapses and we get a major major collapse, you know, like Allah crash type scenario, then Bitcoin likely would go lower because again, it would just freak out people and they would just dump everything. But I do think assuming this is a normal pullback in 2026, let's say 10 15%, then you're looking at kind of a stabilization in Bitcoin, and I still think Bitcoin will continue to see investors flocking to it away from risk assets. For the most part, it's a risk asset still, but I still think big money is looking at it as more as a of a digital gold, and therefore that'll cushion the downside somewhat. when you look at Bitcoin relative to stocks and how how they've performed historically speaking in tandem with each other and this year the stock market's up um you know depending on the day it's up double digits uh percentage- wise versus the the Bitcoin price which is actually down year to date. When you look at this divergence do you think that Bitcoin is a buying opportunity relative to the stock market if you were had to allocate capital to one thing versus the other? If if I had to right now, um, yes, I would be accumulating Bitcoin and slowly accumulating on the way down here. Absolutely. And again, I just think that in in general, we've gotten so much money and so much leverage into the stock market at this point. And you've got these these pipe dreams built on this AI bubble. And by the way, I think AI is going to change our our world and we're going to have robots one day that do all our house cleaning, all this stuff. But again, it's margins. Don't think about it as, oh, this technology Gareth's saying, it's not going to change our lives. It is it's margin contraction. We're already starting to see it and that's what's driven up the market. You got to look for the defensive names now in the stock market in 2026 and also these ancillary plays like Bitcoin, especially if it comes down to around 70,000. What do you think of Bitcoin Treasury companies? Let me just share my screen one more time and show you some things now. Gareth, this is a list of Bitcoin treasury companies ranked by number of Bitcoins held. So, I'll just look at the top two for now. Strategy, Michael, Michael Sailor Strategy, uh, at number one and number two, Mara Holdings. Uh, Mara, as you know, is actually one of the largest miners in America and arguably the world. Uh, they're also the second largest Bitcoin holding company by assets. Now, what have they done in terms of share price performance? Let's take a look at Micro Strategy here. Uh, what is it? Take >> uh MSTR. Yeah, >> MSTR. Uh and then we have uh Mara. Both are down significantly on the year as Bitcoin underperformed uh the stock market is you can see the exact moment they started to drop relative to uh the stock market. They they they've they've been dropping kind of coincidentally with the uh Bitcoin price. But the point is they've both dropped a lot more than the Bitcoin price. Uh which is understandable because they have leverage. But uh they're both dropping. They've both dropped around 50% year-to date. U strategy a little bit more more that a little bit more 60% on over the last 12 months year to date uh 45 and 41% respectively. So Gareth, looking at this, do you think that companies proxied to Bitcoin, should we say, are a better buy right now given how far they've dropped or do you think that because of this poor share price performance year to date in 2025, uh that more downside is to come? What did the charts show you? Yeah. And what's what's amazing about this is that if you go back a year, uh Micro Strategy was valued far above its Bitcoin holdings, right? It was getting a premium. Now it's actually trading at a discount to its Bitcoin holdings. The reason obviously is the amount of debt that they've taken on. And if Bitcoin continues to fall, do they get calls on that debt? Right? Do their debt does their debt get called? Now, at this point, you got to be careful with these companies that have taken on a lot of debt because if Bitcoin, let's say, does go to 70 now, Micro Strategy is negative on its Bitcoin holdings from its average price of 75. I do think when we get back in a bull run, you do want to look at strategy to get that X amount, like a 2x move off of the Bitcoin uh price move, but in the near term, I'm still sitting cautiously waiting for maybe one more flush out on Bitcoin down to that 70,000. And then certainly, I would prefer to buy something where the Bitcoin is actually discounted in strategy versus on the open market. But right now, again, I'm not ready to jump in because of those debt issues. Once Bitcoin gets to $70,000, as a trader, you have to decide, well, I could buy like uh like you're talking about now, or maybe there's new information that will present itself that will that will make me either hold off uh on buying or perhaps even sell some more. I I remember working for you with you for many years now, and there's been situations where you've said to me, well, once it hits this certain target, I'm going to buy. And then you didn't buy because of new market dynamics. And so what are these new market conditions once Bitcoin hits $70,000 that may prompt you to either sell some more or just stay out completely still? >> Yeah, and you're right on that. It's so important for an investor and a trader to always re-evaluate in real time because a level that I talked about a month ago, if the chart changes, then you have to be able to recognize that and say, "Oh, wait. It's changing here." Sometimes that means getting in early, above the level you talk about or sometimes waiting patiently. And I think the best policy here is if we get down to 70, I will be buying. But what I do is and I and this is comes from personal experience is how many times have I thought the low was going to be in and it goes even lower just like I thought the high is going to be in and it going to it goes higher. And so I dollar cost average starting at key levels that cushions me in case it goes lower. But you're right, if we saw something major like let's see more Bitcoin reserves being established by other countries. Um I mean just imagine and this isn't likely to happen but imagine if China starts to do something like that or other big countries start to move towards Bitcoin as a potential reserve. Then obviously these type of things would change the outlook because they would change the chart. But overall right now the key is just inching in toe in the water then another toe to really cushion the volatility that can be in Bitcoin and even in the stock market. >> Okay, we need to talk about gold and silver now uh just for a bit. Are you still bullish on gold? Let's just take gold for a start at 4400. Wow. It's up almost a percent today. >> 4400 now. >> Y >> uh it's just consolidating around this level. Let's Yeah, let's hear from you. >> Yeah. So, so the beauty of this was was we had a support trend line right here established. This was a beautiful thing here and you can see price kept on bouncing off this trend line and then we had this high end and we got right to it, rejected there and we finally broke out. We formed a bull flag. We rallied up and now we're forming a bull flag again that looks like it's going higher. So near-term my it is bullish. As long as we break the all-time high here. You got to make a higher high on the charts for the the the structure of the chart to maintain itself in terms of a bullish nature. And mid to longterm, I'm still bullish. Now listen, be aware we will get pullbacks in gold. It doesn't go straight up. We know that. But ultimately, right now, the chart near-term is bullish and long-term is also bullish. Uh, I would say if we take out the all-time highs by the first quarter of 2026, we could see $5,000 an ounce on uh gold. So, again, bullish chart. So, I've got to be bullish in the near term here. >> How does this look different than let's say the stock market? If we overlay gold and stock market just this year, again, correlation doesn't imply causation, but they've kind of been moving together for quite some time. >> Yeah, they have been. And it's interesting because again, you could argue, well, does that mean gold is a risk on? And the answer is no. Because what we know is that the US debt, what we've been seeing from the financial fiscal lack of responsibility in in government, is that it's really people going in two directions. They're chasing the stock market right now, which is probably risky, but they're also saying, "I don't trust the government. I don't trust the spending curbs or anything like that, and we need to accumulate gold here." Plus, let's not forget China keeps buying tons and tons of gold as do many other central banks and that's keeping a bid under it as well. And so again, I do think you'll get pullbacks, maybe even a worst case scenario be like 35 3600, but ultimately are we headed higher? The answer is yes. If we're to take a step back here as a trader, you're looking at what happened this year. Stocks have gone to new all-time highs. Gold and silver went to new all-time highs. Bitcoin um interesting interestingly enough did not. and uh well, it did, but then it fell from its all-time highs and now it's trading below its $100,000 level. And then you've got the Tanganger yield uh still hovering around um was it 4.3, I think. Um >> yeah, it's down to about 4.1 now. 4.1 >> 4.1. Yeah, 4.1. So, yeah, that was that was a while ago. So, and then and then the Federal Reserve did not start cutting rates until uh until later in the year. It wasn't like the entire year they've been on a on a on a on a cutting cycle. So, the question is what's been driving this everything rally? And the DXY didn't really collapse. It did fall especially after liberation day in April, but it stayed relatively rangebound uh thereafter. And so we can't really pin this on, let's say, unlimited quantitative easing, which was the case in 2020 that pushed everything up. Something else pushed everything up. And maybe we should maybe identify what that is before we look ahead into 2026. Or maybe it's not relevant. >> I'm a believer that it is the mentality, the psychological shift within investors that it's a no- lose situation, which is always something that makes me unbelievably nervous. I mean, think about it. Anytime I ever take a the no-brainer trade, it's usually the trade I get smoked on. So, you know, you have this mentality now where we've seen Vbottoms, right? V-bottom after Vbottom after V-bottom. Markets drop big and then they rebound to new all-time highs within a week or a month or a couple months. And it's an incredible feeling of these new investors that are kind of the Robin Hood style investors to feel like they can never lose, right? Because again, we fall big, we go right back up. And I think it's an an expansion of margin and borrowing, right? more and more money going into the markets. There was an incredible amount of money on the sidelines for a long period of time that shrunk quite substantially. But to me, it's a psychological factor that occurs just before big falls where people start to feel invincible on investing. And that again is setting up for disaster. >> Do you feel invincible right now, Gareth? >> I certainly don't. I certainly don't. And honestly, I've traded too long to ever feel like that. when you trade for 27 years, you get smoked so many times over that period that it really the market reminds you to stay humble. >> How has your risk tolerance changed over the last 27 years? >> Yeah. So, it it's gotten much more cautious, right? So, early on, I had no money to invest. I mean, literally started with $10,000. And so, what I was doing was I was going all in on one play, hoping to just double, triple, quadruple my money. I would, it would work a couple times and then I would just lose my whole account, blow it right up. And I'm sure many people watching this have had that experience. Over time, I actually found that smaller position size allows you to maneuver within the position, meaning dollar cost average, take a little off the table in the money. And that dance has actually been the key to making a lot of money in the market. It's incredible to think that it exposing less money and being more diversified actually makes you richer, but it does because it keeps you from blowing up your portfolio. Do you still employ the same approach but just on a portfolio level? So let's say you've got I'm just using this as an example. Let's say you've got 10 stocks, right? You got Tesla, Apple, you got a few other shares and uh let's say you want to trade Tesla, you want to get rid of Tesla. So instead of let's say you own 10 shares of Tesla, you want to get rid of some of your holdings. Some people will sell some and um and reduce exposure. Or the other approach is what basically you've done when you were younger, which is sell the entire position and then get back in when you think it's appropriate. Otherwise, uh you know, you're not maximizing on the actual gains that you could be making, but the rest of your portfolio isn't changed. You're not selling everything. You're not going all in on one thing. You're just selling the entire position or putting, you know, your maximum allocation to one position when you're getting back in. >> Yeah. In general, I I have a rule with myself is that, you know, on a stock, for instance, like Tesla, if if I have a position and I get up 10%, I usually pocket at least a quarter to a half of that position. And then I'll play with the house's money and let that run. And this way, if it then pulls back, let's say, to my original entry or below, I add back that and my dollar cost average is even better in that scenario. And so, again, it's really this dance about, you know, inching in, inching out. You never know where things are going to top out. You never know where things are going to bottom out. But again, by doing this dance, you're able to net more money. Even though on individual positions, you may not maximize the gain. It keeps you in the game. It takes your emotion down. Emotion when you're overleveraged is so intense that the market feeds off of it like a great white shark. And that will ultimately make you do the wrong thing. The market will push us to our extremes. Once you're not overleveraged, you're just like, "Hey, I can follow the chart. I'll just trade this. I'll just go in a little out a little bit." And again, you do much better. We make more logical decisions, which is the key in trading. >> Gareth, uh, let's look ahead of 2026. Your favorite asset or the thing that you think will outperform uh, other major asset classes. >> Yeah, I would say the asset that I'm focusing in on is, and this is tricky, right? because again I think the stock market is coming substantially lower but I'm going to be looking at metals but I'm going to be looking at more the platinum and palladium area which has just started to run as being some of the key ones here and then ultimately shifting into more defensive names higher dividends that like a fizer like something like that we talked about that in the past where these stocks again are trading at valuations where you know again downside is limited in a stock market selloff they might even see money flow And they're not sexy. They're not the ones like the AI ones that are going to make you a 3x overnight or in a month or two. But it's about preservation of capital. When things start to fall, you want to be able to still make money even if it's a little bit of money. So that's where I'm going to focus. Bitcoin comes down to 70,000 or below. I'm starting to accumulate there as well. And I think that will be a great performer in later 2026. Where does the S&P 500 have to go on the downside to incentivize you or entice you to get back in and feel bullish on on stocks? >> Yeah, I mean at least for a bounce, right? I mean, let's just talk some levels here. So, if I share my chart again and just to quickly go over this, um I would want at least a correction down to the 2025 high. So right here on the charts, if we put a trend line in here, uh we drag this across, this would be a level where I would probably start to accumulate a little bit because again, major highs once we break out, there's a tendency to retrace and then get a big bounce. I don't know if that will be the cycle low because historically this lower trend line will be the cycle low. So I would say this is a buy for a solid big bounce. You know, you can make a lot of money on these bounces and bare market moves. And then really at the low end, that's what has shown me in the past that has been the major buying opportunity. COVID bare market lows of 2022 liberation selloff low. We get down to here, that's that's at least for me the mega buying opportunity. And by the way, as of now, that's around 54 to 5,500 on the S&P. So, you could do the math on what type of selloff that could be. >> All right. Excellent. Well, Gareth, um, let's close off the conversation. Any trades this year that surprised you? Yeah, I I think for me the resilience of the market did from the April lows, that was an incredible move to the upside. Insatiable demand from investors. I think we're starting to see it waver with some of the performance from the AI trades now. And again, I think overall, you know, that's been one of the big ones. And really, to be fair, silver and gold, as much as I was a big fan of gold in 2023ish coming in there, this move has been incredible and very welcome. And the silver move recently is astronomical. All right, that is an incredible move, but be careful. Silver has a history of big pullbacks and I do think we're getting close to one. >> Gareth, well, I wish you all the best for our 2026 Kasa New Year's resolution. Doesn't have to be trading related. Could be. >> All right, we'll make we'll make a trading resolution. The the trading revol resolution is going to be to trade logically and again trade smart. All right, not about hype. Ignore that hype out there. Ignore the media out there that's going to push narratives and the social media that's going to tell you Bitcoin's going to go to 250,000 by year end. How much did we hear that over the last few months? Follow the charts. They will give you the best opportunity. As long as I follow the charts, I generally trade very well. It's when I let my emotion get control, I usually lose. What is a smart trade? Is something only smart in retrospect after you've gained money, or can you make a smart trade but still lose on that one particular trade? >> You can any trade, right? So if you're trading charts, there's usually a probability attached to it. You're essentially trying to be the house versus the gambler, the casino versus the gambler. So the odds are if you do a hundred of those, you're going to win, let's say, 70 of them. And so there are always charts that surprise you, right? If Trump announces something overnight, it could throw that trade off because of that. But in general, the key is having a thesis that isn't like, oh, I heard on social media this was going to go up, or, oh, I just really love this company. Those aren't valid thesises, right? Or thesis, right? It's about looking at the charts and finding actual technical factors. That's what makes a smart trade. >> Let's say somebody comes up to you and says, "Gareth, my account's up 400% this year in 2025." What are some of the questions that you as an experienced trader would ask him or her to determine whether or not they got lucky or actually they've made a number of very smart trades this year? Yeah, I'd ask them to show me the positions and why they bought. You know, was it that they heard something on Reddit or something else? Listen, Reddit can make millionaires. We've seen it happen before, but if you replicate or try to replicate that over years, eventually the markets take all your gains and blow up your account. And so, the key is again, you can do great, right? I've had great years. Um, this was a very solid year of trading as well. But the key is again looking at the charts and having that foundation, which it enables you, by the way, if you have a thesis, it also allows you to know when the thesis is failing so that you can cut that that that trade as well, which limits your losses quite a bit. Very good stuff, Gareth. Appreciate your thoughts. Where can we follow you? >> verified.com. It's all charts. No BS, guys. It's all about what is the chart telling us? Crypto, commodities, stocks, we cover it all there. And again, it's all chart data related. That's it. >> All right. Well, we'll follow Gareth in the links down below. Uh, have a great holiday season, Gareth. We'll see you in 2026. >> Happy holidays, David. Have a great one. >> And thank you for watching. Don't forget to like, subscribe, and follow Gareth in the link down below. And don't forget to use my code L I N when you get started with Koshi link down below or scan the QR code here. And new users once again can get $10 off on their first $100 deposit when they use my code LIN.
‘Watch Out 2026’: What Bitcoin's Meltdown Means For Stocks, Warns Trader | Gareth Soloway
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Click the link http://kalshi.com/r/LIN or download the Kalshi App and use code LIN to sign up and trade today! Gareth Soloway …Transcript
Anytime I ever take a the no-brainer trade, it's usually the trade I get smoked on. Bitcoin has a history of leading the stock market. And you can easily see that by just taking a look at the data, right? And then here we are again, 2025, October, we put in our high. We've seen a big fall on Bitcoin and the stock market is now starting to get weak. The technology is moving fast uh forward. Those chips are basically going to zero within 2 to 3 years. Gareth Soloway is back. He's a chief market strategist at verified investing. And we'll be getting his outlook for 2026. What's next for monetary policy from the Fed, what's next for stocks, Bitcoin, and precious metals, and he's going to be revealing his favorite asset classes for 2026. Stay tuned until the end when he reveals that it's not what you think. This episode is sponsored by Koshi. It's a fully regulated platform that lets you trade on real world events from economic data to political outcomes. Traders can put money down on their favorite teams, events, elections, and more in all 50 states, including California and Texas, and over 140 countries. Go to Kosi and use code lin lin or click the link in the description down below or scan the QR code here to get started. And new users can get $10 off when they deposit $100. More on that later. Gareth, welcome back. Good to see you again. >> Hey David, great to see you and thank you for having me back. Thank you for coming back. It's been a great uh year for uh for stock markets. Um well actually compared to some other assets, not so much like gold and silver. Uh but it's up and the question we have in our minds is whether that'll stay up for the new year. Now we're speaking today on the 18th of December. Huge update for the stock market indices. This S&P is up about 1.4%. The NASDAQ is up almost 2%. And today the CPI numbers came out. So, uh, headline CPI rose at 2.7% annualized, which was lower than the expected 3.1%. I guess that's partly why things have rallied so much this morning, given uh the lower than expected inflation numbers. That gives more room for the Fed to cut rates, I suppose, is what that implies. Yes, absolutely, David. So, again, number one is you can we can debate till we're blue in the face whether we believe these numbers or not. I find it interesting that the president had a prime time speech last night where he talked about how uh prices were coming down and everything's going great and then we get this CPI government data today that kind of reinforces it. But the point is is the market likes the data. It does open the door for the ability for the Fed to cut more. And really there was partially that factor and the other factor was Micron. Micron saved the day for the AI trade. Um we saw Oracle earnings recently. Those were nasty uh mostly because of the debt that they're taking on. Broadcom another two trillion or was2 trillion dollars after earnings. That stock has dropped 20% and so Micron needed to be really be a good number and with good guidance or the AI trade would have just collapsed. I think this is the beginning of that float up into year end where we see a float. But then watch out 2026 is not looking good on the charts. >> All right, we're going to get to the charts in just a minute. So uh tell us about um tell us about uh the tech stock sector uh in a bit more detail right now. Just yesterday I I received news that um uh Oracle who was trying to fund a $10 billion project was cut off by Owl Capital. So that contributed to its selloff which let the markets down. But uh tell us more. >> Yeah. And so and we've also had other news, right? I mean, there's been so many factors in the AI space that have deflated this bubble somewhat at least. For instance, we talk about the depreciation of these chips, how these hyperscalers are depreciating the chips over 7 years. So, they're marking down that loss based on seven years, but in actuality, these these chips because the technology is moving fast uh forward, those chips are basically going to zero within 2 to 3 years. And so, they're really increasing artificially their earnings. And I think the markets are starting to see through that. And then we have to talk about all these other factors. For instance, everyone apparently has a a hundred billion dollar plus deal with OpenAI. But how is OpenAI going to even go close to raising enough capital to complete these? And all of these factors, including Oracle's massive debt overload of $15 billion, have really caused investors to take a step back from the AI trade. And I do think that will continue, but we're due for a bounce. And in fact, let me show a couple charts here. Some really interesting charts. So, first off, this is your Oracle chart. And you can see, or excuse me, Micron. Micron, folks, right here. We see again gapping up today. It is up 10%. And that's helping get this AI trade back on track. But take a look at Oracle. Oracle's down 50% from its earnings two quarters ago, that massive move up. And so essentially what this is doing is it's discounting the risks that Oracle has taken on. The amount of debt, whether or not their backlog is a real backlog or just figment of their imagination. But look at this right down here. This actually has me bullish now on Oracle for the near term for a bounce. We filled a major gap going back to June of 2025. And so we should see some sort of technical bounce off of this. Throw in Broadcom. Broadcom still remains relatively weak, but look at the sell-off from this level here. After hours, it was $424. It's come all the way down to about $320. These are major discounts on major almost billion or over billion dollar companies. And this has really brought valuations down to where you should get a technical bounce at least for the near term. But it is not even close to being over, folks. These stocks are going to go a lot lower in 2026. Well, the Micron story is that it basically beat earnings. Let's just sum it up in one sentence. So, the fact that there's still such strong demand for AI companies and in Micron's case, AI demand soaring and in the last quarter, which is what this result shows, maybe the AI trade isn't over. In fact, it's just heating up. Gareth, >> it's possible. I mean, again, certainly the charts aren't telling us that and the actual data isn't telling us that. So there's no doubt there's a lot of demand for AI and AI products. But the problem is we're starting to see margin contraction and that's one of the reasons why we could all justify that oh let's pay up here for Broadcom. Let's pay up here for for Nvidia because they had essentially a monopoly on these chips. Now we have Amazon, Google getting into the mix. Heck, even Riven. Riven just recently said they're going to create their own AI chips so they don't need anyone's chips. And that's going to again push prices down. Again, contracting margin. And then you have to say, okay, well, if this margin, let's say instead of 70% is now 30, do these stocks need to be dropping by 50% before they match up to their current uh mechanics, right? And I think that's the big issue here that investors are going into. And I'd like to just point out some other issues with the AI trade is that even though data centers are being built out at breakneck speed, the question now we're seeing is how do you actually get energy? Where's the energy coming for from for these data centers? Because there's not enough energy to power them and the nuclear plants are 5 to seven years out. And so how do you actually get these online and that means that these chips could be being sat idle and losing value over time until that energy comes on. there's a huge risk to investors buying some of these hyperscalers. >> Okay. Uh let's come back to um individual tech stocks and uh the broad tech market in just a bit. Let me focus now on the Fed and the economy and what that means for markets. Take a look at my screen right now. Um I've got uh the Fed watch tool supporting the idea that the Fed will not cut rates. I started the interview earlier by saying that perhaps a lower CPI print may encourage the Fed to be more dovish no matter who's going to take over Jerome Powell um in 2026. But at least for January, the market is not pricing in a rate cut. This is from the Fed watch tool. This is Kawoshi uh prediction market and it's very interesting how traders on prediction markets are uh are anticipating events and there's a 72% chance on Kowi that the Fed maintains at the rate in January which is exactly in line with what the Fed wash tool by the CME is projecting as well 73 versus 72 uh a little bit higher than I thought after today's CPI print. What do you think is going on? >> Yeah, I I think reality is is that the economy again is not really falling off a cliff. So, the Fed again, they made it pretty clear in their latest statement that they are starting up this pseudo quantitative easing by buying 40 billion in short-term treasuries, but for the most part, they want to sit pat and see how the economy and the labor market pans out. Uh for instance, one of the Fed presidents just recently said just a day or two ago that he was concerned that that companies were not hiring because AI might take the place. But next year if AI is not living up to the task, then there could be a mass hiring uh going on and he's a little cautious about being too quick to lower rates if the economy is actually going to pick up steam in 2026. I don't think it will, but that is something that the Fed is looking at. And I also think we have to just realize is that these numbers for CPI could just be setting the table for the next Fed chair that comes in May. And that's where we get our 50 basis point cut potentially or at least a few 25 basis point cuts. >> Is there any scenario in which the Fed surprises us to the upside in which case they get cut more than expected and we have even more of a rally? >> So that there is but the the issue here is I don't know if it would result in a rally meaning that let's just say the Fed does cut in January. The only reason they're cutting aggressively um in January after not choreographing it is if the stock market has taken a massive hit or if the economy has really fallen off a cliff or there's a shock to the economy. And so ultimately any of those scenarios, you probably have a scenario where the the the market is not going up but falling and they're cutting because of those issues. So again, I would say that if the Fed is cutting, it's probably not a good thing in January. Well, let's just jump straight into your year-end prediction and I guess for this first quarter of 2026 as well. S&P 500 close price end of 2025. Traders on Koshi are predicting 57% chance. So more than half uh just under 7,000 points. So slightly up from here. People are feeling bullish. That's the sentiment right now. What's your sentiment? I would say I would say at this point we have a couple positive factors working for a year-end float. Number one, micron earnings. Number two, CPI data. Those are those two factors. We're seeing the AI trade get a little traction. That can lead the market floating higher into year end. The CPI data is going to calm people's nerves to let them feel like if things get worse, the Fed can cushion us by cutting rates. And then lastly, keep in mind that once we get to next week, we have a Wednesday Christmas Eve. So that's a dead day. Thursday the markets are closed for Christmas and then the next week you have New Year's Eve and New Year's Day, right? And so ultimately institutional money which is really the primary uh focus of selling uh they are going to be on vacation the next two weeks that leaves retail to rule the roost and that means neutral to upside as long as we don't see and there are some caveats here. What does the Supreme Court do about the tariff decision that should be coming out in the next week and then what happens with Venezuela, right? So, there are some potential risks there, but if everything kind of goes according to plans, float neutral to higher into the end of the year before January selling. >> Okay. And then what happens post January? Why is there going to be a selling? >> Yeah, great question. So, let's let's jump into the charts. And this is where the charts are beautiful, right? So, what we have here is a weekly chart of the S&P 500. And what we see is there's a trend line down here that marks the COVID low, the bare market lows of 2022, and then the liberation sell-off low. And amazingly, it it all aligns with you put a trend line connecting all of them. It perfectly lines up. And then essentially what you do is you use the parallel to your advantage and you say, "Okay, let's drag a parallel up to the bull market highs of 2021." And sure enough, that was right there. You can see a big sell-off on during the bare market of 2022. You zoom up to recent. What did we just do? We just tagged that. And the idea is we likely will see another rejection. So technical analysis is going with probabilities. And probabilities here show us that every time we're at the low end of the parallel, we get a major move up, right? Major move up, major move up. But also, when we're at the highs, we have a major sell-off. And that's the likely outcome here. You throw in here a chart of the QQQ. Look at this NASDAQ 100, which is obviously a majority of the Magnificent 7, 50% of of that is essentially the top 10 companies there. And we see that there was a trend line here that kept getting a bounce, bounce, and bounce and then broke. And look at how markets rallied but got rejected right here. And so this trend line is also major resistance. And while we could float up, you'd have to assume until proven otherwise that the markets are going to come down. So these are just some of the factors right now, but the charts are heavily favored towards limited upside maybe back to these trend lines versus the the the the risk factor is more towards the downside at this point in 2026. >> Which is leading which Bitcoin or stocks or is there no one leading the other situation at all? >> That's a great question. So Bitcoin has a history of leading the stock market and you can easily see that by just taking a look at the data, right? So in 2017 and December we had our bull market high on Bitcoin and four to six weeks later the stock market collapsed in January right so of 2018. Then if you go to the high in November at 69,000 we all remember we had a bare market in 2022. The bull market high on Bitcoin was November. Four to six weeks later the stock market the S&P topped out. And then here we are again 2025 October we put in our high. We've seen a big fall on Bitcoin and the stock market is now starting to get weak. So, you're precisely right on this is that we can use Bitcoin as a leading indicator for the stock market and it also points to more downside in the S&P in 2026. There was an interesting stat that I read recently which is that a lot of the stock market trading today versus let's say in the 80s is retail investing or trading uh versus institutional dominance back 40 years ago. And this is a stark contrast from the trend that we've seen in the crypto space where I believe, correct me if I'm wrong, Gareth, but I believe in 2025 and in to some extent 2024, a lot of the trading was done or investing was done by institutions flowing in to the space rather than more retail capital flowing in relative to 2021. So 2021 when there was a big bull rally um a lot of new retail investors got in especially after stimulus checks were given out not so much this time. So we're looking at the stock market being more and more of a play for retail investors and crypto more and more of a play for institutional investors. That is a generalization. It's not that simple. But again that's just simplifying it. Those trends, what do those mean for volatility? What do those mean for sentiment and ultimately price action going forward? >> Yeah. So, you know, it's interesting because I liken it back to the 1920s, right? And the roaring 20s is when you started to see retail really take note of the stock market. And there was this feeling that you could never lose and it was always going to go up in the 1920s and it led to the obviously the stock market crash in 29 and the Great Depression in 2022. Leverage was being used back then. incredible amounts of leverage. And what we've seen is, and we heard this after the financial crisis, how retail wasn't back in the market until we got to into COVID. And when everyone was home because they couldn't go to work because things were shut down, retail started to come back in. And we've seen the rise of Robin Hood and all of these other platforms that have allowed for investors, retail, to get involved. So, you're 100% right. But in my opinion, it actually probably sets us up for a bigger decline because of that. And then vice versa, in my opinion, you have crypto, which again was mostly retail and now is much more institutional driven. And again, still a lot of retail in there, but the big money is obviously coming in. You saw this big burst of that which helped early in 2024 drive Bitcoin. Now, we're seeing a little bit of a lull. I do think that does cushion Bitcoin. We don't probably get as big a draw down in Bitcoin as we saw in previous cycle moves, right? and we are at the four-year cycle. So, it's not a surprise that in 2025 we're seeing a top here. But my guess is Bitcoin doesn't have its normal 75% draw down like last cycles or the previous cycles. Instead, look for somewhere in the 40 to 50% draw down and then look for a base with institutional money accumulating. >> Well, that's still significant. Has a 40 or 50% draw down already started given how far Bitcoin has fallen from its highs? >> Yeah, you have to think it is. in Bitcoin here. If we look at the chart, peak to trough, we've already dropped 36%. Right? So, so my thesis is that if we look at the chart on Bitcoin, we're likely, and this is something that's happened in other cycles is we're likely headed back to the high of the previous cycle at 69,000, right? And so, if we do that right there and we bring it up kind of this becomes my zone of 69,000 to 74,000. And if we do a draw down from the highs into that range, we're right in the midst of that 40 about 45% draw down into that support. And so that's kind of what I'm thinking is going to happen here. Now listen, if the stock market really collapses and we get a major major collapse, you know, like Allah crash type scenario, then Bitcoin likely would go lower because again, it would just freak out people and they would just dump everything. But I do think assuming this is a normal pullback in 2026, let's say 10 15%, then you're looking at kind of a stabilization in Bitcoin, and I still think Bitcoin will continue to see investors flocking to it away from risk assets. For the most part, it's a risk asset still, but I still think big money is looking at it as more as a of a digital gold, and therefore that'll cushion the downside somewhat. when you look at Bitcoin relative to stocks and how how they've performed historically speaking in tandem with each other and this year the stock market's up um you know depending on the day it's up double digits uh percentage- wise versus the the Bitcoin price which is actually down year to date. When you look at this divergence do you think that Bitcoin is a buying opportunity relative to the stock market if you were had to allocate capital to one thing versus the other? If if I had to right now, um, yes, I would be accumulating Bitcoin and slowly accumulating on the way down here. Absolutely. And again, I just think that in in general, we've gotten so much money and so much leverage into the stock market at this point. And you've got these these pipe dreams built on this AI bubble. And by the way, I think AI is going to change our our world and we're going to have robots one day that do all our house cleaning, all this stuff. But again, it's margins. Don't think about it as, oh, this technology Gareth's saying, it's not going to change our lives. It is it's margin contraction. We're already starting to see it and that's what's driven up the market. You got to look for the defensive names now in the stock market in 2026 and also these ancillary plays like Bitcoin, especially if it comes down to around 70,000. What do you think of Bitcoin Treasury companies? Let me just share my screen one more time and show you some things now. Gareth, this is a list of Bitcoin treasury companies ranked by number of Bitcoins held. So, I'll just look at the top two for now. Strategy, Michael, Michael Sailor Strategy, uh, at number one and number two, Mara Holdings. Uh, Mara, as you know, is actually one of the largest miners in America and arguably the world. Uh, they're also the second largest Bitcoin holding company by assets. Now, what have they done in terms of share price performance? Let's take a look at Micro Strategy here. Uh, what is it? Take >> uh MSTR. Yeah, >> MSTR. Uh and then we have uh Mara. Both are down significantly on the year as Bitcoin underperformed uh the stock market is you can see the exact moment they started to drop relative to uh the stock market. They they they've they've been dropping kind of coincidentally with the uh Bitcoin price. But the point is they've both dropped a lot more than the Bitcoin price. Uh which is understandable because they have leverage. But uh they're both dropping. They've both dropped around 50% year-to date. U strategy a little bit more more that a little bit more 60% on over the last 12 months year to date uh 45 and 41% respectively. So Gareth, looking at this, do you think that companies proxied to Bitcoin, should we say, are a better buy right now given how far they've dropped or do you think that because of this poor share price performance year to date in 2025, uh that more downside is to come? What did the charts show you? Yeah. And what's what's amazing about this is that if you go back a year, uh Micro Strategy was valued far above its Bitcoin holdings, right? It was getting a premium. Now it's actually trading at a discount to its Bitcoin holdings. The reason obviously is the amount of debt that they've taken on. And if Bitcoin continues to fall, do they get calls on that debt? Right? Do their debt does their debt get called? Now, at this point, you got to be careful with these companies that have taken on a lot of debt because if Bitcoin, let's say, does go to 70 now, Micro Strategy is negative on its Bitcoin holdings from its average price of 75. I do think when we get back in a bull run, you do want to look at strategy to get that X amount, like a 2x move off of the Bitcoin uh price move, but in the near term, I'm still sitting cautiously waiting for maybe one more flush out on Bitcoin down to that 70,000. And then certainly, I would prefer to buy something where the Bitcoin is actually discounted in strategy versus on the open market. But right now, again, I'm not ready to jump in because of those debt issues. Once Bitcoin gets to $70,000, as a trader, you have to decide, well, I could buy like uh like you're talking about now, or maybe there's new information that will present itself that will that will make me either hold off uh on buying or perhaps even sell some more. I I remember working for you with you for many years now, and there's been situations where you've said to me, well, once it hits this certain target, I'm going to buy. And then you didn't buy because of new market dynamics. And so what are these new market conditions once Bitcoin hits $70,000 that may prompt you to either sell some more or just stay out completely still? >> Yeah, and you're right on that. It's so important for an investor and a trader to always re-evaluate in real time because a level that I talked about a month ago, if the chart changes, then you have to be able to recognize that and say, "Oh, wait. It's changing here." Sometimes that means getting in early, above the level you talk about or sometimes waiting patiently. And I think the best policy here is if we get down to 70, I will be buying. But what I do is and I and this is comes from personal experience is how many times have I thought the low was going to be in and it goes even lower just like I thought the high is going to be in and it going to it goes higher. And so I dollar cost average starting at key levels that cushions me in case it goes lower. But you're right, if we saw something major like let's see more Bitcoin reserves being established by other countries. Um I mean just imagine and this isn't likely to happen but imagine if China starts to do something like that or other big countries start to move towards Bitcoin as a potential reserve. Then obviously these type of things would change the outlook because they would change the chart. But overall right now the key is just inching in toe in the water then another toe to really cushion the volatility that can be in Bitcoin and even in the stock market. >> Okay, we need to talk about gold and silver now uh just for a bit. Are you still bullish on gold? Let's just take gold for a start at 4400. Wow. It's up almost a percent today. >> 4400 now. >> Y >> uh it's just consolidating around this level. Let's Yeah, let's hear from you. >> Yeah. So, so the beauty of this was was we had a support trend line right here established. This was a beautiful thing here and you can see price kept on bouncing off this trend line and then we had this high end and we got right to it, rejected there and we finally broke out. We formed a bull flag. We rallied up and now we're forming a bull flag again that looks like it's going higher. So near-term my it is bullish. As long as we break the all-time high here. You got to make a higher high on the charts for the the the structure of the chart to maintain itself in terms of a bullish nature. And mid to longterm, I'm still bullish. Now listen, be aware we will get pullbacks in gold. It doesn't go straight up. We know that. But ultimately, right now, the chart near-term is bullish and long-term is also bullish. Uh, I would say if we take out the all-time highs by the first quarter of 2026, we could see $5,000 an ounce on uh gold. So, again, bullish chart. So, I've got to be bullish in the near term here. >> How does this look different than let's say the stock market? If we overlay gold and stock market just this year, again, correlation doesn't imply causation, but they've kind of been moving together for quite some time. >> Yeah, they have been. And it's interesting because again, you could argue, well, does that mean gold is a risk on? And the answer is no. Because what we know is that the US debt, what we've been seeing from the financial fiscal lack of responsibility in in government, is that it's really people going in two directions. They're chasing the stock market right now, which is probably risky, but they're also saying, "I don't trust the government. I don't trust the spending curbs or anything like that, and we need to accumulate gold here." Plus, let's not forget China keeps buying tons and tons of gold as do many other central banks and that's keeping a bid under it as well. And so again, I do think you'll get pullbacks, maybe even a worst case scenario be like 35 3600, but ultimately are we headed higher? The answer is yes. If we're to take a step back here as a trader, you're looking at what happened this year. Stocks have gone to new all-time highs. Gold and silver went to new all-time highs. Bitcoin um interesting interestingly enough did not. and uh well, it did, but then it fell from its all-time highs and now it's trading below its $100,000 level. And then you've got the Tanganger yield uh still hovering around um was it 4.3, I think. Um >> yeah, it's down to about 4.1 now. 4.1 >> 4.1. Yeah, 4.1. So, yeah, that was that was a while ago. So, and then and then the Federal Reserve did not start cutting rates until uh until later in the year. It wasn't like the entire year they've been on a on a on a on a cutting cycle. So, the question is what's been driving this everything rally? And the DXY didn't really collapse. It did fall especially after liberation day in April, but it stayed relatively rangebound uh thereafter. And so we can't really pin this on, let's say, unlimited quantitative easing, which was the case in 2020 that pushed everything up. Something else pushed everything up. And maybe we should maybe identify what that is before we look ahead into 2026. Or maybe it's not relevant. >> I'm a believer that it is the mentality, the psychological shift within investors that it's a no- lose situation, which is always something that makes me unbelievably nervous. I mean, think about it. Anytime I ever take a the no-brainer trade, it's usually the trade I get smoked on. So, you know, you have this mentality now where we've seen Vbottoms, right? V-bottom after Vbottom after V-bottom. Markets drop big and then they rebound to new all-time highs within a week or a month or a couple months. And it's an incredible feeling of these new investors that are kind of the Robin Hood style investors to feel like they can never lose, right? Because again, we fall big, we go right back up. And I think it's an an expansion of margin and borrowing, right? more and more money going into the markets. There was an incredible amount of money on the sidelines for a long period of time that shrunk quite substantially. But to me, it's a psychological factor that occurs just before big falls where people start to feel invincible on investing. And that again is setting up for disaster. >> Do you feel invincible right now, Gareth? >> I certainly don't. I certainly don't. And honestly, I've traded too long to ever feel like that. when you trade for 27 years, you get smoked so many times over that period that it really the market reminds you to stay humble. >> How has your risk tolerance changed over the last 27 years? >> Yeah. So, it it's gotten much more cautious, right? So, early on, I had no money to invest. I mean, literally started with $10,000. And so, what I was doing was I was going all in on one play, hoping to just double, triple, quadruple my money. I would, it would work a couple times and then I would just lose my whole account, blow it right up. And I'm sure many people watching this have had that experience. Over time, I actually found that smaller position size allows you to maneuver within the position, meaning dollar cost average, take a little off the table in the money. And that dance has actually been the key to making a lot of money in the market. It's incredible to think that it exposing less money and being more diversified actually makes you richer, but it does because it keeps you from blowing up your portfolio. Do you still employ the same approach but just on a portfolio level? So let's say you've got I'm just using this as an example. Let's say you've got 10 stocks, right? You got Tesla, Apple, you got a few other shares and uh let's say you want to trade Tesla, you want to get rid of Tesla. So instead of let's say you own 10 shares of Tesla, you want to get rid of some of your holdings. Some people will sell some and um and reduce exposure. Or the other approach is what basically you've done when you were younger, which is sell the entire position and then get back in when you think it's appropriate. Otherwise, uh you know, you're not maximizing on the actual gains that you could be making, but the rest of your portfolio isn't changed. You're not selling everything. You're not going all in on one thing. You're just selling the entire position or putting, you know, your maximum allocation to one position when you're getting back in. >> Yeah. In general, I I have a rule with myself is that, you know, on a stock, for instance, like Tesla, if if I have a position and I get up 10%, I usually pocket at least a quarter to a half of that position. And then I'll play with the house's money and let that run. And this way, if it then pulls back, let's say, to my original entry or below, I add back that and my dollar cost average is even better in that scenario. And so, again, it's really this dance about, you know, inching in, inching out. You never know where things are going to top out. You never know where things are going to bottom out. But again, by doing this dance, you're able to net more money. Even though on individual positions, you may not maximize the gain. It keeps you in the game. It takes your emotion down. Emotion when you're overleveraged is so intense that the market feeds off of it like a great white shark. And that will ultimately make you do the wrong thing. The market will push us to our extremes. Once you're not overleveraged, you're just like, "Hey, I can follow the chart. I'll just trade this. I'll just go in a little out a little bit." And again, you do much better. We make more logical decisions, which is the key in trading. >> Gareth, uh, let's look ahead of 2026. Your favorite asset or the thing that you think will outperform uh, other major asset classes. >> Yeah, I would say the asset that I'm focusing in on is, and this is tricky, right? because again I think the stock market is coming substantially lower but I'm going to be looking at metals but I'm going to be looking at more the platinum and palladium area which has just started to run as being some of the key ones here and then ultimately shifting into more defensive names higher dividends that like a fizer like something like that we talked about that in the past where these stocks again are trading at valuations where you know again downside is limited in a stock market selloff they might even see money flow And they're not sexy. They're not the ones like the AI ones that are going to make you a 3x overnight or in a month or two. But it's about preservation of capital. When things start to fall, you want to be able to still make money even if it's a little bit of money. So that's where I'm going to focus. Bitcoin comes down to 70,000 or below. I'm starting to accumulate there as well. And I think that will be a great performer in later 2026. Where does the S&P 500 have to go on the downside to incentivize you or entice you to get back in and feel bullish on on stocks? >> Yeah, I mean at least for a bounce, right? I mean, let's just talk some levels here. So, if I share my chart again and just to quickly go over this, um I would want at least a correction down to the 2025 high. So right here on the charts, if we put a trend line in here, uh we drag this across, this would be a level where I would probably start to accumulate a little bit because again, major highs once we break out, there's a tendency to retrace and then get a big bounce. I don't know if that will be the cycle low because historically this lower trend line will be the cycle low. So I would say this is a buy for a solid big bounce. You know, you can make a lot of money on these bounces and bare market moves. And then really at the low end, that's what has shown me in the past that has been the major buying opportunity. COVID bare market lows of 2022 liberation selloff low. We get down to here, that's that's at least for me the mega buying opportunity. And by the way, as of now, that's around 54 to 5,500 on the S&P. So, you could do the math on what type of selloff that could be. >> All right. Excellent. Well, Gareth, um, let's close off the conversation. Any trades this year that surprised you? Yeah, I I think for me the resilience of the market did from the April lows, that was an incredible move to the upside. Insatiable demand from investors. I think we're starting to see it waver with some of the performance from the AI trades now. And again, I think overall, you know, that's been one of the big ones. And really, to be fair, silver and gold, as much as I was a big fan of gold in 2023ish coming in there, this move has been incredible and very welcome. And the silver move recently is astronomical. All right, that is an incredible move, but be careful. Silver has a history of big pullbacks and I do think we're getting close to one. >> Gareth, well, I wish you all the best for our 2026 Kasa New Year's resolution. Doesn't have to be trading related. Could be. >> All right, we'll make we'll make a trading resolution. The the trading revol resolution is going to be to trade logically and again trade smart. All right, not about hype. Ignore that hype out there. Ignore the media out there that's going to push narratives and the social media that's going to tell you Bitcoin's going to go to 250,000 by year end. How much did we hear that over the last few months? Follow the charts. They will give you the best opportunity. As long as I follow the charts, I generally trade very well. It's when I let my emotion get control, I usually lose. What is a smart trade? Is something only smart in retrospect after you've gained money, or can you make a smart trade but still lose on that one particular trade? >> You can any trade, right? So if you're trading charts, there's usually a probability attached to it. You're essentially trying to be the house versus the gambler, the casino versus the gambler. So the odds are if you do a hundred of those, you're going to win, let's say, 70 of them. And so there are always charts that surprise you, right? If Trump announces something overnight, it could throw that trade off because of that. But in general, the key is having a thesis that isn't like, oh, I heard on social media this was going to go up, or, oh, I just really love this company. Those aren't valid thesises, right? Or thesis, right? It's about looking at the charts and finding actual technical factors. That's what makes a smart trade. >> Let's say somebody comes up to you and says, "Gareth, my account's up 400% this year in 2025." What are some of the questions that you as an experienced trader would ask him or her to determine whether or not they got lucky or actually they've made a number of very smart trades this year? Yeah, I'd ask them to show me the positions and why they bought. You know, was it that they heard something on Reddit or something else? Listen, Reddit can make millionaires. We've seen it happen before, but if you replicate or try to replicate that over years, eventually the markets take all your gains and blow up your account. And so, the key is again, you can do great, right? I've had great years. Um, this was a very solid year of trading as well. But the key is again looking at the charts and having that foundation, which it enables you, by the way, if you have a thesis, it also allows you to know when the thesis is failing so that you can cut that that that trade as well, which limits your losses quite a bit. Very good stuff, Gareth. Appreciate your thoughts. Where can we follow you? >> verified.com. It's all charts. No BS, guys. It's all about what is the chart telling us? Crypto, commodities, stocks, we cover it all there. And again, it's all chart data related. That's it. >> All right. Well, we'll follow Gareth in the links down below. Uh, have a great holiday season, Gareth. We'll see you in 2026. >> Happy holidays, David. Have a great one. >> And thank you for watching. Don't forget to like, subscribe, and follow Gareth in the link down below. And don't forget to use my code L I N when you get started with Koshi link down below or scan the QR code here. And new users once again can get $10 off on their first $100 deposit when they use my code LIN.