Japanese Yen: Guest favors being long JPY via crosses (e.g., short EUR/JPY) over USD/JPY, citing effective Japanese intervention tools and policy coordination to cap upside.
Emerging Markets FX: Cautions that Mexico and Brazil carry trades have become a perceived “free lunch,” suggesting positioning risk if the crowded EM FX long unwinds.
AI Bubble: Notes late-cycle AI behavior (e.g., tenuous AI claims moving stocks) and growing skepticism; sees signs of narrative exhaustion and risk to speculative favorites.
US Equities Bearish: Highlights rising dispersion, retail risk appetite fading, and potential for a cyclical air pocket despite short-term support from tax refunds.
Semiconductors & NVDA: Despite surging AI capex, NVDA’s inability to rally is a warning; if semis roll over, broader market downside could accelerate.
Banks Under Pressure: Money-center banks like JPM, BAC, and C broke to multi-month lows, signaling broader financial sector stress.
Precious Metals: Gold and silver saw blow-off tops and implied vol spikes; base case is consolidation as speculative froth gets wrung out before longer-term trends resume.
Transcript
Hit it. Friday, February 13, 2026, episode 285. I'm Patrick Sesna. And I'm Kevin Mureer. This week, we are excited to have Spectrum Markets Brent Donnelly back on the show. We have a fascinating discussion about FX interventions, the dangers he sees in the stock market, and what his magazine cover indicator is telling him. And then, I don't know about you folks, but in this topsyturvy world, I feel a little like the legendary Bruce Dickinson, except instead of needing more cowbell, we need more talking charts. Baby, we need more cowbell, baby. And folks, we might even uh drink some beers along the way. So, uh Kev, I'm drinking the Pills and Chop. I'm out here in Paraguay. This is like their Paraguayan beer. And uh I'm I'm gonna give this a go. And let's let's see. >> It is um you're on the same time zone as me, right? >> No, no, no. I'm actually two hours ahead. Uh so, uh so it's like one o'clock right now. >> Okay. Because I was going to say it looks like you've already had a couple sh Let's not say anything else. All right. Uh Kev, give us the um uh the disclaimers, buddy. >> Nothing in this podcast should be viewed as investment advice. Listeners should consult an investment professional before making any decisions regarding topics mentioned in the show. Side effects of too much huddle may include the tech leadership extinction event, the software valuation implosion, or the cloud growth reality shock. >> I think we we're just calling a market bottom on that space by saying those right there. But anyway, let's let's get Brent on. It's our great pleasure to welcome back to the show Brent Donnelly, president of Spectrum Markets, author of the AMFX and the Friday Speedrun and also the podcast, the terrific podcast Macro Trading Floor with Macro Al. Have I got that right? >> Yeah, that's right. Y >> great to be with you. Sorry, great to be with you. Thanks for coming on the show, Brandon. It was great for you to be back. >> Well, we are with each other to in a sort of virtual way, I guess. >> That's right. And the other thing is that for those who are looking at us, uh we're both Canadian. We're both uh follically challenged and uh I just want to assure people that we there are people that aren't Scottish and Irish from Canada that look look like us. We don't all look the same. I personally I I don't know about you, but I'm feeling like I'm going through my Farley Moit stage. >> Well, that's an obscure reference. You got to >> That's right. the Canadian tragically hip and more well-known. >> Okay, let's get right to it. We got a lot of fun things to talk about. Start with the yen. Um, and for those who don't know, um, Brent is the the old axe in terms of yen trading. I can't tell you how many people I've stumbled across over the years that start telling me about like, "Oh, Brent, he used to trade like just size." Now, what bank were you at again? >> Oh, man. So, what bank wasn't I at? I I was the main places I worked were uh RBC, Namora, Lehman, and City. >> Okay. >> And then I worked at a hedge fund for a few years. Um and yeah, most of that time I was a market maker in yen. So the craziest time was Leman because in those days there was two things happening at the same time. So one was correlation trading was like super big at that time because there wasn't as many algorithms and people were just a lot dumber in that time. So you could make make a lot of money just trading correlations if you knew what was correlated to what, >> right? >> And in 2007 and 2008, the tightest correlation to dollar yen was Lehman Brothers stock. So I was working at Lehman Brothers as the dollar yen trader, like watching watching Lehman Brothers stock go to zero and like wondering how much dollar yen I should be short and then what's the point because I'm not going to get paid if it goes down. So >> reference error in Excel spreadsheet. Uh so one of the things I was thinking about was when you think back we had this situation where the there was some intervention and I'm going to get you to speculate on what would happen but before or what did happen in terms of the intervention or whether it even occurred or the checks or how it works but first of all did you ever trade against the Bank of Japan? >> Yeah. Yeah. A couple times. Um in 2011 they intervened uh after the earthquake. Yeah. Yeah. >> Then they intervened again. Um, actually in 2003 they intervened buying dollars as well when I worked at RBC. So, >> all right. I want to know what that's like because to me that feels just wild. Like they phone you up and they just ask you for size and like they want to move it. So you show them way away and then you show them this price and I guess you can do a certain amount. Just walk us through like kind of what those experiences were like. >> Oh man. So, I mean, I don't know how far into the weeds you want me to go because there's a couple of crazy ones, but in 1998 was actually the craziest one because it was the they were selling dollar yen at that time. It was when long-term capital was going under and long-term capital and tiger and all the funds had these massive dollar yen positions because it was like free money carry trade. You were making 4% if if it didn't move. And but the weird thing was just this I'll try to make it short because I don't know if this is interesting. >> No, no, no. and people are going to love it. Like this is this is great. Go. >> It's just so in the weeds. But the way at that time that that FX worked was it was still mostly voice brokers. >> Okay. >> So in order to trade you had to like pick up the phone and say like the guy would be 90 95 you say 100 yours or whatever. >> Yeah. >> But EBS had started which is the electronic brokerage system >> right. And as kind of like a I don't know if it was an experiment or what, but the Fed decided they were going to intervene on EBS, which is weird because like it could be 90 bid in the bro in the voice broker and they're selling at 60 on EBS, right? >> But then the even more crazy thing was I worked at Meil Lynch at that time and the people in credit had not set up the Fed in EBS. Like every counterparty has to be set up in EBS. So like if I want to trade with you know repnat Chicago or whatever they have to be set up in EBS and they had never set them up. So it was basically trading like 100 points below the voice brokers but we couldn't trade with the Fed because we didn't have credit with them. So we could see the offer but we couldn't trade on it. So my boss was like losing his um because it was basically like this it was an insane arbitrage um like where people were making like millions of dollars on it. Um, but the funny thing is, so they actually don't usually come in in size. So what happens is they'll the phone will ring and it'll be like the trader at the Fed, okay? And they'll just say like dollar yen and 10 and like say it's 6065, you you don't show them a stupid price because it's the Fed. So but you just start buying as much dollar yen as you can if they're, you know, if it's at the lows and you know they're a buyer, right? So essentially the second the phone rings you're just buying dollar yen and then you know you make whatever price to them it's irrelevant but then a lot of times they're actually dealing on the machines and dealing in the banks at the same time but essentially like if you're the first call you have like one of your best days of your career and if you're one of the last calls it's already up 250 points and then you're like oh the bankage man or it's the Fed usually the Fed's calling I'm going to buy dollar yen and then you you pay the tippy top and get absolutely wrecked. So that that happened to me in uh in New Zealand dollar actually one time when I worked at Leman, I was trading Kiwi. It was what it's called. And Friday at like 3:30 p.m. Kiwi had dropped like 200 points. And it was like Kiwi was going crazy at that time because it yielded 10% or something. And the phone rings just like my personal line and it's like, "Hey mate, it's like so and so from the Reserve Bank in New Zealand. Uh what's your bid?" And and it was like 100 kiwi. And I I for it took me about five minutes because I thought that it was like a prank or something and then he's like, "No, man. I need your bid." Because he had my number from like my email signature or something, right? >> So, but it had already dropped 200 points. They had already called like five other banks. So, I sold like 300 Kiwi, 300 million Kiwi to for his 100. And then, but I was the last person selling and now it's like 4:30 on Friday and I'm like short 200 million Kiwi going into the weekend. And I actually called him back and said like, "I can do another 200." And he's like, "No, we're good, mate." So, I lost. I think that was actually my worst day at Lea Brothers. Um, so usually when they come in though, it's just a lot of chaos. And then now there's different ways like the Swiss National Bank, obviously, they just left a bid for Infinity uh at 120 in Euros Swiss for a while. So, sometimes they'll do it on the machines and stuff, >> right? >> Um, but this time there was no actual intervention. So, like the two things they can do is they can do what's called I know you know this but for people that some people that don't um they can do what's called a rate check which is essentially they call up and say like what's your rate in $100 yen and you show them but they pass and they don't trade but it's like a strong signal of hey we don't like where the market is right now. So, we're sending a message to the banks and then they usually tell the banks like go tell all your clients that we called, >> right? >> And that's what happened on whatever date that was, Friday, I don't know, like I guess probably January 31st if I'm not mistaken. >> Yeah. >> Um, and it was the Fed that called, but the only reason it's the Fed is that, you know, the Bank of Japan doesn't have phone lines to every single US bank necessarily in New York. So they call the Treasury or the Fed and say like, "Can you guys do a rate check for us on our behalf?" And then the Fed desk calls the banks and the and then obviously everyone's like, "Oh, shoot. Okay, I guess they're going to intervene." But then they never intervene. So dollar yen went like it went down a lot that day and then it went all the way back up. But in the end, people love to like say, "Oh, the market's bigger than the central banks." But like they have a lot of ammunition. So like yes in the long run if everything stays the same they can't hold it forever but they can hold it for a long time. So like they sold in 2022 they sold in 2024 and they sold this year and all at the same level around 158 160 and it never went back above. Like I have I think more respect than a lot of people for the central bank's ability to hold it because all they're trying to do is like they're not trying to make dollar yen go down to 100. They're just trying to make it stop going up. And generally they I think are pretty effective. And the the record shows the Swiss National Bank is like the massive exception to that because they've you know there that's been a complete clown show. Like they've >> Yeah. >> Well, the Bank of England wasn't very good either. >> No, that's true. So, it it sort of depends on the situation. Like those those were kind of unusual situations in that they were trying to defend pegs, right? And markets will just come for your peg because you're just you're holding a market out of equilibrium and essentially pro like showing a bid above where equilibrium is. So the market just comes for that like Soros came for it or or whoever came for the Swiss peg. But when you're just selling into a rally but you're not guaranteeing any level, you know, you can do that five six times and hold it for a year. You know, you just, as the Swiss National Bank showed, you can't hold it forever. But what they're hoping to do is like hold it and then some do some policy changes that will then help with you know maybe asking the BOJ to hike a bit more or using reserves to you know do asset switches. And then the other thing that I think has happened is that in Japan specifically they have a lot of control of everything right so they can get the the two big pension funds which is Campo and GPIF um have massive overseas holdings. So they can call Campo, which is like Japan Post, which is kind of like the national pension system basically. They can say like, "Oh, hey, we need your help, you know, can you sell three yards, like sell three billion dollar yen after non-farm payrolls," which I'm pretty sure that's what happened in this case. >> So they have a lot of tools to kind of like >> send the message first and then start reinforcing the message. Okay. So, let's start with there was some speculation that this was actually um Bessant and it wasn't the Japanese. You just put those aside. It was this was definitely the Japanese wanting to to stop the yen from falling. >> I mean, I don't have like inside information, but GG, which is pretty reliable like in Japan, said that it was on behalf of of the B or on behalf of the MOF. So, >> okay. So, we're going to put that aside. We're going to assume that it was the Japanese government that wanted it to stop going down. >> Yeah. So Besset like so there's two aspects to the US policy is one is people think they want a weak dollar but they kind of don't they just don't want people to have super super competitive currency so like they want a stronger yen a stronger Korean one they want a stronger Chinese yuan but they don't really want like a weak dollar because that opens up Pandora's box like 1987 style. So, um, he talks about like we want the wand and the end to be stronger, but that that's about it. >> Okay. So, let's just assume that we'll take that at face value that it was Japan wanted it to up. And then let's let's why don't we just take a moment to explain what you mean when you're talking about the different ways that they can influence that price. And one of them is you're you're saying that they're asking pension funds that they somewhat control to actually change their asset mix and and just kind of just go through how that would work. Like they own US bonds. What what how that would work. >> Sure. So Jeep for example um I can't remember. I could Google it, but I can't remember the exact amount that of assets they have, but it's an absurd number. Like >> that's the largest pension fund in the world by like a factor of two. >> I think it might be a trillion or something. Yeah, it's a monster number. >> When agonomics happened, they wanted a weaker yen because it was creating all this deflation and and all that like dollar yen was at 80 or or something like that. So part of that the that reform was to get GPIF to go instead of like having all your money in Japan, send 25% of it abroad and in order and do it unhedged. So they would basically buy euros or buy Canadian dollars or whatever and then buy European assets and buy Canadian assets whether it's bonds or equities. And so when they announced certain phases of abonomics, then literally like one of them, I think it was Halloween 2016 or 2014, I can't remember, but one of them literally like the Abonomics announcement came of like here's some stuff about the three arrows. Yeah. And then two two hours later, GPIF announced they're going to increase their foreign uh investment percentages or whatever, right? And like Dolian went up 600 points that day or something. So now they've done that like they've avanomics on a lot of levels succeeded in what they were trying to do. You know they brought the animal spirits back. They got inflation back to kind of normal and all that and dollar yen went from 80 to 160 which is insane for a currency. You know dollar cat doesn't do that. So now there the issue is like it can become too much of a good thing. Um especially politically like as a Japanese person things start feeling expensive. You know price of rice has gone up a lot. Um you know imports get really expensive when your currency's cut in half. So the politics have now flipped and they they they don't necessarily like I said want the yen massively stronger but it's weak now and they want to stabilize it. And then the other problem that they were having is there was kind of like this negative feedback loop between the yen and JGBs where people were just like, "Okay, this policy is crazy. Bank of Japan is super loose there." You know, they're going to have like runaway inflation and currency collapse. Like there was a point I remember um when they intervened in 2022, I made like this little like I don't know sometimes I make these things. It's like making when you're a kid when you make a scrapbook and you like cut out stuff and put it in the thing >> of like screenshots of like yen do yen's going to 200 Asian currency crisis like all the you know Japan's the next Zimbabwe or whatever and it was all in like a two-eek period in in April 2022 and then they intervene and that was it and it was over. Um, so but the problem is if your currency and bond markets start becoming too correlated and and there's a reflexivity and then you have a problem. So they're trying to stabilize it. So they have like on their side they have trillions of dollars of foreign assets that they own which they can sell, right? They have the Bank of Japan which they control because it's not an independent central bank. So they can get them to hike. They can use like moral persuasion. They have the US on their side as well so they're not pissing in the wind against the US. So, they have a lot of things on their side. >> Why do you think it's staying here, though? Like, why isn't the yen higher? And like, what do you what what do you think? How do you think this plays out? >> Uh, it just takes time. Like, I think sometimes people like want things to happen instantaneously in currency markets. And the reality is is like things just don't move that fast in in FX generally. Like you can take huge positions because ball just generally isn't that high. And there are things, you know, things going the other way. Like the biggest thing coming the other way is that first of all, if oil's going up, the importers in Japan still have to buy dollar yen. In order to buy their oil, they need to buy dollars, right? >> Um and then US corporates are still earning a lot of money. So like Apple still sells a lot of products in Japan. They get yen from customers and they don't want yen, so then they buy dollars. So there are like offsetting flows that aren't going to be buying dollar yen and they don't really those kind of flows aren't taking a view on monetary policy or whatever. They're just like okay we got to buy dollars on the 30th of the month so go buy your $4 billion or whatever. So I would say like a lot of the time in FX there's natural flows in both directions. Like it's not like a lot of times in equities or something like that you can have a situation where it's just like almost everyone's a buyer and it's impossible like there's just nobody selling some micro cap that's you know 30% short or whatever but in FX there's almost always people on the other side and then the other thing too is there's natural rebalancers so like if you're China and you have just to keep the math simple like say you have a billion euros in your reserves >> and and euro goes up 10% then if you wanted to be 10% euros now you're 11% euros so you sell so they tend to rebalance a lot because it's so liquid so whenever something moves like two or 3% the a lot of central banks are on the other side rebalancing so I think it'll just take a while um if you look at what like the craziest moves have been in crossen so because stuff like euro dollar has gone up but dollar yen has gone up so euryen has like absolutely gone crazy Right. >> Um, so, >> okay, before we go on that, actually, I just want to, well, let's just stick because I do want to ask you about one of my subscribers asked me. He said, "Make sure you talk about Swiss yen because that's going straight up." And I wanted to get your opinion on that. But before we get to the crosses, >> what about the idea that um, part of the reason for the yen's weakness is retail, Japanese retail chasing the US a AI bubble? >> Yeah, I mean, that's been a big component. Same with Korea. like a lot of Korean money is coming into the US and then that's weakening the lawn there as well. >> I mean I would guess that some of that is coming to an end just given >> relative performance of Nicay to Mag 7 and things like that. Um but yeah that's been a lot of the flow and same thing with like soft bank investing in the US. >> Yeah, >> you know people in the US VCs or Open AI or whoever they're investing in don't want yen. So obviously then if South Bank has some of their funding in yen, they got to buy dollar yen. So like anything that's US exceptionalism tends to create a lot of flows into the into dollar yen uh for various reasons. So that's been but I think that's like a big reason it did go up, but it's not really a reason it should keep going up because I don't >> Okay, fair enough. But then isn't that make our our thinking about like why don't you own yen here? you know, if that's coming to an end there, like there's going to be a change of flows. And then talk a little bit about this new prime minister um in terms of what she believes and is isn't one of her kind of ideas is kind of like a make Japan great again and doesn't that require fiscal and if so, wouldn't that mean that there's going to need to be money coming back? Like cuz wouldn't a natural way for her to pay for those things is to say to the GPIF, listen you have 25% in US bonds bring 5% 10% back so we can do it here in Japan. Yeah, I think that might be a theme globally too is that all this money has flowed into the US like all the way from like Swiss National Bank to GPIF to you know Danish pension funds and for a bunch of reasons like some political and some economic. I think a lot of countries are like why are we putting so much money in the US when you know our own industries could use some of that money as well. I mean the question is are there enough investable projects in Japan or Denmark or whatever to for all the money that's out there but I think that that is part of the thinking. So yeah, the thing with fiscal is that if it it can go both ways because like you saw in the US, like if people think it's out of control and there's going to be a bond vigilante attack and the wheels are going to come off, it's bad for the currency, right? >> But if people think that it's somehow manageable through they can thread the needle, then it's good for the currency because it boosts growth and it and tends to make the central bank more hawkish. So, it's really hard to trade fiscal versus FX because the, you know, the the story can be so on a uh like a razor edge. >> Yeah. >> Um, so you mentioned Korea and they were kind of they fascinated me a little bit as well because they're obviously struggling with money flowing out of the out of Korea into the into the US stock market. So much so, did you notice that on December 24th that that tax law that they switched they snuck through? >> Yeah, I think there's kind of like a whole issue there of like Robin Hood on crack kind of thing and so they're trying they're also making like people take a course if they want to day trade and stuff like that. So yeah, but it doesn't seem to be having that much of an effect. But but yeah, it does that that definitely is another thing. But then then again again like I said before a lot of that stuff to me peaked in like October of 2025 like the unprofitable codes and crypto and everything that retail loves the most. It all peaked on basically like October 30th of 2025. >> Well I know that's what a lot of people don't realize. The NASDAQ hasn't made a new high since that date. >> It's that date. Actually NASDAQ's gone sideways but like the software index is down 30 40%. And if you look at unprofitable tech, look at quantum computing, crypto, all the the sort of like the junkiest stuff that retail likes the best is down like crazy amounts. Yeah. >> Okay. >> So, so >> we will get we will get to stocks because people will get mad at me if I talk, but let's just finish up with currencies. Yeah. >> Um, so you you were about to talk about the cross rates. Do you think that there's more opportunities in like the the like owning Euroyen or sorry selling Euroyen or selling Swiss yen? Is that are those better trades in your mind? >> I like So it depends on the time horizon. Like right now I feel like the dollar down trade is tired. Like it's people got really excited about it when the Greenland thing happened and then Trump was saying weak dollar is okay and we kind of had like a blowoff in the blowoff bottom in the dollar. So right now I'm more like I'm more neutral on the dollar. So that's why I like crosses because then you don't have like a outright dollar exposure. And if you look at some of the things like one thing I look at is just the sharp ratio of being long whatever the thing is. >> Okay. >> And the sharp of like Euroyen over the last year is two and a half which is really really high. Like very few things in all asset classes across all of macro have that high of a sharp. >> Okay. And generally it's like the up the up the escalator down the elevator kind of thing a lot of times where >> high sharps attract more money. The more money comes in, you know, the better the sharp gets because it keeps on going. Yeah. But then when it turns a lot of times you get like a more of a discombobulated reversal, right? >> Just making up terms here as I go. Um so that's why I like uh euroyen a little bit better. you're kind of it's a way to be long yen but but you're neutral on the dollar. So it just if you're bearish dollar then just be short dollar yen but to me I'm more neutral on the dollar. So yeah euroy yen Swiss yen Swiss is a weird one though that's like it's basically been a widowmaker for three years four years five years is that it's it the rates are super low there. There's no inflation. So, it appears to be the best funding trade, like the best short currency trade you could ever have. Yeah. >> But they have a massive current account surplus and money just keeps on flowing in. And they don't really give a rat's ass anymore about what Swiss does. Like, they gave up a about 20 big years ago. So, you just have this natural flow that's relentless that's buying Swiss. And then there's also kind of like a loose connection between gold and Swiss. like Swiss is the closest thing in FX that you can get to gold. So generally if gold's ripping, being short Swiss is just not a good trade. So um I I don't really like the Swiss yen side, although Euroyen and Swiss yen are not that different in, you know, but yeah, I just stick with Euroyen. >> Um one of the things that I've been kind of pounding on the table incorrectly is that um V and FX is going to go up. You know, trade wars are going to eventually turn into currency wars. Am I a fool for thinking that? >> Uh I mean it has gone up a little bit from like ridiculously low levels. Um I feel like V is kind of cyclical but it's weird. It's like you know the Minsky moment thing. Like it sounds so smart when you're young and then you realize like okay well tell me tell me when this the inst when this when is the stability going to breathe the instability. Like sure it's basically a truism. you go from stability to instability and back and forth, but like unless you can figure out when that's going to happen that it's just like a pointless truism. And FX ball is kind of like that. Like it's cyclical, but timing the turns can be difficult. So what I tend to do is like kind of more pick my spots. Like if I have a reason that I think it's something's going to accelerate, I will like buy ball or buy gamma. >> Yeah. But as a rule, it's, you know, like it it's very difficult to predict because most of the really big moves in FX ball come from shocks that that can't be forecast. So I I generally like don't like as an asset to owning FX ball is pretty shitty generally. >> Yeah, for sure. >> Owning like gamma with good timing can be good. I I just thought that eventually the Trump kind of uh I want a U lower US dollar and I know he's probably getting talked out of it by best because they're worried about it accelerating if they start to get what they want and then that causes stocks to go down. >> But I kind of thought Trump's going to win over and and start saying some crazy stuff. But >> he's actually being quite disciplined in terms of the currency. Like if you think about it, this is the first time he's said anything about the currency in what like since he took power. Yeah. And he'd mentioned it a couple times in like 2017 as well and people tried to jump on board. I think among like they just have so many balls in the air and like you said a weaker dollar is no is not a free lunch like there's a lot of risks around it. Yeah. So I think if you rank all your priorities and then you say like okay how risky are they? You know a weaker dollar is like priority 14 and it's kind of risky. So I don't think it's like a big policy feature of this administration. Like yeah sure if dollar if euro went to 125 they'd probably be happy but they're not sitting there like planning how to get it to how to get it there. >> Okay well there we go. So my my f long FX of all trade is terrible according to >> and I sell FX options for a living. So, whatever. >> Let's let's talk a little bit about stocks because people are probably fed up of the currency stuff, even though I love chatting about and hearing your stories. Um, you you mentioned that stocks are no longer behaving as well, especially the real speculative stuff. Do you worry about um some of this being kind of the pause and the rotation before the big drop or do you think that this is just a natural healthy rotation on in a continuation of a bull cycle? >> So, okay, there's a there's a few thoughts that I have, but some of them like are contradictory in terms of direction. So, the one thing that's bullish, I'll start with that because I have more bearish things, but one thing that's bullish for the next four weeks or so, is the way that the big beautiful bill worked was the IRS didn't change withholding in 2025, right? >> But the the tax changes did apply. So, people are going to get crazy tax refunds in 2026, and that basically starts February 15th. They can't send them out until February 15th because of some law. I forget what it is. Scam prevention law or something. >> Okay. >> So, >> and generally there is kind of like a seasonality to stocks that benefits from tax refunds in March kind of area. >> And this will be an especially large this will be an especially large refund because yeah, I can't remember the number, but I think it's like 50 billion or 60 billion extra um is what people are going to get. But so normally that should be like bullish codes and crypto and whatever crappy stuff that people will buy when the money drops >> um on Robin Hood or whatever. But the one thing though now is that I don't know if people are actually if there's enough animal spirits that if you're like the person that's been trading crypto for the past five years and made some money and lost some money and whatever in your account and then you get 3,800 bucks in your in your tax refund, I don't know if the first thing you're going to do right now is go and buy crypto or go and buy uh like RG like Regetti Computing or whatever. I'm wondering if the spirits are kind of have been dampened especially by like the the sort of like true believer stuff like Sailor and Tom Lee and all that has all been destroyed so much that I kind of feel like maybe people are going to be like, you know what, fool me once, shame on me, fool me twice, I'm I'm the the dummy or whatever, right? Almost almost like when you know they give cash back in Japan way back when when they had too much debt and people just paid down debt instead of spending it. >> Right. Right. So that's the question is like this $60 billion is going to show up and what are people going to do with it? And I guess I'm leaning more towards the fact that they'll save it or pay down debt. Okay. >> Um but I'm also a little bit nervous to be overly short after like we have dropped a lot and this money is coming. So the next four weeks I think will be really important for my view going forward in terms of like how things trade. But overall, like if you just if you sep like if you just forget about fundamentals completely, the charts look so bad. Like even the S&P chart doesn't look very good. Like we had a sort of a pretty steady rate of appreciation for a long time and now it's kind of flatline peaked head and shoulders at around number 7,000. And you know like a lot of a lot of blowups are happening under the surface. So, like dispersion is crazy. Like every single day something's dropping 10, 15, 20%. There was a chart um I I can't I'd like to give the person credit, but I don't remember. >> I think it's the compound. You're talking about the number of stocks like 115 stocks have traded of 10% or something. >> Yeah. 7% or more. >> It's the compound, guys. >> Whatever period. Yeah. Um I thought that was interesting. And then the the guy at Miguel at Namora does a lot of work on dispersion. >> Yeah. dispersion predicting blowups and stuff like that and all that stuff like all the under the hood stuff all kind of screams like not no bueno. >> Yeah. >> So, but >> well, you know what I talked to some like pod shop guys and the the pain in the long community is huge >> and all is just out of this world. It it's it's ugly out there. People don't appreciate how bad it is from that perspective, >> right? Like you look at a chart of like IGV and XLE, it's like it's not the K-shaped economy, it's like the, you know, the alligator jobs that are just like this. And so all that stuff kind of makes me more bearish. Um the funny thing too is that there's a pattern that plays out so often. Um basically, okay, you you start around December 10th and you say, "What are all the favorite trades for the next year?" and they all start rallying because new money comes in. And then in January, they all rip because all the leverage comes in and all everyone who's trading puts on those positions. And then usually around the end of January, people start getting nervous and it loses momentum and then stuff starts to to bed in February. And that's kind of what we've seen so far. So like now most of the popular trades are getting taken to the woodshed one by one. And it's interesting like even stuff like Nvidia is not rallying even though like the picks and shovels story is is stronger than ever with like all these capex numbers being way way above. Um you know I can like it's very easy to explain why like Microsoft selling off or Salesforce is selling off but Nvidia is selling off when everyone raised their capex by like 30% to 2% of US GDP >> doesn't seem very good. So there's a lot of stuff like that that all adds up to me to to say like the structure doesn't look very good. Um but the funny thing is like if you just look at the fundamentals, you know, payrolls growth is above break even, unemployment rates low, claims are low, inflation's falling, you have like a captured Fed that is not allowed to hike rates. So like what's not to love? But all that stuff was kind of known in December and January when everyone put these trades on. And now everyone's sitting there going like, "Okay, now what am I supposed to do with with, you know, I'm long silver at 100. I'm long Nidia at whatever at 200. I'm long, you know, all all the trades basically. >> Eventually they just we run out of buyers. Like this is my point. Like everyone tells me all these good news and I go, "Yeah, okay. I get it. Trump's not going to let the economy go down or not going to let markets go down. Worse is going to, you know, cut rates. I get it. But everyone else knows those things. You're not trading, you know, what's going to happen. You're trading what everyone expects to happen and it's fully priced in, >> right? That's the thing. And and like even on that, like is worse really going to get the committee to cut into this economy? Like I I don't know. I don't really buy that anyways. >> Well, even the point that he says like Trump's not going to let the the market go down and go, do you think Reagan wanted 87? Do you think that Bush wanted08? Like I'm like since when do we think that the governments can can control markets? >> Well, you know what the two worst years of the past like other than '08 of the past 20 years were 18 and 22 were the two worst years recently. Like in 2018 and 2022 basically every single asset went down. Those are the last two midterm years. So there's absolutely no argument about the midterms. Like they don't Yeah. They don't just come in and go like okay we're going to buy S&P futures. So yeah I definitely don't buy that argument. So yeah, I think we came from a place of like price for perfection. Obviously now we're not. Um, so I guess overall I'm bearish, but I'm nervous about the next couple weeks. I want to see how like the retail favorites trade. And then one other thing just on top of all of this is that the thing with the the karaoke company um you know causing 7% selloffs in trucking firms. That's kind >> I don't know this. I wasn't paying attention. I was on the road traveling. What happened? >> Okay, so this company that used to be like a karaoke machine company, okay, >> pivoted to uh freight logistics in 2024. And yesterday they announced uh some AI thing that they're using is going to increase freight throughput by 200% or something like that. >> Yeah. And so all the freight logistics companies sold off like 7%, but then it cascaded into like these other logistics companies and stuff. And it reminds me so much of in 2017 and the these two things were like literally the tippy tippy top of Bitcoin blockchain mania was when do you remember when Long Island ICT pivoted to blockchain? >> Yes, I do. and then Kodak the like two weeks later Kodak and like that those were like December 20th 2017 and January 10th 2018 which was like and the top was like New Year's 2018 >> right >> so it that you could argue is like a sign of okay this AI freakout is getting a little bit stupid. >> Yeah. Um, but what that means to me is like for my trading is you can try to find like go dumpster diving on things where it just like literally makes no sense, but then you can still be short other stuff against it. So like an example and this is not investment advice and this isn't even like my area of expertise but I think it's a useful example for people to think about how to think about these things when you get like the baby thrown out with the bathwater kind of situation are some of the best opportunities in markets because like people are just freaking out and like you said long short pods are just selling everything that is in that factor but that factor might benefit from AI not hurt not get hurt from AI >> and it doesn't matter because it's position itioning. That's what everyone's trying to make it like come up with reasons for this. >> Stop making reasons for it. The reality is somebody's overweight and he's got he's getting the tap on the shoulder and that's all it is. >> You mentioned um crypto and I'm bringing it up because you have a new piece or you've written about it recently and you have some new views on that. Well, you want to share them with us? >> Yeah. So, I guess like I'll try to keep it short. It's like an eight minute read if people want to go go read it. But the the long story short is that I think people tend to occupy this one side of the spectrum or or the other which is like crypto's going to zero because it's a scam or Bitcoin's going to a million because it's like the only safe money in the world or whatever. And I just feel like or or also people like the the other bull case is like web 3 will become a consumer product and and all that. And I think the experiment has been running long enough, right? Like block like the Genesis block was mined in tw 2009. Crypto stuff really started like 2017 2018 the blockchain started and you know there's been a lot of use cases tried you know Gamefy NFTts whatever and I think it's fair to say at this point that crypto is a real thing. This is my opinion that crypto is a real thing, but it's mostly a financial use case and then some other selective niche use cases. And at this point, like Bitcoin's not digital gold. It's not really a risky asset. It's not money definitely. Like it's not a useful means of transacting goods and services. So I think essentially what we can say is that it's like this narrative sponge that picks up narratives and creates a lot ticket mentality and then people see the lotto ticket and you know the stories are are decent. But I think going forward it's going to be harder to convince people that the next narrative is for real just because it's tried on so many different narratives and none of them have worked that I think the amount of skepticism going forward is going to be higher than it was in the past. And to me that just means like I would guess that we probably go nowhere in crypto for like two years and it just consolidates. If you look at like the people the OG crypto people are like 45 50 years old and nobody in my son my son's 21 nobody in his cohort is takes crypto seriously. Like I think Sailor and Tom Lee and those guys have kind of ruined it a little bit. Um, so I feel like we're just going to go into this kind of like crypto is kind of cool, like 3D printing is cool or VR or whatever. And it's like a niche, like a big industry, like it's a $3 trillion market cap if you believe the market caps, but but I don't like I feel like we've reached like a maturation phase here where it's like it is what it's going to be. You know, what you see is what you get. >> Okay. Um, one of the things you mentioned earlier is you talked about the dangers of the yen going down while we were having a selloff in the JGBs. And I agree with you that was um that is I think one of the reasons that they they intervened. They didn't want that. And the last thing I think even the Americans didn't want that. They didn't want the JGB spinning out of control and dragging uh rates up in the US. >> Right. Uh, one of the things that I think has been interesting from a macro perspective that we haven't seen in many many years is that you go back to liberation day, we actually had a situation where all three assets in terms of US assets were moving together. We had the US dollar, US stocks and US bonds moving together. It's been a long time since that's happened. Do you worry that that's a sign of something big that's changed? And what do you have any comments about whether you think that will continue? So yeah, that's like the bond vigilante. That's like the doom loop trade that is people are have been afraid of in the US for a long time. And it was kind of happening, right? Like you said, it happened for a good three, four weeks. And it also happened in the UK in 2022. >> Yeah. The Liz stress moment. >> Yeah. But I think the the hard part about believing in that trade is that in the end the government has a lot of tools to come back at that trade. like in in the UK, they just started buying bonds and everyone gave up pretty quickly because the they're not going to fight the central bank buying bonds. And so it's kind of like the doom loop scary thing that could potentially happen. But okay, say say that starts to happen in the US like for real in a really scary way. The Fed will just be there. They'll cap yields at four and a half% or whatever and >> but doesn't that send the dollar lower? >> Well, then the currency will go down for sure. Yeah. So, but the the whole doom loop thing, you know, it tends to be like an episodic thing that hap comes and goes, but I I don't know. I'm not a huge believer in it. Um, just simply because like I guess maybe because I feel like I've been hearing about it my whole life, but you know, there's the whole thing of like >> it's nonlinear. How'd you go bankrupt slowly then suddenly or whatever? Like I get that. >> I I'm with you that it's not going to cause the end of the world and I I you know, like I always laugh about the doom at 11. the guys that are trying to make, you know, a living just scaring everyone. But I do think it's interesting that that relationship, that correlation has changed. I wonder if the markets are trying to tell us something. >> Well, yeah, that definitely at that it was a huge eye openener, but it only lasted for like three weeks and then so actually in Japan it lasted for a long time, but it was weirdly kind of gradual like the bond market and the currency were selling off for a long time, but then equities were rallying, so everyone's like, "Ah, I guess it's okay." Um, but yeah, when you get all three selling off at the same time, it's definitely scary. But that's why there's usually a response. I mean, they, you know, that's where the taco the tacos were first served was, you know, three days after that they started changing the policy. So, that's the thing is that like if you're betting on that, you're betting on the government not doing anything. And that's just like not hasn't >> No, no, I'm with you. I I just wonder if we for they force the markets force the government to do something. I just wonder that's the that's how we get to a lower US dollar, >> right? I mean that's that's usually how it happens, right? I mean even in the UK they changed their fiscal policy because the market was was the bed. So it will trigger very fast changes. Um but there's still I don't know there's still a world where like they just lose control and then like you said then they have to cap yields and then the dollar drops 35% or whatever. I mean that that's always kind of on the bingo card, but I don't know. It just I I'm not holding my breath for it. >> Okay, so we're getting towards the end here. What question should I have asked you that I didn't ask you? Like what's on your mind? What's important that I you know that I've missed? >> Oh god. Uh the only other thing like I guess that we didn't really talk about is and it kind of relates to my sharp ratio thing is I know I've noticed a pattern over the years when whenever I want to suggest a trade idea and I'm like people are going to hate this like it's just sounds so stupid. Those are usually good trade ideas because like that tells you something that feeling that you get in your gut >> when I always say when I'm scared to hit publish because I'm scared of what people are going to think about me. Those are the best trades and even though it's still scary to say it published, but I'm with you. The hard if everyone agreed with you, it wouldn't be a good trade because everyone's already in it. >> So the thing that's like that right now is emerging markets FX like stuff like Mexico and Brazil has been just going straight up. It's been a free lunch because you've been getting currency appreciation and like 10% yields in Brazil or whatever it depends on what you're doing. So I do feel like we may be getting close to a point where it's just become this free lunch that everyone just assumes like low ball high carry free money keep piling in keep piling in and you know it just in the long run em doesn't work like that like there's a free lunch but you eventually got to get off and I was going to mix two analogies there but eventually you got to get off the bus and I have a feeling partly because I feel like some other dominoes are falling already with like you know megate techch not looking good and software and all that kind of stuff that like I I would be nervous. I wouldn't necessarily be short EM currencies but if I was like along a massive basket of EM currencies I would be nervous. >> Got it. Um in terms of trading what do you think is one of like the timeheld truths that you think people mistake or or are most likely to get wrong or overlook? Uh I would say the it's such a simple thing but it's shocking how often people don't calibrate for it is just don't blow up. Like the risk of ruin should over like the managing risk of ruin should override everything else. >> Yeah. >> But yet people still like sell calls in sofur and blow up or like nack gas. Somebody just got let go for n gas or whatever. Like if you're running a strategy and like obviously it happens a lot in retail. I get a lot of emails from people like I blew up my account again. >> Yeah. >> Um like fundamentally however you're trading whatever you're doing you should be structuring it in a like it's like an erodicity problem basically like if you run this simulate like if you run your trading strategy a million times you should be able to understand like it's not going to blow up. And so I feel like professional and retail it just people still just blow up way too much and mostly doing things that Xanti you could have told that you could have predicted you know there's a a 4% chance that you're going to blow up doing that you know but people just do it anyway. >> I I keep saying because it's been so easy for so long and a lot of people are long stocks it's you know they like to be long and the markets keeps going up. I keep saying trade smaller. There's a lot more risks out there. Be careful when V increases. you need to change your trading and often I find people don't do that. >> Yeah, absolutely. >> Yeah. Okay. >> Actually a huge lesson in 08 because like literally if you've all adjusted at at one point in 2007 you'd be trading like $50 million max. Yeah. >> And then in '08 it would be like 2 million would be the same. >> I know it's a huge number. It's big. Like I know I I feel it. I go well what's the point of even trading that size? I say to myself sometimes. >> Right. Right. You feel like the loser. Yeah. But you know the loser is the person that keeps trading that size and then you know gets stopped out by the inevitable V moves that are occurring just within the market. Even today in spoos like this morning it was all over the map. Like you could e it was moving 1% like that you know in a blink of an eye >> and 1% is a lot. Like we used to spend all day working for 1%. And it was it was up and down a percent by like 10 o'clock. >> Yeah. And actually that's kind of like a correlary to what I was saying is correctly vol adjusting your position sizes, you know, is not really that hard to do like with an Excel spreadsheet, but a lot of even professional traders, a lot of people don't do it very well. Yeah. >> Okay. So, I'm going to pop this the last question on you. I did not warn you, but I know you're going to be able to do this. So, there's this thing called Desert Island on BBC where they ask celebrities their top 10 um bands and songs or whatever. Um, I'm not going to do that to you. We're going to do Desert Island Trader Edition. And Desert Island Trader Edition, you got to give me your three bands. If you were stuck on an island, a desert island, three bands that you would want. You could tell me songs or albums, whatever you want. Three that you'd take with you. And then you're allowed to bring one traitor from any point in time. Like you could bring Jesse Livermore, you could bring your old boss, whoever you want, and why you bring them. >> So, I'm going to keep talking while you think about this. And you got to, you know, as a Canadian, I'll be pretty upset if there isn't a Canadian band in there. >> All right. So, and is it albums that we're doing? >> You could do albums or you can do bands. You you pick. >> Okay. So, yeah. I mean, I would the for sure Radio Head and and The Hip would be like my two, you know, that are >> your go-to. You're just showing your Gen X all over there. Like, it's >> And for those who don't know, he's talking about the tragically hip, a Canadian. >> Tragically hip. Um, and then the third one would probably be Phoebe Brides. Um, I find her stuff is so good. >> I'm with you. Big fan. And like the the album she did with Connor Robst, I think was outstanding. Have you listened to that? >> Yeah. Yeah. >> She she has um a little crossover reference here, but she has a a cover of Fake Plastic Trees that she did on BBC. >> Yeah. >> That is like absolutely like heartwrenching. It's so good. Um, if anyone wants to Google that. And then what was the other thing? Oh, what? >> Give me a trader that you'd want. Any tra any point in time. >> So, it would probably be my boss from from City Bank. >> Tell us why. >> 1995, 1998. So, he was like an absolute psychopath, but he was like a heart of gold. Like he was like people were super scared of him. But then one time because I was in New York and I was I'm from Ottawa and the PL flights were canceled. He's like, "Oh, just come to my house for Christmas." And like I spent Christmas at his house, you know, I'd been working for him for a year or whatever. So he's like a heart of gold, but like came came across as a psychopath on the trading floor. >> Yeah. And he taught me a lot too. Taught me a lot about trading. A lot about like his mantra basically like I don't know if he ever said this out loud was like >> take the job seriously but don't take yourself seriously. So, okay, >> he like was really hardcore about trading and and and took his and wanted to make money, but then, you know, when you're at the bar, he's just joking about it and like, "Oh, man, that was so stupid when I said that thing or whatever." So, I felt like he kind of taught me like how to have fun and like take the job seriously, but still have fun. >> All right. Okay. So, before you go, tell people about your service, where they can find more, and your podcast that they can tune in on. Give us the whole spiel. >> Okay. So I mean the the one thing you didn't mention I guess which is like the thing that I think is the best that I've produced is Alpha Trader is my second book and it's like about trading and you know risk management everything about trading that I've learned basically in my life. So I feel like that's like my best thing and then >> so it's called Alpha Trader and it's a book and I and I listen I quote it all the time. You're in my trading wisdom my daily trading wisdom. I didn't mean to. >> No, honestly, you did. You are like I'm not I just I forgot to list it. I didn't know you were still plugging it, but we'll >> I mean, yeah, it's I'm >> and it's timeless wisdom. So, the reality is that you can, you know, it's going to be just as relevant to, you know, 10 years from now as it is today. >> Yeah, I think I think it's a good book. Like, I feel proud of that book and I got a lot of feedback so I know it's decent. Um and then the other thing is if people go to spectrumarkets.com sctararkets.com um I write my daily which comes from there and and everything like my free stuff is on there as well. Um so pretty much everything's on that website. So alphatrader and spectrumarkets.com. >> Actually before I let you go I forgot to ask you about your ingenious magazine cover uh system. >> Oh man. Do do we have two minutes? I can >> Yeah, let's go. Let's do it. Let's tuck this in at the end here. >> So, one thing that used to drive me crazy was people would pull up these anecdotal things of like, oh, look, there's a party in the Hamptons with all these tech guys. You know, you got to be short tech. Like all these anecdotal things. Um, and I was like, is that really true or is that just like cherrypicking? So, one of the famous ones is The Economist. And people would say like, oh, weak dollars on the cover of the Economist, you got to be long dollars. Yeah. So me and a guy at city actually got all the covers from 1997 to 2016 and back tested it and actually so specifically the economist not Barons because we did Baronss and a couple others but specifically the economist is like a really really good reverse indicator and we did that study in 2016. So that's like all in sample but then since 2016 it's still been unbelievable out of sample for 10 more years. So, uh, I actually trade off of it. Like, it's it's a meaningful six-month signal for a lot of asset classes. So, >> and just to be clear, you're fading it. You're you're going the other way. So, if they if it's like uh like here's one you had recently, the true danger post by Donald Trump, did you So, you're long us from that, >> right? Yeah. >> Yeah. >> And sorry, go ahead. >> No, no. So, the logic essentially is that something like Barons is a coincident indicator, right? They're just reporting on like what's going on in the market constantly and pretty much in real time. But in order for something market-based to get on the front of the economist, it has to really been going on for ages. And it's so they tend to be like the tippy top of the narrative cycle. Um, so like they're they're crazy. Like one of them was Age of Chaos with like Trump going crazy like this and it was like sell VIX at 75 or whatever, you know, like they just tend to pick the extremes because that's, you know, they're by definition saying here's the most prevalent narrative in the market, like here's what's totally priced in, right? And so fading it makes sense. >> And you have this great spreadsheet and you show all like the P&L, you track it live. It's awesome. It's terrific. People should definitely go find it. And to your point, February 7th on the cover, the dangerous dollar. >> Yeah. Yeah. I know. >> Tough to be short when that's happening. >> So hard to be short dollars. Yeah. >> And you know, someone asked me to ask you about the fact that the Japanese uh prime minister is on the cover of it. And I don't know if it's positive or negative though is the problem. Like sometimes it's a difficult decision for you to decide if it's actually uh you know has a view. So to make it as objective as possible, we had three criteria which was is there a market or asset class or country on the thing which a lot of them it's not. >> Is there an unambiguous direction um in in the tone or whatever the image >> and then you know I can't remember what the third one was it wasn't as as important but there was a third one like I guess it was maybe is is it emotional or something like that I can't remember. So we try to follow like these three steps and say but in the end there is still some objective element to it because like if it says age of chaos you know do you buy S&Ps or do you sell VIX futures or do you sell >> and like it says it's Japan it's like the world's most powerful woman does that really >> yeah like yeah it's probably not >> I wouldn't think so now it's gonna eat the world or something then yeah but yeah >> okay so uh go to Spectrum Markets um check all this out. Check out the the magazine cover indicator and go buy his book. Still for sale. It's still great. >> Yeah. And actually, maybe the reason I'm pumping it is I actually wrote a a follow-up called Guess What? Alpha Trader 2. >> And uh that's going to come out in a few months. So, uh >> Oh, well, there you go. >> Listen, when you when you get it out there, um we'll come back and you can come on and tell us all about it. Come on. >> Properly like marketing genius. >> Okay. Well, thank you very much. Thanks, Brent. All right. >> Take care. >> Okay. Thanks. All right, Patrick. Lots to talk about. >> Oh my god. >> Exciting markets. >> Lots lots to talk about, right? Uh okay, so let's let's dive in. Okay, so the S&P 500 had a a shitty day on Thursday. Um breaking back down. It's the same usual suspects which is is um weakness in the tech space and continued sector rotation into uh the spaces such as consumer staples. Actually, let's start with the positives, right? Like uh like that money rotation has um caused a monstrous rip in the upside of consumer staple names. Like they were the dog of the entire space for a year. Nobody wanted to touch the Proctor and Gambles or Colgates with a 10-ft pole. And suddenly when that sector rotation kicked in, people can't get enough of these names. Like >> what which are we looking at there? >> The XLP, which is the consumer staple. >> That's an index ETF. >> That's That's the ETF, right? That's insane. >> That's crazy, >> right? >> For those that are just listening, it basically looks like like a hockey I mean, sorry. It looks like the the Eiffel Tower went straight up. >> Absolutely. And obviously the other benefactor was the energy space, the XLE's ripping. Point is is there's there are places money is going when it's leaving the tech space. And the theme that we had even for many episodes is obviously the idea that the MAG7s may come under pressure and uh and see distribution. When you look at that MAG7 ETF yesterday was a legitimate break to lower lows. Not only have we spent two weeks below the 50-day moving average, but whether you know some technicians will want to jam the geometric shape of a head and shoulders topping formation or whatever on there, but it has been a very heavy market for four or five months and now we've legitimately started a sequence of lower highs and lower lows. the so we have we're we're seeing legitimate pressure in that mag seven space that obviously was uh driven by huge distribution in the software space. Again, we talked about this last episode right back down to the lows. It's been an awful place and you know the the one part that bothers me about it is is like everyone thinks the sector is doomed. like is this due for a bounce just because of the sentiment and bearishness toward the space being so extreme. Uh but it has been where the blood bath has been happening. This uh in itself was going on actually for a month or two, right? Like this is not something new to you and me. We've been talking about this in previous shows. But what changed what changed in the last few days and what is still in the favor of the bulls? Well, first of all, I'm going to start with what's favor. Like the SMH, which is the semiconductor ETF, actually went up to its previous 52- week high and is still holding up. And Nvidia hasn't ruined the party, even though the earnings coming up in the next few weeks could uh could certainly offer a catalyst for a pivot, but the semiconductors haven't broken. more importantly where I feel like the real AI bubble was really taking full hold was in the Cosby right and uh looking at the South Korean index and particularly uh is grossly not only is it making fresh new highs but like when you look at the two components look at the Samsung chart break out to fresh new highs look at uh SKHEX holding up along its highs we haven't seen the AI kind thing where what's been driving the last leg break yet. So at least that's a positive for the bulls on on that element. But what it happened yesterday can't be ignored and that was the breakdown in the financials. Uh the XLF and the major money center banks took it massively on the chin. Not only did they report bad earnings back uh a few weeks ago that caused the first breakdown, but that during this period where the market was trying to rally, they had nothing but a pathetic flagging formation uh form where that showed zero accumulation uh zero bounce, failed at the 50-day moving average, and we just got this breakdown uh in the financials. So, like if we kind of break it down, JP Morgan broke down to its multimonth lows. Uh, Bank of America broke down to its uh multimonth lows. And then you take a stock like City put in a double top, legitimately broke its uh midpoint and is below the 50-day moving average on a two-day slam. Point is, suddenly Money Center banks, which are your quintessential beta 1 asset, suddenly cracked. >> Yeah. And you know, actually, I was just looking through my chat in my group here. Um, one of my subscribers passer by, he was saying that it's not just US and Canadian banks, it's actually UK and EU banks as well. >> It's across the board. >> So, are they snipping something out on a global basis that is scaring folks? But you know what bugs me about making that conclusion though Kev is that we haven't seen it yet emerge in widening of credit spreads on junk which is where I thought it would have happened before we would see the money center >> bank remember we talked about this and that the indexes the junk indexes are no longer the old the indexes of old and the reason that they're no longer the indexes of old is because all the stuff that was previously lowrated credit is now gotten sucked up by private credit. So the reality is >> credit, >> right? So the reality is that this that this index the high yield is in terms of the quality of it is the best it's been in a long time. >> So but you can see here this is Blackstone which is your kind of like uh private equity kind of names of this has been death this chart like >> a lot of the BDC >> back to liberation day lows. >> Yeah. Like my buddy Paul Apollo Macro has been, you know, talking about this for a long time and I got kind of shaken off my short uh cuz you know Harley Bassman started talking about how there's some good quality in there and I was worried that they were pricing these things in with way too much of a discount and then you know I'm not blaming Harley that's his opinion. He might ultimately be correct but I got shaken off and I shouldn't have because the reality is that these things are are trading like death and and nobody knows what to value them at and they just keep getting sold. Right. Nonetheless, so this this this is the backdrop by the way and let's just quickly touch on a couple things. First of all, up until today, the breadth of the market was okay. I mean, uh I wouldn't say that, you know, it wasn't making higher highs or anything, but back at the start of the year, we were 70 plus percent, which is healthy. Um and even during this mag seven weakness and stuff uh it was um holding in and it wasn't until the breakdown yesterday that there's a little bit of a sign of little deterioration but that sector rotation and breath were sort of the uh the story as in the S&P equal weight even up until yesterday was actually making 52- week highs and looking like it was rock and rolling which is now money's coming out of the mags and it's being sprinkled everywhere else. That sector rotation is a story we've been talking about and this chart was showing it. But this is the first kind of reversal day that one day doesn't make a new trend. I don't want to call an end to this. But if we see the breath of the market suddenly go down while uh while the mag sevens don't recover, that's when you have the serious deterioration in conditions because that means sector rotation is no longer dominating and maybe um uh uh raising cash is and that uh and that um we'll see whether that manifests because one day I don't want to already claim that this is a new trend but let's watch because uh because we saw that equal weight index doing really well. We saw um uh the um Russell 2000 doing very well and they have started to at least show a little bit of heaviness on the short term. >> Got it. >> Any comment you want to make on it? >> Well, no. And just back to this, you know, I'm still thinking about that XLP chart you showed. And although I'm kind of shocked because I didn't realize how violent the move is, I've been kind of counseling that and and talking about the fact that the MAG7s are so large compared to the rest of the index. When money comes out of those and goes into other things like gold stocks, like XLPS or whatever, the moves are going to be manic. And I think that this is just another example of that in that you shouldn't underestimate how much these other stocks can move once the rotation starts. Another example, the analogy that I give my members uh is uh like imagine you're in a speedboat going uh and the Mag Sevens not performing is like throwing the anchor over the side of the boat and asking why it can't go full speed. Well, you know, like in the end the mag sevens are that big of a waiting that how can the indicy even when the breath is wider, how can the indicy um make new highs and progress higher when such a huge kind of one-third of the S&P and twothirds of the NASDAQ 100 are those seven stocks. It's like it's so hard for the whole indicy to move when these things are being sold. I thought when you said the speedboat, I thought you were gonna pull up that analogy of that uh famous, you know, the seven people on the speedboat, the bald dude driving and the >> That's how it ends, buddy. That's how it ends when when when correlation goes to one in a risk off. That's the uh that's the boat bouncing. Um but uh but anyway the one thing to highlight uh is you know there's been numerous quants out there that generally have highlighted that m that they the belief is that many of the CTA triggers lie um around 6,800 right and so you know overall the systematic trading world whether I think the last number I heard is like a half a trillion dollars in size. I don't know if I got that right. You can correct me if I didn't. >> Nobody knows like the reality. >> It's something like that. But the point being that uh that a lot of people are estimating that the a lot of these triggers for degrossing lie around 6,800. But whether you're a vault targeting fund with realized volatility starting to pick up and uh and or the CTA is just getting their quant or technical triggers to to degross. Uh we're on the edge of the cliff. We haven't really fallen off where that becomes a feedback mechanism and uh and overwhelms the bid. But we're right there. And uh and the question here is is that are we going to see this market trip up a little bit uh at this point? What any thoughts? >> Well, yeah. You know, I I've been writing about this and I've been worried about it and I think that the reality is that >> it's cute that you said I that you've been writing about it like I would know. You think I'd read your >> Okay. >> No, I know you don't read it. I know you don't read it, but you'd be proud of me because I've been arguing that you should be buying protection, which is very unusual for me. And and I >> Yeah, you are. You should be proud of me. And not only that, I'm not cutting off the left tail. And I think that's something that people should really think thinking about >> and um be aware that >> now you're crazy talk. That's crazy talk. What do you mean? Like uh >> well cuz like I think you know I I counseledled this in terms of the precious metals trade for a long time. kept saying you might not want to cut off the right tail on the thing because the skew you know although the skew is attractive that we might be surprised about the sort of move that we get on the upside but I think that that might be the same you know scenario happening in stocks on the downside meaning that usually skew doesn't pay usually you don't want to be betting on that those overpriced far out of the money um uh puts being you know worth that to buy. But I I don't know, Patrick, there's a lot of things under the surface that are behaving very strangely. We're having all sorts of problems out there. The finally, as you highlight, we have the the leading stocks rolling over. Um, you know, and I wrote about the fact that, you know, the reality is that at times this is the final grasp gasp, but you see a situation where they reach for other things and then the whole thing rolls over together. >> Lots of danger out there. >> Can I tell you? Can I tell you what bugs me? >> What's that? >> What bugs me is that rarely does lightning strike twice uh in the same spot or in the same way. The market rarely ever drops the same way twice. And what is really crazy is is that this market is literally to the calendar date and from duration playing this out identical to the pre-liberation day period which is it's like it started topping out in October, November started getting heavy uh not uh be able to beat new highs uh all the way through and middle of February it breaks down and begins to drop and it's like literally following the analog to the tea. And is it this easy, Kev? Like, can literally we see lightning strike twice where it's going to literally do the exact same playbook the same way? And this is what bugs me. It doesn't feel like it's possible. >> Well, maybe it'll be worse. Maybe it won't bounce. Um, but in terms of uh in terms Yeah. Um, in terms of why that might occur, I I I think that you have to put a big weight on the fact that there's new seasonality with the issuance of these auto callables and the option markets. I really I really truly believe that the the issuance of those things is so important and is moving the markets more than people >> appreciate. So >> anyway, I just thought there was really weird newity that is occurring. >> Yeah. Anyway, I just want to highlight that the analog looks the same. It's insane. Like that that literally it's following the textbook um uh like in total duration, the topping, the timing, everything seems to be just following tick by tick the same thing and it just seems too easy. I hate when something looks so obvious. Well, the only thing I will say about this, Patrick, is that you're the f like I did notice that and I haven't, you know, spoken about it publicly, but I did notice it. You're the first person I've heard that's actually talked about that publicly. >> It's it's not and one of the things that worries me most is when when those sorts of analoges get fully priced in. It's what everyone's talking about, when everyone's passing around the charts, everyone is positioned for that. And and so far, >> you know, but this is why this is why our market how to listeners listen to the show. >> That's right. this alpha. >> They get this alpha. You know, this is >> Anyway, >> uh that's such a douchy thing to say. Um next thing we know, you're going to make a, you know, a thumbnail video with you with big bright eyes, you know, on YouTube. Check in for the this amount of alpha. Uh okay, keep talking. Anyway, uh so what I wanted to move on with briefly, let's just quickly talk about the economic news this week. Um uh the key thing here, retail sales came in weak. Uh we got the delayed uh non-farm employment which came in strong but this is the most sketchy time of the year because the seasonality uh always has that huge drop in the post um Christmas period and they seasonally adjust it and the question is what is the real number supposed to be like the it's it's always the hardest one because it's of the adjustment but it came in stronger the market kind of brushed it off and then we get a soft inflation number. Uh first of all, what's your sizing up of the data this week and and then I want to talk about what some of the impacts that happened from it. >> Okay. So, >> anything you want to comment on? >> Umployment, it's a random number generator. There's lots of different variables. I don't think that's mattered. Um, on inflation, you're going to be surprised to hear me say this, but I think that it's tending towards lowering inflation's is tending towards coming in lower than expectations. So, I'm actually like for I I was saying earlier, I'll take the under today when we were, you know, laughing about what what happens with the CPI prints. And one of the things that I've noticed is there's this CPI um this trueflation chart >> and um you know if anyone wants to see it just hit me up, send me an email and I'll send it to you. Um the >> I'm hitting you up right now. Send it to me. >> Okay, I will send it to you. But this true which I stumbled upon and I think you know some guys are talking about Mike Green might have been doing it and I and I made a chart of it going back. It seems to lead it's it's a it looks like it's a great indicator and it's showing you know inflation at 0.5 and a lot of smart guys that follow inflation keep telling me you know what the reality is we're going to we're headed lower. So what if instead of the inflation that everyone's expecting and is priced in? What if we get an actual deflationary weight like what if this is the start? What if the finances >> Yeah. What if the finances are actually financials are actually noticing that the economy is not as strong as everyone expects and that we're you know we might be rolling over uh from a kind of in a deflationary way >> right I I don't let's not use the scary word deflation I would say disinflationary >> okay disinflation like in the end that in inflation is not a problem right now and it's not and there's no reason actually to believe inflation is imminently going to be a problem. >> Well, I guess I'm going to push back a little bit on that because I think it's complicated because some of the commodities are starting to go. >> So, on the one hand, I understand >> that matters is oil, Kev. >> Yeah, but oil's doing well. >> Oil's doing well. >> Come on. That is not inflationary when we're just coming off of of multi-year lows on oil. No, but if we're talking about the margin chart, >> but if we're talking at the margin and we're talking about versus expectations, >> then it's it's it's it's headed the wrong way. >> Anyways, we'll see. I just I I think it's complicated. It's a scary it's a scary situation right now. >> I I I continue to say that people are underestimating the the intraasset volatility that's occurring, the the moves that are occurring. You know, we have even talked about the fact that a lot of the quants are getting absolutely destroyed um in terms of the factor movements and what's happening within the markets. People seem to be um uh positioned for the wrong sort of rallies like as you say, the reason that XLPs, you know, look like they're on a stick is because nobody owns them. Uh and these are the kind of environments that that where accidents happen. That that's how I look at it. And and not only that, like IGVs, like Patrick, like those things are down 30 odd percent and they're not bouncing and this was something that everyone owned and you know, software was going to eat the world and this is what everybody, you know, like it's not like you go pull up this the let's do it together. Let's pull up what's in here because it's not like there's some crazy um crappy stocks. Microsoft Oracle, Palunteer, Salesforce, Palo Alto Networks, Adobe in it, Crowd Strike, Appan, Service Now. Like a lot of these things are the old like uh kind of leaders that everyone was was touting and that everyone's, you know, accounts are stuffed full of >> and they've just gotten absolutely crushed. >> And so I look at that, I'm scared. So, and and Patrick, you you talked about the semis and you talked about how they rallied and they're they're still looking good. Yeah. >> To me, I think what's happened here is that a lot of these pod shop type places that, you know, need to be invested were long the softwares and thinking that the semis were expensive or, you know, or just long longies were long the softwares thinking that uh semis were expensive. And what's happened is as the the softwares have gotten crushed, they're like, "Well, we better go back and buy something." And they're like, "I'm just going to go back into semis." And one of the things that worries me is that when that cycle turns, when we see, you know, semis like earnings start to roll over and the and the and the market realizes that semis are still cyclicals, like the market is going to get absolutely annihilated, right? Like it's gone through. And like if you think about it, we went through we destroyed Bitcoin, >> you know, market took it. We destroyed software. Market took it so far. What happens when they finally go for like the Nvidia and like the final one? Like I I'm worried about it. >> By the way, by the way, since you're on you mentioned Bitcoin, is this uh is this time around when Michael Sailor zeroed? Is this the is this the >> I don't think I think he's actually smarter than that. he's not going to get zeroed because the reality is that I don't believe that his debt is due for a while. So, but one of the things I will say about this is that I suspect there will reach a time when Mister instead of trading at a premium to NAV trades at a discount to NAV and there will be all sorts of wise guy hedge funds that are buying it trying to pressure Sailor to sell Bitcoin and buy back stock. So, that's where we're headed on that. But you know what, Patrick? I haven't put in the thousand hours and I'm not part of the 0.01% of Wall Street that can truly understand this. So, you have to take what I say with a grain of salt. >> All right. There's the grain of salt has been taken. All right. So, uh, I Okay, so I want to talk about one of the big things that happened off of the economic news and, uh, and I've been trading it and, um, so far it's working, but, uh, particularly on the jobs numbers when I saw the fade, we saw the turn on sofer futures uh, in the post jobs number period. They, this is the December 2026. >> I love this. We've turned you into a store trader. trainer. Dude, >> dude, >> I used to talk about these things and you'd be like your eyes would gloss over. Now you're just like a junkie sitting around. >> I'm a junkie. I'm a junkie. But but like Okay, but so let's let's put it into context though. >> So the jobs numbers, whether they're hot or not, but look, retail sales came in soft. Inflation's coming in soft and uh and it was a seasonal adjustment on the jobs. Yeah. Overall, what you can see here by the stir traders is that the vote of confidence is a dovish pivot. Uh right, like uh they're basically starting to price in potentially another rate cut this year. Uh and I'm wondering whether this becomes a bigger trend particularly in any point if the stock market breaks. There is no bigger disinflationary pressure than asset prices going down uh that impacts everything and the the stir traders at some point are going to price in a far more dovish Fed uh in here. Is this a turn point in in the sofur futures is a puzzle to solve? I don't want to make it like I know but it is the first interesting time like we literally have gone through three months of watching paint dry. It was an awful boring period over the holidays into January in in the rates markets and it's woken up. The other place where we've seen that beyond that is the bonds and we saw a huge breakout in the uh in the 30-year and uh and I say it's huge. It's huge. But um look the the what we have seen in the bond markets. This is the weekly chart and this is the the looking at the ZBs. We have seen one big sideways consolidation. No matter whether you're bullish or bearish on the long term, it's been boring as It's been a sideways uh dead market. The implied volatilities on bonds have have gone down to single digits at one point. uh like the the move index V all of it's been collapsing and >> it's moving up and uh and >> first of all in terms of the V going down I think that that's actually a desired outcome from the administration they want V to go down >> they are trying to >> bottom line >> bottom line is the stock markets have weakened and while we saw in 2022 and we've and you've talked about over those scenarios where stocks, bonds, and the dollar all going down together, all that But for now, from a traditional intermarket perspective, stocks down, bonds up is at least from a traditional intermarket perspective manifesting here. >> Yeah, I would agree with that. But I I don't think the dollar has resumed that their typical relationship. But I agree with you that the traditional negative relationship between stocks and bonds has started to reassert itself. I I will. >> So the question is, is this a new trend? One of look this has been a positive three, four, five days. I never love to draw new conclusions in such a short window of time. But nobody gave a about bonds. I could not find a single person talking about it. And that's when I love it. And uh and like it it's it's like setting up in a a clean way and nobody gives a And this is well now clearly this is an alpha show. And now we're giving away the the secret sauce, but it but the point here. >> Yeah. >> The point here >> is it's moving. >> I I I agree with you. I think that they're starting to trade better. I still don't think the long end's the way to play it. And I actually like your sulfur call better. And I >> Yeah, like that's >> a better lever way up to to play it for sure. But that's that's the better call because ultimately I do think they'll panic and they'll panic and that'll steepen the curve because they'll go and they'll cut rates way higher, way more than folks expect. Um, and they're starting to trade that way. >> It doesn't even matter what the cuts will be. It's about the fact that the stir traders are going to start pricing in uh way more dovish fed and that move is going to happen fast. >> I was just laughing though. Can I just one second? I just want to say when you were complaining about nothing happening and then I was like welcome to the stir world nothing happens nothing happens and then complete utter madness for like you know a month or two and then nothing happened nothing happens right yeah >> it's the the way that these things work once we get the actual turning point like when they once they start turning back on the cuts it's going to get exciting and and if they're turning on the cuts because stocks are going down then watch out and and if that is the case in their training and and that's one of the things that I think we go back to. You know, a lot of people were excited when they were cutting rates and there was some really smart people out there that always be like, "Hey, be careful what you ask for." And like, you know, uh Suzanne Saunders from Schwab is one of my favorite uh strategists out there. And she would she would argue this all the time. You know, the the stock market is strong because they don't have to cut rates. And if they have to cut rates, then that's actually a problem. And I I think we should just remember that when we start getting excited about if all of a sudden we see the front end starting rally like in terms of we see those sulfur futures really take off, it's going to be because there's a problem in the economy and that like the most bullish scenario at the front end is actually negative for for risk assets. >> Right. Right. Well, listen uh that's it's it's spicy out there, buddy. things uh things are uh interesting. So uh I want to move on and let's let's talk about the dollar. The most important thing to watch right now but um >> I actually think it's really interesting where the dollar index stalled. Now I think the only currency that is kind of bucking the trend and doing its own thing is the yen and rightfully so that's being driven by yen monetary polic sorry the Japanese monetary policy and other things but the dollar and a lot of the other cross currencies outside the yen are very much following suit now overall just looking at this chart it looks bearish there's no uh I don't like I cannot look at this chart and tell you something looks bullish about this chart. Lower highs, lower lows, breaking key support lines, rallies failing at the moving averages and the Fibonacci zones. Overall, it hasn't even upticked in the last few days. So, as of this moment, there is nothing that can be said bullish technically just on this chart. >> Okay. >> But what but there are some interesting things. >> You're gonna find something. No, no, no, no, no. I am not finding something. I actually am looking at the dollar here purely from a neutral perspective for a moment. Now, the the low that came in on the jobs numbers around 9650 happened to be uh exactly at the 61.8 retracement like Fibonacci work, right? It's a it's a bit uh it came right in there and that becomes a a phenomenal line in the sand because if the dollar index breaks below 9650 then uh the it's fallen off the cliff again and there's another leg going down to 94 probably on the dollar index but it's got to trip up this support line. At the same time, the previous high, which came in at the 50-day moving average, which is right where where it is, would be the failure point of a dollar where a dollar bull reversal would become technically very evident. And so the way uh both of us as Canadians, the way we want to do is look at this from a a hockey perspective, which is that the consider this area to be the neutral zone on the on the rink. >> Yeah. Be careful of the neutral zone trap, though. Be careful. The neutral zone trap. >> Neutral zone trap is is is a tough one. But the way I would put it is that you don't want to in any way conclude that the Bulls are playing offense unless we're clearing uh the upside zone here and the Bears are playing offense if it breaks below. And the way I look at it is take at this moment at least a neutral enough stance where you can pivot where you where which way it goes you want to be able to have acknowledge because if we do go off into a riskoff cycle yes I understand money being repatriated out of the MAG7s and out of the US dollar internationally could drive the dollar lower. don't hate that thesis but I want to see it technically confirmed and uh if that and to me that's a breakdown below that this uh this uh 9650 level to saying that the dollar has re resumed a new leg down and if we go into a riskoff cycle where suddenly dollar plays safe haven even if you don't like the thesis it would happen above 98 and uh and at that moment you there's just no denying that something is underway and so I'm taking a very neutral stance on the dollar here. I don't have any strong conviction uh at the moment and I'm going to let the technicals do the talking in this situation because I don't think my opinion is strong enough to uh to take um it off of that and so I'm going to let the technicals talk. >> A true technical analyst buy it if it goes up and he's gonna sell it if it goes down. >> I'm just giving you a hard time. Okay, let's go. Keep going, buddy. Anyway, so uh so the uh the point though is that I think it's is that but what I do want to talk about the yen for a moment >> uh and I'm going to do the yen US dollar uh rather than the traditional US dollar yen pairing >> uh because I want to look at it from a yen bullish perspective. It's easier when it you see it as a bottoming formation. I'm going to put on a weekly chart and obviously the yen is at a two-year low been bouncing off a key support. The intervention came pretty much exactly at the levels where interventions have come before. And what what degree of an intervention this was, you can also be uh give your two cents on, but it is off of a major low uh supporting here and uh and there could be uh a carry trade unwind. Now, I don't think it would have the same drama as it did uh back a few years ago, but will this become a flows thing? Will will a capital flows element come into play here and the yen rally? I think this is a super interesting thing to watch. The fact that the yen reversed the way it did off of this retest of its low makes this the an interesting case that we just witnessed a fourmonth bottoming formation on the on the yen. And this is probably the most interesting currency pair of them all at this point. And the fact that you abandoned it a few months ago. >> No, I didn't. I you were saying I had to admit I was wrong. I said I was admit I was wrong, but that doesn't mean I gave up on it. >> You're I'm a huddler. I'm I you know you know you know you're gonna be able to spend all this yen the next time you're in Japan for >> that I just chose the wrong one. I was just admitting that I was completely and utterly chose the wrong currency to be bearish on. But uh or to be bullish on and bearish on the US dollar. The one thing I will do is I will plead the fifth from for fear of guerring my trade by saying anything that remotely >> okay so nothing else nothing else to be said then all right let's move on everyone knows everyone knows it's all right now anyway listen uh is there is there anything you want that I forgot to talk well it's not gold and silver Jesus holy cow we my god can you believe it actually our last episode >> uh was literally day before the big like the the big >> how could we not talk about I can't believe we nearly like what is what are charts did I forget oh obvious but uh but yeah like we recorded it right up along the top uh the one thing that you know and you've heard me talk about it and I know you uh fundamentally agree you give your own perspectives on it uh but the one thing that I always highlight is when there's parabolic uh acceleration to the upside of any asset. Um, the one thing that becomes much more predictable is time versus price. Like price, you don't know how high something in a parabolic phase can really go. It could have been 6,000. It could have been even 7,000 on the upside of gold in the final parabolic blowoff phases. But when things accelerate hockey stick, the one thing that uh is far more predictable is that it usually will end within a very small window of time as in like a few weeks. And that that was something that was a part of my thesis and I'm not I'm trying to remember if I shared that with you back then. >> You called it well. I think we were you were saying like yeah >> but what what so what is the interesting things I want to highlight on gold? Well, you know, again, like if you take the low to the high uh so uh so let me just do it this way. You know, we had basically uh a fib retracement drop in, uh in gold, which was more or less a 50% retracement of last year's rally, right? uh and so the the uh the the bounce has come to a very typical retracement zone. So overall what I would generally uh say here is that after a blowoff top it is usually quite traditional for uh an asset to uh consolidate and absorb the previous six months of price movement and end up actually trading far more rangebound far more boring and far tighter ranges. I think that uh the gold in the past after its first corrective low did not make lower lows. Be interesting to see whether gold does that this time around where 4500 now becomes the low end of this trade range. And while gold may trade back to 46 or 4700, uh 5200 very likely could be a ceiling. And we're going to probably spend the entire first quarter just chewed up in a bouncing tri trading price action on gold as it absorbs that previous parabolic move is my starting base case. Do you want to push back on that? >> Nope. I I'm with you. I listen I I I'm hoping that we get rid of the the the speculative fever and we go back to the the the real reason for the bull market, which is the central bank's buying. And I don't think that the central bank buying was what sent gold up there. In fact, I suspect that if I, you know, if I was Bank of China, I I definitely wouldn't have bought any. And I might even even have sold some as it turned to try to break it because again, to me, the most important thing that China is doing, they want to buy as much gold as they can over the next 5, 10, 15 years. They're not interested in the thing rocketing up right away because the reality is they're trying to buy volume and that's who you're trading against. And so to me, it's just a matter of now shaking out these these speculators and we get back to them being there to buy it again. I don't know what that number is, but I do suspect there will be a sentiment point where people get fed up with it and get bored with it and go on to the next thing. And at that point when everyone's saying, "Nah, it doesn't work. It's the end of the market." That's when you start buying it because that's where Bank of China will be standing in there and just saying waving it in. >> Generally, generally there's a debasement drift which is essentially money fiat money loses value. Gold naturally over the long term rises and at the same time central bank buying no and central bank buying is a a positive tailwind for that. So gold will structurally be rising over time. This is a fact. But the thing is is when >> it's a fact is it is it is it like the Bitcoin yield? It's just a fact. It has to occur. >> It's a fact. It's a fact. This is like put >> you know I heard there's a Bitcoin yield too. >> Okay. So point though is is that when gold goes and and literally r rallies 50% in a year uh there's a point where this is no longer trading based upon uh you know that logical stream but rather speculative money is coming in and the speculative money now is being squeezed out. That's what it really was. What a conclusion I want to get to. And uh but what's interesting is the implied vault of gold the last go around in October only had a 30% implied but this time around there was a crash to the upside as the gold implied went to almost 50% on the upside but it already uh uh uh trimmed 20% off of that high. So like we see ball normalization finally coming back in on there. But the crazy one had to have been silver. Like let's quickly do this and talk about them as a aggregate. Silver obviously goes and does a double in a span of of like a few months. >> Yeah. >> And crashes in one of the most spectacular like a a peak to trough within a span of days. The thing dropped 48% off of its high. Like a it's a having in in literally a few days. But what was insane was gold implied went to 120%. >> Silver implied. >> Silver, sorry. Silver implied went to 120%. >> Kev, I'm gonna make a confession here. >> Yeah. >> Know what I did on the SLV? >> You didn't sell vault, did you? >> I'm so proud of you if you did. Well, but no, no, but this is insane. >> Yeah. >> The $210 strike calls. >> Yeah. >> Were paying $57. >> I I looked at it. I did I did something similar, too. I sold the 180s. I can't remember what they were. And I bought the like um 80s. I think it was something like that. I bought the 80s. The skew was just obscene. Like >> tell me you ratioed it. Did you ratio it? No, but I wasn't long go silver, so I was just straight outright short. I was buying a put and selling a call. So, listen, I did it. The only reason it worked is because I only did like just little shits and giggles size. >> I I lean into this, but I did it as a ratio ratio call spread. And so, I I I bought a very small amount of at the monies against a very large naked position up above >> to kind of give a hedge and it it worked. But like I the fact that they were paying >> your underwear getting like worn because of the all the extra weight that you're carrying in there. >> Wanker. All right. So, but the but the point being that it's insane that we saw that kind thing and look how it's normalizing. We went from 120 already back to 70. I don't think that that the consolidation is over until we're back to the trade ranges of implied where we were before where everyone's just going to get bored of it. Things are going to grind. Things are it's not going to get the same speculative attention. Things are going to normalize. I think the next major buying opportunity in gold and silver is when no one gives a and that's going to be when everything reverts on all this. >> Yeah, I'm with you. I'm with you, buddy. >> All right. But uh uh other than that uh crude oil now la yesterday was a bit of a dip but overall it's staying above its 50-day moving average and we have seen the pattern of all dips being bought. To me the line in the sand for it to stay bullish is the 60 handle. long as old dips are contained into the 60s and bought on dip along the way, then I think that that you have to be still fishing to see whether or not um upside ball is there. What was crazy was the skew. There was um a huge right tail skew being built into the crude uh uh options. Uh and obviously oil volatility was also quite elevated. What I'm I don't know how to size it up, but like gold. So sorry, oil didn't have a move like gold and silver did, but yeah, we got >> maybe it's still coming. >> Don't fade the skew, man. Don't fade the skew. It's my new line. Don't fade the skew. >> But but V did go from 55% down to 42% in uh in the thing. >> Not over yet. Like it's >> this is like we're still I think well the reality is that this is the Iran Iranian premium >> right? Like for a little while there everyone thought it was going to happen on the weekend. Like I kept hearing it's this weekend. It's this weekend. >> Even recently I heard some guy that supposedly is a smart guy saying oh Netanyahu just came back from the White House. He's gonna they're gonna do it tonight. They said you know like they were gonna do it last night or Wednesday night or whatever it was which we all know is You only have wars on the weekend when the market's closed. Everybody knows that. >> Well, let's be realistic. They do do that. There's a there is historical precedent for this. >> Well, I wouldn't use historical. There's recent precedent for this. >> Recent precedent for it for for it to happen that way. All right. So, >> most presidents don't worry about the stock market when they're doing geopolitical things. You know, it's kind of unusual to pick like, you know, well, the listen the the optimically from a battle point of view, it would be great if we went on this Tuesday, you know, but no, no, no. Let's wait until Friday >> when the GlobeEx is closed. >> All right, let's talk about the widow maker. >> No, not gas, our friend. >> Like, what? Like I am shocked that we didn't get an optionellers.com event uh announced by somebody during >> we did get something. Uh let me just click on this. So they were sharing this in my chat. Uh today's edition of hedge fund speak. Uh blueest Capital Management senior natural gas trader Alex Watson and several analysts have left the firm as extreme price moves in markets have dented profitability. people familiar with the market said, you know, like that Winnie the Pooh thing where it's like there's like two ones, one in a tux and one is, you know, just regular Winnie the Pooh and they put blue up and then they put that's the regular Winnie the Poo poo and then the one in the tuxes extreme price moves in markets have dented profitability. So when you have a bad trade, Patrick, that's the new line. Extreme price moves in markets have dented profitability. >> Dented. It's just a dent. Just a dent. >> Tiny little dent. But everyone's fired. >> Yeah. >> So, there were some casualties. We shouldn't be laughing. >> What was crazy was that it literally the squeeze was only on the front month contract. Like what was crazy was that the fact that uh you know like when you when you looked at it, it was the uh February contract that made the entire move and the March contract barely budged. >> I know. And you know the real picture about that is that stupid boil and whatever the other opposite one of boil is >> in Febs. >> They weren't in Febs. They they're in the more liquid ones and so they weren't trading FEBs. They were trading and they usually sometimes they are in the front ones. So there would have just been it would have been even spicier. Patrick, if this had had Boil owned uh Febs >> then though or yeah own FBS and then what's the other side of Boil? What's the downside one? Well, >> anyways, whatever because you have to look at them as a whole because they're both negative gamma. So, whatever existed, but they might have zeroed it because like how much did it go up and down >> on a daily basis? What was the most what was the the biggest daily move? >> Was there a 50%? >> Probably this g probably this gap where it was up 41%. So, it wouldn't have zeroed it. It would have just been an 80% down day for the for for the oil or the opposite of boil, >> but it would have then gone even further because they would have had to hedge more and more. So, it would have been spicier. >> So, listen to that gas traders. Next time you're doing this, let's do it in the one that Boil and the other guys own. >> But what you know, it literally does not disappoint. Widowmaker like literally like I why not have a strategy on just owning the tales of Nat Gas because I think they're No, no, but it's priced for that. >> Go look at the tails. It's not like the market hasn't figured that out. >> I think if anything tailed >> Yeah. I think if anything the tails are overpriced over time because the reality is that >> if if they weren't then then people would do what you say. Yeah. Yeah. >> So, anyways, I I I listen, it's a spicy move. One of these days, though, Patrick, can you imagine if it doesn't come back? Like, we get a a real move in that gas. >> Yeah. >> Right. It's been a long time since What are we looking at there? >> This is wheat. I wanted to talk about next. >> Okay. Let's >> Let's move on. >> Let's talk some wheat. What but I was going to say like we had the uh Russia Ukraine war uh create the uh the top and then the Eiffel Tower formation form perfectly on grain prices and and so we have this huge period where basically not only was it a vicious bare market in 2022 23 in wheat but it's been dead. It's been dead. Nobody gives a about grains anymore because there there's zero pulse in this and and uh and they've been left for dead. Is this year the year of the grains? We got a really interesting wheat turnup here in the last week and it's just coming to some previous overhead resistance. The egg stocks have already been working great. Stocks like deer are rocking and rolling on the upside. Um, I I'm starting to be curious. I love it when nobody talks about this and uh and you're seeing this kind of price action. Anyway, I'm just curious whether or not that this is when we start seeing the grains work. >> You know, Patrick, I don't know what's happened to you. You're trading stir now. You're trading like wheat and corn and stuff like you're turning like you're turning into me. Uh, this is bad news for you, buddy. Um, one of the things I'm just going to say about the about the grain about the AS in general that scares me now. I don't know how to I don't know how to deal with this, but the reality is that with um Trump and all the uh tariffs, it ends up being that you could have a situation where US wheat is like in the dumps because they've nobody's buying it because of tariff issues and things like that and European wheat is flying. And so one of the things I just want you everyone to think about is that wheat isn't wheat anymore. And with the end of globalization and the the the reverse, sorry, not the end, the reverse of globalization and the increasing tariffs that we're seeing, you need to be aware and trade different markets. Like remember how we saw copper trade? >> Solution is that Americans need to eat more baguettes. like this is uh this is uh there has to be internal consumption >> internal consumption. Well, the reality though is America is is a global egg exporter. So as the world tries to, you know, fight back, you could see a situation where tariffs are put on that and therefore it ends up being that the farmers pay the price and the reality is that Europe, US wheat and soybeans and things that we trade don't go up and the world the rest of the world is going up. So that's my only my only kind of thing is >> you know when you're trading technicals you're not like thinking about actual fundamentals anyways, but just just be I don't want to confuse the the kind of message with some fundamentals. >> I'll call on your thing though fundamentally which is that you know the tariffs are geopolitical and political jostling. But if there became any reasonable gap between prices of wheat in uh in Europe and uh and America, very quickly there would become political pressure in Europe to to lighten up on the tariffs so that they can take advantage of bringing prices down in Europe. It would be short-lived. There is no way that they would allow politics to get in the way of of um of them like taking advantage of a gap like that. I It would be shortlived. >> I'll take the other side of that. Patrick Patrick thinks that government officials are going to do the right thing. Uh I'll >> not the right thing. Not the right thing. The polit It's political suicide. >> I just I don't think most people would realize. >> And like when you think about it, wheat like the actual wheat that goes into your bread, it's not as much as you think. That's not the major component of it. >> No, in terms of the price, in terms of how much the component like it like so, so wheat doubles in Europe or whatever. I don't know even that would be a lot. But let's just imagine it goes up 30%. Big >> difference. At 30% it goes up in Europe and then US it goes down 20%. US trading levered long futures, it means everything. But for the average person, it means very little. >> All right, but I'm done. >> I have nothing else to say because you're get you're getting c You're getting a little uh uh >> philosophical. >> Philosophical or fundamental? That's the problem. Getting a little fundamental. >> Yeah. Okay. Um >> all right, folks. Thank you very much for tuning in. It's always a pleasure to have you on um bull market, bare market. We're just happy you spend some time. Uh now, stick around for Oh, wait. Actually, before I do that, Patrick, where can they find you? and more importantly that great YouTube show that you have with the thumbnails that are just out of this world. Um although I have noticed that there's no fire in behind you recently. Uh I'm going to have to talk to Danny. There's there needs to be more fire behind you. >> Listen, Danny has been hired to get me more views. He's doing what works. It's it's just the nature of the thing. You can you can come and check out the amazing thumbnails at patrick_reszna. It's just worth it. Just the thumbnails alone. Forget the alpha in the actual videos. It's it's literally the thumbnails that make the difference. >> Yeah, you want to subscribe just so that you can see on your feed. It pops up and you see like, oh, there's a just a high quality thumbnail. the world is ending and now I don't even need to click it because I know the world's ending and that this is the the biggest thing that's ever happened in the markets just happened this weekend so therefore I don't need to worry >> well listen the one thing I can I can say though if you can get past the puke point of the thumbnail >> the analysis tends to be very similar to our conversations so you just have to you have to get past the gag reflex of the actual image and if you can do that and click on it. There's some actual great content. >> Some people say that that's the true alpha is actually all in in Patrick's channel and he doesn't share any in here. >> Okay. Um, where can they find you, buddy? >> They can go to the macro tour.com and listen bare market bull market where I just happy to spend some time together on this crazy ride. Now, stick around for the after show. >> All right. Danny is going to be audio only today. >> Shocking. A shocking >> He doesn't want to show his face after those thumbnails. >> That's right. He's embarrassed. >> Absolutely shocking. >> Shocking. What? That I'm the ragging on your thumbnails. >> Exactly. Yeah. I'm I'm making Patrick millions here. A >> million. >> Here you are. Here you are coming in here putting me down. That's not like you, Kevin. >> I I just had a mean streak today. I'm just I'm just feeling saucy. >> Yeah. >> Yeah, >> I can tell. >> Yeah. Okay, Patrick, what about this beer early? We got to get that done. It actually looked good. It was empty. >> Okay. You give us a rating. It was good. >> It was actually a very good. You know what it it's uh it's a very much just the like obviously Paraguay is a very hot country in terms of temperature. So it it just like uh your traditional kind of Caribbean beers. It's like a a it drinks like a a clean summer refreshing drink. Uh like a Banks beer or one of these other kind of Caribbean ones. Um, nice, clean, solid. Uh, you know, for the type of beer it is, uh, I'm gonna give it a a 7.6. >> 7.6. All right. >> What's the temperature there, by the buddy? >> Uh, 37°. >> Come on. >> Is it really? >> Yeah. Yeah. >> Yeah. >> And for those that are American friends that are going, that doesn't sound very warm. He's selling us in Celsius. >> In Celsius. >> What's that? Like 110. What is 37? >> Yeah. It's It's hot. >> 37. >> It's hot degrees. >> Luckily, the uh the hotel >> Yeah. But it's like, you know, the air conditioner's going. It's like I I I I'm doing a lot of work. So, it's not like I'm being tortured outside. >> That's why the shirt is popped. I knew it. That's why the shirt >> The shirt is popped. No, you know what it is? The shirt is popped because he saw Rick Reer. You don't know this, but Rick Reer is this black guy and he goes on CNBC always and like it's always depending on how well the bond market's doing, it's like two or three uh buttons undone. So, >> absolutely like you know, >> well, it could also be the fact I may add fire to the thumbnail today after this recording. So, I think >> Yeah. Yeah. He's got I think you have to add fire. >> Yeah. >> I'm surprised that you don't add fire each time. Well, because you can't overuse it, Kevin. >> Oh, okay. >> You got to change it up. >> You got to change it up. >> You got you got you just don't know these things, man. It's >> I I'm not very good at the thumbnail jokes for sure. >> Kevin, so you were skiing up in Whistler. >> I was uh It actually did not rain top to bottom for once, so I have to take back everything I said. Well, not really, cuz it proceeded to rain almost all the other days. Um I did learn something. something I was, you know, thank you very much for Mike Campbell for having me at this wonderful conference. Uh, our friend Victor Adair was there, Tony Greer was there. It was just a terrific time. But I I did go a day or two early, Patrick, you know, talked to some of my subscribers and and clients. And um I've I think I've learned the trick about Vancouver is that they find out when the Easterners are coming and they schedule all the rain for the official times that they're going to be there. And when I snuck and you know in and had just one extra day, I got there and it was the most beautiful day. You know, I left Toronto was minus 25 with like two feet of snow and I got there and it was 9°, sun's shining. I was like, "This is no wonder everyone moves out there." >> And then it started raining and I was like, "Okay, send me back to the cold." >> Yeah. Yeah. >> Oh, you know what? Like, but it's it it's like ridiculously cold out in Ontario, isn't it? like you guys all that snow. >> Yeah, there's a lot of snow. It's strange. Like uh they're sending like um dump trucks to the streets, Patrick. And like so they they had so much that they was kind of they needed to pull it away. You know how there's that big mound of of snow out by the um Allen Road or whatever it is. It's the highest it's ever been. Uh, and one of the things is we have this joke because so for those who don't know, they they take all the snow from the streets and they pile it up in this old airfield that's kind of mid Toronto or a little slightly north and you can drive by it on the highway and there's always a, you know, a dispute about or not dispute, there's always talk about how long till it melts and you would think that this thing would be like, you know, done, right? you know, May, you know, you get a hot day or whatever, and it goes well into the into the year. And so, there's talk uh like that we might actually have the kind of uh the glacier event on our snow pack cuz it might make it through the entire year into the next year. That's how much snow we have this year. >> That's insane. >> Yeah, it'll be funny. We're going to have to do it. We're going to have to get >> I'm not going back. >> I'm not going back. >> I know. You're sitting there and you're 37° and you're just like >> you're not going back. But you are coming back and we're going to see we're going to see each other. >> It will it will be nice. >> But I last week uh while you were freezing your ass off, I uh I was down in Mexico City. It was uh it was pretty sick. >> Oh, I've never been. Is it nice? >> Oh, it's it's honestly uh one of my favorite North American cities. >> Really? >> Uh absolutely. And uh and uh yeah, I've been this that was my uh fourth time being there in the last few years. But uh this time around was awesome. I was down there with uh with my inner circle and we were trading. But we went uh on a uh a little trip and we uh basically went to the Temple of the Sun and we went uh on a balloon ride uh basically to to check out the temple. That's uh it's this temple right over here. uh that that's the uh the big uh uh one that they have there on Mexico City and uh it was just an absolutely once in a-lifetime opportunity. It was it was so awesome. Uh I highly recommen Patrick has posted this picture that one of his members has taken and it looks like it should be out of National Geographic. >> Like literally you should be sub you should be submitting that for for consideration for the picture of the year >> and um Sorry. Go ahead. >> Epic International one of the members that uh that actually took the picture. I my camera skills are nowhere near enough uh to to be able to capture something like that. He just uh he scored the money shot. >> Do you want to tell Can you say his name or no? >> Uh George. >> Oh, George. >> It was I'm not going to say that. >> No. >> But uh but George nailed it. Like uh just amazing picture. Uh but it was but it was so awesome in person. Like just uh we went up into the air at 6:00 a.m. so that way we'd uh we'd be there for the sunrise. And uh it's it's honestly highly recommend it. If anyone uh is heading to Mexico City, hammer the uh balloon ride in on the thing. It's totally worth it. You know what you um it just you feel like when you're saying that um all it can remind me is that you know that song you're so vain. Um one second and not that you're vain but it's like um so if we pull up the lyrics it's like what was it? He drove or is it something about Learjet? Oh yeah. Then you flew your Learjet up to Nova Scotia to see the total eclipse of the sun. That's kind of feels like you. >> You're just like going around the world doing crazy stuff. >> By the way, do you know who your Sain's about? >> No, >> you probably won't know. Danny, do you know you? Danny won't even know the song. Danny, do you know the song? >> Sing it. >> No. >> Good way. >> So, you don't know. But anyway, >> anyway, so the song, she's never admitted it, but it's pretty it's it's pretty um well known that it's Wor Bey. So when you hear that song next, it's it's about Warren Bey. >> He was a a famous uh Playboy philanderer flander philanthroper. >> There you go. >> Whatever. Anyways, okay. >> All right. Let's wrap. >> All right, folks. Thank you very much for tuning in. We'll see you next week. Stay safe. Trade smaller. It's scary out there. >> Cheers, everyone. Byebye.
ROBIN HOOD ON CRACK (Guest: Brent Donnelly)
Summary
Transcript
Hit it. Friday, February 13, 2026, episode 285. I'm Patrick Sesna. And I'm Kevin Mureer. This week, we are excited to have Spectrum Markets Brent Donnelly back on the show. We have a fascinating discussion about FX interventions, the dangers he sees in the stock market, and what his magazine cover indicator is telling him. And then, I don't know about you folks, but in this topsyturvy world, I feel a little like the legendary Bruce Dickinson, except instead of needing more cowbell, we need more talking charts. Baby, we need more cowbell, baby. And folks, we might even uh drink some beers along the way. So, uh Kev, I'm drinking the Pills and Chop. I'm out here in Paraguay. This is like their Paraguayan beer. And uh I'm I'm gonna give this a go. And let's let's see. >> It is um you're on the same time zone as me, right? >> No, no, no. I'm actually two hours ahead. Uh so, uh so it's like one o'clock right now. >> Okay. Because I was going to say it looks like you've already had a couple sh Let's not say anything else. All right. Uh Kev, give us the um uh the disclaimers, buddy. >> Nothing in this podcast should be viewed as investment advice. Listeners should consult an investment professional before making any decisions regarding topics mentioned in the show. Side effects of too much huddle may include the tech leadership extinction event, the software valuation implosion, or the cloud growth reality shock. >> I think we we're just calling a market bottom on that space by saying those right there. But anyway, let's let's get Brent on. It's our great pleasure to welcome back to the show Brent Donnelly, president of Spectrum Markets, author of the AMFX and the Friday Speedrun and also the podcast, the terrific podcast Macro Trading Floor with Macro Al. Have I got that right? >> Yeah, that's right. Y >> great to be with you. Sorry, great to be with you. Thanks for coming on the show, Brandon. It was great for you to be back. >> Well, we are with each other to in a sort of virtual way, I guess. >> That's right. And the other thing is that for those who are looking at us, uh we're both Canadian. We're both uh follically challenged and uh I just want to assure people that we there are people that aren't Scottish and Irish from Canada that look look like us. We don't all look the same. I personally I I don't know about you, but I'm feeling like I'm going through my Farley Moit stage. >> Well, that's an obscure reference. You got to >> That's right. the Canadian tragically hip and more well-known. >> Okay, let's get right to it. We got a lot of fun things to talk about. Start with the yen. Um, and for those who don't know, um, Brent is the the old axe in terms of yen trading. I can't tell you how many people I've stumbled across over the years that start telling me about like, "Oh, Brent, he used to trade like just size." Now, what bank were you at again? >> Oh, man. So, what bank wasn't I at? I I was the main places I worked were uh RBC, Namora, Lehman, and City. >> Okay. >> And then I worked at a hedge fund for a few years. Um and yeah, most of that time I was a market maker in yen. So the craziest time was Leman because in those days there was two things happening at the same time. So one was correlation trading was like super big at that time because there wasn't as many algorithms and people were just a lot dumber in that time. So you could make make a lot of money just trading correlations if you knew what was correlated to what, >> right? >> And in 2007 and 2008, the tightest correlation to dollar yen was Lehman Brothers stock. So I was working at Lehman Brothers as the dollar yen trader, like watching watching Lehman Brothers stock go to zero and like wondering how much dollar yen I should be short and then what's the point because I'm not going to get paid if it goes down. So >> reference error in Excel spreadsheet. Uh so one of the things I was thinking about was when you think back we had this situation where the there was some intervention and I'm going to get you to speculate on what would happen but before or what did happen in terms of the intervention or whether it even occurred or the checks or how it works but first of all did you ever trade against the Bank of Japan? >> Yeah. Yeah. A couple times. Um in 2011 they intervened uh after the earthquake. Yeah. Yeah. >> Then they intervened again. Um, actually in 2003 they intervened buying dollars as well when I worked at RBC. So, >> all right. I want to know what that's like because to me that feels just wild. Like they phone you up and they just ask you for size and like they want to move it. So you show them way away and then you show them this price and I guess you can do a certain amount. Just walk us through like kind of what those experiences were like. >> Oh man. So, I mean, I don't know how far into the weeds you want me to go because there's a couple of crazy ones, but in 1998 was actually the craziest one because it was the they were selling dollar yen at that time. It was when long-term capital was going under and long-term capital and tiger and all the funds had these massive dollar yen positions because it was like free money carry trade. You were making 4% if if it didn't move. And but the weird thing was just this I'll try to make it short because I don't know if this is interesting. >> No, no, no. and people are going to love it. Like this is this is great. Go. >> It's just so in the weeds. But the way at that time that that FX worked was it was still mostly voice brokers. >> Okay. >> So in order to trade you had to like pick up the phone and say like the guy would be 90 95 you say 100 yours or whatever. >> Yeah. >> But EBS had started which is the electronic brokerage system >> right. And as kind of like a I don't know if it was an experiment or what, but the Fed decided they were going to intervene on EBS, which is weird because like it could be 90 bid in the bro in the voice broker and they're selling at 60 on EBS, right? >> But then the even more crazy thing was I worked at Meil Lynch at that time and the people in credit had not set up the Fed in EBS. Like every counterparty has to be set up in EBS. So like if I want to trade with you know repnat Chicago or whatever they have to be set up in EBS and they had never set them up. So it was basically trading like 100 points below the voice brokers but we couldn't trade with the Fed because we didn't have credit with them. So we could see the offer but we couldn't trade on it. So my boss was like losing his um because it was basically like this it was an insane arbitrage um like where people were making like millions of dollars on it. Um, but the funny thing is, so they actually don't usually come in in size. So what happens is they'll the phone will ring and it'll be like the trader at the Fed, okay? And they'll just say like dollar yen and 10 and like say it's 6065, you you don't show them a stupid price because it's the Fed. So but you just start buying as much dollar yen as you can if they're, you know, if it's at the lows and you know they're a buyer, right? So essentially the second the phone rings you're just buying dollar yen and then you know you make whatever price to them it's irrelevant but then a lot of times they're actually dealing on the machines and dealing in the banks at the same time but essentially like if you're the first call you have like one of your best days of your career and if you're one of the last calls it's already up 250 points and then you're like oh the bankage man or it's the Fed usually the Fed's calling I'm going to buy dollar yen and then you you pay the tippy top and get absolutely wrecked. So that that happened to me in uh in New Zealand dollar actually one time when I worked at Leman, I was trading Kiwi. It was what it's called. And Friday at like 3:30 p.m. Kiwi had dropped like 200 points. And it was like Kiwi was going crazy at that time because it yielded 10% or something. And the phone rings just like my personal line and it's like, "Hey mate, it's like so and so from the Reserve Bank in New Zealand. Uh what's your bid?" And and it was like 100 kiwi. And I I for it took me about five minutes because I thought that it was like a prank or something and then he's like, "No, man. I need your bid." Because he had my number from like my email signature or something, right? >> So, but it had already dropped 200 points. They had already called like five other banks. So, I sold like 300 Kiwi, 300 million Kiwi to for his 100. And then, but I was the last person selling and now it's like 4:30 on Friday and I'm like short 200 million Kiwi going into the weekend. And I actually called him back and said like, "I can do another 200." And he's like, "No, we're good, mate." So, I lost. I think that was actually my worst day at Lea Brothers. Um, so usually when they come in though, it's just a lot of chaos. And then now there's different ways like the Swiss National Bank, obviously, they just left a bid for Infinity uh at 120 in Euros Swiss for a while. So, sometimes they'll do it on the machines and stuff, >> right? >> Um, but this time there was no actual intervention. So, like the two things they can do is they can do what's called I know you know this but for people that some people that don't um they can do what's called a rate check which is essentially they call up and say like what's your rate in $100 yen and you show them but they pass and they don't trade but it's like a strong signal of hey we don't like where the market is right now. So, we're sending a message to the banks and then they usually tell the banks like go tell all your clients that we called, >> right? >> And that's what happened on whatever date that was, Friday, I don't know, like I guess probably January 31st if I'm not mistaken. >> Yeah. >> Um, and it was the Fed that called, but the only reason it's the Fed is that, you know, the Bank of Japan doesn't have phone lines to every single US bank necessarily in New York. So they call the Treasury or the Fed and say like, "Can you guys do a rate check for us on our behalf?" And then the Fed desk calls the banks and the and then obviously everyone's like, "Oh, shoot. Okay, I guess they're going to intervene." But then they never intervene. So dollar yen went like it went down a lot that day and then it went all the way back up. But in the end, people love to like say, "Oh, the market's bigger than the central banks." But like they have a lot of ammunition. So like yes in the long run if everything stays the same they can't hold it forever but they can hold it for a long time. So like they sold in 2022 they sold in 2024 and they sold this year and all at the same level around 158 160 and it never went back above. Like I have I think more respect than a lot of people for the central bank's ability to hold it because all they're trying to do is like they're not trying to make dollar yen go down to 100. They're just trying to make it stop going up. And generally they I think are pretty effective. And the the record shows the Swiss National Bank is like the massive exception to that because they've you know there that's been a complete clown show. Like they've >> Yeah. >> Well, the Bank of England wasn't very good either. >> No, that's true. So, it it sort of depends on the situation. Like those those were kind of unusual situations in that they were trying to defend pegs, right? And markets will just come for your peg because you're just you're holding a market out of equilibrium and essentially pro like showing a bid above where equilibrium is. So the market just comes for that like Soros came for it or or whoever came for the Swiss peg. But when you're just selling into a rally but you're not guaranteeing any level, you know, you can do that five six times and hold it for a year. You know, you just, as the Swiss National Bank showed, you can't hold it forever. But what they're hoping to do is like hold it and then some do some policy changes that will then help with you know maybe asking the BOJ to hike a bit more or using reserves to you know do asset switches. And then the other thing that I think has happened is that in Japan specifically they have a lot of control of everything right so they can get the the two big pension funds which is Campo and GPIF um have massive overseas holdings. So they can call Campo, which is like Japan Post, which is kind of like the national pension system basically. They can say like, "Oh, hey, we need your help, you know, can you sell three yards, like sell three billion dollar yen after non-farm payrolls," which I'm pretty sure that's what happened in this case. >> So they have a lot of tools to kind of like >> send the message first and then start reinforcing the message. Okay. So, let's start with there was some speculation that this was actually um Bessant and it wasn't the Japanese. You just put those aside. It was this was definitely the Japanese wanting to to stop the yen from falling. >> I mean, I don't have like inside information, but GG, which is pretty reliable like in Japan, said that it was on behalf of of the B or on behalf of the MOF. So, >> okay. So, we're going to put that aside. We're going to assume that it was the Japanese government that wanted it to stop going down. >> Yeah. So Besset like so there's two aspects to the US policy is one is people think they want a weak dollar but they kind of don't they just don't want people to have super super competitive currency so like they want a stronger yen a stronger Korean one they want a stronger Chinese yuan but they don't really want like a weak dollar because that opens up Pandora's box like 1987 style. So, um, he talks about like we want the wand and the end to be stronger, but that that's about it. >> Okay. So, let's just assume that we'll take that at face value that it was Japan wanted it to up. And then let's let's why don't we just take a moment to explain what you mean when you're talking about the different ways that they can influence that price. And one of them is you're you're saying that they're asking pension funds that they somewhat control to actually change their asset mix and and just kind of just go through how that would work. Like they own US bonds. What what how that would work. >> Sure. So Jeep for example um I can't remember. I could Google it, but I can't remember the exact amount that of assets they have, but it's an absurd number. Like >> that's the largest pension fund in the world by like a factor of two. >> I think it might be a trillion or something. Yeah, it's a monster number. >> When agonomics happened, they wanted a weaker yen because it was creating all this deflation and and all that like dollar yen was at 80 or or something like that. So part of that the that reform was to get GPIF to go instead of like having all your money in Japan, send 25% of it abroad and in order and do it unhedged. So they would basically buy euros or buy Canadian dollars or whatever and then buy European assets and buy Canadian assets whether it's bonds or equities. And so when they announced certain phases of abonomics, then literally like one of them, I think it was Halloween 2016 or 2014, I can't remember, but one of them literally like the Abonomics announcement came of like here's some stuff about the three arrows. Yeah. And then two two hours later, GPIF announced they're going to increase their foreign uh investment percentages or whatever, right? And like Dolian went up 600 points that day or something. So now they've done that like they've avanomics on a lot of levels succeeded in what they were trying to do. You know they brought the animal spirits back. They got inflation back to kind of normal and all that and dollar yen went from 80 to 160 which is insane for a currency. You know dollar cat doesn't do that. So now there the issue is like it can become too much of a good thing. Um especially politically like as a Japanese person things start feeling expensive. You know price of rice has gone up a lot. Um you know imports get really expensive when your currency's cut in half. So the politics have now flipped and they they they don't necessarily like I said want the yen massively stronger but it's weak now and they want to stabilize it. And then the other problem that they were having is there was kind of like this negative feedback loop between the yen and JGBs where people were just like, "Okay, this policy is crazy. Bank of Japan is super loose there." You know, they're going to have like runaway inflation and currency collapse. Like there was a point I remember um when they intervened in 2022, I made like this little like I don't know sometimes I make these things. It's like making when you're a kid when you make a scrapbook and you like cut out stuff and put it in the thing >> of like screenshots of like yen do yen's going to 200 Asian currency crisis like all the you know Japan's the next Zimbabwe or whatever and it was all in like a two-eek period in in April 2022 and then they intervene and that was it and it was over. Um, so but the problem is if your currency and bond markets start becoming too correlated and and there's a reflexivity and then you have a problem. So they're trying to stabilize it. So they have like on their side they have trillions of dollars of foreign assets that they own which they can sell, right? They have the Bank of Japan which they control because it's not an independent central bank. So they can get them to hike. They can use like moral persuasion. They have the US on their side as well so they're not pissing in the wind against the US. So, they have a lot of things on their side. >> Why do you think it's staying here, though? Like, why isn't the yen higher? And like, what do you what what do you think? How do you think this plays out? >> Uh, it just takes time. Like, I think sometimes people like want things to happen instantaneously in currency markets. And the reality is is like things just don't move that fast in in FX generally. Like you can take huge positions because ball just generally isn't that high. And there are things, you know, things going the other way. Like the biggest thing coming the other way is that first of all, if oil's going up, the importers in Japan still have to buy dollar yen. In order to buy their oil, they need to buy dollars, right? >> Um and then US corporates are still earning a lot of money. So like Apple still sells a lot of products in Japan. They get yen from customers and they don't want yen, so then they buy dollars. So there are like offsetting flows that aren't going to be buying dollar yen and they don't really those kind of flows aren't taking a view on monetary policy or whatever. They're just like okay we got to buy dollars on the 30th of the month so go buy your $4 billion or whatever. So I would say like a lot of the time in FX there's natural flows in both directions. Like it's not like a lot of times in equities or something like that you can have a situation where it's just like almost everyone's a buyer and it's impossible like there's just nobody selling some micro cap that's you know 30% short or whatever but in FX there's almost always people on the other side and then the other thing too is there's natural rebalancers so like if you're China and you have just to keep the math simple like say you have a billion euros in your reserves >> and and euro goes up 10% then if you wanted to be 10% euros now you're 11% euros so you sell so they tend to rebalance a lot because it's so liquid so whenever something moves like two or 3% the a lot of central banks are on the other side rebalancing so I think it'll just take a while um if you look at what like the craziest moves have been in crossen so because stuff like euro dollar has gone up but dollar yen has gone up so euryen has like absolutely gone crazy Right. >> Um, so, >> okay, before we go on that, actually, I just want to, well, let's just stick because I do want to ask you about one of my subscribers asked me. He said, "Make sure you talk about Swiss yen because that's going straight up." And I wanted to get your opinion on that. But before we get to the crosses, >> what about the idea that um, part of the reason for the yen's weakness is retail, Japanese retail chasing the US a AI bubble? >> Yeah, I mean, that's been a big component. Same with Korea. like a lot of Korean money is coming into the US and then that's weakening the lawn there as well. >> I mean I would guess that some of that is coming to an end just given >> relative performance of Nicay to Mag 7 and things like that. Um but yeah that's been a lot of the flow and same thing with like soft bank investing in the US. >> Yeah, >> you know people in the US VCs or Open AI or whoever they're investing in don't want yen. So obviously then if South Bank has some of their funding in yen, they got to buy dollar yen. So like anything that's US exceptionalism tends to create a lot of flows into the into dollar yen uh for various reasons. So that's been but I think that's like a big reason it did go up, but it's not really a reason it should keep going up because I don't >> Okay, fair enough. But then isn't that make our our thinking about like why don't you own yen here? you know, if that's coming to an end there, like there's going to be a change of flows. And then talk a little bit about this new prime minister um in terms of what she believes and is isn't one of her kind of ideas is kind of like a make Japan great again and doesn't that require fiscal and if so, wouldn't that mean that there's going to need to be money coming back? Like cuz wouldn't a natural way for her to pay for those things is to say to the GPIF, listen you have 25% in US bonds bring 5% 10% back so we can do it here in Japan. Yeah, I think that might be a theme globally too is that all this money has flowed into the US like all the way from like Swiss National Bank to GPIF to you know Danish pension funds and for a bunch of reasons like some political and some economic. I think a lot of countries are like why are we putting so much money in the US when you know our own industries could use some of that money as well. I mean the question is are there enough investable projects in Japan or Denmark or whatever to for all the money that's out there but I think that that is part of the thinking. So yeah, the thing with fiscal is that if it it can go both ways because like you saw in the US, like if people think it's out of control and there's going to be a bond vigilante attack and the wheels are going to come off, it's bad for the currency, right? >> But if people think that it's somehow manageable through they can thread the needle, then it's good for the currency because it boosts growth and it and tends to make the central bank more hawkish. So, it's really hard to trade fiscal versus FX because the, you know, the the story can be so on a uh like a razor edge. >> Yeah. >> Um, so you mentioned Korea and they were kind of they fascinated me a little bit as well because they're obviously struggling with money flowing out of the out of Korea into the into the US stock market. So much so, did you notice that on December 24th that that tax law that they switched they snuck through? >> Yeah, I think there's kind of like a whole issue there of like Robin Hood on crack kind of thing and so they're trying they're also making like people take a course if they want to day trade and stuff like that. So yeah, but it doesn't seem to be having that much of an effect. But but yeah, it does that that definitely is another thing. But then then again again like I said before a lot of that stuff to me peaked in like October of 2025 like the unprofitable codes and crypto and everything that retail loves the most. It all peaked on basically like October 30th of 2025. >> Well I know that's what a lot of people don't realize. The NASDAQ hasn't made a new high since that date. >> It's that date. Actually NASDAQ's gone sideways but like the software index is down 30 40%. And if you look at unprofitable tech, look at quantum computing, crypto, all the the sort of like the junkiest stuff that retail likes the best is down like crazy amounts. Yeah. >> Okay. >> So, so >> we will get we will get to stocks because people will get mad at me if I talk, but let's just finish up with currencies. Yeah. >> Um, so you you were about to talk about the cross rates. Do you think that there's more opportunities in like the the like owning Euroyen or sorry selling Euroyen or selling Swiss yen? Is that are those better trades in your mind? >> I like So it depends on the time horizon. Like right now I feel like the dollar down trade is tired. Like it's people got really excited about it when the Greenland thing happened and then Trump was saying weak dollar is okay and we kind of had like a blowoff in the blowoff bottom in the dollar. So right now I'm more like I'm more neutral on the dollar. So that's why I like crosses because then you don't have like a outright dollar exposure. And if you look at some of the things like one thing I look at is just the sharp ratio of being long whatever the thing is. >> Okay. >> And the sharp of like Euroyen over the last year is two and a half which is really really high. Like very few things in all asset classes across all of macro have that high of a sharp. >> Okay. And generally it's like the up the up the escalator down the elevator kind of thing a lot of times where >> high sharps attract more money. The more money comes in, you know, the better the sharp gets because it keeps on going. Yeah. But then when it turns a lot of times you get like a more of a discombobulated reversal, right? >> Just making up terms here as I go. Um so that's why I like uh euroyen a little bit better. you're kind of it's a way to be long yen but but you're neutral on the dollar. So it just if you're bearish dollar then just be short dollar yen but to me I'm more neutral on the dollar. So yeah euroy yen Swiss yen Swiss is a weird one though that's like it's basically been a widowmaker for three years four years five years is that it's it the rates are super low there. There's no inflation. So, it appears to be the best funding trade, like the best short currency trade you could ever have. Yeah. >> But they have a massive current account surplus and money just keeps on flowing in. And they don't really give a rat's ass anymore about what Swiss does. Like, they gave up a about 20 big years ago. So, you just have this natural flow that's relentless that's buying Swiss. And then there's also kind of like a loose connection between gold and Swiss. like Swiss is the closest thing in FX that you can get to gold. So generally if gold's ripping, being short Swiss is just not a good trade. So um I I don't really like the Swiss yen side, although Euroyen and Swiss yen are not that different in, you know, but yeah, I just stick with Euroyen. >> Um one of the things that I've been kind of pounding on the table incorrectly is that um V and FX is going to go up. You know, trade wars are going to eventually turn into currency wars. Am I a fool for thinking that? >> Uh I mean it has gone up a little bit from like ridiculously low levels. Um I feel like V is kind of cyclical but it's weird. It's like you know the Minsky moment thing. Like it sounds so smart when you're young and then you realize like okay well tell me tell me when this the inst when this when is the stability going to breathe the instability. Like sure it's basically a truism. you go from stability to instability and back and forth, but like unless you can figure out when that's going to happen that it's just like a pointless truism. And FX ball is kind of like that. Like it's cyclical, but timing the turns can be difficult. So what I tend to do is like kind of more pick my spots. Like if I have a reason that I think it's something's going to accelerate, I will like buy ball or buy gamma. >> Yeah. But as a rule, it's, you know, like it it's very difficult to predict because most of the really big moves in FX ball come from shocks that that can't be forecast. So I I generally like don't like as an asset to owning FX ball is pretty shitty generally. >> Yeah, for sure. >> Owning like gamma with good timing can be good. I I just thought that eventually the Trump kind of uh I want a U lower US dollar and I know he's probably getting talked out of it by best because they're worried about it accelerating if they start to get what they want and then that causes stocks to go down. >> But I kind of thought Trump's going to win over and and start saying some crazy stuff. But >> he's actually being quite disciplined in terms of the currency. Like if you think about it, this is the first time he's said anything about the currency in what like since he took power. Yeah. And he'd mentioned it a couple times in like 2017 as well and people tried to jump on board. I think among like they just have so many balls in the air and like you said a weaker dollar is no is not a free lunch like there's a lot of risks around it. Yeah. So I think if you rank all your priorities and then you say like okay how risky are they? You know a weaker dollar is like priority 14 and it's kind of risky. So I don't think it's like a big policy feature of this administration. Like yeah sure if dollar if euro went to 125 they'd probably be happy but they're not sitting there like planning how to get it to how to get it there. >> Okay well there we go. So my my f long FX of all trade is terrible according to >> and I sell FX options for a living. So, whatever. >> Let's let's talk a little bit about stocks because people are probably fed up of the currency stuff, even though I love chatting about and hearing your stories. Um, you you mentioned that stocks are no longer behaving as well, especially the real speculative stuff. Do you worry about um some of this being kind of the pause and the rotation before the big drop or do you think that this is just a natural healthy rotation on in a continuation of a bull cycle? >> So, okay, there's a there's a few thoughts that I have, but some of them like are contradictory in terms of direction. So, the one thing that's bullish, I'll start with that because I have more bearish things, but one thing that's bullish for the next four weeks or so, is the way that the big beautiful bill worked was the IRS didn't change withholding in 2025, right? >> But the the tax changes did apply. So, people are going to get crazy tax refunds in 2026, and that basically starts February 15th. They can't send them out until February 15th because of some law. I forget what it is. Scam prevention law or something. >> Okay. >> So, >> and generally there is kind of like a seasonality to stocks that benefits from tax refunds in March kind of area. >> And this will be an especially large this will be an especially large refund because yeah, I can't remember the number, but I think it's like 50 billion or 60 billion extra um is what people are going to get. But so normally that should be like bullish codes and crypto and whatever crappy stuff that people will buy when the money drops >> um on Robin Hood or whatever. But the one thing though now is that I don't know if people are actually if there's enough animal spirits that if you're like the person that's been trading crypto for the past five years and made some money and lost some money and whatever in your account and then you get 3,800 bucks in your in your tax refund, I don't know if the first thing you're going to do right now is go and buy crypto or go and buy uh like RG like Regetti Computing or whatever. I'm wondering if the spirits are kind of have been dampened especially by like the the sort of like true believer stuff like Sailor and Tom Lee and all that has all been destroyed so much that I kind of feel like maybe people are going to be like, you know what, fool me once, shame on me, fool me twice, I'm I'm the the dummy or whatever, right? Almost almost like when you know they give cash back in Japan way back when when they had too much debt and people just paid down debt instead of spending it. >> Right. Right. So that's the question is like this $60 billion is going to show up and what are people going to do with it? And I guess I'm leaning more towards the fact that they'll save it or pay down debt. Okay. >> Um but I'm also a little bit nervous to be overly short after like we have dropped a lot and this money is coming. So the next four weeks I think will be really important for my view going forward in terms of like how things trade. But overall, like if you just if you sep like if you just forget about fundamentals completely, the charts look so bad. Like even the S&P chart doesn't look very good. Like we had a sort of a pretty steady rate of appreciation for a long time and now it's kind of flatline peaked head and shoulders at around number 7,000. And you know like a lot of a lot of blowups are happening under the surface. So, like dispersion is crazy. Like every single day something's dropping 10, 15, 20%. There was a chart um I I can't I'd like to give the person credit, but I don't remember. >> I think it's the compound. You're talking about the number of stocks like 115 stocks have traded of 10% or something. >> Yeah. 7% or more. >> It's the compound, guys. >> Whatever period. Yeah. Um I thought that was interesting. And then the the guy at Miguel at Namora does a lot of work on dispersion. >> Yeah. dispersion predicting blowups and stuff like that and all that stuff like all the under the hood stuff all kind of screams like not no bueno. >> Yeah. >> So, but >> well, you know what I talked to some like pod shop guys and the the pain in the long community is huge >> and all is just out of this world. It it's it's ugly out there. People don't appreciate how bad it is from that perspective, >> right? Like you look at a chart of like IGV and XLE, it's like it's not the K-shaped economy, it's like the, you know, the alligator jobs that are just like this. And so all that stuff kind of makes me more bearish. Um the funny thing too is that there's a pattern that plays out so often. Um basically, okay, you you start around December 10th and you say, "What are all the favorite trades for the next year?" and they all start rallying because new money comes in. And then in January, they all rip because all the leverage comes in and all everyone who's trading puts on those positions. And then usually around the end of January, people start getting nervous and it loses momentum and then stuff starts to to bed in February. And that's kind of what we've seen so far. So like now most of the popular trades are getting taken to the woodshed one by one. And it's interesting like even stuff like Nvidia is not rallying even though like the picks and shovels story is is stronger than ever with like all these capex numbers being way way above. Um you know I can like it's very easy to explain why like Microsoft selling off or Salesforce is selling off but Nvidia is selling off when everyone raised their capex by like 30% to 2% of US GDP >> doesn't seem very good. So there's a lot of stuff like that that all adds up to me to to say like the structure doesn't look very good. Um but the funny thing is like if you just look at the fundamentals, you know, payrolls growth is above break even, unemployment rates low, claims are low, inflation's falling, you have like a captured Fed that is not allowed to hike rates. So like what's not to love? But all that stuff was kind of known in December and January when everyone put these trades on. And now everyone's sitting there going like, "Okay, now what am I supposed to do with with, you know, I'm long silver at 100. I'm long Nidia at whatever at 200. I'm long, you know, all all the trades basically. >> Eventually they just we run out of buyers. Like this is my point. Like everyone tells me all these good news and I go, "Yeah, okay. I get it. Trump's not going to let the economy go down or not going to let markets go down. Worse is going to, you know, cut rates. I get it. But everyone else knows those things. You're not trading, you know, what's going to happen. You're trading what everyone expects to happen and it's fully priced in, >> right? That's the thing. And and like even on that, like is worse really going to get the committee to cut into this economy? Like I I don't know. I don't really buy that anyways. >> Well, even the point that he says like Trump's not going to let the the market go down and go, do you think Reagan wanted 87? Do you think that Bush wanted08? Like I'm like since when do we think that the governments can can control markets? >> Well, you know what the two worst years of the past like other than '08 of the past 20 years were 18 and 22 were the two worst years recently. Like in 2018 and 2022 basically every single asset went down. Those are the last two midterm years. So there's absolutely no argument about the midterms. Like they don't Yeah. They don't just come in and go like okay we're going to buy S&P futures. So yeah I definitely don't buy that argument. So yeah, I think we came from a place of like price for perfection. Obviously now we're not. Um, so I guess overall I'm bearish, but I'm nervous about the next couple weeks. I want to see how like the retail favorites trade. And then one other thing just on top of all of this is that the thing with the the karaoke company um you know causing 7% selloffs in trucking firms. That's kind >> I don't know this. I wasn't paying attention. I was on the road traveling. What happened? >> Okay, so this company that used to be like a karaoke machine company, okay, >> pivoted to uh freight logistics in 2024. And yesterday they announced uh some AI thing that they're using is going to increase freight throughput by 200% or something like that. >> Yeah. And so all the freight logistics companies sold off like 7%, but then it cascaded into like these other logistics companies and stuff. And it reminds me so much of in 2017 and the these two things were like literally the tippy tippy top of Bitcoin blockchain mania was when do you remember when Long Island ICT pivoted to blockchain? >> Yes, I do. and then Kodak the like two weeks later Kodak and like that those were like December 20th 2017 and January 10th 2018 which was like and the top was like New Year's 2018 >> right >> so it that you could argue is like a sign of okay this AI freakout is getting a little bit stupid. >> Yeah. Um, but what that means to me is like for my trading is you can try to find like go dumpster diving on things where it just like literally makes no sense, but then you can still be short other stuff against it. So like an example and this is not investment advice and this isn't even like my area of expertise but I think it's a useful example for people to think about how to think about these things when you get like the baby thrown out with the bathwater kind of situation are some of the best opportunities in markets because like people are just freaking out and like you said long short pods are just selling everything that is in that factor but that factor might benefit from AI not hurt not get hurt from AI >> and it doesn't matter because it's position itioning. That's what everyone's trying to make it like come up with reasons for this. >> Stop making reasons for it. The reality is somebody's overweight and he's got he's getting the tap on the shoulder and that's all it is. >> You mentioned um crypto and I'm bringing it up because you have a new piece or you've written about it recently and you have some new views on that. Well, you want to share them with us? >> Yeah. So, I guess like I'll try to keep it short. It's like an eight minute read if people want to go go read it. But the the long story short is that I think people tend to occupy this one side of the spectrum or or the other which is like crypto's going to zero because it's a scam or Bitcoin's going to a million because it's like the only safe money in the world or whatever. And I just feel like or or also people like the the other bull case is like web 3 will become a consumer product and and all that. And I think the experiment has been running long enough, right? Like block like the Genesis block was mined in tw 2009. Crypto stuff really started like 2017 2018 the blockchain started and you know there's been a lot of use cases tried you know Gamefy NFTts whatever and I think it's fair to say at this point that crypto is a real thing. This is my opinion that crypto is a real thing, but it's mostly a financial use case and then some other selective niche use cases. And at this point, like Bitcoin's not digital gold. It's not really a risky asset. It's not money definitely. Like it's not a useful means of transacting goods and services. So I think essentially what we can say is that it's like this narrative sponge that picks up narratives and creates a lot ticket mentality and then people see the lotto ticket and you know the stories are are decent. But I think going forward it's going to be harder to convince people that the next narrative is for real just because it's tried on so many different narratives and none of them have worked that I think the amount of skepticism going forward is going to be higher than it was in the past. And to me that just means like I would guess that we probably go nowhere in crypto for like two years and it just consolidates. If you look at like the people the OG crypto people are like 45 50 years old and nobody in my son my son's 21 nobody in his cohort is takes crypto seriously. Like I think Sailor and Tom Lee and those guys have kind of ruined it a little bit. Um, so I feel like we're just going to go into this kind of like crypto is kind of cool, like 3D printing is cool or VR or whatever. And it's like a niche, like a big industry, like it's a $3 trillion market cap if you believe the market caps, but but I don't like I feel like we've reached like a maturation phase here where it's like it is what it's going to be. You know, what you see is what you get. >> Okay. Um, one of the things you mentioned earlier is you talked about the dangers of the yen going down while we were having a selloff in the JGBs. And I agree with you that was um that is I think one of the reasons that they they intervened. They didn't want that. And the last thing I think even the Americans didn't want that. They didn't want the JGB spinning out of control and dragging uh rates up in the US. >> Right. Uh, one of the things that I think has been interesting from a macro perspective that we haven't seen in many many years is that you go back to liberation day, we actually had a situation where all three assets in terms of US assets were moving together. We had the US dollar, US stocks and US bonds moving together. It's been a long time since that's happened. Do you worry that that's a sign of something big that's changed? And what do you have any comments about whether you think that will continue? So yeah, that's like the bond vigilante. That's like the doom loop trade that is people are have been afraid of in the US for a long time. And it was kind of happening, right? Like you said, it happened for a good three, four weeks. And it also happened in the UK in 2022. >> Yeah. The Liz stress moment. >> Yeah. But I think the the hard part about believing in that trade is that in the end the government has a lot of tools to come back at that trade. like in in the UK, they just started buying bonds and everyone gave up pretty quickly because the they're not going to fight the central bank buying bonds. And so it's kind of like the doom loop scary thing that could potentially happen. But okay, say say that starts to happen in the US like for real in a really scary way. The Fed will just be there. They'll cap yields at four and a half% or whatever and >> but doesn't that send the dollar lower? >> Well, then the currency will go down for sure. Yeah. So, but the the whole doom loop thing, you know, it tends to be like an episodic thing that hap comes and goes, but I I don't know. I'm not a huge believer in it. Um, just simply because like I guess maybe because I feel like I've been hearing about it my whole life, but you know, there's the whole thing of like >> it's nonlinear. How'd you go bankrupt slowly then suddenly or whatever? Like I get that. >> I I'm with you that it's not going to cause the end of the world and I I you know, like I always laugh about the doom at 11. the guys that are trying to make, you know, a living just scaring everyone. But I do think it's interesting that that relationship, that correlation has changed. I wonder if the markets are trying to tell us something. >> Well, yeah, that definitely at that it was a huge eye openener, but it only lasted for like three weeks and then so actually in Japan it lasted for a long time, but it was weirdly kind of gradual like the bond market and the currency were selling off for a long time, but then equities were rallying, so everyone's like, "Ah, I guess it's okay." Um, but yeah, when you get all three selling off at the same time, it's definitely scary. But that's why there's usually a response. I mean, they, you know, that's where the taco the tacos were first served was, you know, three days after that they started changing the policy. So, that's the thing is that like if you're betting on that, you're betting on the government not doing anything. And that's just like not hasn't >> No, no, I'm with you. I I just wonder if we for they force the markets force the government to do something. I just wonder that's the that's how we get to a lower US dollar, >> right? I mean that's that's usually how it happens, right? I mean even in the UK they changed their fiscal policy because the market was was the bed. So it will trigger very fast changes. Um but there's still I don't know there's still a world where like they just lose control and then like you said then they have to cap yields and then the dollar drops 35% or whatever. I mean that that's always kind of on the bingo card, but I don't know. It just I I'm not holding my breath for it. >> Okay, so we're getting towards the end here. What question should I have asked you that I didn't ask you? Like what's on your mind? What's important that I you know that I've missed? >> Oh god. Uh the only other thing like I guess that we didn't really talk about is and it kind of relates to my sharp ratio thing is I know I've noticed a pattern over the years when whenever I want to suggest a trade idea and I'm like people are going to hate this like it's just sounds so stupid. Those are usually good trade ideas because like that tells you something that feeling that you get in your gut >> when I always say when I'm scared to hit publish because I'm scared of what people are going to think about me. Those are the best trades and even though it's still scary to say it published, but I'm with you. The hard if everyone agreed with you, it wouldn't be a good trade because everyone's already in it. >> So the thing that's like that right now is emerging markets FX like stuff like Mexico and Brazil has been just going straight up. It's been a free lunch because you've been getting currency appreciation and like 10% yields in Brazil or whatever it depends on what you're doing. So I do feel like we may be getting close to a point where it's just become this free lunch that everyone just assumes like low ball high carry free money keep piling in keep piling in and you know it just in the long run em doesn't work like that like there's a free lunch but you eventually got to get off and I was going to mix two analogies there but eventually you got to get off the bus and I have a feeling partly because I feel like some other dominoes are falling already with like you know megate techch not looking good and software and all that kind of stuff that like I I would be nervous. I wouldn't necessarily be short EM currencies but if I was like along a massive basket of EM currencies I would be nervous. >> Got it. Um in terms of trading what do you think is one of like the timeheld truths that you think people mistake or or are most likely to get wrong or overlook? Uh I would say the it's such a simple thing but it's shocking how often people don't calibrate for it is just don't blow up. Like the risk of ruin should over like the managing risk of ruin should override everything else. >> Yeah. >> But yet people still like sell calls in sofur and blow up or like nack gas. Somebody just got let go for n gas or whatever. Like if you're running a strategy and like obviously it happens a lot in retail. I get a lot of emails from people like I blew up my account again. >> Yeah. >> Um like fundamentally however you're trading whatever you're doing you should be structuring it in a like it's like an erodicity problem basically like if you run this simulate like if you run your trading strategy a million times you should be able to understand like it's not going to blow up. And so I feel like professional and retail it just people still just blow up way too much and mostly doing things that Xanti you could have told that you could have predicted you know there's a a 4% chance that you're going to blow up doing that you know but people just do it anyway. >> I I keep saying because it's been so easy for so long and a lot of people are long stocks it's you know they like to be long and the markets keeps going up. I keep saying trade smaller. There's a lot more risks out there. Be careful when V increases. you need to change your trading and often I find people don't do that. >> Yeah, absolutely. >> Yeah. Okay. >> Actually a huge lesson in 08 because like literally if you've all adjusted at at one point in 2007 you'd be trading like $50 million max. Yeah. >> And then in '08 it would be like 2 million would be the same. >> I know it's a huge number. It's big. Like I know I I feel it. I go well what's the point of even trading that size? I say to myself sometimes. >> Right. Right. You feel like the loser. Yeah. But you know the loser is the person that keeps trading that size and then you know gets stopped out by the inevitable V moves that are occurring just within the market. Even today in spoos like this morning it was all over the map. Like you could e it was moving 1% like that you know in a blink of an eye >> and 1% is a lot. Like we used to spend all day working for 1%. And it was it was up and down a percent by like 10 o'clock. >> Yeah. And actually that's kind of like a correlary to what I was saying is correctly vol adjusting your position sizes, you know, is not really that hard to do like with an Excel spreadsheet, but a lot of even professional traders, a lot of people don't do it very well. Yeah. >> Okay. So, I'm going to pop this the last question on you. I did not warn you, but I know you're going to be able to do this. So, there's this thing called Desert Island on BBC where they ask celebrities their top 10 um bands and songs or whatever. Um, I'm not going to do that to you. We're going to do Desert Island Trader Edition. And Desert Island Trader Edition, you got to give me your three bands. If you were stuck on an island, a desert island, three bands that you would want. You could tell me songs or albums, whatever you want. Three that you'd take with you. And then you're allowed to bring one traitor from any point in time. Like you could bring Jesse Livermore, you could bring your old boss, whoever you want, and why you bring them. >> So, I'm going to keep talking while you think about this. And you got to, you know, as a Canadian, I'll be pretty upset if there isn't a Canadian band in there. >> All right. So, and is it albums that we're doing? >> You could do albums or you can do bands. You you pick. >> Okay. So, yeah. I mean, I would the for sure Radio Head and and The Hip would be like my two, you know, that are >> your go-to. You're just showing your Gen X all over there. Like, it's >> And for those who don't know, he's talking about the tragically hip, a Canadian. >> Tragically hip. Um, and then the third one would probably be Phoebe Brides. Um, I find her stuff is so good. >> I'm with you. Big fan. And like the the album she did with Connor Robst, I think was outstanding. Have you listened to that? >> Yeah. Yeah. >> She she has um a little crossover reference here, but she has a a cover of Fake Plastic Trees that she did on BBC. >> Yeah. >> That is like absolutely like heartwrenching. It's so good. Um, if anyone wants to Google that. And then what was the other thing? Oh, what? >> Give me a trader that you'd want. Any tra any point in time. >> So, it would probably be my boss from from City Bank. >> Tell us why. >> 1995, 1998. So, he was like an absolute psychopath, but he was like a heart of gold. Like he was like people were super scared of him. But then one time because I was in New York and I was I'm from Ottawa and the PL flights were canceled. He's like, "Oh, just come to my house for Christmas." And like I spent Christmas at his house, you know, I'd been working for him for a year or whatever. So he's like a heart of gold, but like came came across as a psychopath on the trading floor. >> Yeah. And he taught me a lot too. Taught me a lot about trading. A lot about like his mantra basically like I don't know if he ever said this out loud was like >> take the job seriously but don't take yourself seriously. So, okay, >> he like was really hardcore about trading and and and took his and wanted to make money, but then, you know, when you're at the bar, he's just joking about it and like, "Oh, man, that was so stupid when I said that thing or whatever." So, I felt like he kind of taught me like how to have fun and like take the job seriously, but still have fun. >> All right. Okay. So, before you go, tell people about your service, where they can find more, and your podcast that they can tune in on. Give us the whole spiel. >> Okay. So I mean the the one thing you didn't mention I guess which is like the thing that I think is the best that I've produced is Alpha Trader is my second book and it's like about trading and you know risk management everything about trading that I've learned basically in my life. So I feel like that's like my best thing and then >> so it's called Alpha Trader and it's a book and I and I listen I quote it all the time. You're in my trading wisdom my daily trading wisdom. I didn't mean to. >> No, honestly, you did. You are like I'm not I just I forgot to list it. I didn't know you were still plugging it, but we'll >> I mean, yeah, it's I'm >> and it's timeless wisdom. So, the reality is that you can, you know, it's going to be just as relevant to, you know, 10 years from now as it is today. >> Yeah, I think I think it's a good book. Like, I feel proud of that book and I got a lot of feedback so I know it's decent. Um and then the other thing is if people go to spectrumarkets.com sctararkets.com um I write my daily which comes from there and and everything like my free stuff is on there as well. Um so pretty much everything's on that website. So alphatrader and spectrumarkets.com. >> Actually before I let you go I forgot to ask you about your ingenious magazine cover uh system. >> Oh man. Do do we have two minutes? I can >> Yeah, let's go. Let's do it. Let's tuck this in at the end here. >> So, one thing that used to drive me crazy was people would pull up these anecdotal things of like, oh, look, there's a party in the Hamptons with all these tech guys. You know, you got to be short tech. Like all these anecdotal things. Um, and I was like, is that really true or is that just like cherrypicking? So, one of the famous ones is The Economist. And people would say like, oh, weak dollars on the cover of the Economist, you got to be long dollars. Yeah. So me and a guy at city actually got all the covers from 1997 to 2016 and back tested it and actually so specifically the economist not Barons because we did Baronss and a couple others but specifically the economist is like a really really good reverse indicator and we did that study in 2016. So that's like all in sample but then since 2016 it's still been unbelievable out of sample for 10 more years. So, uh, I actually trade off of it. Like, it's it's a meaningful six-month signal for a lot of asset classes. So, >> and just to be clear, you're fading it. You're you're going the other way. So, if they if it's like uh like here's one you had recently, the true danger post by Donald Trump, did you So, you're long us from that, >> right? Yeah. >> Yeah. >> And sorry, go ahead. >> No, no. So, the logic essentially is that something like Barons is a coincident indicator, right? They're just reporting on like what's going on in the market constantly and pretty much in real time. But in order for something market-based to get on the front of the economist, it has to really been going on for ages. And it's so they tend to be like the tippy top of the narrative cycle. Um, so like they're they're crazy. Like one of them was Age of Chaos with like Trump going crazy like this and it was like sell VIX at 75 or whatever, you know, like they just tend to pick the extremes because that's, you know, they're by definition saying here's the most prevalent narrative in the market, like here's what's totally priced in, right? And so fading it makes sense. >> And you have this great spreadsheet and you show all like the P&L, you track it live. It's awesome. It's terrific. People should definitely go find it. And to your point, February 7th on the cover, the dangerous dollar. >> Yeah. Yeah. I know. >> Tough to be short when that's happening. >> So hard to be short dollars. Yeah. >> And you know, someone asked me to ask you about the fact that the Japanese uh prime minister is on the cover of it. And I don't know if it's positive or negative though is the problem. Like sometimes it's a difficult decision for you to decide if it's actually uh you know has a view. So to make it as objective as possible, we had three criteria which was is there a market or asset class or country on the thing which a lot of them it's not. >> Is there an unambiguous direction um in in the tone or whatever the image >> and then you know I can't remember what the third one was it wasn't as as important but there was a third one like I guess it was maybe is is it emotional or something like that I can't remember. So we try to follow like these three steps and say but in the end there is still some objective element to it because like if it says age of chaos you know do you buy S&Ps or do you sell VIX futures or do you sell >> and like it says it's Japan it's like the world's most powerful woman does that really >> yeah like yeah it's probably not >> I wouldn't think so now it's gonna eat the world or something then yeah but yeah >> okay so uh go to Spectrum Markets um check all this out. Check out the the magazine cover indicator and go buy his book. Still for sale. It's still great. >> Yeah. And actually, maybe the reason I'm pumping it is I actually wrote a a follow-up called Guess What? Alpha Trader 2. >> And uh that's going to come out in a few months. So, uh >> Oh, well, there you go. >> Listen, when you when you get it out there, um we'll come back and you can come on and tell us all about it. Come on. >> Properly like marketing genius. >> Okay. Well, thank you very much. Thanks, Brent. All right. >> Take care. >> Okay. Thanks. All right, Patrick. Lots to talk about. >> Oh my god. >> Exciting markets. >> Lots lots to talk about, right? Uh okay, so let's let's dive in. Okay, so the S&P 500 had a a shitty day on Thursday. Um breaking back down. It's the same usual suspects which is is um weakness in the tech space and continued sector rotation into uh the spaces such as consumer staples. Actually, let's start with the positives, right? Like uh like that money rotation has um caused a monstrous rip in the upside of consumer staple names. Like they were the dog of the entire space for a year. Nobody wanted to touch the Proctor and Gambles or Colgates with a 10-ft pole. And suddenly when that sector rotation kicked in, people can't get enough of these names. Like >> what which are we looking at there? >> The XLP, which is the consumer staple. >> That's an index ETF. >> That's That's the ETF, right? That's insane. >> That's crazy, >> right? >> For those that are just listening, it basically looks like like a hockey I mean, sorry. It looks like the the Eiffel Tower went straight up. >> Absolutely. And obviously the other benefactor was the energy space, the XLE's ripping. Point is is there's there are places money is going when it's leaving the tech space. And the theme that we had even for many episodes is obviously the idea that the MAG7s may come under pressure and uh and see distribution. When you look at that MAG7 ETF yesterday was a legitimate break to lower lows. Not only have we spent two weeks below the 50-day moving average, but whether you know some technicians will want to jam the geometric shape of a head and shoulders topping formation or whatever on there, but it has been a very heavy market for four or five months and now we've legitimately started a sequence of lower highs and lower lows. the so we have we're we're seeing legitimate pressure in that mag seven space that obviously was uh driven by huge distribution in the software space. Again, we talked about this last episode right back down to the lows. It's been an awful place and you know the the one part that bothers me about it is is like everyone thinks the sector is doomed. like is this due for a bounce just because of the sentiment and bearishness toward the space being so extreme. Uh but it has been where the blood bath has been happening. This uh in itself was going on actually for a month or two, right? Like this is not something new to you and me. We've been talking about this in previous shows. But what changed what changed in the last few days and what is still in the favor of the bulls? Well, first of all, I'm going to start with what's favor. Like the SMH, which is the semiconductor ETF, actually went up to its previous 52- week high and is still holding up. And Nvidia hasn't ruined the party, even though the earnings coming up in the next few weeks could uh could certainly offer a catalyst for a pivot, but the semiconductors haven't broken. more importantly where I feel like the real AI bubble was really taking full hold was in the Cosby right and uh looking at the South Korean index and particularly uh is grossly not only is it making fresh new highs but like when you look at the two components look at the Samsung chart break out to fresh new highs look at uh SKHEX holding up along its highs we haven't seen the AI kind thing where what's been driving the last leg break yet. So at least that's a positive for the bulls on on that element. But what it happened yesterday can't be ignored and that was the breakdown in the financials. Uh the XLF and the major money center banks took it massively on the chin. Not only did they report bad earnings back uh a few weeks ago that caused the first breakdown, but that during this period where the market was trying to rally, they had nothing but a pathetic flagging formation uh form where that showed zero accumulation uh zero bounce, failed at the 50-day moving average, and we just got this breakdown uh in the financials. So, like if we kind of break it down, JP Morgan broke down to its multimonth lows. Uh, Bank of America broke down to its uh multimonth lows. And then you take a stock like City put in a double top, legitimately broke its uh midpoint and is below the 50-day moving average on a two-day slam. Point is, suddenly Money Center banks, which are your quintessential beta 1 asset, suddenly cracked. >> Yeah. And you know, actually, I was just looking through my chat in my group here. Um, one of my subscribers passer by, he was saying that it's not just US and Canadian banks, it's actually UK and EU banks as well. >> It's across the board. >> So, are they snipping something out on a global basis that is scaring folks? But you know what bugs me about making that conclusion though Kev is that we haven't seen it yet emerge in widening of credit spreads on junk which is where I thought it would have happened before we would see the money center >> bank remember we talked about this and that the indexes the junk indexes are no longer the old the indexes of old and the reason that they're no longer the indexes of old is because all the stuff that was previously lowrated credit is now gotten sucked up by private credit. So the reality is >> credit, >> right? So the reality is that this that this index the high yield is in terms of the quality of it is the best it's been in a long time. >> So but you can see here this is Blackstone which is your kind of like uh private equity kind of names of this has been death this chart like >> a lot of the BDC >> back to liberation day lows. >> Yeah. Like my buddy Paul Apollo Macro has been, you know, talking about this for a long time and I got kind of shaken off my short uh cuz you know Harley Bassman started talking about how there's some good quality in there and I was worried that they were pricing these things in with way too much of a discount and then you know I'm not blaming Harley that's his opinion. He might ultimately be correct but I got shaken off and I shouldn't have because the reality is that these things are are trading like death and and nobody knows what to value them at and they just keep getting sold. Right. Nonetheless, so this this this is the backdrop by the way and let's just quickly touch on a couple things. First of all, up until today, the breadth of the market was okay. I mean, uh I wouldn't say that, you know, it wasn't making higher highs or anything, but back at the start of the year, we were 70 plus percent, which is healthy. Um and even during this mag seven weakness and stuff uh it was um holding in and it wasn't until the breakdown yesterday that there's a little bit of a sign of little deterioration but that sector rotation and breath were sort of the uh the story as in the S&P equal weight even up until yesterday was actually making 52- week highs and looking like it was rock and rolling which is now money's coming out of the mags and it's being sprinkled everywhere else. That sector rotation is a story we've been talking about and this chart was showing it. But this is the first kind of reversal day that one day doesn't make a new trend. I don't want to call an end to this. But if we see the breath of the market suddenly go down while uh while the mag sevens don't recover, that's when you have the serious deterioration in conditions because that means sector rotation is no longer dominating and maybe um uh uh raising cash is and that uh and that um we'll see whether that manifests because one day I don't want to already claim that this is a new trend but let's watch because uh because we saw that equal weight index doing really well. We saw um uh the um Russell 2000 doing very well and they have started to at least show a little bit of heaviness on the short term. >> Got it. >> Any comment you want to make on it? >> Well, no. And just back to this, you know, I'm still thinking about that XLP chart you showed. And although I'm kind of shocked because I didn't realize how violent the move is, I've been kind of counseling that and and talking about the fact that the MAG7s are so large compared to the rest of the index. When money comes out of those and goes into other things like gold stocks, like XLPS or whatever, the moves are going to be manic. And I think that this is just another example of that in that you shouldn't underestimate how much these other stocks can move once the rotation starts. Another example, the analogy that I give my members uh is uh like imagine you're in a speedboat going uh and the Mag Sevens not performing is like throwing the anchor over the side of the boat and asking why it can't go full speed. Well, you know, like in the end the mag sevens are that big of a waiting that how can the indicy even when the breath is wider, how can the indicy um make new highs and progress higher when such a huge kind of one-third of the S&P and twothirds of the NASDAQ 100 are those seven stocks. It's like it's so hard for the whole indicy to move when these things are being sold. I thought when you said the speedboat, I thought you were gonna pull up that analogy of that uh famous, you know, the seven people on the speedboat, the bald dude driving and the >> That's how it ends, buddy. That's how it ends when when when correlation goes to one in a risk off. That's the uh that's the boat bouncing. Um but uh but anyway the one thing to highlight uh is you know there's been numerous quants out there that generally have highlighted that m that they the belief is that many of the CTA triggers lie um around 6,800 right and so you know overall the systematic trading world whether I think the last number I heard is like a half a trillion dollars in size. I don't know if I got that right. You can correct me if I didn't. >> Nobody knows like the reality. >> It's something like that. But the point being that uh that a lot of people are estimating that the a lot of these triggers for degrossing lie around 6,800. But whether you're a vault targeting fund with realized volatility starting to pick up and uh and or the CTA is just getting their quant or technical triggers to to degross. Uh we're on the edge of the cliff. We haven't really fallen off where that becomes a feedback mechanism and uh and overwhelms the bid. But we're right there. And uh and the question here is is that are we going to see this market trip up a little bit uh at this point? What any thoughts? >> Well, yeah. You know, I I've been writing about this and I've been worried about it and I think that the reality is that >> it's cute that you said I that you've been writing about it like I would know. You think I'd read your >> Okay. >> No, I know you don't read it. I know you don't read it, but you'd be proud of me because I've been arguing that you should be buying protection, which is very unusual for me. And and I >> Yeah, you are. You should be proud of me. And not only that, I'm not cutting off the left tail. And I think that's something that people should really think thinking about >> and um be aware that >> now you're crazy talk. That's crazy talk. What do you mean? Like uh >> well cuz like I think you know I I counseledled this in terms of the precious metals trade for a long time. kept saying you might not want to cut off the right tail on the thing because the skew you know although the skew is attractive that we might be surprised about the sort of move that we get on the upside but I think that that might be the same you know scenario happening in stocks on the downside meaning that usually skew doesn't pay usually you don't want to be betting on that those overpriced far out of the money um uh puts being you know worth that to buy. But I I don't know, Patrick, there's a lot of things under the surface that are behaving very strangely. We're having all sorts of problems out there. The finally, as you highlight, we have the the leading stocks rolling over. Um, you know, and I wrote about the fact that, you know, the reality is that at times this is the final grasp gasp, but you see a situation where they reach for other things and then the whole thing rolls over together. >> Lots of danger out there. >> Can I tell you? Can I tell you what bugs me? >> What's that? >> What bugs me is that rarely does lightning strike twice uh in the same spot or in the same way. The market rarely ever drops the same way twice. And what is really crazy is is that this market is literally to the calendar date and from duration playing this out identical to the pre-liberation day period which is it's like it started topping out in October, November started getting heavy uh not uh be able to beat new highs uh all the way through and middle of February it breaks down and begins to drop and it's like literally following the analog to the tea. And is it this easy, Kev? Like, can literally we see lightning strike twice where it's going to literally do the exact same playbook the same way? And this is what bugs me. It doesn't feel like it's possible. >> Well, maybe it'll be worse. Maybe it won't bounce. Um, but in terms of uh in terms Yeah. Um, in terms of why that might occur, I I I think that you have to put a big weight on the fact that there's new seasonality with the issuance of these auto callables and the option markets. I really I really truly believe that the the issuance of those things is so important and is moving the markets more than people >> appreciate. So >> anyway, I just thought there was really weird newity that is occurring. >> Yeah. Anyway, I just want to highlight that the analog looks the same. It's insane. Like that that literally it's following the textbook um uh like in total duration, the topping, the timing, everything seems to be just following tick by tick the same thing and it just seems too easy. I hate when something looks so obvious. Well, the only thing I will say about this, Patrick, is that you're the f like I did notice that and I haven't, you know, spoken about it publicly, but I did notice it. You're the first person I've heard that's actually talked about that publicly. >> It's it's not and one of the things that worries me most is when when those sorts of analoges get fully priced in. It's what everyone's talking about, when everyone's passing around the charts, everyone is positioned for that. And and so far, >> you know, but this is why this is why our market how to listeners listen to the show. >> That's right. this alpha. >> They get this alpha. You know, this is >> Anyway, >> uh that's such a douchy thing to say. Um next thing we know, you're going to make a, you know, a thumbnail video with you with big bright eyes, you know, on YouTube. Check in for the this amount of alpha. Uh okay, keep talking. Anyway, uh so what I wanted to move on with briefly, let's just quickly talk about the economic news this week. Um uh the key thing here, retail sales came in weak. Uh we got the delayed uh non-farm employment which came in strong but this is the most sketchy time of the year because the seasonality uh always has that huge drop in the post um Christmas period and they seasonally adjust it and the question is what is the real number supposed to be like the it's it's always the hardest one because it's of the adjustment but it came in stronger the market kind of brushed it off and then we get a soft inflation number. Uh first of all, what's your sizing up of the data this week and and then I want to talk about what some of the impacts that happened from it. >> Okay. So, >> anything you want to comment on? >> Umployment, it's a random number generator. There's lots of different variables. I don't think that's mattered. Um, on inflation, you're going to be surprised to hear me say this, but I think that it's tending towards lowering inflation's is tending towards coming in lower than expectations. So, I'm actually like for I I was saying earlier, I'll take the under today when we were, you know, laughing about what what happens with the CPI prints. And one of the things that I've noticed is there's this CPI um this trueflation chart >> and um you know if anyone wants to see it just hit me up, send me an email and I'll send it to you. Um the >> I'm hitting you up right now. Send it to me. >> Okay, I will send it to you. But this true which I stumbled upon and I think you know some guys are talking about Mike Green might have been doing it and I and I made a chart of it going back. It seems to lead it's it's a it looks like it's a great indicator and it's showing you know inflation at 0.5 and a lot of smart guys that follow inflation keep telling me you know what the reality is we're going to we're headed lower. So what if instead of the inflation that everyone's expecting and is priced in? What if we get an actual deflationary weight like what if this is the start? What if the finances >> Yeah. What if the finances are actually financials are actually noticing that the economy is not as strong as everyone expects and that we're you know we might be rolling over uh from a kind of in a deflationary way >> right I I don't let's not use the scary word deflation I would say disinflationary >> okay disinflation like in the end that in inflation is not a problem right now and it's not and there's no reason actually to believe inflation is imminently going to be a problem. >> Well, I guess I'm going to push back a little bit on that because I think it's complicated because some of the commodities are starting to go. >> So, on the one hand, I understand >> that matters is oil, Kev. >> Yeah, but oil's doing well. >> Oil's doing well. >> Come on. That is not inflationary when we're just coming off of of multi-year lows on oil. No, but if we're talking about the margin chart, >> but if we're talking at the margin and we're talking about versus expectations, >> then it's it's it's it's headed the wrong way. >> Anyways, we'll see. I just I I think it's complicated. It's a scary it's a scary situation right now. >> I I I continue to say that people are underestimating the the intraasset volatility that's occurring, the the moves that are occurring. You know, we have even talked about the fact that a lot of the quants are getting absolutely destroyed um in terms of the factor movements and what's happening within the markets. People seem to be um uh positioned for the wrong sort of rallies like as you say, the reason that XLPs, you know, look like they're on a stick is because nobody owns them. Uh and these are the kind of environments that that where accidents happen. That that's how I look at it. And and not only that, like IGVs, like Patrick, like those things are down 30 odd percent and they're not bouncing and this was something that everyone owned and you know, software was going to eat the world and this is what everybody, you know, like it's not like you go pull up this the let's do it together. Let's pull up what's in here because it's not like there's some crazy um crappy stocks. Microsoft Oracle, Palunteer, Salesforce, Palo Alto Networks, Adobe in it, Crowd Strike, Appan, Service Now. Like a lot of these things are the old like uh kind of leaders that everyone was was touting and that everyone's, you know, accounts are stuffed full of >> and they've just gotten absolutely crushed. >> And so I look at that, I'm scared. So, and and Patrick, you you talked about the semis and you talked about how they rallied and they're they're still looking good. Yeah. >> To me, I think what's happened here is that a lot of these pod shop type places that, you know, need to be invested were long the softwares and thinking that the semis were expensive or, you know, or just long longies were long the softwares thinking that uh semis were expensive. And what's happened is as the the softwares have gotten crushed, they're like, "Well, we better go back and buy something." And they're like, "I'm just going to go back into semis." And one of the things that worries me is that when that cycle turns, when we see, you know, semis like earnings start to roll over and the and the and the market realizes that semis are still cyclicals, like the market is going to get absolutely annihilated, right? Like it's gone through. And like if you think about it, we went through we destroyed Bitcoin, >> you know, market took it. We destroyed software. Market took it so far. What happens when they finally go for like the Nvidia and like the final one? Like I I'm worried about it. >> By the way, by the way, since you're on you mentioned Bitcoin, is this uh is this time around when Michael Sailor zeroed? Is this the is this the >> I don't think I think he's actually smarter than that. he's not going to get zeroed because the reality is that I don't believe that his debt is due for a while. So, but one of the things I will say about this is that I suspect there will reach a time when Mister instead of trading at a premium to NAV trades at a discount to NAV and there will be all sorts of wise guy hedge funds that are buying it trying to pressure Sailor to sell Bitcoin and buy back stock. So, that's where we're headed on that. But you know what, Patrick? I haven't put in the thousand hours and I'm not part of the 0.01% of Wall Street that can truly understand this. So, you have to take what I say with a grain of salt. >> All right. There's the grain of salt has been taken. All right. So, uh, I Okay, so I want to talk about one of the big things that happened off of the economic news and, uh, and I've been trading it and, um, so far it's working, but, uh, particularly on the jobs numbers when I saw the fade, we saw the turn on sofer futures uh, in the post jobs number period. They, this is the December 2026. >> I love this. We've turned you into a store trader. trainer. Dude, >> dude, >> I used to talk about these things and you'd be like your eyes would gloss over. Now you're just like a junkie sitting around. >> I'm a junkie. I'm a junkie. But but like Okay, but so let's let's put it into context though. >> So the jobs numbers, whether they're hot or not, but look, retail sales came in soft. Inflation's coming in soft and uh and it was a seasonal adjustment on the jobs. Yeah. Overall, what you can see here by the stir traders is that the vote of confidence is a dovish pivot. Uh right, like uh they're basically starting to price in potentially another rate cut this year. Uh and I'm wondering whether this becomes a bigger trend particularly in any point if the stock market breaks. There is no bigger disinflationary pressure than asset prices going down uh that impacts everything and the the stir traders at some point are going to price in a far more dovish Fed uh in here. Is this a turn point in in the sofur futures is a puzzle to solve? I don't want to make it like I know but it is the first interesting time like we literally have gone through three months of watching paint dry. It was an awful boring period over the holidays into January in in the rates markets and it's woken up. The other place where we've seen that beyond that is the bonds and we saw a huge breakout in the uh in the 30-year and uh and I say it's huge. It's huge. But um look the the what we have seen in the bond markets. This is the weekly chart and this is the the looking at the ZBs. We have seen one big sideways consolidation. No matter whether you're bullish or bearish on the long term, it's been boring as It's been a sideways uh dead market. The implied volatilities on bonds have have gone down to single digits at one point. uh like the the move index V all of it's been collapsing and >> it's moving up and uh and >> first of all in terms of the V going down I think that that's actually a desired outcome from the administration they want V to go down >> they are trying to >> bottom line >> bottom line is the stock markets have weakened and while we saw in 2022 and we've and you've talked about over those scenarios where stocks, bonds, and the dollar all going down together, all that But for now, from a traditional intermarket perspective, stocks down, bonds up is at least from a traditional intermarket perspective manifesting here. >> Yeah, I would agree with that. But I I don't think the dollar has resumed that their typical relationship. But I agree with you that the traditional negative relationship between stocks and bonds has started to reassert itself. I I will. >> So the question is, is this a new trend? One of look this has been a positive three, four, five days. I never love to draw new conclusions in such a short window of time. But nobody gave a about bonds. I could not find a single person talking about it. And that's when I love it. And uh and like it it's it's like setting up in a a clean way and nobody gives a And this is well now clearly this is an alpha show. And now we're giving away the the secret sauce, but it but the point here. >> Yeah. >> The point here >> is it's moving. >> I I I agree with you. I think that they're starting to trade better. I still don't think the long end's the way to play it. And I actually like your sulfur call better. And I >> Yeah, like that's >> a better lever way up to to play it for sure. But that's that's the better call because ultimately I do think they'll panic and they'll panic and that'll steepen the curve because they'll go and they'll cut rates way higher, way more than folks expect. Um, and they're starting to trade that way. >> It doesn't even matter what the cuts will be. It's about the fact that the stir traders are going to start pricing in uh way more dovish fed and that move is going to happen fast. >> I was just laughing though. Can I just one second? I just want to say when you were complaining about nothing happening and then I was like welcome to the stir world nothing happens nothing happens and then complete utter madness for like you know a month or two and then nothing happened nothing happens right yeah >> it's the the way that these things work once we get the actual turning point like when they once they start turning back on the cuts it's going to get exciting and and if they're turning on the cuts because stocks are going down then watch out and and if that is the case in their training and and that's one of the things that I think we go back to. You know, a lot of people were excited when they were cutting rates and there was some really smart people out there that always be like, "Hey, be careful what you ask for." And like, you know, uh Suzanne Saunders from Schwab is one of my favorite uh strategists out there. And she would she would argue this all the time. You know, the the stock market is strong because they don't have to cut rates. And if they have to cut rates, then that's actually a problem. And I I think we should just remember that when we start getting excited about if all of a sudden we see the front end starting rally like in terms of we see those sulfur futures really take off, it's going to be because there's a problem in the economy and that like the most bullish scenario at the front end is actually negative for for risk assets. >> Right. Right. Well, listen uh that's it's it's spicy out there, buddy. things uh things are uh interesting. So uh I want to move on and let's let's talk about the dollar. The most important thing to watch right now but um >> I actually think it's really interesting where the dollar index stalled. Now I think the only currency that is kind of bucking the trend and doing its own thing is the yen and rightfully so that's being driven by yen monetary polic sorry the Japanese monetary policy and other things but the dollar and a lot of the other cross currencies outside the yen are very much following suit now overall just looking at this chart it looks bearish there's no uh I don't like I cannot look at this chart and tell you something looks bullish about this chart. Lower highs, lower lows, breaking key support lines, rallies failing at the moving averages and the Fibonacci zones. Overall, it hasn't even upticked in the last few days. So, as of this moment, there is nothing that can be said bullish technically just on this chart. >> Okay. >> But what but there are some interesting things. >> You're gonna find something. No, no, no, no, no. I am not finding something. I actually am looking at the dollar here purely from a neutral perspective for a moment. Now, the the low that came in on the jobs numbers around 9650 happened to be uh exactly at the 61.8 retracement like Fibonacci work, right? It's a it's a bit uh it came right in there and that becomes a a phenomenal line in the sand because if the dollar index breaks below 9650 then uh the it's fallen off the cliff again and there's another leg going down to 94 probably on the dollar index but it's got to trip up this support line. At the same time, the previous high, which came in at the 50-day moving average, which is right where where it is, would be the failure point of a dollar where a dollar bull reversal would become technically very evident. And so the way uh both of us as Canadians, the way we want to do is look at this from a a hockey perspective, which is that the consider this area to be the neutral zone on the on the rink. >> Yeah. Be careful of the neutral zone trap, though. Be careful. The neutral zone trap. >> Neutral zone trap is is is a tough one. But the way I would put it is that you don't want to in any way conclude that the Bulls are playing offense unless we're clearing uh the upside zone here and the Bears are playing offense if it breaks below. And the way I look at it is take at this moment at least a neutral enough stance where you can pivot where you where which way it goes you want to be able to have acknowledge because if we do go off into a riskoff cycle yes I understand money being repatriated out of the MAG7s and out of the US dollar internationally could drive the dollar lower. don't hate that thesis but I want to see it technically confirmed and uh if that and to me that's a breakdown below that this uh this uh 9650 level to saying that the dollar has re resumed a new leg down and if we go into a riskoff cycle where suddenly dollar plays safe haven even if you don't like the thesis it would happen above 98 and uh and at that moment you there's just no denying that something is underway and so I'm taking a very neutral stance on the dollar here. I don't have any strong conviction uh at the moment and I'm going to let the technicals do the talking in this situation because I don't think my opinion is strong enough to uh to take um it off of that and so I'm going to let the technicals talk. >> A true technical analyst buy it if it goes up and he's gonna sell it if it goes down. >> I'm just giving you a hard time. Okay, let's go. Keep going, buddy. Anyway, so uh so the uh the point though is that I think it's is that but what I do want to talk about the yen for a moment >> uh and I'm going to do the yen US dollar uh rather than the traditional US dollar yen pairing >> uh because I want to look at it from a yen bullish perspective. It's easier when it you see it as a bottoming formation. I'm going to put on a weekly chart and obviously the yen is at a two-year low been bouncing off a key support. The intervention came pretty much exactly at the levels where interventions have come before. And what what degree of an intervention this was, you can also be uh give your two cents on, but it is off of a major low uh supporting here and uh and there could be uh a carry trade unwind. Now, I don't think it would have the same drama as it did uh back a few years ago, but will this become a flows thing? Will will a capital flows element come into play here and the yen rally? I think this is a super interesting thing to watch. The fact that the yen reversed the way it did off of this retest of its low makes this the an interesting case that we just witnessed a fourmonth bottoming formation on the on the yen. And this is probably the most interesting currency pair of them all at this point. And the fact that you abandoned it a few months ago. >> No, I didn't. I you were saying I had to admit I was wrong. I said I was admit I was wrong, but that doesn't mean I gave up on it. >> You're I'm a huddler. I'm I you know you know you know you're gonna be able to spend all this yen the next time you're in Japan for >> that I just chose the wrong one. I was just admitting that I was completely and utterly chose the wrong currency to be bearish on. But uh or to be bullish on and bearish on the US dollar. The one thing I will do is I will plead the fifth from for fear of guerring my trade by saying anything that remotely >> okay so nothing else nothing else to be said then all right let's move on everyone knows everyone knows it's all right now anyway listen uh is there is there anything you want that I forgot to talk well it's not gold and silver Jesus holy cow we my god can you believe it actually our last episode >> uh was literally day before the big like the the big >> how could we not talk about I can't believe we nearly like what is what are charts did I forget oh obvious but uh but yeah like we recorded it right up along the top uh the one thing that you know and you've heard me talk about it and I know you uh fundamentally agree you give your own perspectives on it uh but the one thing that I always highlight is when there's parabolic uh acceleration to the upside of any asset. Um, the one thing that becomes much more predictable is time versus price. Like price, you don't know how high something in a parabolic phase can really go. It could have been 6,000. It could have been even 7,000 on the upside of gold in the final parabolic blowoff phases. But when things accelerate hockey stick, the one thing that uh is far more predictable is that it usually will end within a very small window of time as in like a few weeks. And that that was something that was a part of my thesis and I'm not I'm trying to remember if I shared that with you back then. >> You called it well. I think we were you were saying like yeah >> but what what so what is the interesting things I want to highlight on gold? Well, you know, again, like if you take the low to the high uh so uh so let me just do it this way. You know, we had basically uh a fib retracement drop in, uh in gold, which was more or less a 50% retracement of last year's rally, right? uh and so the the uh the the bounce has come to a very typical retracement zone. So overall what I would generally uh say here is that after a blowoff top it is usually quite traditional for uh an asset to uh consolidate and absorb the previous six months of price movement and end up actually trading far more rangebound far more boring and far tighter ranges. I think that uh the gold in the past after its first corrective low did not make lower lows. Be interesting to see whether gold does that this time around where 4500 now becomes the low end of this trade range. And while gold may trade back to 46 or 4700, uh 5200 very likely could be a ceiling. And we're going to probably spend the entire first quarter just chewed up in a bouncing tri trading price action on gold as it absorbs that previous parabolic move is my starting base case. Do you want to push back on that? >> Nope. I I'm with you. I listen I I I'm hoping that we get rid of the the the speculative fever and we go back to the the the real reason for the bull market, which is the central bank's buying. And I don't think that the central bank buying was what sent gold up there. In fact, I suspect that if I, you know, if I was Bank of China, I I definitely wouldn't have bought any. And I might even even have sold some as it turned to try to break it because again, to me, the most important thing that China is doing, they want to buy as much gold as they can over the next 5, 10, 15 years. They're not interested in the thing rocketing up right away because the reality is they're trying to buy volume and that's who you're trading against. And so to me, it's just a matter of now shaking out these these speculators and we get back to them being there to buy it again. I don't know what that number is, but I do suspect there will be a sentiment point where people get fed up with it and get bored with it and go on to the next thing. And at that point when everyone's saying, "Nah, it doesn't work. It's the end of the market." That's when you start buying it because that's where Bank of China will be standing in there and just saying waving it in. >> Generally, generally there's a debasement drift which is essentially money fiat money loses value. Gold naturally over the long term rises and at the same time central bank buying no and central bank buying is a a positive tailwind for that. So gold will structurally be rising over time. This is a fact. But the thing is is when >> it's a fact is it is it is it like the Bitcoin yield? It's just a fact. It has to occur. >> It's a fact. It's a fact. This is like put >> you know I heard there's a Bitcoin yield too. >> Okay. So point though is is that when gold goes and and literally r rallies 50% in a year uh there's a point where this is no longer trading based upon uh you know that logical stream but rather speculative money is coming in and the speculative money now is being squeezed out. That's what it really was. What a conclusion I want to get to. And uh but what's interesting is the implied vault of gold the last go around in October only had a 30% implied but this time around there was a crash to the upside as the gold implied went to almost 50% on the upside but it already uh uh uh trimmed 20% off of that high. So like we see ball normalization finally coming back in on there. But the crazy one had to have been silver. Like let's quickly do this and talk about them as a aggregate. Silver obviously goes and does a double in a span of of like a few months. >> Yeah. >> And crashes in one of the most spectacular like a a peak to trough within a span of days. The thing dropped 48% off of its high. Like a it's a having in in literally a few days. But what was insane was gold implied went to 120%. >> Silver implied. >> Silver, sorry. Silver implied went to 120%. >> Kev, I'm gonna make a confession here. >> Yeah. >> Know what I did on the SLV? >> You didn't sell vault, did you? >> I'm so proud of you if you did. Well, but no, no, but this is insane. >> Yeah. >> The $210 strike calls. >> Yeah. >> Were paying $57. >> I I looked at it. I did I did something similar, too. I sold the 180s. I can't remember what they were. And I bought the like um 80s. I think it was something like that. I bought the 80s. The skew was just obscene. Like >> tell me you ratioed it. Did you ratio it? No, but I wasn't long go silver, so I was just straight outright short. I was buying a put and selling a call. So, listen, I did it. The only reason it worked is because I only did like just little shits and giggles size. >> I I lean into this, but I did it as a ratio ratio call spread. And so, I I I bought a very small amount of at the monies against a very large naked position up above >> to kind of give a hedge and it it worked. But like I the fact that they were paying >> your underwear getting like worn because of the all the extra weight that you're carrying in there. >> Wanker. All right. So, but the but the point being that it's insane that we saw that kind thing and look how it's normalizing. We went from 120 already back to 70. I don't think that that the consolidation is over until we're back to the trade ranges of implied where we were before where everyone's just going to get bored of it. Things are going to grind. Things are it's not going to get the same speculative attention. Things are going to normalize. I think the next major buying opportunity in gold and silver is when no one gives a and that's going to be when everything reverts on all this. >> Yeah, I'm with you. I'm with you, buddy. >> All right. But uh uh other than that uh crude oil now la yesterday was a bit of a dip but overall it's staying above its 50-day moving average and we have seen the pattern of all dips being bought. To me the line in the sand for it to stay bullish is the 60 handle. long as old dips are contained into the 60s and bought on dip along the way, then I think that that you have to be still fishing to see whether or not um upside ball is there. What was crazy was the skew. There was um a huge right tail skew being built into the crude uh uh options. Uh and obviously oil volatility was also quite elevated. What I'm I don't know how to size it up, but like gold. So sorry, oil didn't have a move like gold and silver did, but yeah, we got >> maybe it's still coming. >> Don't fade the skew, man. Don't fade the skew. It's my new line. Don't fade the skew. >> But but V did go from 55% down to 42% in uh in the thing. >> Not over yet. Like it's >> this is like we're still I think well the reality is that this is the Iran Iranian premium >> right? Like for a little while there everyone thought it was going to happen on the weekend. Like I kept hearing it's this weekend. It's this weekend. >> Even recently I heard some guy that supposedly is a smart guy saying oh Netanyahu just came back from the White House. He's gonna they're gonna do it tonight. They said you know like they were gonna do it last night or Wednesday night or whatever it was which we all know is You only have wars on the weekend when the market's closed. Everybody knows that. >> Well, let's be realistic. They do do that. There's a there is historical precedent for this. >> Well, I wouldn't use historical. There's recent precedent for this. >> Recent precedent for it for for it to happen that way. All right. So, >> most presidents don't worry about the stock market when they're doing geopolitical things. You know, it's kind of unusual to pick like, you know, well, the listen the the optimically from a battle point of view, it would be great if we went on this Tuesday, you know, but no, no, no. Let's wait until Friday >> when the GlobeEx is closed. >> All right, let's talk about the widow maker. >> No, not gas, our friend. >> Like, what? Like I am shocked that we didn't get an optionellers.com event uh announced by somebody during >> we did get something. Uh let me just click on this. So they were sharing this in my chat. Uh today's edition of hedge fund speak. Uh blueest Capital Management senior natural gas trader Alex Watson and several analysts have left the firm as extreme price moves in markets have dented profitability. people familiar with the market said, you know, like that Winnie the Pooh thing where it's like there's like two ones, one in a tux and one is, you know, just regular Winnie the Pooh and they put blue up and then they put that's the regular Winnie the Poo poo and then the one in the tuxes extreme price moves in markets have dented profitability. So when you have a bad trade, Patrick, that's the new line. Extreme price moves in markets have dented profitability. >> Dented. It's just a dent. Just a dent. >> Tiny little dent. But everyone's fired. >> Yeah. >> So, there were some casualties. We shouldn't be laughing. >> What was crazy was that it literally the squeeze was only on the front month contract. Like what was crazy was that the fact that uh you know like when you when you looked at it, it was the uh February contract that made the entire move and the March contract barely budged. >> I know. And you know the real picture about that is that stupid boil and whatever the other opposite one of boil is >> in Febs. >> They weren't in Febs. They they're in the more liquid ones and so they weren't trading FEBs. They were trading and they usually sometimes they are in the front ones. So there would have just been it would have been even spicier. Patrick, if this had had Boil owned uh Febs >> then though or yeah own FBS and then what's the other side of Boil? What's the downside one? Well, >> anyways, whatever because you have to look at them as a whole because they're both negative gamma. So, whatever existed, but they might have zeroed it because like how much did it go up and down >> on a daily basis? What was the most what was the the biggest daily move? >> Was there a 50%? >> Probably this g probably this gap where it was up 41%. So, it wouldn't have zeroed it. It would have just been an 80% down day for the for for the oil or the opposite of boil, >> but it would have then gone even further because they would have had to hedge more and more. So, it would have been spicier. >> So, listen to that gas traders. Next time you're doing this, let's do it in the one that Boil and the other guys own. >> But what you know, it literally does not disappoint. Widowmaker like literally like I why not have a strategy on just owning the tales of Nat Gas because I think they're No, no, but it's priced for that. >> Go look at the tails. It's not like the market hasn't figured that out. >> I think if anything tailed >> Yeah. I think if anything the tails are overpriced over time because the reality is that >> if if they weren't then then people would do what you say. Yeah. Yeah. >> So, anyways, I I I listen, it's a spicy move. One of these days, though, Patrick, can you imagine if it doesn't come back? Like, we get a a real move in that gas. >> Yeah. >> Right. It's been a long time since What are we looking at there? >> This is wheat. I wanted to talk about next. >> Okay. Let's >> Let's move on. >> Let's talk some wheat. What but I was going to say like we had the uh Russia Ukraine war uh create the uh the top and then the Eiffel Tower formation form perfectly on grain prices and and so we have this huge period where basically not only was it a vicious bare market in 2022 23 in wheat but it's been dead. It's been dead. Nobody gives a about grains anymore because there there's zero pulse in this and and uh and they've been left for dead. Is this year the year of the grains? We got a really interesting wheat turnup here in the last week and it's just coming to some previous overhead resistance. The egg stocks have already been working great. Stocks like deer are rocking and rolling on the upside. Um, I I'm starting to be curious. I love it when nobody talks about this and uh and you're seeing this kind of price action. Anyway, I'm just curious whether or not that this is when we start seeing the grains work. >> You know, Patrick, I don't know what's happened to you. You're trading stir now. You're trading like wheat and corn and stuff like you're turning like you're turning into me. Uh, this is bad news for you, buddy. Um, one of the things I'm just going to say about the about the grain about the AS in general that scares me now. I don't know how to I don't know how to deal with this, but the reality is that with um Trump and all the uh tariffs, it ends up being that you could have a situation where US wheat is like in the dumps because they've nobody's buying it because of tariff issues and things like that and European wheat is flying. And so one of the things I just want you everyone to think about is that wheat isn't wheat anymore. And with the end of globalization and the the the reverse, sorry, not the end, the reverse of globalization and the increasing tariffs that we're seeing, you need to be aware and trade different markets. Like remember how we saw copper trade? >> Solution is that Americans need to eat more baguettes. like this is uh this is uh there has to be internal consumption >> internal consumption. Well, the reality though is America is is a global egg exporter. So as the world tries to, you know, fight back, you could see a situation where tariffs are put on that and therefore it ends up being that the farmers pay the price and the reality is that Europe, US wheat and soybeans and things that we trade don't go up and the world the rest of the world is going up. So that's my only my only kind of thing is >> you know when you're trading technicals you're not like thinking about actual fundamentals anyways, but just just be I don't want to confuse the the kind of message with some fundamentals. >> I'll call on your thing though fundamentally which is that you know the tariffs are geopolitical and political jostling. But if there became any reasonable gap between prices of wheat in uh in Europe and uh and America, very quickly there would become political pressure in Europe to to lighten up on the tariffs so that they can take advantage of bringing prices down in Europe. It would be short-lived. There is no way that they would allow politics to get in the way of of um of them like taking advantage of a gap like that. I It would be shortlived. >> I'll take the other side of that. Patrick Patrick thinks that government officials are going to do the right thing. Uh I'll >> not the right thing. Not the right thing. The polit It's political suicide. >> I just I don't think most people would realize. >> And like when you think about it, wheat like the actual wheat that goes into your bread, it's not as much as you think. That's not the major component of it. >> No, in terms of the price, in terms of how much the component like it like so, so wheat doubles in Europe or whatever. I don't know even that would be a lot. But let's just imagine it goes up 30%. Big >> difference. At 30% it goes up in Europe and then US it goes down 20%. US trading levered long futures, it means everything. But for the average person, it means very little. >> All right, but I'm done. >> I have nothing else to say because you're get you're getting c You're getting a little uh uh >> philosophical. >> Philosophical or fundamental? That's the problem. Getting a little fundamental. >> Yeah. Okay. Um >> all right, folks. Thank you very much for tuning in. It's always a pleasure to have you on um bull market, bare market. We're just happy you spend some time. Uh now, stick around for Oh, wait. Actually, before I do that, Patrick, where can they find you? and more importantly that great YouTube show that you have with the thumbnails that are just out of this world. Um although I have noticed that there's no fire in behind you recently. Uh I'm going to have to talk to Danny. There's there needs to be more fire behind you. >> Listen, Danny has been hired to get me more views. He's doing what works. It's it's just the nature of the thing. You can you can come and check out the amazing thumbnails at patrick_reszna. It's just worth it. Just the thumbnails alone. Forget the alpha in the actual videos. It's it's literally the thumbnails that make the difference. >> Yeah, you want to subscribe just so that you can see on your feed. It pops up and you see like, oh, there's a just a high quality thumbnail. the world is ending and now I don't even need to click it because I know the world's ending and that this is the the biggest thing that's ever happened in the markets just happened this weekend so therefore I don't need to worry >> well listen the one thing I can I can say though if you can get past the puke point of the thumbnail >> the analysis tends to be very similar to our conversations so you just have to you have to get past the gag reflex of the actual image and if you can do that and click on it. There's some actual great content. >> Some people say that that's the true alpha is actually all in in Patrick's channel and he doesn't share any in here. >> Okay. Um, where can they find you, buddy? >> They can go to the macro tour.com and listen bare market bull market where I just happy to spend some time together on this crazy ride. Now, stick around for the after show. >> All right. Danny is going to be audio only today. >> Shocking. A shocking >> He doesn't want to show his face after those thumbnails. >> That's right. He's embarrassed. >> Absolutely shocking. >> Shocking. What? That I'm the ragging on your thumbnails. >> Exactly. Yeah. I'm I'm making Patrick millions here. A >> million. >> Here you are. Here you are coming in here putting me down. That's not like you, Kevin. >> I I just had a mean streak today. I'm just I'm just feeling saucy. >> Yeah. >> Yeah, >> I can tell. >> Yeah. Okay, Patrick, what about this beer early? We got to get that done. It actually looked good. It was empty. >> Okay. You give us a rating. It was good. >> It was actually a very good. You know what it it's uh it's a very much just the like obviously Paraguay is a very hot country in terms of temperature. So it it just like uh your traditional kind of Caribbean beers. It's like a a it drinks like a a clean summer refreshing drink. Uh like a Banks beer or one of these other kind of Caribbean ones. Um, nice, clean, solid. Uh, you know, for the type of beer it is, uh, I'm gonna give it a a 7.6. >> 7.6. All right. >> What's the temperature there, by the buddy? >> Uh, 37°. >> Come on. >> Is it really? >> Yeah. Yeah. >> Yeah. >> And for those that are American friends that are going, that doesn't sound very warm. He's selling us in Celsius. >> In Celsius. >> What's that? Like 110. What is 37? >> Yeah. It's It's hot. >> 37. >> It's hot degrees. >> Luckily, the uh the hotel >> Yeah. But it's like, you know, the air conditioner's going. It's like I I I I'm doing a lot of work. So, it's not like I'm being tortured outside. >> That's why the shirt is popped. I knew it. That's why the shirt >> The shirt is popped. No, you know what it is? The shirt is popped because he saw Rick Reer. You don't know this, but Rick Reer is this black guy and he goes on CNBC always and like it's always depending on how well the bond market's doing, it's like two or three uh buttons undone. So, >> absolutely like you know, >> well, it could also be the fact I may add fire to the thumbnail today after this recording. So, I think >> Yeah. Yeah. He's got I think you have to add fire. >> Yeah. >> I'm surprised that you don't add fire each time. Well, because you can't overuse it, Kevin. >> Oh, okay. >> You got to change it up. >> You got to change it up. >> You got you got you just don't know these things, man. It's >> I I'm not very good at the thumbnail jokes for sure. >> Kevin, so you were skiing up in Whistler. >> I was uh It actually did not rain top to bottom for once, so I have to take back everything I said. Well, not really, cuz it proceeded to rain almost all the other days. Um I did learn something. something I was, you know, thank you very much for Mike Campbell for having me at this wonderful conference. Uh, our friend Victor Adair was there, Tony Greer was there. It was just a terrific time. But I I did go a day or two early, Patrick, you know, talked to some of my subscribers and and clients. And um I've I think I've learned the trick about Vancouver is that they find out when the Easterners are coming and they schedule all the rain for the official times that they're going to be there. And when I snuck and you know in and had just one extra day, I got there and it was the most beautiful day. You know, I left Toronto was minus 25 with like two feet of snow and I got there and it was 9°, sun's shining. I was like, "This is no wonder everyone moves out there." >> And then it started raining and I was like, "Okay, send me back to the cold." >> Yeah. Yeah. >> Oh, you know what? Like, but it's it it's like ridiculously cold out in Ontario, isn't it? like you guys all that snow. >> Yeah, there's a lot of snow. It's strange. Like uh they're sending like um dump trucks to the streets, Patrick. And like so they they had so much that they was kind of they needed to pull it away. You know how there's that big mound of of snow out by the um Allen Road or whatever it is. It's the highest it's ever been. Uh, and one of the things is we have this joke because so for those who don't know, they they take all the snow from the streets and they pile it up in this old airfield that's kind of mid Toronto or a little slightly north and you can drive by it on the highway and there's always a, you know, a dispute about or not dispute, there's always talk about how long till it melts and you would think that this thing would be like, you know, done, right? you know, May, you know, you get a hot day or whatever, and it goes well into the into the year. And so, there's talk uh like that we might actually have the kind of uh the glacier event on our snow pack cuz it might make it through the entire year into the next year. That's how much snow we have this year. >> That's insane. >> Yeah, it'll be funny. We're going to have to do it. We're going to have to get >> I'm not going back. >> I'm not going back. >> I know. You're sitting there and you're 37° and you're just like >> you're not going back. But you are coming back and we're going to see we're going to see each other. >> It will it will be nice. >> But I last week uh while you were freezing your ass off, I uh I was down in Mexico City. It was uh it was pretty sick. >> Oh, I've never been. Is it nice? >> Oh, it's it's honestly uh one of my favorite North American cities. >> Really? >> Uh absolutely. And uh and uh yeah, I've been this that was my uh fourth time being there in the last few years. But uh this time around was awesome. I was down there with uh with my inner circle and we were trading. But we went uh on a uh a little trip and we uh basically went to the Temple of the Sun and we went uh on a balloon ride uh basically to to check out the temple. That's uh it's this temple right over here. uh that that's the uh the big uh uh one that they have there on Mexico City and uh it was just an absolutely once in a-lifetime opportunity. It was it was so awesome. Uh I highly recommen Patrick has posted this picture that one of his members has taken and it looks like it should be out of National Geographic. >> Like literally you should be sub you should be submitting that for for consideration for the picture of the year >> and um Sorry. Go ahead. >> Epic International one of the members that uh that actually took the picture. I my camera skills are nowhere near enough uh to to be able to capture something like that. He just uh he scored the money shot. >> Do you want to tell Can you say his name or no? >> Uh George. >> Oh, George. >> It was I'm not going to say that. >> No. >> But uh but George nailed it. Like uh just amazing picture. Uh but it was but it was so awesome in person. Like just uh we went up into the air at 6:00 a.m. so that way we'd uh we'd be there for the sunrise. And uh it's it's honestly highly recommend it. If anyone uh is heading to Mexico City, hammer the uh balloon ride in on the thing. It's totally worth it. You know what you um it just you feel like when you're saying that um all it can remind me is that you know that song you're so vain. Um one second and not that you're vain but it's like um so if we pull up the lyrics it's like what was it? He drove or is it something about Learjet? Oh yeah. Then you flew your Learjet up to Nova Scotia to see the total eclipse of the sun. That's kind of feels like you. >> You're just like going around the world doing crazy stuff. >> By the way, do you know who your Sain's about? >> No, >> you probably won't know. Danny, do you know you? Danny won't even know the song. Danny, do you know the song? >> Sing it. >> No. >> Good way. >> So, you don't know. But anyway, >> anyway, so the song, she's never admitted it, but it's pretty it's it's pretty um well known that it's Wor Bey. So when you hear that song next, it's it's about Warren Bey. >> He was a a famous uh Playboy philanderer flander philanthroper. >> There you go. >> Whatever. Anyways, okay. >> All right. Let's wrap. >> All right, folks. Thank you very much for tuning in. We'll see you next week. Stay safe. Trade smaller. It's scary out there. >> Cheers, everyone. Byebye.