COMEX Futures Veteran Insights (Guest: John Johnston)

Summary

This week, Kevin & Patrick welcome to the show, John Johnston. They’ll discuss his career on the trading floor, explore the silver …

Transcript

hit it it's Friday March 14th 2025 episode 260 I'm Patrick cesna and I'm Kevin mure this week we welcome to the show comx and NX veteran and author of The Market Vibes letter John Johnston we have a great discussion about his career on the floor we talk about the silver squeeze of the late 1970s and then find out what he is buying and selling today then Patrick regales us with his technical analysis Wizardry in talking charts and for those who are interested in learning more about Patrick and his team at bigp pictur trading.com make sure you go to his website and register for the completely free webinar on March 18th stock repair strategy using options all right well thanks for the plug Kev uh I have no beer I have no beer no no explanation I I AP I apologize anyway we're gonna just have to go straight to the disclaimer all right 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 hle may include the recession risk reverberation I was worried about actually saying that one Patrick but I did a job you pulled it off you pulled it off volatility vacuum Vortex and the short squeeze spasm which is gonna happen soon at some point all right let's get to the guests all right it's our great pleasure to welcome to the show John Johnston uh comx and Nyx veteran and author of The Market Vibes letter John JJ as you're well known thanks for coming on thank you good to be here that's uh before we start I have to say something about your background and for those that are listening JJ is writing or uh talking to me from one of the coolest rooms I have ever seen I feel like you're in medieval England or something like that or no I should say actually what 1800s New York uh what is that room tell me a little bit about your background so I'm I'm in a house which was designed by Thomas Edison oh and it was uh the residence of a guy who invented Dr scholes ins yeah yeah so it was built in 1908 uh it it's the the construction is is an Edison invention where it's the the foundation is cut out of the ground a cage a rebar and and it its shell is built for the three stories that it is and then the entire structure is poured uh solid concrete top down in one poure oh so all all of the you know ancient intricacies you know whatever they had as technology in those days are trapped inside two feet of concrete walls and where about is it where is that New York or is it or where are you like connectic or something yeah in Mor New Jersey yeah New Jersey okay got it all right uh so why don't we learn a little bit more about you before we start talking about markets and you do have some great stories and we're going to have a lot of fun but a little bit about yourself where did you grow up did you always think you were going to end up on the on the floor trading and you know how did how did the early part of your life develop well uh well I came from an upper middle class family went to private schools got a pretty good education uh my mom and dad were divorced so I was by Coastal like you know spent Winters in California summers in New York City and Upstate New York and pretty nice I went to uh the first job I got on Wall Street was I was a runner and uh I love did you go to university like did you did yeah I went to University of Arizona and what did you study there liberal arts liberal arts most art history you know Russian lit where I picked up the name elosha and that's a Davi character okay and and so so you go study you know this uh uh the liberal arts background in Arizona and then you know are you just looking for a job and you're like I just need a job I'm gonna go to the floor and go work there how does that work well uh you know was um not not not a really interesting story but I didn't get along very well with my father when I was young I you know 60s guy really wasn't really he was a military man um officer followed Patton in the second world war oh jeez and so you know we as I say we kind of bumped heads but um when I was in my 20s uh I had to kind of rescue him down in the Caribbean uh because he was drinking a lot of Jin and eating raw chicken and in a hut somewhere oh my gosh yeah he had a lot of money so he could do whatever he wanted um anyway I brought him back to New York put him in the hospital when he got better he and I became roommates in gry park oh okay right and uh got to like each other and so I feel like that should be a sitcom not quite sord and Son anyway so he you know he ran an ad agency is his father my grandfather was a very successful financier in New York City around you know the World War One days he was one of the most successful Bond salesmen in the nation and uh he ran a bank uh called the Handover bank I know it for sure became uh many handy yeah he stayed on the board of that that that Institution for the rest of his life actually anyway um so me and my father were trying to figure things out probably 23 24 years old at the time and uh he said well you know money's made where money is and he helped me get a job as a runner from one of his Pals who was a specialist on the stock exchange okay I I segue out of that to a a better wage 90 bucks a week uh for Continental grain and they had a startup in those days called Connie Commodities okay which was one of the first uh you know retail Futures Brokers that uh took in specs okay so the the guy who ran that uh sponsored me for a series 3 and uh so what year is this 1970 7576 okay so it's early like the so and it's the Hees of the pits it's wild you're there eventually you go and you start trading for yourself and yeah so I made a little money I made a little money um actually I made quite a bit of money as a sales guy in 7677 and um I bought a seed right away the first thing I did you know because I had to go to the floor a lot when I was a runner I right there was the Coco exchange on John Street cutting on wall the Merk was over on Harrison yeah and I was running checks up up Uptown downtown to all the exchanges uh making margin calls you to be like guy showing up saying you know you got to S some money you got to come up with some money and that's funny that that's how you did it you did it like actually showing up at the exchange actually yeah it's you know I work for a a xmarine Corps guy uh Sergeant actually and you know I had to show up early and he'd say you know get your ass up to Park Avenue get those checks and get down to the Coco exchange otherwise we're gonna sell these guys out right right so that was a perfect job for me you know okay so you buy this seat and you have this story about how you got your start in terms of because like buying your seat is one thing but you still need some to trade and I thought this was just the most touching story in terms of what the other members did in terms of funding your account oh yeah well that was that was interesting um you have to kind of work your way up you know I I what I did is I took my sales business to the floor no one ever did that you know and I was able to get some banks and uh nothing makes you more popular than success particularly in that environment so you know you're feeding everybody they're feeding you you're taking good care of them and um when I you know when I bought a seat and I went went in I was sponsored by some guys that were very respected and on you you want me to tell you about how they came around and gave me money yeah I love this story I thought it was just like I felt like I don't know it's like I don't know why it would just it just seemed very unusual not what I expected and it was a great story so please it's kind of a ritual uh in those days you know the exchange really wasn't a bunch of geniuses it was a guild and trading is was was not not Visionary or anything that it's a skill you your job was to make prices and so locals you know this is before we had Bloomberg and and um I don't know technology or anything like that you know your job was to if if someone was asking for a quote you made the quote you know house right 10 20 and they sell 50 well I don't want 50 I'll take 10 right right then I'll be like even bit yeah um and okay sell you're 40 more so what I'm doing is is I'm getting the edge and I with that edge everybody you know traded a lot trade with each other and just you know try to make a little money you know and if I didn't really want to buy them I wouldn't say anything right right or i' just show an offer and then you know no one would trade with you that was the way the flow went every day we opened around I guess we open around nine o'clock and closed I think at 3 yeah that was it you know when gold closed if you were long or short you were yeah there was nothing to do until the next morning right so most guys including me learned how to trade flat right right you had a day you made money or lost money or anything like that every day is a new d new day although uh there were charting services that we subscribed to that came in the mail and we could update them with the pencil okay but tell us the story about how they funded your account all right so um you know I started out the first day I had to do a few orders and so forth but at the end of the day um some of the guys came around and they said here I'm GNA sell you 10 at this I'm G to buy 10 here be 500 bucks another guy came over and he you know did about the same thing one guy gave me a grant uh his name is Johnny EO um so everyone just came in get trades that were automatic winners for your account stuck them in your account yeah were so that they funded you and then they they left you with one piece of advice what was that you'll never be poor again yeah but they also said never take never put money into your traing account which I was kind of shocked about I remember who said that maybe so anyway he said couple things he said this is your money you know never put money in a trading account you only take money out yeah only take money out if you're if you're putting money in the trading account you really have to step back and think about what you're doing maybe you shouldn't be doing this that's true you know you shouldn't actually so yeah and then he said you'll never be poor again kid and so this was in this the early late 70s and I guess you were in the silver pit for one of the most most famous episodes of all Futures tradings ever and that was the Hunt Brothers cornering silver and I was just to prepare for this I went and grabbed the quotes just so people understand because I don't think that a lot of folks there's not a lot of folks that remember it and you probably just can't appreciate it so I went and looked at it at the end of 1978 or sorry at the end of 77 Silver was four and three qus yeah at the end of 78 it was six bucks at June of 79 it was eight and a half September of 79 it was 16 and a quarter don't forget this was four and three qus just two years earlier yep December of 79 it was 3220 January 15th it was 44 January 18th it was 49 and a half February 1st it was 35 and then March it was back to 13 and then December 1980 was 15 and then December 1981 was 8 so that has got to be just one of the most wild periods ever I would just love to know oh man what it was like being there any stories any color you could share about that period so I work for Norton waluk who was probably if not the one of the most important players in that in that squeeze um he was my original boss he hired me you know he didn't hire me Harry hired me but he sponsored me to for my Series 3 and I was working at Cony Commodities at the time um that's pretty green you know I I I had made by that time a lot of money not even knowing what I was doing um because I did what everybody else did and it was it was easy to make a lot of money the more Frank a guy stood next to his name was Frankie ly in the silver pit he also worked for the same guy that you know I I was in his Booth a friend of kind of an incestous relationship but at any rate Frankie he was just a regular guy an Italian guy got great guy you know FLIR trador and so forth I don't really know how much he made but I know that he lost $4 million one on the opening he had you know his his it's you know when you're making that kind of money yeah but and not only that just to put this in context folks this is in the like early 80s 4 million bucks is a lot of money this is yeah I guess it was January because uh what it h I went to Aspen the weekend before with some guys right and we were all you know drinking playing back Amon for like a Grand Point $20,000 games and things like that and uh um so uh I came in the next morning Frankie was l a bunch of sugar he was long a ton of silver and silver had had gone uh liquidation only um can you explain to people what that is well um yeah the squeeze was from the lungs and there was no silver and uh I think J was the guy who was able to get um The Exchange to get it through its head that if they allowed this thing to play out the way Norton and the guys in Brazil were going to and the Hunts and so forth were going to make it happen it would have been the end of The Exchange okay it would have it would have been catastrophic for futures and it may have like taken down some really big Banks because every the the cycle of the silver was to buy it on the exchange where there were no limits yeah receive all the silver because you had to deliver a default right send the silver to Zurich collateralize it get the cash buy more fatures and and that that went on you know both were the guys in Texas uh a click in Brazil our guys in New York yeah and Norton was the guy my boss who was the guy who was going to the floor every day and you know just silver was like just pick a price you know 20 21 and a half 22 or something like that he just come in and he'd say I'll pay 25 for 5,000 Lots so come on really actually this is true he he would well maybe not 25 23 24 yeah he was so regular through he it through to get size they the guys on the floor paid guys to stand by the elevator bank so that they could you know run up the stairs get to the pit and let him know that Norton was coming to the pit wow wanted us he wanted us to load up for him right yeah he don't want to stand in there and like go I'll take 10 I'll take 20 I'll take three 68 two I say you one you know he wanted to get hundreds at one time and best way to do that was to get us long oh so you guys could show him an offering so when you walked in there when he walked in there and went 24 bid you could sell him a thousand well if you're clear remember would let you put that kind size on whatever the number was but yeah okay 500 or 200 or whatever number was he could trade in size instead of trading in twos yeah but sometimes it didn't work too and you get stuck right yeah maybe Norton was just going to lunch anyway so that you're so this guy lost $4 million on the open one day yeah that is just obene that is I'll tell you why because the Merc had this contract silver coins yeah and there were bags right and so you know when you make that kind of money you think you're inven right you think nothing can happen to you but the MC had limits uh different limit rules right and and and so our guys we had limits as well but we could still get out of silver some of them I didn't I didn't get caught long I was I didn't have anything long um but it was easier to get out on the comic because it was for liquidation words The Exchange wanted the market to go down okay but the Merk was like this parochial old uh butter and eggs kind of exchange their big product was platinum and padium and potatoes potatoes I didn't know they listed a silver bags contract which was quarters and dimes okay so Frankie had like a limit position of that and that just went limit down limit down limit down limit down never traded just went all the way down so he lost money on that that day he was long a bunch of sugar that came in limit down silver went in limit down and so when you know in those days um the market just blocked and there was there were things called pools so you had to put your offers in a pool and pray that somebody would come and buy it and so oh wait I don't understand that I didn't realize that I thought you mean you got in line to sell yeah yeah okay as soon as it went down you know you showed offers and then you could you could enter volume in a pool okay which uh which was first in first out what was it first in first out or was it random or Pro yeah you you put your offers in at the rostom said 50 limit right okay and then you'd watch it and it could pile up and you'd watch the pool grow you know there could be like a thousand in the pool 2,000 3,000 in the pool oh wow and um so you knew nobody was gonna buy them right yeah or if somebody did they would take them all and then you didn't want to sell them and then right so um anyway uh it was pretty crazy it was it was pretty crazy um I'd love to talk a little bit about your story that you wrote uh called writes a passage and it was a story to your daughter yep and I take it that you've gotten a lot of feedback on that and I was kind of reflecting on why you'd gotten a lot of feedback and for is this one by the way do you need to pay for your substack to get this one or is this one open to the public I think you know you have to subscribe now I mean it's free it's free for I think I leave it free for months and then it kind of all those old stories you know there must be 20 short stories and stuff like that it kind of just goes to the bottom of and and people just stop reading them yeah well they shouldn't stop reading this one because it's absolutely fantastic and it's a story about your daughter that was having trouble uh making sales because people around her were cheating and and it was just you know your advice to her in terms of what's more important in life and it and it was really touching um as I was watching your previous interview and thinking about this thing that you wrote I remembered actually that there was a big sting operation in many of the uh Futures exchanges in the 80s and because there was a lot of problems in terms of or I don't know if there's a lot of problems at least there was enough problems that the FBI actually put in undercover a you know uh agents and stuff like that so I just love to kind of get your opinion about um why you wrote that talk a little bit about your philosophy about cheating and just kind of the feedback that you've gotten from that I actually don't know why I wrote it you know I it's been rolling around in my head you know I've always been a broker who writes and I write about the markets and occasionally I write short stories and uh I must have written 50 uh at least and these short stories that are in my substack now uh some of them I had sketched out in earlier days and this was one of them um they kind of sat on my hard drive for several years really yeah and um occasionally you know I go back and I prowl around and that stuff just oh yeah I wrote that you know how that's kind of cool I like that and I said the other thing so after writing on substack you know substack is like is is intellectual uh weightlifting you know it's it's it's a discipline I get up at 4:00 every morning I ride for a couple of hours a morning piece and then I write for an hour at least at the end of the day an evening repap and you know it it really elevated my skills my ability to you know select words language and so I thought this I saw this and I thought I really like this story I wrote I'm going to rewrite it and uh so I did essentially the same um it's for your for your listeners it's a story of about my daughter and I having dinner at the gramarcy uh it's the gramarcy Inn yeah um in around 2015 or 16 she just gotten out of school uh trying to figure out what's going on in life she had a job at Yelp and the sales pit so Yelp was just Rising then you know stock might be 10 bucks on its way to 100 she'd gotten a few shares of stock and you know she thought that was great but she was very frustrated because there's tremendous pressure on the sales team and there about a 100 people in the sales pit to make a quota right and and uh being a sales guy I know I know what that's it's not the quite the same thing for us but you know there's a lot of alpha jerks right that are willing to like you know say whatever needs to be said right yeah promise whatever needs to be promised close that deal move do it again move do it again and some guys made a lot of money so she was frustrated and said you know I I don't know what to do I uh everybody lies you know I I just don't think I can lie so we talked about that and I told her about you know my time on the floor which uh forces everyone because it's an honor System everything we did in those days was your word say a 50 no matter what happens those trades are going to be good right and the whole system on the floor would break down if there weren't that initial very very very high level of honor and beyond that you're talking about some of the stings in the 70s or in the'80s um you know guys did things that I didn't want to do right I just I just didn't want to do them I I wasn't brought up that way I couldn't I just couldn't do them so uh I told her about that and I said you know this is this is this is the way I did it you know find it find find something you can live with draw that line stay on the right side side of it and everything will work out for you and what I I think what was most touching about it is also you talked about how it was a difficult time in your life and it was probably would have been easier to actually choose not a different path and I think that's what really a lot of people my guess is that they respond to it is because everyone sees these traitors that have done well and they go oh that guy probably never had any Downs he's been all up and all you know everyone seems to just talk about their winners and nobody talks about their losers or their down periods right like Traders will talk about their trading well so that is true when you get real Traders together in a room like like I personally you won't you won't get me talking about my winners but I'll tell you a lot about all the bad trades I've done and it's I think we're a superstitious bunch and stuff like that but when you go in in this world of of social media and people getting up there on CNBC or whatever it it's easy to think that these people don't um have never had a down period and like you know I I personally I'm not a big Bill Amman fan but I have to say that the one time I found him the most uh human was when he talked about how his he ran into this problem you know in terms of his his fund he says I was having trouble with my fund I was having trouble with my life and he was very open and honest about it and it was the only time I've actually found myself you know liking the guy was when he was you know when became human and I think that that's also what what comes through in the story is your humanness right in terms of the the vulnerability as Traders well uh yeah I I I there were a lot of different people down there there was Geniuses but they didn't even graduate from eth grade they were gifted and and good trading is has many many parts of it you know it some people like famous Traders Market Wizards gu they're they're they're they're just one in a million right and you're not going to be that so there are other guys who who are steady 10 lot 20 lot locals always making prices always helping out always eating errors just good guys right and you can make a really good living at that and so you see that as an example around you you see them behaving honorably and then you see other guys not maybe not doing things the way you would really do them you know and there was a lot of that going on yeah um the the the pit is organized like any other um uh anthropological Society it's like a society of Apes you know what I mean they're the big powerful apes they're the regular Apes in the tribe we have our squabbles and and stuff like that they're the little guys and um every now and then some very successful and gifted person would challenge one of the big apes and he would become a Big Ape and that's really it you know and the tra the the pits were tribal uh Traders didn't leave their pits you know gold guys stayed in gold silver guys stayed in silver I went to Copper because I wanted to you know get along some copper they'd make room for me I'd be a tourist I'd be a guest but I was a member they'd allow me to do my business and go right I stayed and I started competing for like spreads and legs and things like they're like what are you doing F off man gonna be here stay here you know and of course you know I already I had a spot I had my spot in gold and and and moving to a market is a very challenging experience you know it can be really expensive and there there's a lot of competition you know where you are if you grow up in a market right if you if you if you if you write brokerage if you're a phone Clerk you become a pit Kirk you get sponsored and you come in under the wing of somebody you belong right you've they you're you're a known person and so the The Honorable requirements of being in the pit in those days had a had a vetting process so just to get in there right you know you couldn't just come in and buy a seat and say oh well now I own you know I'm going to put 100 Grand in my account which was you know pretty much the minimum you had to be self- guaranteed at that time um and go TR afid yeah that's not going to happen you know people would they just ignore you and the one of the the great rights about being a member in those days was called recog recognition trading like there could be 20 guys bidding you know for a spread that was 1020 and buy the to buy the bid or sell the offer was was essential if you paid the offer and it went against you now you had to sell the bid to get out it could be it could be you know really bad if you did that a few under Lots so um you could pick whoever you wanted to trade with you get 50 you get 10 you get 85 you get nothing you know you didn't trade with me why should I be trading with you yeah so you were organized in little areas where you had your friends and on the other side of the ring you know maybe there were some some guys you like and then there were guys you didn't like and that's just the way life was I watched this um well actually not only did I watch the the speech that Charlie D from Chicago did but I also read his book and one of the things that he always talked about was making your pit size bigger and how important it was when you were going to hit the bid to make sure you expanded your friends you or you gave it to someone you owed and that was really like crossing the bid or offer was a chance for you to expain your pit size was what he argued the pit is that it's just like that right and here's a good example uh you want a story here's a pit story so later on in the 80s I had a really big business one of the biggest silver books I'd gone from gold to Silver right okay but I was sent to Silver by someone so the silver pit had to respect that right right I was representing someone big so I you know that that's how I got in but I still had to fight for my spot so anyway I'm standing next to this guy salico who was J's uh right-hand guy a really good guy a pretty big Trader and so I'm filling this order it's a pretty big order and I'm I'm hearing him bidding for what I thought was a piece of size 60 Lots I said sold sold you know but I didn't check check it because he's standing right next to me and I'm trading with a lot of guys and I wanted to get this fill out so about an hour later I came back you know his or cler his Clerk and my clerk are there hey you guys have out and he was bidding for 16 not right yeah so we had a lot out and the market had already moved like 80 cents oh gosh so yeah it's just it's about 40 Grand maybe more it was it you or him that was out well it was an out so we had to split it oh is that how it works yeah no matter what you know I didn't know you guys split I claimed him on 60 period that's it so he had it buy 60 that's that was it you know you guys split it yeah so okay so then what we did is we got you know Julie brosky Craig Efron some other guys you know and we said hey we need you to help us here I I think Jack andala was another guy who took a piece of it uh you know the locals that's their job so you split up like A50 $60,000 error and everybody gets like five 10 Lots five Lots five Lots so then for the rest of the summer this is like in the early part of the summer everything good every good you know if I had to sell 50ds we're trading July it's a widespread you know that went to these guys I did not do it that's how you guys did it ah that makes sense got it we we paid them back every penny and got it that's the way the pit worked okay so let's talk a little bit past the peak the pit because only old guys like you and me will enjoy those stories let's talk about going upstairs and of the things that uh first of all what was that like going upstairs for you like moving doing the move I can't remember when the Nyx and comx did it in relation to Chicago were you guys earlier or later than them they were or the same time you mean when when we bought the rollup no when did when did you guys go to electronic trading like when did like who was later in terms of keeping the floor alive the same I wor for I work for refco and uh I think it was 2005 2005 uh they were doing an IPO with Thomas Lee yeah we all had shars and everything like that and you know they ipoed in September and the first week of October I'm having breakfast with a good pal of mine did a lot of business together he worked at refco and he said we have a problem and uh ref uh Phil uh who ran the company at that time had done a uh $500 million deal with bwag in Austria that he didn't disclosed during the IPO and it it was a kind of exident discovery which invalidated the the IPO and refco stock closed at 30 on the Friday afternoon before that on Tuesday morning it opened at 45 cents okay but was this the floor trading going electronic that's what I was asking about yeah so you're that by that time it was still electronic but uh I got sold 10f Global I stayed on the floor I went to I probably around 2007 Okay I uh I had I had to leave the floor yeah and it was just because there's no more money there it was like it gone electronic you couldn't compete right uh as as an open outcry Trader with the electronic markets right okay so I'd love to talk about that because at one point you tried to go and write yourself some code to actually do what used to do what was that like what was the basis for that um what ultimately did you decide uh you know like you're writing code in C what do you are you writing to the TT system like the trading like like walk us through how that worked in your thought process and your experience so uh I got plenty of money when I got cashed out by the CME okay seats went for Millions you know so uh I had a comic seat so I had a little over about a million two out of that and then um I had some other money so I decided I was going to uh to learn to r c okay I wasn't gonna you know start a um a corn farm or something like that I uh so cqg who you may have heard of there yeah I know CG Top Line uh front end um they were just uh doing a um a beta group for a thing called AutoTrader which you had to write your own systems right and so um I teamed up with a guy who knew how to write code and we started writing you know taking my trading ideas and putting them into code and so he taught me how to write in the specific cqg language okay which is a form of C right okay so you know you use use their symbology and it reaches down all the way down to machine language right and you know it does what you want excuse me so I I I liased with tons of systematic writers uh Toby krael who used to be oh I know that yeah great guy range breako right isn't he the author of that right those guys right yeah so and I showed him my work and so forth and so he was helpful to me but you know nobody givs away their systems no one is ever going to tell you why they've what they've discovered and and a lot of itless it doesn't work then they'll be happy to tell you so what I found out really for all all of the the hundreds of hours that I spent you know trying to grind through data and back testing and all that stuff is that the most important thing about systematic applications is is whatever you know was it was okay it's it's it's it's pasted right right and there is no certainty about this very next minute day week month or anything like that and the most dangerous thing that's going to happen to you is Divergence so you know um most of the things that you learn are isotropic that's a big fancy word $10 word but anybody who writes code knows what it means it means that if you do 10,000 trades at the end of those 10,000 trades you'll have exactly the same amount of money that you started with okay everything it's it's all even so in the middle of that you have the cost of execution you have commissions you have slippage then and then you have draw Downs you know and when you're in a draw down it's like you know not great yeah so you so you did this work you decided this wasn't it but eventually you come back to trading because you trade a lot now um and you just decide you're going to go like your style must to change though right because you're in the pits and you're yes you're doing some longer term trades but I'm assuming you're sitting there trading spreads filling orders like being a lot more active than you are today yeah that's completely different now you know I I I can't I can't you can't you can't approach the markets today uh and survive because you have so many disadvantage es like for instance you know as I said I was I was long s smps this morning I was sure it was going to be an update I said you know just got to figure out how to get in right yeah so I got flat last night and I I didn't want to take anything overnight so as soon as I could I saw it wasn't up much I got along so we go into and it's everything's going great so we go into this Michigan number which is never anything you know it's just just like nothing not only that it's really seriously for 400 Michigan old people that answer their phone like it's a stupid thing to be so focused on but anyways the market is but anyways go on whatever so you know I've never traded with that stop if it's can be a wide stop you know or it could be a tight stop usually I try to look for some some kind of sa Tre and can I ask question about that you say I never trade without a stop is it implicit or explicitly in the market no it's Lo it's in there yeah okay that's why I wanted to know because some people will be like no I hit this then I'm I work out or whatever yours is like it's in there I'm I thank God every time I'm stopped out thank you that's a good line I like that those those stops are sometimes the best trades I've ever made right I you know I I'm going in for risk you know I'm not I I'm not looking to just like look at a trade sit there all day I I want to make money so you know uh yeah I'm going to put a stop in and you know if it starts going my way I'm not going to let it get away from for me you know I I I i' never been a big fan of like you know little bit here a little bit there or anything like that you know I like to get in I like to make the money and I try to have enough discipline to just take it off you know okay not I'm not going to get the highs you know and if it goes way up and I and I miss that well I might have just held on to it and when it went all the way down it may have gotten out lower I may not have gotten out right they give you the money you win so you know and you learn that you know like uh trading as a local you you have a mortgage you've got kids in school you got a life wife that likes to make you know goes go shopping and uh you can't you can't not make money otherwise you shouldn't be doing it you know so anyway I us stops and so this stupid number comes out I stopped out on the Lowe's and it just kind of wrecked my day you know but it wasn't you know I never I try to avoid as I said I look for safe entries and if I can't find something that you know I think is reasonable uh I just let it go and so when you looked at that and then you get stopped out and obviously then very quickly trades back up do you ever go you know what I'm getting back in even though I stopped out or is that like a cardinal you know sin of trading yes it's kind of a sin yeah you know you you had a trade idea you know you put it on unless you know unless the Market's really moving right like yeah and then it's a new idea though so we were coming down last week you know I was I've been short some PS I to this because I'm ashamed to say it but I I've been bearish on snps probably since last August right okay I had a killer trade on the 5th of August you know I had a load of puts they came in took come all off made a lot of money on it I'm up at the river uh where I was born you know and I'm thinking well I should probably leave this alone but I did leave it alone so um it started going up I shorted a little bit got stopped out shorted it got stopped out short so the the period after I don't know if you remember what snps are like um they kind of they had a really big October so I didn't get hurt there I you know I I I read what's going on around me and I respect smart people so this guy ruer at Goldman said hey yeah yeah Scott yeah right and when I read that I think well okay I'm not short in socks here right okay should I do that because all the people that he writes to they're buying right so at that point you're bearish but you'll say instead of instead of getting long because you can't bring yourself to get long you'll just be like I'm just not gonna trade I I forced myself to get long oh you did you okay fair enough okay I I if I find myself you know with like with 10 trades in a row on the same side of the market you know you're you're a weeder dude you know gotta force yourself to to buy this Market you know okay yeah right just just do it shut up and do it so your opinion get in the way of making money well you know yeah you're in our world right now if you're trading you know I'm here in my office alone I have a bunch of books I have a lot of memories and I have some wisdom and experience but uh there's no one to talk to you know like in the pit if I kept shorting a market what perfect here's a great story right so I sell this guy Frank maera 50 lots of of of gold I can't remember the year or anything like this some kind of 82 number right yeah and it dumps goes right down to 75 so I'm up like 35 grand and I'm I'm standing next to this guy Steve clles you know and he's still got that 50 I said yeah he goes what are you waiting for what you stupid yeah you know so that wounded my pride and I did not cover and so oh seven bid eight bit nine bid and I'm thinking oh man oh absurd so anyway I got out I didn't lose money but I sure left a lot of money on the table so that is a good story I like that the reality of that story is is if you're in an office if you're on a trading desk if you're in an environment that's a human environment there's no secrets there right you know I sold you 50 you know that right you bought two it's trading eight I'm like yeah like hi how you doing you know if you if if somebody's losing money on a training desk you know it you know you you feel it with them you're all on the same team and stuff like that so there's no secrets so there's conversation and it's it's a different environment when you're alone it's just you you you have to have the very unbreakable rules of like stops and things like that otherwise you know you can wind up you can wind up well just having a catastrophic day right yeah so uh anyway so I forced myself to go along and stuff like that so October wasn't too bad for me but when it you know after the the Trump move in November I realized that that rally in snps was like a one-day rally it you know went up that day and it never went any higher or oh yeah know you're right it struggled it just it just did this and then do you know what the most amazing part about it was even though it was going sideways people were getting more and more bullish exactly yeah and like um it's covner that talks about what I really look for in a market is a market that is not uh price is not confirming sentiment and that's what that was happening you as everyone got more bullish it should have been going up and it wasn't it was telling you it wanted to go lower well I I thought so so I uh oh God anyway uh I thought it was going to happen sooner I thought we were going to have a serious break in December because we have had some bad you know year in breaks and everything like that but we did have a little break there was a day or two in there big spiked the curve went inverted slightly like there was a little bit of a selloff in there but it was so we it was a week or maybe it was two days I can't even remember well i b a lot of puts and um you know anyway so I I got hurt on that uh but I so I decided of little screw and I'm highly confident it's going to happen although you know I never say anything like that in in my writing because I don't want to hurt people yeah but it's there's no question how I feel about a if you read what I write yeah like I the other thing is that good Traders don't need to be told you know what I own all these puts they know you say I'm bearish well you're he's bearish like he's going to be given a view or you go I don't really I don't have a view or whatever like you don't need to be told I own X number of puts or I am this bearish nothing like that plus if you I think if you say you have a position you know it's it's a it's a brain killer yeah because then you don't want to let you it's tougher to unwind the trade right you have to defend it yeah well that's the other thing is right well again back to Charlie D the one of the favorite stories I have about Charlie D is he makes every Trader go out into the pit and goes I want you to hit the bid and I want you to take the offering right away there you just lost 12 and a half or what's the tick in the b in Bonds in the old days 32 bucks 31 and a half or something like that yeah whatever he goes you just lost 32 bucks that's how easy it is to take a loss don't ever forget it and I thought that was a really good lesson that it was interesting that way um okay so let's talk a a little bit of the the markets today what you're seeing obviously you're bearish but you know you're a Trader you were bullish today expecting it like do you still own your mask do you still own your puts and are you just are you trading No I gave up on the puts like okay I hate options they're brain Killers right you know you think you've got a position you don't really have a position you're not you're not short snps you're long some options right yeah yeah and the market makers literally you know they just crush your head every day and you know listen I can tell you screw this I'm just gonna sell some Futures yeah plug my ears hold my nose and wait for this thing to happen right oh I like it you're like I uh you know I was in and and going down you know I tried to trade it you know but yeah what I did was you know I never bought I never got long on this on this spill because I could just look at the screen and it was just hitting the bid right and and you can tell like there's got to be like 25 t- wops going all of them you know they're gonna Gonna Fill to close and it was you know why don't we explain to people what a t- is and fill the clothes and actually explain to people how that trading has changed in the last you know what I would say 10 20 years in terms of more and more or trading is done this way well that's probably the the backbone of all box tobox trading and you know what it is is you have a fixed quantity of of stuff to buy or sell yeah the the algorithm will time slice it over a period of time that you want to be executed in it can be 10 minutes can be two minutes can be a whole day it can be any amount of size and you will get a a Time weighted fill uh so it allows the market to undulate and you know you can capture that without without becoming the market but when you get uh a market like this one where uh Scott bassent says uh there is no put on an interview in CNBC well that was like pull the plug here's a grenade and the stock market just went straight down everybody said screw it we're we're getting out and so and and the thing that that you know was the most vulnerable of course were the Maxs and Nvidia and so their their waiting was so immense the the NASDAQ just just just put a hole in the bottom of the ship and everything went down okay let's talk a little bit about gold because that is your like passion am I correct like that is what you like talking about the most is that what you like trading the most or are you more a spoze guy uh um there's not a lot moving right now except for gold and it has a very unique way of saying moving right it's just kind of like silently up right I I agree with you I agree with you why do you think that is it's a it's a long answer I I I wrote about it in my substack this morning okay and uh you know I I'll try to I'll try to tell you why it is um in the western world uh for us for all of our currencies here the most antithetical or threat to to uh modern finances gold you know they don't want people talking about it they don't want people recommending it when's the last time you saw Goldman recommend buying gold well gold Man actually did like uh a month ago and that's actually why gold stalled for a little bit but you're right they don't get on TV like when's the last time you saw a big firm get on TV and say buy gold nobody really says it no great an is saying it no no one's you know planting their flag saying Gold's bullish we should be buying gold like nobody's talking about the fact that Gold's beaten the S&P 500 over whatever time period it is right like some people like acknowledge that yeah but you can't get away from it yeah I can't ever remember a someone asking Jay Powell in one of his press conferences after the f1c uh hey Jay you know I know we're trying to solve this inflation thing here you know when what what about gold yeah what about gold yeah and um there were uh a number of events in the market for anyone who's trading gold since the the you know October 23 launch of this gold market you know when they they had the Gaza thing blow up um the Sunday night of December 4th uh there was a go new high and a lot of uh barriers and options were um everybody knew about them right so everybody these are option these are uh options that are barrier options that are when they're St when they hit a certain spot they kick in and they become profitable Struck it around Struck it around 2175 is or 21 something up there okay anyway so that that Sunday night everybody was on everybody was watching because it came in like uh 75 higher right and millions and millions of ounces were sold and it and it went down not only did it go all the way down to unchange it went down 50 lower and came closed 50 lower the next Monday okay that I think three days later two days later was a Fed meeting and so I said to myself no one in the world ha has either the desire or the resources or some kind of purposeful intent to sell that many millions of ounces of gold but you not yelling think it's yelling so you're uh so you're are you in the um the Elon Musk uh Donald Trump uh camp that there's not going to be the gold and Fort Knox that they everyone expects I I think there's uh there's something rotten in Denmark I I I I don't know what it is you know but I I uh there just how about the fact that it's now 3,000 around but now it's 3,000 bucks so you asked why I think it is and we're sort of like you know slowly Meandering towards why I think it is what I what I just told you is that there there is definitely you know um an aversion to having gold be a part of the financial conversation now because we owe 36 or seven trillion dollars uh let's back up for a second here you're saying gold is going up really that the gold gold is not going up gold is like the sun in a solar system of financial assets that are all revolving around it gold is like the fair man and sartha the river never moves when you know when I saw the sun coming up this morning I think you know yeah it's the sunrise but actually in my mind I'm thinking I am rolling towards the sun on my planet right okay so when you see gold go above 3,000 what you should really be thinking is everything else is going down like this right so and that was the probe today uh every all of the paper world is in a constant Trend lower because it can't escape escape the kind of Doom Loop that we're in right which is with the market the gold market is is we yeah I used to have a saying gold gold NOS two words gold knows gold knows gold knows what's going on so you know it is a constant commentary that pal and no one else could ever get away uh get away from and it would be the worst that would be your career ending question if you were at at at the press conference that's funny by the way I take it you're a fan of JP Morgan's line gold is money everything else is credit uh I've heard it I yeah I I couldn't disagree with that you know I've written extensively along you know Collegiate pieces about the history of gold in Mesopotamia and the bank of England and the 17th century and the founding of gold is money in you know the major Roman Minds in Spain you know one of the great things about being in gold and having a life in gold is I know these things and all of my friends and so forth close buddies that I've had all my life we all know these things um it's it's a it's a kind of like we have our own language you know and so um Everybody trades it differently but knowing about you know that gold coin you have if you have any that was probably mined in Spain in 200 BC or in Germany in in the 15th century you know these there are only a handful of great mines that have ever ever produced The millions and millions of ounces the South African mins in the late 19th century are among those you know so knowing you know when you when we start talking about Fort Knox and that gold where all that gold is yeah uh most of that gold has been above ground passed around in one form or another for centuries do you think we're going to have an accident because of the fact that we have all these Financial derivatives based upon gold and theoretically you know like going back to Silver and where if everyone asked for the silver caused the squeeze like could you see something like that happening in Gold I I okay so this you know you're never going to get the answer you want out me I'll say that wa you're just too scared to say yes because I I've been on record I think we're going to have a $1,000 up week in gold and I know that's not easily yeah and I and I and I just think to me it's all about the People's Bank of China I think they're the ones buying it and they're accumulating it and and the reality is you know you go talk to Gold Traders guys I talk to and I'll say you know do you know when they're buying and they're like no we don't know when they're buying but we know when Chinese Banks come in and then they demand physical gold and they take it away and they put it on a plane and and take it away and like that's the People's Bank of China buying it and the reality is to your point about all these Financial you know our our state of affairs if you're People's Bank of China and you have all these treasuries why wouldn't you be you know diversifying away from the treasuries into gold it makes complete sense and it's such a tiny Market it's not that tiny uh but it's tiny compared to treasuries I put it a different way um I think it's market cap right now is around 20 trillion of all the all the known stock of gold above the world right okay but most of it you know it's diffuse it's it's um a lot of it's in the form of jewelry which is uh in in in countries like India and other countries that don't have sophisticated Financial products to do savings and investment um that's the way that they they have their wealth and um there's a lot of it is in in uh in the motherboard of this computer or your cell phone so has industrial uses and then there is the remainder of what was once official gold when it was you know used uh for money which is hoarded uh we have 250 million ounces I think among the European central banks there's about 250 million uh China's official statement of what the goal it has is absurd they've been importing uh a th000 tons a year every year probably going back to 2013 so yeah why would they tell us like like I don't understand everyone that's sits around thinking that these numbers are real I'm like they why would they tell you that they're accumulating gold they have no you know there's no upside for them to to tell anybody right the truth about anything right you know and it's like an Iowa Corn farmer why should he tell you he's having bumper crop right he's concerned that's terrible that's the worst crop I ever had you know I mean this is just human nature anyway uh let's put it in these terms we have 250 million ounces or so was you know reputedly 250 million ounces if anything ever happened to that gold it would be catastrophic to this nation it would be Irreplaceable we would never and I mean never Capital never be able to replace it it would be and and the loss of it you know the the intuitive confidence that all Americans have while all this shit's going on everybody's lying and stealing and all this debt and everything else that's going on we still have it's like you you or me or something like I have my you know I have my gold coins in my sock drawer I still I still know I have that to have that be gone uh by any device grifting or lies or or something like that what about this what about if bessent decides that they have to give to the broag archs they need to buy some Bitcoin reserve and I know they've said that they're not going to add to it but let's just imagine they did it let's just play a little game let's say that they say we're going to revalue Gold to 2500 or three grand or whatever it is yeah and by the way we're going to sell a bunch and we're going to buy Bitcoin with it do you think that would be a huge problem with like would would us financial markets go offered in size if that happened well I don't know what this Bitcoin Reserve idea is you know first of all but let's just imagine they sold gold to buy Bitcoin you just told me how important it is to the confidence of America do you think that the dollar would immediately react by going down if that happened I have no idea you know know I I don't have a strong view on that uh okay I'm not a fan of Bitcoin you know John Paulson once said Bitcoin is a limited supply of [Music] nothing I thought man sign me up for for that you know that is a great line I can do anything with gold you know when when the is the fan if I have gold yeah that's that the only next best thing would be food or guns right I I can get on any plane I can transact any transaction you know I I I I'm the guy with gold I I I can get out of town so if I had Bitcoin you know what am I gon to do with that yeah I can't do you know I can't do anything plus what happens if the power goes out where's your Bitcoin well this is my point is that when you own physical gold it is nobody's liability you have there is nobody else that you need to rely on to own your physical gold when you own a Bitcoin you have a liability the liability is to the network that that network has to keep going and everyone thinks that the internet is something that's just forever going to be going and there's no way it could ever stop and I'm like no and not only that like let's imagine we go to war with China we all of a sudden cut the line between us and China what happens to your Bitcoin there's two forks which one is which I have stuff here and there gold nobody's taking your gold you own it we go to war with China you still own your gold right right and that's ultimately what I concluded about why gas you could buy coffee yeah you anyways that that's that's to me the argument but anyways that is a great line um okay let's talk about your other markets you have any other views in terms of stuff that you like don't like love to you know share with us uh well I've been selling rallies in crude okay let's talk about that what why like cuz I look at this and and for the first time I'm getting kind of bullish like I looked at the other day Goldman Sachs had um a series of sentiment indicators from all their clients and they went through it all and you could very easily see like the Trump bump and you could see all these different things and one of the things that I saw was just an object bearishness in terms of crud it felt to me like there's nobody left to be bullish on this nobody likes it uh am I Am I Wrong Am I just early or is it headed a lot lower I'd love to hear your thoughts well the market acts badly uh the margins are terrible uh if you're a refiner and you're not really making much money and you're doing an awful lot of work to make nothing yeah uh we're got a ample supply of crude uh Canada's going to continue to raise their production um I think we have had room to produce a little more crude but the the big the big risk to crude is LG and I think Trump gets that you know he's saying drill baby drill well I wrote a piece the other day called chill baby chill which is you know lngg man you know we have the biggest most sophisticated best capitalized energy industry in the world and all we have to do is deregulate it yeah okay so do you like n gas down here I think n gas is yeah I I I you know I bought Natty when it was you know in the low threes and I you know I traded and I made some money I got out and then um how do you by the way when you say a buy do you just pick a month you trade the strip what do you do well depends on what time of year you're in you know right so the places just you know I I am an old-timer with this kind of stuff so I know what Mar April can do and everybody hated March April March April was the worst spread on the board right so I bought it okay so for those who don't know March April is a notoriously crazy spread because if it gets that one last bit of cold I guess is it that or it's the one that everybody sells now right right I figured if everybody's this bearish on that and I natural gas had this winter the record high open interest and it was very very cheap and I knew Trump was coming in and I knew you know I knew what I would do if I were if I were you know going to try to build a manufacturing economy I'm going to need a lot of energy right and it's that's not crude oil you know you don't run factories and refineries and things like that on crew you run trucks cars there a transportation fuel the energy fuel to to to fuel this this economy that Trump is talking about is natural gas meaning that it turns into electricity electricity or you know furnishes and all kinds of other junk you know yeah at any rate like in Japan they've been I I wrote about this the other day Japan has been their taxis have been running on propane since 1965 it's a very mature uh technology to to run Transportation so it's cheap we can we can you know we can do this for a century and never never have to like you know worry about a cartel or someone jacking us you know or shooting our ships and and so forth so you're you have a big picture view yeah that Nat gas is gonna win over crude because it's a homemade a homemade we're gonna keep doing crude I know but in terms of we're going to move more towards neas therefore is a better trade from the Longs side yeah well both I think this is what I think is is why why am I selling crude and why am I negative on crude positive on that gas well the the energy equivalent factor of this this guy doomberg who's really a great guy really smart guy is all over this uh the energy equivalent is way out of whack yeah it's seven to one isn't it or something like that right should be like six or 7 to one I don't know what it is now it's like $5 do and cruit 70 so do the math it's like double what it should be right so um I having traded these markets all my life I know that they can they they they diverge they revert and then you know the the gravity of that relationship is going to bring those two together and I see the fundamental future uh validating that thesis so who wins you know do I want to be constantly uh dealing with uh n ass no it's not like a primary Market of mine so I just bought a bunch of l&g stocks and oh okay okay you know and I I've traded them all so I know what I'm doing there I don't really have to like you know scratch my head and say what what am I going to get or anything like that I just bought a few of them that I know uh well enough to to own with confidence and I'm just gonna do that right got it okay right let's talk about some other things that you might like or not don't like what about uh do you trade bonds do you trade dollars do you trade any of those very rarely oh yeah you're you're a commodity guy more I get the same same trade and gold you know I mean okay so you'll focus on the gold and won't bother and the same dollar those things you know like I every now and then I'll buy TLT okay and it's an ETF it's 20year Bond SP gives me a little exposure rates it's not really like you know something I want to do it's you you can take the the the NX Trader off the NX but you can't tra you know he's always going to be a NX Trader that's are what the Chicago guys trade I don't trade those but you do trade a lot of SPO okay um all right I'm going to uh I'm going to ask you I'm gonna leave with one question here because you've been very generous with your time uh and I'm gonna kind of spring this on you I didn't tell you but one of my favorite questions I like to ask people is can you name something that someone did along your career that was especially kind oh yeah something that really stuck out to you someone something in your career that someone did for you and obviously you already told the story of everyone coming around and funding your account by you know doing a trade I buy from you at you I sell you at five I buy from you at six and funding it that's one thing but is there is there one person in particular or an incident can you think of something off the top of your head or am I put you in too much whole crowd of people okay so pick one that you love the best not the best pick one that you would that you'd like to feel the most comfortable sharing so uh I think I wrote about this in one of my stories uh I was I I was in trouble you know I I think I talked about this with Maggie you know trading terribly behind my mortgage huge Visa bills and so forth and I I just came to the end of my rope and I bumped into an old pal uh and uh it's just before Christmas rainy night coming out of the exchange you know he said how you doing you know I just you know like damn burst I said I don't want him to do I'm I'm screwed you know so he said well give me a call tomorrow you know maybe I can help you with something so and you know it's not like we were Bros or anything like that you know he was he was a customer he he respected me uh and um so the next day he gave me just a huge amount of brokerage you know and kept giving it to me for a couple weeks maybe three four weeks yeah and it changed my profile on the exchange to where I you know because nobody wants to know you when you're losing right and it helped me get myself out of the ditch you know not all the way but certainly helped me pay some bills and and breathe a little a little bit and it made it possible for me to get a job with a good firm and uh I don't think I've you know I haven't talked to him in years but it was uh it was it was lifechanging do you think he knows that yeah I think so not you know it's not it's not the kind of thing you know that we had just you know I made it clear to him hey man this is great I really appreciate this business thank you it would have it would have probably been a negative if I you know if I you know made a big deal out of it right right it's you you need your distance in in situations like that but he just knew that it was the right time to help you out just did and I you know I needed it to be done and uh and that's the way that went well that's great okay so let's talk a little bit about your substack um it's called Market vibes yeah and if we just Google market Vibes let me just see what happens do we are you the first to come up uh you are there we are Market Vibes alosia um on substack you write twice a day you are very diligent very disciplined I must say how do you find time well um the nice thing about writing particularly to a a community of people who are at a very high level yeah uh they are uh quick to say I you know you got that wrong or I disagree right or I challenge that yeah that not no disrespect you know no yeah yeah they're just people telling their opinions great community of of of people uh who are curious uh skilled experienced and always looking for an edge right right so it's uh it's demanding for me I have to know where I'm saying you know I can't be careless I can't be tired and I have to be on top of it at a level where um you know it's not only fresh uh and energetic but I'm also providing a kind of a CER service that you know you if if if you don't have time to do other things you're busy or something like that you may have missed the fact that you know open interest fell off like I don't know six% yesterday right right but I'm G to point that out right and if another Market is moving it's correlated or if it's negative this this wrong that's wrong I'm I'm going to point that out because I'm going to probably be trading it right you know I have money on it right and and uh that's that's 95% of why I've always been a broker who writes well that's awesome it forces me to know what I'm what I'm thinking if you want to know a subject well you should write about it um JJ it's been a real pleasure having you on I really appreciate it check it out Market vies on substack thanks a lot for your time thank you Kevin it's been a pleasure all right Patrick it's time for talking charts lots to talk about oh yeah for sure okay let's quickly punch through the top three things to watch uh I want to spend a lot of time during that to actually talk about uh them technically on the charts but first uh thing I think is important to watch is whether this gold breakout was a breakout or a fake out uh you know the infamous prairie dog or not uh all I know is that actually things are behaving very well uh I was at first a little cautious because things were advancing pretty quietly but the silver market has woken up the all of the miners are participating uh there and more importantly Kev it's happening in a time when there's a a a not a liquidity event but liquidity is being sucked out of the stock markets and usually that causes pressure on almost all r assets and the fact that gold is behaving very well and all of the gold miners everything I think that's definitely a positive what's your take I think it's one of these um cases where it's one of the quietest bull markets that nobody cares about and the more that this goes on the more excited I am I am a little concerned that you do see some big upticks in terms of the amount of glds getting created like there was like a lot of um Financial you North American Financial buying but having said that that's the what you see at the start of bull markets often and I still contend Patrick one of these weeks we're going to have a $1,000 up week oh there you go uh please you know I I'll I'll I'll buy you a a very nice bottle if it happens all right hold you to that number two uh is H is this a the beginning of a bare Market or has this just been one big Market correction and uh I think this is a conversation I actually want to at least 10 minutes on on the charts in a moment but let's at a higher level uh talk about this first what are your thoughts I mean you've been pretty bearish but you think that this thing is far from over or is this already getting this is this this is the start of a bare market and now the thing about bare markets so you need to remember is that there's massive Corrections in it go back and look at the uh the 2000.com bust and how many um rallies there were and actually for those that are interested go to my website because I actually uh reprinted that um or send me an email Kevin at thecr.com and I'll send you a piece because I actually reprinted a post from a couple years ago that I showed I think it was right at the start of the 2022 bare Market where I just highlighted the fact that there's in bare markets you get these violent one two day upate days and I think there was seven that were kind of like more than 7% in the Buble it was just it was monstrous so let's let's let's look at that technically I want to I want to definitely talk about that the the third thing to W for everyone to watch is the fomc and it's not just the FC we have uh Bank of Japan and I think the bank of England all within 24 hours of each other in there so a lot of monetary uh things coming but the thing is is clearly the market is reacting far more to politics and administration than it is about Powell will Powell try to take that stage back like is is is it gonna make monetary policy matter again what's your take that's good I like that line um no so I I I contend that monetary P policy matters a lot less than people expect and that uh it is actually you should be focusing on the fiscal all you have to do is look at what's happened in Europe and you can see that the huge rally over there was a result of Germany finally you know abandoning their debt break and in terms of U monetary policy mattering and make it matter again I don't think it will okay so let's uh let's dive into the charts here Kevin or let's start with the S&P 500 I want to talk to your points I'm going to put this on a weekly chart just so that we can really uh go back and I want to go back and observe both the bare markets of the past which is let's starting with the 2000.com bubble and uh what I want to highlight is how did the 2000.com bubble start well it started with uh what was basically just over a half a year topping formation of where the S&P more or less uh failed to make make higher highs this was though accompanied by uh the NASDAQ ripping to 5,000 was like a parabolic blowoff but the S&P didn't participate in the final takes and in many ways we had our own version of this which is the breath of the market uh wasn't there most of the market wasn't participating and the mag sevens took uh uh took off and were where all the performance was so even though it didn't necessarily reflect in the exact way it happened back then you can see an echo of the way that uh that transpired uh but after retesting its highs uh the ini the initial drop in the market was about 42 days long and about 15% right we're 10 we're 10% into a 30-day correction not even we're like 20 some odd days into this correction and so we're in a situation where even this very first leg of the of the bare Market which just started to violate that 50e moving average which uh is almost like a 200 day moving average uh on on the weekly charts uh and yet that was just the beginning of the bare Market back then um and but to talk about the violent bare Market rallies as much as on this chart this doesn't look like a lot uh in terms of the bounce that initial bounce off of the low from trough to Peak uh was a 10% bounce in the markets you just like you look at this Patrick you look at the chart and you think oh it's so easy I'll just get short and I'll just ride it all the way down and then you realize like within there there was some rip like face ripping rallies would be really really difficult to stay short and that's ultimately what everyone needs to remember is that bare markets are tough to trade yeah and uh and so uh that that so but what I want to highlight is this if this uh is a bare market then we should see something like this I W I'll explain when we look at the some other versions this but you basically have it trading below the 50e moving average temporarily and then it bounces and the there's a short squeeze bounce but it's short-lived it's just a incredibly oversold Market that does a reaction um and a reflexive rally that is just a bare Market squeeze to the upside and then the bare Market resumes so go back let's go to then how the bare Market started in uh during the financial crisis actually before you do Patrick can I just tell one quick story yeah as you're saying this it reminded me of this book that I read about the 1987 crash and during the 1987 crash there was lots of people that were worried about the stock market being overvalued it was very frothy and on that Friday we had the initial kind of first selloff in the 1987 crash and it was actually pretty large and there was I've I've read stories and recounts about people having parties that the correction was over that finally we got the the break and finally we got the correction that was here and yet that was just actually the start of the of the bigger and uglier point so so let let's actually take a deep uh dive into the this thing so the first in 1987 the uh the first decline was about 9% in about a month right right and then the the violent short squeeze that lasted just about uh a week or two was a 7% Market bounce uh that happened in a in the span of a week or two uh violently ripping to the upside uh before the crash sequence the reason I don't like the 1987 analog for what we're situation we're in though is because I wouldn't call 1987 a bare Market it was a crash uh it was a crash but it wasn't a prolonged period that was accompanied by huge recessions and some bigger cycle uh and and I think that that's an important thing to take away is that is if it if we're just going to get a little crash then you can't use these bare Market uh uh just a little crash just a little crash 19 just a little CR but be held on you're good you're good you're good but hey Buy and Hold worked both during covid crash and in 1987 crash they did right during no moments of Doubt there you could have just held on there might have been just a few moments of Doubt there might have been just a few just a few okay so back to uh 2008 and uh after um after Double topping there was a quick Market drop that dropped below that 50e moving average that was about 11% drop in the market that lasted about uh let's say 49 days so let's say uh a month and a half right and even uh then it had a bounce that was eight% in in less than two weeks right uh just again another thing and then came uh another leg down that was like this two to three month 20% decline 18% point though is is that uh again of something that was like a 10 plus percent Market correction a violent 78% rally and then rolls over uh and uh so then let's take 2022 when which was really more of a bond be Market than a a stock be Market but uh even then the first wave down off of the high was about a 15% decline in the market over close to two months and then that initial uh rally uh was a 12% rip to the upside off of the off the thing this is where I'm just confirming what you're talking about which is and and just for Imagine put yourself in that place don't think that everyone wasn't getting bullish again they were everyone was convinced oh there we go the the correction is over we got the rally time to ra time to get excited yeah and I think this is the point where actually your technical skills really help because that is the kind of the reaction after that reaction is what's going to really set the tone and and a failed a failed rally need is is I would argue that while trying to catch the top of the market is like something you could put on your belt like a trophy type of thing like uh it's a thing but the real shorting opportunity is the first failed rally because it's the first failed rally that you know that the tide has shifted uh that the Bulls are no longer in possession of the ball making a drive but it's the bears that are in control it's then when you can with more confidence lean into shorts the only big advantage of hitting the exact top is usually you got much cheaper uh uh volatility premiums on options so like uh positioning yourself short usually can give you a better asymmetry just because you're uh getting cheaper options but the point being here is that we're now just uh at this current moment uh we had a peak to trough 10 plus percent correction that lasted 20 days and so we we are even in comparison to all of the other breakdowns this is actually so far the most mild one on a S&P basis because I know the mag sevs were much deeper and things like this but on the S&P basis this is a relatively mild one so uh at any one moment when uh a short squeeze happens uh a let's say the eight to an eight% bounce would be 5900 and a a 10% bounce would be almost uh retesting the highs at 6,000 right uh and so like just the idea that if this Market went from 5600 to 50 900 it would be very hard a to hold on to your shorts and two uh very hard not to want to get bullish thinking that this was that big buying opportunity uh and and the bus has left the station and I'm not on the bus uh and uh and you know that that kind of fomo kicks in every time right and um and so this is a really interesting moment I think to me even if we temporarily beat 5900 to me it's about whether the market primarily trades below 5900 so if it spends two three days above 5900 and then comes back down to me that's not breaking the the rule it's about the idea that it's not going back to the highs it's not re resuming a bull Trend that this was just simply a a reflexive Snapback rally that's this violent bounce and then if that rolls over then the Market's it there we go with all that technical jargon again all the the jargon it's F anyway so but um yeah we're at a really interesting moment is so is it is it uh going to be uh you know the one thing I want to immediately jump to is uh me and you talked about in previous episodes about a canary in the coal mine do you remember what it was was the junk bond markets oh yeah yeah okay yeah right and we talked about the fact and you were the one that highlighted this point which is you said that there are plenty of times when the the markets have a five or 10 per correction and the credit markets don't care right that's actually signal that's actually the signal that there's going to only be a 10 instead of a 20 right but almost every you know 15 to 25% Market correction has credit markets reacting correct and or leading and so we have have this is the the from K in here um our good friend Rob over there has great site uh we saw um the credit spreads widen from like 260 uh up to 320 right and so uh definitely a widening and this is on the broad base but and very distinct breakdown and junk bonds uh and I would argue the canary and the coal mine is officially dead I technically it's dead well I mean I'm not as ready as you are to call that to me when you actually look I saw a chart the other day from Goldman that showed the relationship between I don't know if they use CDX or the ibox but they were comparing credit spreads to the stock market and the stock market correction was definitely a lot more than the credit spreads and the trouble is the credit was so tight that you knew that it was going to back up and but when you kind of take a bigger picture and step back like I'm just pulling up the five-year IG credit the CDX right now yeah okay so it moved from 46 to 55 but the reality is that you know we spent all of 2022 with it in 100 around a 100 and this is actually still a really tight credit situation so I'm not as willing you know no doubt the canary is slowing down the canary is slowing down you think that because that you know it hasn't moved in a little bit that it's for sure dead I'm saying I'm watching that Canary because I'm worried it's on the it's it's on the ground twitching like it just it's just kind of kept quiet for a little bit like it's like dozing off like it's about to go to sleep but you don't know if it's a so here's the real problem though I think with credit and I wrote about this because I think this is a really important um part of the equation that a lot of people are missing with the popularity of private credit which has just exploded in terms of it's people chasing that asset class A lot of the really crappy credit meaning the junky kind of more risky credit is not getting put in the indexes themselves and when you go and you talk to really smart folks that are into this they'll say you know the quality of the index are much better than they have been in the past and so one of my worries is we're sitting around watching corporate credit or or even trying to get short corporate credit spreads but the reality is that the real problem loans the ones that are going to hurt you are actually sitting in private Credit World yeah and so on that basis I might agree with you that maybe the credit situation is much worse than it looks like by watching just the you know o OAS on those indexes because the real pain is occurring in unmarked books that we're not seeing I love it you know what uh that's wisdom buddy I all the listeners should should have a listen all right what else you got got top me the Canary's Dead all right I know you think the Canary's dead I'm I'm I'm worried about the canary I'm thinking about even after I'm saying this I am short the the the private uh equity irms I do think that that is what's going to end up being the blowing up portion of it having said thatan they already got hammered this is like like look at Blackstone off of H off of its uh it's Peak to trough is already 33% off of its high you would have been proud of me when I read that I did you read my piece I had like a sophisticated option strategy with different parts and stuff what yeah you should go back oh my God I'm gonna go back and reading now yeah that's awesome I had I had various parts you have you have tranches of options no I was was selling credit spreads to buy puts and like I was doing all sorts of stupid things uh but yeah you proud I'm you're rubbing off on me all right I love it okay so uh one thing I wanted to talk about now is volatility and uh what's interesting to me is not that we got up to 28 but we got up to 28 on the vix methodically now like you take the two little scares we had in 2024 with the Yen carry trade unwind and that little December Spike each time it was almost like a one or two day everyone puked in a bucket someone hit the uh the panic button things got out of hand and v mean reverted very very quickly within days right and um and that is typical of Corrections within a bull market but when you look at for instance uh what volatility did during 2022 uh you know I remember when we were doing the show and I kept asking like are we ever going to see under 20 again on the vix for like for like for you remember those conversations we we had like it was a a period of sustained higher volatility premium by the way what was my answer uh you you were saying yes I'm always I find myself in this weird position Patrick right now though where you always want to be short Paul well no where I'm actually lying for the since basically Trump and I realized in my opinion he was going to make macro great again and I thought that the world was underappreciated how much it was about to change I've been nothing but long volatility on all sorts of things and I feel weird like I just feel weird and you know what what's amazing Patrick tell me tell me you're you're doing a little bit of offsetting selling so that you're trying to kill some of that data burn car of course you know me um but having said that I I find it strangely um off-putting to to for the S&P to be you know going up and down these huge amounts and for not for me not to be offside like I'm not losing money on these moves hey there's something to be said about being volatility uh anyway sorry point though Patrick that that it on prolonged bare markets that we don't get the spike and so are you arguing the fact that we haven't got this I don't know about arguing I'm asking because it's so it's so weird to me that during this whole selloff it was an incredibly methodical climb higher and volatility and to me one of the clues is going to be do we see sustained higher B on a day in day out basis for the weeks to come is are we going to generally see a new higher range for volatility premium because if that's there to me that's another clue that we've transitioned from a bull market to a bare Market uh and uh and I think that uh dealers are just gonna command more B premiums to hedge themselves out and it's just going to be a new higher volatility regime for that kind of perspective that's uh and you can comment is the thing that I'd like to comment is I'm I'm a big fan of Dean kerut and his Alpha exchange and he loves talking about volatility and his insights are are wonderful and I think he's the one that says it's really the second move that gets you because the first move usually what happens is that that clients are well positioned they've bought protection but it's the second move when protection has become too expensive and people say oh I don't want to thought of that yeah I never thought of that but that's true because because rarely uh uh rarely do hedgers go out and hedge six months or a year out some do but that's not uh but that's not what majority three months yeah even even if you're lucky three months some use zero dtes look at me dropping bombs here but like I I'll wash my mouth with soap here but but like they use uh zero DTE they're hedging out with very quick little uh options trying to make quick moves and in inevitably uh the volatility spikes the the cost of the hedges destroy the asymmetry of doing it and suddenly they're bag holders yeah and uh and then they have to choose to just uh unwind their positions right yeah speaking of zero DTE have you been following uh Brent kacho and his spot gamma with his captain Condor no okay so Captain Condor is this lunatic that does iron Condors in zero DTE and when he loses he just doubles the amount of contracts he does he's marting galing it yeah he's marting galing and so it's oh man I was having so much fun in my chat we were all watching it and seeing if Captain Conor would blow up because he was like at one point I think he was up to ah was he past 22,000 he was doing 22,000 of the big snps like just a massive position he's just doing this and he's just like you know it was it was five and then it was 10 and whatever and he keeps doing more and more and more one of my buddies that follows it closely told me that he was up to 50 at one points 50,000 contracts like this is wild so anyways go go tune in to Bren kachua is Captain condra I made a little you know it's in my chat I I put made a little AI of Captain Condor yeah it's pretty funny because like you know Martin giling nothing ever goes wrong there never never it's a it's a winning strategy that you can repeat over and over again ask ask option seller.com he knows yeah oh yeah I know that's and especially do it on the Widowmaker that's right on N gas okay actually you know what Kev this is a a great opportunity because I wanted to switch to the dollar but like like when we're on stocks this is an opportunity for me just have a quick conversation I'm doing that special webinar on uh how to uh repair stock positions using option strategies uh you you know I'm going to do a Shameless plug you can just go to bigp pictur trading.com and register we're doing it on Tuesday the 18th but uh the idea behind it is that while there are these violent drops in the market there are also going to be violent rallies and uh and you know I'm going to use Tesla as an example but let let's say uh somebody bought Tesla thinking it was a bottom at 300 bucks uh a week or two ago and they find themselves suddenly you know the stock goes and drops a further 80 bucks to the downside in a span of of a week right and you find yourself offside well the thing is is that how can you repair the the the trade to try to improve the level from which you can get out of this trade uh at a lower price point a lower Break Even uh to get out of the trade and like uh one of the popular ways of executing that is uh let's say for instance doing a racial call spread uh and uh as an example let's say right now uh Tesla's at 250 I was just looking at the live market price if you let's say went and bought another call option at 250 right at the money it was somewhere near $20 and the 275s were uh all trading for about 10 bucks but you would sell twice as many of the short calls above because the your original stock is covering the one call and the second call is like a like a debit spread covering the the the credit from the others so you basically it cost you nothing to open the ratio uh spread it it was 20 bucks in 20 uh bucks out uh to open it but if you originally purchased Tesla at 300 your break even on the exit is at 275 you literally have allowed yourself that you know I'm going to put on like an hourly chart if uh if you just simply had uh Tesla make one quick little pop up here to 275 you could uh near expiration get out of this trade at at even right and um and the point being is that you didn't need the stock to Rally to 300 bucks and uh to get back out uh at your break even PR and so there's these option strategies that are really important and why is this something I highly endorse well what's the most common way most people repair trades dollar cost average right right the problem is is that if you go and the amount of money that you put into Tesla say you had a thousand shares and you go buy a second thousand oh your clients are obviously Shooters yeah but let's let no but let's but let's say you you had a thousand you go and slam in with another thousand yeah uh now if this thing was just a flagging formation it drops to 200 or 180 you're losing now at twice the pace and the pain is becoming twice as hard and you took really good nice clean money and you threw it after a bad trade and making the whole thing a big hot mess right but with this spread strategy the uh if Tesla keeps going down well the call options you paid nothing for them and they just expire off there and you're just stuck with your original shares you didn't double down you didn't increase your risk to the downside and so it's one of the tools in your toolbx that you should know how to fix things and uh you know very few people understand it I'm going to just do a great webinar explaining it in Greater detail and anyone who wants to join is completely free all right that's big picture.com Tuesday but you have to sign up ahead of time you can't trading.com you see you gotta give the right you now you said big picture oh sorry big picture trading.com what is bigp picture.com let's go have a look oh don't one second I got see what it is subliminally sending the wrong message to I know I'm sorry I I am terrible big picture trading.com trading trading don't ever forget the trading part otherwise you're going to end up at some weird venue or something I don't know what's going on here it's a concert okay sorry about that Patrick I I completely it's not worth mentioning I we were all waiting in hot in suspense here I don't know it's some sort of concert venue or something I'm not really sure what it is uh okay so let's talk currencies okay and uh the currency Whisperer got me he's awesome got me he is so good is he not he met me in the machine and he took it all he just took it all he saw your offering and your own he's like bought from you I'm bid where do you offer me the next piece godam good for him man all right well done I I love the currency we and you know what the nice thing about the currency Whisperer he's a nice guy he's a Beyond nice guy he's truly one of the best guys out there so you know he give me my money back if he was truly a nice listen if you ever want you're ever in New York City and you want to meet the currency with spur I'm sure he'll buy you a bagel or something he'll do something oh really a bagel even a beer he'll take you up for a beer for sure all right there you go all right so uh anyway uh the the part about the dollar was not the breakdown the breakdowns happen you know Trump says something Spooks the markets uh the dollar makes a bad break but what is really interesting to me is we haven't seen any viol uh short covering squeeze rally the other way which is very typical if it was a Buy on dip and this is where I have to take the knee and admit that the the cautious bullishness of this being just a correction uh has big holes in it and I have to accept that uh something different might be happening here uh because if it was a short-term little drop we should have seen it back to 10550 106 107 already and instead the selling is is just there but the part that I I'm curious about about the dollar Index is that it doesn't feel like this is a broad you know US dollar sell-off and all other currencies Rising this has really been a Euro and a pound so European area currency move uh and um because like uh so the Euro was where literally the major snap happened pound sterling joined the party of course with a with a little continuation uh but beyond that even though you have been right about the Yen for quite a while uh the thing is is that in the last week it didn't really do anything it wasn't where the move was the Canadian dollar has not moved much the Australian dollar hasn't moved much this really was a reaction to Europe yep and I think the European new and but the thing is and in my mind a true US dollar bare Market Market should be the US dollar declining against all of the Cross currencies it should be a complete repricing of the dollar against it and so far this has just been an incredibly oversold Euro that was given a catalyst for a a very big Snapback and for me to get outright bearish the US dollar I'd want to see all of the currency starting to confirm that something has changed and and it's just not there yet on all of the Cross currencies so I think you have to play it maybe it has to be just focused on the individual pairings you focus just on the Euro USD don't just play where the action is and the catalyst is and the story is um and focus on there but I don't know if I want to make it a broad US dollar call rather but much more a US dollar against that Euro okay I'm gonna agree with there but I will say this I think that that's just the first part of this leg oh and then the next leg maybe the Yen goes bid again maybe the rimi goes bid or it you know maybe even Canada goes bid uh and Australia I I I really think that although I can't dispute your analysis so far that this is just early stages of a of a monster US dollar bare Market okay well bull market or barket Market the one thing I do want to highlight so I just here have the monthly charts on uh on the US dollar going back to 1981 all right so like want to really zoom out and I want to highlight that the last half of a decade this was the range that the dollar has traded and uh and when you put it in the context of the kind of volatility that we have currency volatility we have seen throughout the last 40 years you know 40 plus years uh a big move in the currency is not out of line it's actually far more often that these currencies are moving huge and the fact that we've been in such a tight range is actually the rare event I Patrick I couldn't agree with you more that's why I I've expressed all of my currency views with one-year options I think VA in currencies is so fraking cheap like it's just so cheap and that that that is going to be listen how long before Trump's getting up and getting off the toilet and tweeting out the Yen two week but I don't think that that starts a dollar bare Market I think that there has to be a bigger Catalyst that that you're talking about trades Trump tweeting something is gonna and creating you know a 200 pit move is just a trade uh to me I'm talking about a meaningful dollar repricing because I think it's going to be Patrick it's it's at the Crux of the problems about the US losing all its manufacturing so even though you're kind of saying okay he tweets it it doesn't matter but the reality is that the Tweet will represent a battle that will be going on amongst nations in terms of the thing so it will be followed by by policies and by disputes and by Capital fleeing and I think that you know we've just started to see this so what I can't wrap my head around here Kevin you can help me with this right um it's not about just a dollar going down because it in turn means that other countries need to see their currencies rise and even though you're going to see uh more fiscal spending in Europe and all of these other types of uh catas I mean can't like what would happen to the European economy with uh if the Euro started a a rip to the upside and uh and to like let's let's just put up a chart on the Euro I don't buy that argument I I hate that argument because like let say people could have said the same thing about the US like like this is this is the you're basically making the same argument that the people that argued that interest rates were going to crush the economy in 2022 they said oh the interest rates are going to crush the US economy and there was lots of them there was lots and lots of folks and and they persisted for 2023 2024 it really wasn't until you know the end of 2024 2025 that they got bullish on the US economy but all that time they were like you interest rates are going to crush them interest rates are going to crush them I don't buy that argument people are underestimating the power of fiscal and they're not realizing that all the lower rates and the lower currency hasn't helped like let's just take Europe for example Europe had negative rates did that help their economy no Europe had a lower you know currency did that get it going no what's going to get it going is actually confidence in the economy and the confidence is g to come when the government isn't starving the economy of funds and so I I I I'm gonna push back hard on that and I know that Patrick your thinking I'm just trying to your thinking is going to be consensus like so and I like I realize I'm saying this and people are going to be like you're full of it mure like you know you're absolutely wrong but I I think all you have to do is look at the actual empirical evidence of what happened with the us we they had the strongest economy in a period of rising rates Rising currency they were the strongest in the world so I just I you know I just don't buy that anyways that's that's so that's my push back and and I apologize to get feisty about no no no no no listen get feisty i i i to me I'm just having a hard time reconciling how uh how that would all play out in terms of uh if the US dollar weakens and know how does it play out for other countries but I you're I get your point I get and the other thing about it is that all of a sudden all these other countries their own economy is going to be doing better like let's just take China China is now forced to go from a policy of one where they were actively trying to stop speculation they were trying to you know weed out all the problems they had in real estate they were purposely putting their break on the economy now all of a sudden they're looking at it and they're saying holy we're getting tariff by Trump this is a disaster we need to get our own economy going we need to be our own consumer and so all of these things are going to mean that the world around the world is going to be spending more fiscally so instead of relying on the US buying their stuff they're going to buy their own stuff and ultimately that's why I think that it's all that is bullish all these other currencies they've been sitting around trying to balance budgets doing all these stupid things that just don't work and now all of a sudden and counting on the Americans to do it and and listen I'm sympathetic to Trump when he says this is ridiculous we're running a huge trade deficit we're running a huge fiscal deficit you guys should do some spending and he's right and now it's coming and it's going to mean that these other currencies are going to go up and these other stock markets are going to go up right all right I agree all right at least I I appreciate what you're saying and it makes sense so let's um uh let's uh move on to gold and uh what I you know whenever I see a strong break out on this I I love one part of me wants to completely jump on the bandwagon and uh and just like this is super bullish the other part of me always sees a prairie dog and they're Noble animal it's a no animal of course and and the thing is is that I want to see a couple of days to just see whether or not we get some sort of a a drop back into the trade range uh the one thing I've remained decisively bullish gold never once deviated from that my debate always was is this the window of time when the next leg was going to happen or was it more of a second quarter story after a couple months of consolidation and what I mean by that is like if we look back there was two periods of of considerable consolidation after rallies this one lasted three months right over here this one lasted about two three months as well there's these periods where they just takes a break and Trad sideways right and and so I was trying to figure out is whether or not this was one of these periods where gold was just going to take a break and then it's still resuming its bu manner after consolidating and so this resumption happened in less than a month after a swing high and this is where I'm just trying to settle in as to is it really just a bull continuation right here right now because uh this measures up to 3,200 on the upside for this impulse and I there's still plenty of money to be made uh if this is a real breakout and I think that the puzzle to solve in the next couple trading sessions is whether this was a breakout or fake out and while we were both in the camp that it's a breakout you can't rule out the fake out or unless this thing can hold the gains for a couple days okay and sorry finish up and then I want to chat about this no no no I'm just the point I was going to make so you know me I have consistently talked about how the People's Bank of China is the underlying fundamental reason why you have to buy gold because they are they have no choice they need to basically diversify their foreign exchange Holdings into gold gold is such a tiny Market one of the things that I have also been you know steadfast in terms of reiterating is that when everyone gets bullish you need to be careful because a lot of times China will just pull back back on their buying and when everyone gets bearish and all of a sudden and that did happen it was a month ago it looked like it was rolling over lots of people got and they just stepped in and they just stepped in and that's kind of my under my my conclusion in terms of trading gold is that it's G to trade weird and that it's not going to be as clean as everyone thinks but for for weirdness technically it has done everything very technically clean pullbacks to moving averages consolidations at our flags I don't see behavior that is out of Norm of what I would view as normal technical price Behavior Uh and so other than it's a bull Trend and being very well accumulated so but I would say this Patrick don't you think that the sentiment has been consistently to chase rallies and then to get bearish on the dips and that's then maybe you're right that when you're looking at it from a technical perspective it hasn't done anything that weird but I would say that right now people are foaming at the mouth and I could see everyone getting in there and then all of a sudden it dips and it dips back to the you know the moving average that place that you highlighted and everyone's bearish then and and it's just so maybe you're right I don't know I just I just think that you should be careful about getting too excited about it don't don't get too excited as it rallies and everyone else gets too excited and don't get too pessimist ISC when everyone else gets too pessimistic I love it and then one last thing though Patrick F the sentiment I'll tell you this eventually it will become a North American long I don't know if we're there but there will reach a point when the People's Bank of China will be competing with financial flows from North America because let's face it up until now it is being very a hated Market but that is that is changing and there is some sentiment changing I'll tell you though uh don't like people can't Overlook also that uh gold is priced in US Dollars it's pricing all sorts of currencies right but a strong US dollar has generally uh uh made gold of a subdued move if there is any meaningful uh US dollar bare Market that is when gold has done some of its most spectacular moves right and so if if your dollar thesis is right then that in itself it makes uh the gold story that much more exciting and it what I'm watching for Patrick is the handoff from The People's Bank of China controlling that market to eventually North American or Western let's call it flows and if that ends up being the case then all of a sudden all bets are off that's probably when we get our thousand up week like I I'm been predicting because there won't be the same discipline in terms of pulling back when it works yeah like up until now the major buyer has been very disciplined and maybe that's why from a technical perspective it's worked so well they've been very disciplined but then it comes back to the moving average because that's because there just isn't anyone they're competing with and they can control that that uh that nice methodical flow exactly when when when when everyone else joins the party they'll have no choice but to compete I don't know if they're bother gonna bother to compete because they're just could to make it worse but it won't matter because that what I mean by compeers is that they'll be adding to the buying they might just be that the Western demand takes off yeah because all of a sudden we'll go from Western you know so counterparties usually trying to short gold to now being also buying it yeah with no offerings in sight Sor I didn't mean to cut you off no problem go ahead oh I was just gonna say we have to talk about Gold's little cousin silver okay uh and this is a weekly chart and it never really gained any big Traction in the last six months stuck in that range but here we are at a 52- we high and uh and things usually get attentions when they break to alltime new highs so the big question here is this uh is this the moment where if gold broke out to a new high that silver joins the party and um and a breakout here could open that window for a move to like 36 37 38 bucks on a very shortterm basis uh it'll be interesting whether this gets underway is that a cup and handle am I doing that correct I you could call that I mean yeah you could call that a cup and handle sure I'll give that one to you okay but the other the other thing I wanted to highlight was uh the um uh the gold miners like in a period where it's very hard to find any equities that are doing well the gold miners are doing well and they're cheap they're cheap cheap cheap they're going higher I keep saying it it's going to be one of the best performing sectors out there the uh the last thing and then we'll wrap it up for the day I wanted to just touch on uh bonds we can't not not talk about bonds but uh they've been pulling back for the last week uh and a little consolidation but uh with your little smirky smile and everything so far bonds have behaved exactly uh in line with uh What uh a bullish accumulation pattern should be it it rallied all the way to the December highs uh it uh found some resistance it's pulled back to the moving average is right to a retracement Zone and this is an inflection point for where if this is a bullish Market it shouldn't go any lower if uh if if we see 116 hold here on the uh on the long Bond and it turns up from here then some form of a bullish trend is forming even if it is just an intermediate move remember I'm not uh bullish like 2% yields are coming back like long-term Buy and Hold I was was just saying that that ridiculous sell-off to happen in 2024 made it very oversold and a reaction the other way was coming I I I would not be shocked if we went back to September Highs but on a weekly basis that's not a stretch it's it just coming back to the top end of this trade range that it's been established uh at its bottoms I'm not looking for a huge bull market where we're going to see 150 or 160 on the upside uh but I think there's room uh for for this to still Edge a little higher but if it is going to go higher literally this is that moment if it breaks down back to 114 or 113 it it's uh not the kind of price action that would be typical of something that's being bulled and accumulated and then i' have to take a little more of a neutral stance on it okay well I'm I'm firmly in the neutral Camp I think it goes nowhere well six months from now we're talking about nothing's Chang Kev when I put it on a weekly chart and I Define this as its trade range if bonds did this and this would that not also be going nowhere yeah no I I hear what you're saying saying's trade listen you articulated very well you articulated very well I'm just saying there's a the trade range thesis Could Happen very well but I just think that the trade range is a little bit wider than yours you you're you're much more sticky to the bottom end of the range well I think there's room for it to go towards the top end of of of its weekly ranges on that front that's a great summary of the difference of our opinion all right that's all I've got bud I I think well that's uh well you know we didn't let Danny talk at the beginning of the show let him talk end let me just sign off so listen everyone thank you for tuning in bare Market bull market it's just a lot of fun and I'm gonna give a special little shout out that to our Canadian listeners and only our Canadian listeners will get this elbows up all right thanks for tuning in we'll catch you next week all right Danny you better join the party at some point yeah the uh oh there he is okay there he is Danny needs to join us so the seven ladies that are watching are can be oh thank God we got to get to look at Dan instead of those other two mopes yeah absolutely that's what I'm here for it's okay the seven listeners or Watchers hopefully you know yeah this is for you yeah so we have no beer to review have nothing I am dying I am dying for a beer I've been on this diet like so for listeners I I've been on this diet and uh I've cut temporarily alcohol out of my diet and I'm miserable as hell and I'm cranky and angry but I'm I'm I'm pulling it off uh but I you know what one day soon there will be a beer in my hand again by the way I wanted to chat with you I sent a note to Patrick and Daniel about the moose head logger um presidential pack so this is for those who don't know a moose head logger is the uh long oldest Canadian independent Brewer and they have made a presidential pack and let's just read it here it's 1461 pans of moose just enough for Canadian loggers to get you through a full presidential terms for one a day and uh and we were talk we were thinking about buying a pack of this and having like a market hudle meet up to drink it I love it okay but the trouble is by the way we can't do it guess why why for Americans sold off sold out these things went 1,400 loggers these things went off the shelf it's done sold out crazy $500 a beer then the guys on the desk we were talking about how long they would last cuz I was like let's buy one and just split it like everyone take it but then we were having debate how long do you think a a a beer lasts uh was a couple the thing is there we go the Brit the Brit's like gonna I'll drink anything a couple years old depends if if it has if it has preservatives like for instance steam whistle which is just U like organic things like literally they can get skunky after three months like a steam whle needs to be correct so so some beers like a typical beer only lasts three months if it's not refrigerated that's why that's why hinin tastes like uh skunk half the time you drink it because it's supposed to be drank fresh and all these places uh keep the the hinin on the shelves way too long and then you get a skunky beer so now but if you ref anyway yeah if you're refrigerated how long do you think it lasts an average beer or or one of the uh think because there's ones with ones that have preservatives and stuff like that yeah I would say a half a year to a year yeah I'd say six months yeah yeah so it is actually loggers and als's generally good for six to 12 months when store properly there you go oh look at I yeah oh no kegs and oh kegs and draft beer few months unopen cans but this is the part that I thought was funny um stronger beers EG Porters and Stouts can actually improve with age and could be stored for longer periods yeah because they've got a higher alcohol content exact it's sterilized for longer yeah I love it funny because Pat you know what that is um your English your your countrymen there uh Daniel they created beer although maybe it wasn't beer it was whatever because you couldn't drink the water right it was it was a situation where people were getting sick and they're like oh you know what we'll do let's make some alcohol let's put some alcohol in and then we won't get sick and then you guys just took it too far well alluded the whole world with this stuff I mean unfortunately what actually happened was that this is how Jinn became a thing was that the Dutch king came over yeah removed removed the beer so they tax the beer and then they had nothing to drink right so they they then tried to copy what the Dutch people were doing with Jin and they would basically make bathtub so there's there's there's a few Brands called like bathtub Jin and Tom Cat Jin bathtub um refers to the the bathtubs that they would fill with booze and then people would go and they would with their cups like they would do with ale and drink the and the tom cat one was that there was a cat that fell fell in got sweet and people were loving the taste of this gin and then at the bottom realized that there was a dead cat at the bottom but th this this is where mother's ruin becomes a thing because everybody was so shitfaced every single day there's there's a famous picture of people just drunk in the streets because they were trying they were drinking Jin the same way they good old Britain that's what I say come on good old Brit you were you around for our Doss and toe discussion Patrick you remember the sour toe Cocktail Club yeah I think I remember a little bit remember okay the legend here I'll just tell you about it it's in Dawson City up in Northern Canada the legend of the first sour toe de back to the 1920s and features a feisty Rum Runner named Louis Lincoln and his brother Otto during one of their crossborder deliveries they ran into an awful blizzard in an effort to keep help direct his dog team L stepped off the sled and into some Icy overflow soaking his foot thoroughly fearing fearing that the police were on their Trail they continued on their Journey unfortunately the prolonged exposure to the cold caused Louis big toll to be towed to be frozen solid to prevent ganging the faithful Auto performed the amputation using a wood cutting axe as one does and some overproof rum for amnesia uh Amnesia Anastasia to to commemorate this moment the brothers preserved the toe in a jar of Al alcohol years later while cleaning out an abandoned cabin the toe was discovered by Captain dick Stevenson after conferring With Friends the sour toe Cocktail Club was established and the rules were developed okay so let me see if I can find you the rules um uh okay you go down you purchase a shot you pledge the sour toe oath and then you watch as they put a toe into your drink and then you have to drink it with the toe in it with the human toe in it and this is real and they say this is the important part the most important rule you can drink it fast you can drink it slow but your lips have got to touch the toe [Music] we should have a market huddle meet up at Dawson City and go to the sour toe club all right would you do it do I would do it do it's a human part of it like I could do like if you told me it was a pig toe or a cow toe I'd have no problem but it's the it's the human the cannibal in you it's the cannibal it's just taking it a too far and listen someone swallowed the toe once and it was yeah some some guy and then so they had to get more toes and then people sent them in and they got they got extra toes anyways they got extra to come to Canada come to Canada everybody where did they get those to from though that's what I want to know no I think it's like when people lose a toe from like the same way that the the brothers lost one of the brothers lost like so so you get to donate your toe yeah like so Daniel's never heard of frost B probably doesn't even know what it is I know what frostbite is come on I know what frostbite is have you ever had have you ever had frostbite have you ever been at school when some kid comes and he's not wearing a toque and he's basically his ear has gone black yeah yeah yeah and they flick it and it's really painful and that's what we well no no when it goes black you don't flick it cuz that guy he's losing in ear I remember there's a kid in my class that basically his ear went black it was the black for three weeks and I can't remember if we lost pieces of it or not but no yeah anyways on that happy note everyone have a great week thanks for tuning in we'll see you in a couple weeks elbows up cheers everyone elow elbows up cheers guys for