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Um, I bet again the ETF that tracks Bitcoin mainly because the old adage goes when there's blood in the streets, buy, right? And all I care about is the like a short covering bounce, you know, give me 15 or 10% even and I'm out of this trade. But I do think today with the volume that that Scott showed, those are signs that maybe there's a little bit more, but I'll DCA down there.
Um, maybe we go to 55, whatever it may be. But ultimately, I think we'll get a big bounce, you know, 105,000 bounce on Bitcoin at some point. And it wouldn't even shock me at some point. And I do think that Trump may try to show up for crypto. Um, to be honest, if he doesn't, that's a little messed up considering the promises that were made early on.
Not that I think he cares that much, but I could see him trying to stabilize this since so much of the core was was was voting for him, right? I mean, that's that's really what he he wooed the crypto crowd like crazy. So, just let me follow up on that. I I called it a fostian bargain at the time. It's a fian bargain that's unwinding.
He got elected. I don't think he and I don't think it's top on his list of everything that's going on with that administration right now. Um that yeah, he might, but is it going to help him get elected? The primary focus right now is the midterms and he's got to do something about the inflation issue and maybe the market will do it for him.
And I think they might have figured out stuff we talked about a year ago. You just get a little backup in the stock market and you know all those issues he wants. You want lower yields, you want lower energy, you want the Fed to ease. It'll all happen. Yeah. Yeah. Amazing stuff. And let's flip let's flip over to silver real quick.
Silver getting smoked today down about 15%. It hasn't taken out the low from Monday, but needless to say, when you see a bounce on silver this week, that's never a good showing, right? I thought it would at least do a 50% retrace. It only hit a Fibonacci 382. Uh, and now it's right back down. I I agree with Mike in this is that this likely will break this 71 and a half level and we're probably in the next few months going back to 50 to 55 which is kind of those highs from 1979 and 2011.
So there'll be a retrace to the former breakout level um on silver but we went from 120 to 70 in 5 days. Exactly. We could be at 50 in three hours. Exactly. Yeah. And so speak of all this volatility we're talking about in these peripheral markets. Ho how long can the stock market avoid that without some real volatility?
I mean we're so overdue to me that's the trade. This is just warning us. Yeah. No, I agree. Now so we have gold. Now one of the things that I do think is interesting that I want to bring up here is gold, right? So you look at silver down this much. Remember on Monday gold was down at one point like almost 10% I believe it was.
Gold today is holding up better and I wanted to get your perspective on this. Is this because everything is selling. So stocks are selling and we'll look at the NASDAQ soon which looks like a beautiful roll over here uh to continuation. But Scott, stocks, Bitcoin, silver and there's got to be some money that's probably saying okay well at least gold is gold.
Let me go into that. Um would you agree with that Scott? Yeah I would. I think I don't think that silver and gold are the same and people conflate them unfortunately. Yeah like I said I think it you know I I think of everything through a crypto lens. So gold is like Bitcoin and silver is like the altcoin market.
So, you know, you can see a major uh downside on altcoins and Bitcoin kind of moves a bit because people run back to big daddy, right? So, I I don't And like you said, I mean, I guess bonds are probably I don't know. Dollar's up, right? So, probably rates are down. I don't know. I haven't Yeah, the tenure is is down substantially today, which I think is is that same thing.
It's a rush to safety, right? Bonds are being bought because everything else is essentially dumping. Um, I also think that we had jobless claims today, which were 231,000, which by itself is nothing to make a big deal about. That's actually kind of normal for a good economy or solid economy, but we were at 200 to 210.
So, it is a jump in the people filing for unemployment. And then the challenger, did you have that? Do you have those numbers? Um, Mike, the challenger numbers this morning because it was pretty, it wasn't a good picture if I remember correctly. In fact, I think Amazon, UPS, and one other company made up a majority of those layoffs.
Um, and and anyways, that's what I was hearing. But again, we are seeing some of these bigger companies cutting a substantial amount of workforce. I think that's part of what we're going to look back from the future and say this is such a substantial paradigm shift with the switch to AI. Here's the challenger cuts jolts
jolts cuts. I I it's so much I didn't even really notice it. I mean, a little bit of a bounce there, I guess. Um, but the it's the transition. We all know new technology is massively deflationary. Jeff Booth, quote him. He's awesome. Um, and but it's a transition from new hires are finding a hard time.
AI is replacing everything. Every company on the planet is doing everything they can to be efficient to pump their profits with AI. They're not hiring. They're light they're lighting off. It's the transition time. But it's the key thing that I think is this data. It's something you look at then you look back the market and say where's where where's it going?
And to me that's the 10 is when you're this high it all trickles down from the stock market has to go up. So I I've had conversations with these pe people this week who are bullish um copper. I said okay so um are you do you have um S&P 500 right next to your copper on the on your value of risk model?
They ask me and they look like I have three heads. like well if the S&P 500 drops 10% copper is dropping 20% almost guaranteed. It's it's it's we're at that stage and it's so stretched. Um I just it like I said this like I mean by 2008 though it's just going to be a tre I mean for me it was one of my best trading years ever because I just would stayed nimble like um and took opportunities and just sold rallies and bought puts and opportunities and you know you bought a few dips once in a while to me.
And what are you looking at there? Is that copper? This is this is the NASDAQ. So, so one of the things I want to bring up there and this is something that I I kind of thought about last Friday when we went into the weekend after that huge drop in silver and gold and then we saw Bitcoin falling over the weekend is that essentially this was the beginning of dominoes, right?
Essentially as people get scared in silver, they exit. They get scared in Bitcoin, they exit and then it eventually bleeds into other assets. And so the market, the stock market was just a matter of time. And we've seen, I think on the NASDAQ about a 6% drop just from about a week, week and a half ago.
But again, look at the trend line here. I mean, this is just amazing how we came to the line, we bounced, we came to the line, and look at each bounce is shorter lived until we finally break down, and then you do a classic retrace to test the underbelly, and then we come down. And again, classic technical analysis there.
I think it's so amazing to look at that. But to me, this tells me we're going lower. Like, you know, yeah, sure, we'll get bounces. We all know bounces occur. Nothing goes straight up or straight down generally. But this is not a good chart on the NASDAQ. And look at the earnings, right? I mean, Microsoft, AMD was down almost 20% yesterday on earnings.
And these earnings are good, right? Even even Google, right? Alphabet, they had amazing earnings, but they're spending, they're going to spend $170 billion on um on spending, right, capex. And these numbers are so massive that the questions being raised now is are they ever going to make money from this investment or or enough to recoup the investment.
And I think that's something that's going to come into AI here. And again, we are seeing it now. Google's come back nicely off the lows. You can see great bounce, but still down on the day. It's going to be interesting to see. I I appreciate you mentioning that, Garrett, because to me, this is how these things really happen in um bull market peaks.
Earnings have been awesome, but prices have just stopped going up and they start underperforming. That's what our our our equity strategist has been saying. Yeah, earnings have been great, but the performance has been poor. And that to me is typically how it happens. And we it's just we're so everybody knows you always get a dip to buy in equity market every year and we're still what five percent six% above a 200 day moving average.
Haven't touched it since you know that little swoon last year. So I think almost every trader gets it. I still don't see why anybody should buy buying any risk assets until you can at least say beta is below its 200 day moving average and the VIX where we are right now. 20% pops up the least a decent level.
20s 19's historical level at least 30 or 40 and get you know just some normal corrections in markets and they're just getting started. The key thing, like I said though, is we've just never had this stuff happen with the peripherals, like you just pointed out, silver and gold going up so much. And that's the problem.
I think when we look back from the future at this year, we're going to see that everything is going to go down. Meaning silver, I think, slowly going to end the year down. Copper is going to end down. Even gold might end down because it's the power of the margin call. And main thing is they went up too much.
They just went up way too much. And you look for value. doing this. That's here. Here's the thing is, you know, I've been wrong on bonds for three years, but when that rally gets going, it's going to suck in everything, I think. And look, look at this, guys. Bitcoin. And I can see Scott, you're over there buying Bitcoin.
I can tell right now you're entering orders over there. But look at I mean, Bitcoin just went almost to 63,000 here. I mean, so this is an all out massive 63 23. No, I'm kidding. Yeah, 63, man. We might get to Mclo's 10K in no time here. Well, this is a key level though that the last thing you want to do is gap below this level because you if you wake up tomorrow morning or when we start mass trading US it's and we know Bitcoin doesn't close but here we mark it about 5:00.
If it's below that level, it gaps below that level, that's the signal it's going to go straight to 50 and then 10 because you're not supposed to gap below this level. And anytime it's happened in history, in my experience, when you gap below a significant mean like this, it's a complete rejection of support.
This is a level you're supposed to be buying. Yeah. And again, just going back on this chart, look at the last time we were down in this range on Bitcoin. You're basically in the midst of this major sideways chop. So, generally on technical analysis, this is generally where you'll find some support because of all this chop here.
But again, the question is, is it the lower range, which again, you're I think Scott, you said the 200 was around what 55,000. Um, that would be the lower end of this support range if it gets down there. Yeah, it's about 50. I'm looking right now. It's about 575 now, but the if you go to the monthly, you've got the 50 MA there, which you know obviously is about as strong of a support as you can look for in that 55 56 area.
Amazing. US employers announced 108,000 layoffs in January, up 205% from December and the highest January total since 2009. AI accounted for 7% of the cuts. Loss of contracts and economic uncertainty were the main drivers here. The most concerning thing is that hiring plans are also weak right now with just 5,36 announced, the lowest level on record.
So, the door is closing from both sides. Bitcoin has fell over $10,000 in the last 24 hours after data was released and everything gave out. We can see right here, Bitcoin has been on a massive downtrend. Um, as a reminder, on October 6th, crypto markets hit a record market cap of $4.3 trillion. Today, it's only worth 2.3 trillion, losing $2 trillion worth of market cap in 4 months.
Bitcoin itself is down 50% from highs, and it officially erased the entire gain it made since Trump won the election. Again, though, this is the crypto total market cap, and to see $2 trillion being wiped out of crypto is a very serious thing. It is a bloodbath and prediction markets are only expecting it to get worse.
We can see that Kelshi is expecting Bitcoin to reach a low of $49,000 this year. So that's insane. But the good thing is that Bitcoin has been this oversold only four times before. And in every instance, Bitcoin was higher 4 days later with an average gain of 16%. So that is good to see. Yeah, that is a great gain right there.
Going green 100% of the time. And as we go out further, even 1 month to two months later, we can see the average percent return grows, even goes up to 23% and 34% 2 months later. So maybe this is a good buy the dip scenario for Bitcoin. And whenever I look at it on the chart here, you know, it has predicted a lot of these low points on the Bitcoin chart.
So I find this to be an extremely interesting indicator here. Um, and Mike, whenever we talk about Bitcoin and the overall market right now, a lot has been shaking up. um everything out there. The government shutdown of course has been one of the biggest factors in play and there's actually a 67% chance that there will be another partial government shutdown by February 14th.
So what's going on here is what we're seeing is the last time the government shutdown instead of reaching a full deal they just push the problem down the road. The main point of contention is the Department of Homeland Security funding and if it expires on February 13th, you know, there could be another government shutdown that would affect ICE, the Border Patrol, the Coast Guard and TSA furlows and FEMA furlows could end up impacting airport travel as well.
So, this just uh complicates this whole mess even more. And when we look at the S&P 500, it is continuing to sell off. At this point, it is 2.99% away from all-time highs. It's now negative on the year. The price action is pretty rough. Tom, what are you seeing on the charts? One thing that we've been watching with SPY over the past few days and the past few weeks is the overall uptrend that it's been in.
It's been in a good trend of higher lows over the past few months into this new year. And something that we're seeing right now is a true test of that recent low. The recent low extended down to around 67650. And today, the SPY actually broke under 67650, pretty much testing 676 at the low point of the day.
So, what I'm really watching for is this double bottom in the short term. If we see this double bottom start to give out, it's going to be a good indicator that we could be seeing this downtrend start to really develop and maybe we'll even come down to test this large lower range closer to 656 to 654.
That's another big range recently where SPY had been bouncing on the way up. So, that'll be a big level in focus if this selloff truly does start to develop and continue. But that was a nasty sell-off today, Mike. And one thing that was extremely negative in my opinion heading into the end of the day is the way in which the SPY is continuing down in after hours.
Of course, Amazon's earnings are affecting this, which we'll talk about in a little while, but that that end of day action shows a lot of bearishness in the market. And I think a lot of investors are starting to get concerned about the macro picture we're in right now. We can see that the Buffett indicator is flashing some serious warning signals.
It's close to 200% which is the highest point ever. And the last two times it has gotten this overextended. Stocks pulled back by 25% and 49%. We can see it got very overextended in 2021 and 2022. Uh the stock market then pulled back by 25% and we also saw a very large overextension with the dot bubble in 2000 and then the stock market pulled back by 49%.
The Buffett indicator is like the ultimate measure of valuation because it compares the total valuation of US stocks to the US GDP. Yeah, it's an indicator that a lot of people love to look at and there's a lot of people out there right now who think that stocks are overvalued. So, I'll keep this in mind, but it's not the only red flag waving at the moment.
Europe's largest asset manager, Amundi, who has $2.4 4 trillion in aum announced that they will reduce exposure to the US over the next 12 months. Amundi told clients to shift away from the greenback or the US dollar over the next coming year, warning that if US economic policy remains unchanged, we will go on seeing a weakening of the dollar.
This is just a the latest big investor to say it is looking to cut or hedge its exposure to US assets amid concerns about Donald Trump's volatile economic policies following US bond giant PIMCO. This isn't the end of the world, but it is interesting and worth paying attention to. And looking at the market in a more immediate sense for tomorrow, Amazon just reported earnings and they're getting hit hard.
Their stock is down 10% in after hours. Tom, their earnings came in fine. The revenue beat by 1%, but they had some scary capex news. Yeah, they definitely did. Whenever we look at Amazon right now, they ended up having $200 billion in spending forecast versus only $146 billion expected. And we've been seeing this happen a lot throughout this earning season, whether you look at Meta or Microsoft or even multiple other names of people who have announced more spending.
And this is starting to worry investors in the short term. And Amazon is down in after hours. It's in the MAG 7 and as we can see here, it is affecting the SPY. That's part of the reason why the SPY is moving down in such a bearish way at this very second. So, I'm I'll be watching Amazon like a hawk tomorrow, Mike.
It is straddling a very key psychological level of $200. And if it starts to fall below this more, things could really heat up. But Amazon's pretty much the big earnings uh or the last big earnings report of the week. There are a couple smaller reports tomorrow, but nothing too crazy. Yeah, it's a tough sign when you have Amazon, Google, Microsoft, and other uh strong companies in the market all fall in a pretty big way and basically for the same reason.
It's because they're spending too much on AI and investors are starting to get sick of it. So, very interesting. And another thing to pay attention to for tomorrow is that we're going to have consumer sentiment data released 30 minutes after the market opens. This can move the market depending on uh how far the data comes in compared to expectations.
And let's also not forget that nuclear talks between the US and Iran is set to take place in Oman on Friday. Technically, this is going to happen at like 1:00 a.m. Eastern time on Friday because there's a huge time difference between Oman and the United States. Um, but basically, the Trump admin keeps repeatedly saying that they have many options aside from diplomacy.
So, maybe this means military action, maybe not. We'll see what happens. But pay attention to this. This has been uh becoming more important lately. It really has and it's been kind of shaking up the market a little bit whenever we see tensions flare up there. So hopefully the meetings go well. Either way though, the market's getting hit in the short term in a pretty rough way.
But Mike, I think it's time for some setups and predictions for tomorrow. And speaking of the market getting hit in a rough way with my first setup of the day, I'm looking at Nvidia to the downside. That's definitely going to make the Nvidia bulls a bit sad here. But if we zoom out on Nvidia's daily chart, there is a major level coming into play.
Nvidia has bounced off of this zone around $170 multiple times over the past year. And we can see it's actually held above there in a great way a lot of times. It's been a great spot to snipe this stock to the upside and continue the rally off of. But as of right now, and it comes down for this next test, I'm getting worried of a potential breakdown.
And what I'm really watching for is that key $170 area even for tomorrow. We can see there's 431,000 shares that were stacked up there on bookmap. So it's a it's a solid buy wall there. There's real shares stacked up there and it lines up with the historical price action. So I'm happy to say, Mike, that this support is back in play.
You know, there there will probably be some traders that attempt to snipe it to the upside off of this, but I am more of setting up a plan for when it breaks down. Uh maybe scalping it to the downside more. Sounds good.
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