저자: Kevin · 외국인
요약 보기
단기 숏커버링 랠리로 Q(나스닥100 ETF) 595선 지지 후 607 돌파, 테슬라·엔비디아·HOOD 등 전술 목표 달성. 다만 신용시장 리스크(사모신용, IG 스프레드 상승)와 일본 엔캐리 트레이드 청산 우려는 여전하며, 장기 디레버리징 리스크는 유지된다고 봄. 중기적으로 변동성 확대 예상, 관세 철회·고용지표(수요일 발표)를 주요 변수로 언급. 저PEG 종목(Circle, 메타, 엔비디아 등) 매수 기회 제시.
다듬은 글
Holy smokes, there was a massive surge in stock valuations today and people are wondering, Kevin, what just happened? Are all of the issues of private credit, Kevin Warsh, deleveraging over, or what actually just happened? We're going to use data and what happened in the market to figure it out. So, buckle up and let's no BS get right into the facts.
Here the facts. First, the five-day average put to call ratio, words, how many people were shorting relative to how many people were bullish, was at one of the highest levels yesterday that we have seen in the last year. In fact, if you go back about a year, up until liberation day and including December right here, you really don't see levels in this extreme fear territory.
So, you can see we were at one of the local peaks over here and then since then we weren't as high as this level since liberation day. This really suggests that there were a lot of people sitting out there with puts and a lot of profit. And what happens when you have people out there with a lot of profit in the bag and then all of a sudden, no negative catalyst to keep the pain going in shorts?
Well, you tend to get short covering. Because remember this chart, two days ago we saw 24 billion dollars of short seller profit. That was two days ago. That number has likely increased even more or had likely increased even more through yesterday, suggesting there was a real appetite for an explosion to the upside and we're to the moon since apparently, per SpaceX, we're no longer going to the Mars planet, we're going to the moon instead.
I guess they're killing the plans of Mars for now and we'll just focus on the moon. But anyway, that I think helped contribute to this massive explosive short squeeze that we saw today, especially when you look at highly shorted stock exposure. Look at Coinbase, Robinhood, or MicroStrategy as what I like to call exhibit A.
Or exhibit alpha. And you'll see why I say exhibit alpha in just a moment, but Coinbase up 13% on the day, Robinhood about 13% or 14%, MicroStrategy up about 26%. These had a really great short covering rally today. And again, it makes sense because we had quite a few negative catalysts going into today, pushing valuations down.
Now, what I think is valuable is looking at, okay, well, how could you set up a sort of trading regime for the day going into this? And what does this mean longer term? Well, the easiest way to show what this means longer term is just show you what I told everybody in the alpha report this morning. Now, I'm not asking you to buy anything.
If you want that, you can go to me at kevin.com. I'm just going to show it to you. So, this is a screenshot directly from what I wrote this morning. I said, "Will this morning be a dead cat bounce or a bottom?" With cooling information on Iran. This, by the way, was corroborated later in the day because we ended up hearing that not only were talks place taking place in Oman, which was good, but that even though talks didn't resolve the nuclear enrichment plans, we did end up hearing that Iran and the United States had, quote, "Made good progress on their talks." So, this was bullish and it was bullish before even the market opened up.
So, I wrote that we had a cooling on Iran. Uh we also overall had lower prices in the stock market and we were really holding that 595 level on the Qs yesterday, uh suggesting we could really, as well as buy the dipping yesterday on Google, suggesting we could hold green today. In fact, today I wrote that I'm leaning 75% chance towards an up.
And my tactical targets for the day were the following. Tactically, 414 on Tesla, 607 on the Qs, 180 on Nvidia, and 8125 on Hood. And the reason I mentioned that was specifically because of the short covering that we saw today. And then of course it begs the question, are we going to see that short covering continue?
But first, let me show you that tactical strategy. Yesterday, I saw this constant support at 595. One bounce, two bounce, three bounce towards the end of the day, four bounce post market, five bounce. Yeah, we temporarily lost that after the Amazon earnings, but pre post market matters less. It just matters that we were in the daily before trending on that 595 line.
So if you're a short-term trader, I told everybody in the Alpha report this morning, this doesn't change my bear bull scale at all that I think we're going to have a big bounce today, but I think tactically we're going to see a short covering rally today and we'll go to 607 on the Qs. Folks, what did we get?
We smashed right to 607 line of the line. We actually resisted it a couple times, bounced on it once over here, kind of like basically dangled along it until we ended up getting that rally into the close, which is common because now those triple leverage funds need to go buying again. That opposite effect of what we saw yesterday where they're selling into the you know, bottom basically, happened today where they're buying into the rally.
This is very common. This is essentially that short covering and to some extent releveraging at least on those 3x plays. It also has to do with Japanese carry trade, which we'll talk about in just a moment. Tesla, we called this morning right here when it was at 401 we said, "Hey, this is going to 414." You can actually see we held 414 until just a minutes before the close right here with multiple rejections right at this line.
I swear people are going to look at this line and be like, "Kevin, you put that line there after the fact." And those of you who know, know. This line has been there for a very long time. So we regularly say trust the lines. We also called for Nvidia to get back to 180. It actually did a a better. It went from about 175 to about 185.
In HUD, we were calling for a rally to um 8125, I believe it was. 8125 exactly. Uh and so we shot up from the pre-market at about 77 over that 81 level. And we went as high as $82 by the close, a little bit higher, about 84 intraday. So So really good upside consistent with what we thought would be a bounce back short covering rally.
Now of course the question is is this sort of short covering behavior going to lead to lasting benefits or do we still have to be concerned about, well frankly, that diversification we talked about yesterday? Remember yesterday I showed uh some diversification. For example, I was talking about real estate, which I still heavily believe in.
You know, one day of a tactical bounce doesn't change anything. Uh here was a drone uh shot we actually got this morning down in San Diego uh of one of our buildings in Bankers Hill. And this is a gorgeous, gorgeous location. You can actually see the This is what I want to pause on, the ocean right over here.
It's gorgeous. This is a House Hacko in property. Uh obviously the investment round does end tonight at househack.com. Read the solicitation, you already know about that. But I also wanted to clarify before we talk about the carry trade here, I also wanted to clarify it because some of you were asking me, you said, "Hey Kevin, like you know, that property you were talking about with that $4.7 million lot that might be worth, you know, in the high sixes now.
And House Hack is developing. Does House Hack own the lot?" Yes. I I don't want anybody to be confused and think that, you know, I want to succeed without House Hack. Like I I This is my baby, baby. All right. But anyway, so long term s- nothing has changed in terms of deleveraging and uh you know, being diversified.
But in the short term, I think what we found is some of that aggressive short covering helped the market bounce today. What's more important though is some of this selling that we've seen has by market participants been associated with the Japanese carry trade. Now, about uh a week to 2 weeks ago, we talked a lot about how the Japanese carry trade was likely about to go through a period of deleveraging because all of a sudden yields on Japanese bonds are getting so high and US yields are trending down.
Bottom line to speed it up for you, it would make sense for people who are taking advantage of the Japanese carry trade, especially hedge funds, to start unwinding those positions. Maybe not all at once, but certainly over the next few weeks because we're clearly going into a consistent direction here.
Seems to be exactly what happened. Now, why? Well, if you look at The Market Ear, The Market Ear put together this chart and they argued that there's a correlation between the software ETF IGV, which is this blue line right here, and the Bitcoin to US dollar ratio. And as the Bitcoin to US dollar ratio declined, so exactly did the software ETF, which they argue is a perfect form of a carry or deleveraging unwind.
So, it's probably a combination of those. Usually when we hear Japanese carry trade, you know, it's very common for us to think, "Oh, you know, it's just people in Japan like unwinding their positions." It's honestly mostly US hedge funds. US hedge funds have had massive exposure to software and they've been deleveraging from that.
And so, they're probably also paying back some of that Japanese debt. Obviously, it's all a little bit arcane, but so far the statistics tell us, "Yeah, today's bounce totally, totally normal and we saw it coming." I'm not trying to act like a, you know, an oracle who actually sees things coming unlike Oracle stock.
I'm just trying to say like we made a bet this morning in the Alpha Report. And if you want to see those before the market opens up every day, you just go to me kevin.com and you get lifetime access to it. Made a bet, thought we're 75% prime to get a short covering rally today. And that's what we got.
Now, what we didn't get though is a really big reduction in risk. We've actually been seeing an increasing of risk over here to levels we haven't seen since really last summer. And you can see these investment grade spreads and the business the business development corporation spreads over here the lighter gray lighter blue right here.
Lighter blue is actually now at the highest level that we've seen since June of last year and the purple line highest level since about October. And these spreads versus the market are really just in indicating that towards the end of January as we started seeing and beginning of Feb. So we started seeing more of those capex commitments from Microsoft and otherwise.
We're starting to see more risk in the credit market that's becoming evident. This is exactly the concern that we've had. So let's dive into just simplifying this for a moment on the whiteboard. I really uh I got to order a an eraser. So today we're going to use the benefit of my hand and my pants to erase this.
But anyway, now that that's said and done, let's analyze what what you know, what does this actually mean? Okay. So what this means is short-term, you know, short term, okay. We got a bounce. We got a bounce at 595, which is really good. It means we kind of have a structural floor, right? So you want to mark that line even if you're not a short-term trader, use that line.
In fact, that's something we and even yesterday I'm like, look, if you're not worried about a recession, man, this is a great time to buy the dip. Look how things have gotten cheap. Netflix, Microsoft, Palantir, although that one's not exactly cheap. Intuit, UiPath. You know, there's so many companies that have gotten hit with these massive discounts.
We'll probably do a more deep dive video this week on all this. But there are a lot of good opportunities if you're not worried about recession. That 595 hold was a good structural indicator that, "Hey, for now, still holding up." We also didn't have a lot of data today, right? We're supposed to get jobs data today.
We didn't get jobs data today. We ended up getting consumer expectations, uh you know, via via the Michigan survey. And the consumer expectations did beat a smidgen. However, they're still down 20% lower than what we had last January. But, the Challenger and JOLTS news from yesterday, old news. Nobody cares today.
Jobs data today got delayed until Wednesday. We don't have any earning shock to deal with. And Jensen came out to go do sort of chip damage control, if you will, saying, "Hey, software stocks are still good. 6-year-old GPUs are still rising in prices. The gold mining operation is just getting started." Of course, you know, and then, you know, over the next few weeks I expect as well we're going to hear fundraising opportunities like, "Oh, OpenAI." Not to be confused with the House Hack fundraise ending today.
OpenAI, just keep in mind, you don't have to fund your money today. You just have to sign the document today. So, you go to househack.com. As long as you sign today, you could take, you know, a week or 10 days or so to get your money in. That's at househack.com. Read the offering circular. But, anyway, you know, keep this in mind.
Jensen's got to kind of keep the pump going. It's critical to Nvidia. I do trust Jensen, though. I do think there are still underlying risks. And I do think we're going to get announcements of CapEx investments into OpenAI and otherwise. Those things are also going to happen. But, what we're finding is in the short term it's good.
We've got this 595. We still have what I call a ghost. And the ghost that we have is the ghost of volatility. The fact that small caps were up like 3.6% today and the S&P was up like two. And that's almost a 2x spread on how much the small caps were up today. It's a sign people are like, not only short covering cuz small caps usually get shorted when there's panic.
But, also like some people trying to go risk on again. It's fine. It's likely just going to lead to continued volatility until we really confirm what's critical. So, this is not definitely, "Hey, we're going to the moon now." Well, SpaceX is going to the moon now instead of Mars. We already know that.
But, it's a sign expect more volatility. And we're probably going to expect this volatility through some really critical decisions. Uh number one, the tariffs getting rug pulled, which is a great thing for markets, but it'll create short-term volatility, buying opportunity. I tariffs going out, good.
Long-term bullish for everyone. Long-term bullish for the economy. And of course, jobs. You know, jobs data that we're now going to get Wednesday could be really good. I mean, it would seem like it could also be bad because the JOLTS numbers were bad and the Challenger numbers were bad. But, who knows?
Maybe the BLS data's rigged to perfection. But anyway, whether it's rigged or not doesn't matter. What matters is that in the short term, that's our next catalyst to pay attention to. In the short term, we got our 595 bounce, which is good for now. Creates a buying opportunity if you're not worried about recession.
Uh and there are a lot of cheap stocks out there right now. I mean, you could just go look uh at at some of these. I'll I'll read you some PEG ratios, okay? So, um I'll not not only read you some of those so you kind of have where my head is uh on some of these in terms of which of these have cheap values just to give you a little head start.
Uh but also uh just to say like bull bear scale, it's we're like 5 1. All right? So, it's not like, "Hey, everything's going to the toilet right away." We still have to be prepared for that deflationary cycle we talked about yesterday, right? So, just cuz the market's green today doesn't doesn't kill all of that long-term data and information.
Private credit woes are still a real issue. But, uh Roblox had a great day today. It's at a 2.05 PEG. Not my favorite stock to mention. Uh Circle Circle stock has gotten absolutely hammered in and this AI stuff. Dude, it's at a 0.77 PEG. 0.77 that is massively low for a company like Circle. 0.77 PEG suggests that it is about 3.4x undervalued, which is pretty remarkable.
That's That's a good one I think to pay attention to. Uh you know, you've got GameStop, which is just at a 1.26 PEG. You've got Meta, which Jensen had great compliments for today at a 1.28 PEG ratio. Nvidia itself is at a 1.64 ratio. That's valuation-wise cheap. Now, like even though that means they should align with a $300 value, that assumes that that growth remains, right?
So, I just want to reconcile that because when I tell you these PEG ratios, those often include Wall Street PEG ratio or Wall Street projected growth rates. So, if Nvidia has all of a sudden their growth slow down and Wall Street goes, "Oh crap, we got to revise down." It actually could look expensive.
That's why I'm a little cautious on the hardware sector. The only way they go to $300, which I I think is reasonable, is if the chip sector holds up. Private credit makes me nervous about that. Fact that banks are offloading debt, like what we saw with Oracle, and concerns regarding Well, I mean, you just look at like even Blue Owl for example.
I know we had a green day today, but yeah. Not by much. So, the stock today is up 7%, which seems like a big deal, right? But look at the day you had. You know, when when you look at the chart, it's down from 25 bucks to 12. It still sucks. And that's what's funding private credit. So, so the issues remain.
Yes, we had a tactical bounce today, which is fantastic, and we had some chillaxing regarding geopolitical issues, which we didn't have yesterday because yesterday there was talk about everyone leave Iran now, which is really just a Trumpian negotiation ploy. Overall, everyone hold your breath. It's okay.
They're good buying opportunities. I bought stocks this week. I bought the dip. Uh, you know, long term, not saying sell everything and run for cover. But long-term issues do still remain, so I just wanted to give you a level-headed summary of what the heck just happened today, where my head is on this.
And then of course, uh, if you want to join the Alpha membership, you can do that at mekevin.com. You get a clear example of, uh, in a portion of our Alpha report today. Uh, and then of course, our investment into House Hack does end, uh, tonight. Uh, so if you do want to invest into House Hack, remember if you have questions, email us at staff, uh, at, um, reinvest.co, or [email protected], same company.
Uh, you can also go over here, hit that invest tab. Remember to read that offering circular. You get 5% yield through conversion, plus all the upside real estate back. Invest with credit card, ACH, or wires, no fees. As long as you click invest, you fill out your forms by 11:59 p.m. tonight. It's okay if you need a little bit longer to fund.
You know, some people are like, "Hey, I need until next week to fund or whatever." It's fine. As long as you get your docs in, establish some communication with us, uh, we'll get you set up, we'll get you cleared out with the broker then over the next, uh, week or so. And, uh, and we'll be moving on.
So, with that said, thank you so much for being here. I love you all. Follow me on Instagram to see some stories this weekend at mekevin, and we'll see you next one. Goodbye and goodbye. .
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