Greater Depression

While I do expect a leg lower in December, with a stock rebound, it isn't the bottom.  The US Stock market is now setup for a Greater Depression.   But this time, I do expect some companies to excel during this Greater Depression as AI yields massive profits by reducing labor.   And there is the rub, companies that can cut their workforce by 50-75% and increase profits will do great.

Companies that depend on consumers will not to well.   Therefore overall the market will enter a greater depression as the economy transforms itself "before AI to post AI" in the next few years.  I view this akin to the great depression in the 30's, as USA became a manufacturing powerhouse.  Before then, the industries thriving in the 20's was not the same as the 40's.

How does this affect investing? Well, once the greater marketplace acknowledges an economic issue, I expect printing money to resume.  The reason why its not done now is fear of inflation with Jerome Powell as head of the Federal Reserve.  However Jerome Powell is retiring in January, and President Trump will put in a puppet, doing Trumps will over using data to guide actions.   

So I fully expect once printing starts hardcore (Q2-Q3 2026?), the liquidity must go someplace.  That will be either the few companies improving profits or Bitcoin and potentially Gold.   Why? since the 40's when USA created loose money, new companies and expanding companies received improved financial conditions.  With an economy that many companies are not doing what it takes to improve profits with AI, there will be resistance for investing.  The excess liquidity will flow to the few companies or to 'Ponzi like' schemes such as Bitcoin.

Bottom Ahead

I am looking at multiple analysts, the bullish ones, the bearish ones, everyone is pointing to a low in December.  When everyone agrees I get nervous.  However, these are not mainstream analysts so it is still a reasonable expectation.

Therefore we should see a bottom Dec 8th-25th, with a sustained bounce.  we may not break the old highs but if not we should get close.  The target is 5%-10% lower from here.

All USA and commodity assets are in the same disposition.  Good luck!

Why Everything Is Selling Off

 A good video helping understand how Bitcoin selloff maybe a macro indicator for the overall asset markets.

Trump Weekend Surprise

SPY is at 660 today, in the same danger zone as I posted back on Sept 23rd, Oct 10th, Oct 14th,  and yesterday waiting for the hail Mary.  The market is fighting to not fall, and I fully expect a break lower with a power save.  One potential is a fail into Friday or next week (holiday week) and a save over a weekend.   

By allowing the market to end lower before a weekend, the market can "gap up" on a Monday maximizing the market makers positioning for the upside.

So if this Friday its a blood bath, expect Monday before the open or after the open (circa the Trump bump in April) to start a rocket higher.  I do fully expect this rocket to last 1 to 5 days, then we can find a meaningful bottom.

Good luck!

Waiting for the Hail Mary

 

IMO there is likely wild turmoil in the markets as we have a confluence of financial events culminating in the next ~4 months.   When President Trump hears the "market is collapsing" or "going down", with full certainty a tweet to "put a band aide" on the market sentiment.  The insiders will force the market to gap up, very hard core, forcing all the people short (like me) to sell their positions.  That will give the top 1% ability to sell their shares (to the short covering people) and a final flush to resume.

I am NOT mega short, I will take it on the chin hard core when above comes to pass, but I am leaving cash open.  When this event happens, there is no need for a post, or talk to me, I am going in.  Maybe not 100% on the day of the announcement (whatever it is), but I will be looking to load the boat.

This economic situation has been building since before 2008, and we have done nothing since then to fix the core financial rot.  We could have kicked this can for another 4 years if the people elected another politician.  They did not.  We are pulling forward the financial reckoning. 

Post washout, as the government "issues free money", Bitcoin/Gold should soar.  That will of course start government taxes or limits on such investments, and the price controls will begin.

I do expect the next USA downturn to be short, as the "new thing", AI, is from USA.

Through all of this I expect the USD to do well.  If China or Russia fail as countries, we could see a crazy rocket of US stocks.

Sold a BitCoin Today

I purchased 1 bitcoin back in 2020 , sold it today.  Why now?
Bitcoin was the one optimistic asset in my portfolio that I had the strength to hang in there.
But I do expect a market correction (been since August?) and bitcoin is now held by institutional investors.  I believe these entities are more likely to sell than the traditional buy and holders like myself.  Bitcoin holders since the coin's inception have been selling.  I suspect they believe the same thing I do.

In an asset crunch, people sell assets to cover their margin calls.  Bitcoin I think will be impacted materially.  This is the one place Gold does have an advantage, it takes more than a click to sell your gold "collection".

I am still in the game!  Sure $125K would have been better, but like I said,  having a bearish tilt on the USD global financial order, Bitcoin was (is) my long term hope.

I do still believe Bitcoin will hit $1M, even $10M a coin, who knows on what timeline.  I do think once the USA over-reacts to this bear run in US markets, Bitcoin is the first place to invest.

Going short again, surprised?

 The market has done a ridiculous good job of pushing higher.   The market has not been a rocker above SPY 666.

We could run up into extreme highs into next year, but I think that is the narrative the majority is banking on.

I do think a 2008 crash is now impossible, as the Fed chairman will be replaced in January, and the person will be a Trumper.  Trump has always run loose fiscally, as his multiple bankruptcies and defaulting on contractors.

So whenever the bottom is, I suspect in December or January.   The bitcoin and gold sectors will be safest plays for liquidity inflows.   As we print, there will be fear to invest in companies.   There are also less startups as tech centralizes power.  Therefore the currency will flow into ‘ponzi’ type assets.

Good luck!

The final market bottom

If we get a downdraft in the markets, I do think for the next generation of companies, that is the time to buy for a lifetime.  Technology is accelerating, the problem now is our ability to affect change quick enough.  For companies that cannot adjust quickly, their value will continue to go down.  In effect we will have a repeat of 1929, a cleansing of the old and a birth of the new.

This is a great video to watch, to appreciate we are about to live through transformation that is unthinkable by every human, as we cannot appreciate exponential change with AI.   

Buckle up!

Picking a direction

 I lightened my longs today, and added shorts.

Ill give til Tuesday to see if i am wrong.

We could be at this level with big money buying for a run into 2026 or big money is selling into people buying.

It is truly impossible to know unless you are in the US administration or market makers.

Good luck on guessing correctly!

Next Leg

 Market is gaining ground slowly.  Assuming close of Monday is above 666, a clear signal higher that 663 pivot I have been watching, then time to get bullish again.

A caution note, China and USA are now in a full trade war.  Looking at reality that is not good for markets.   But if the charts show a positive trend, cant fight the tape.

I am keeping about half my assets in foreign investments, gold, bitcoin.

Decisions, Decisions

SPY Ended just below 663 on Tuesday, curious what the close of today will bring.  Who knows, bull into 2026 as long as we stay above 663.

Honor the charts for Market direction

I have been saying 663 is an important number, and notice that yesterday's market close at 663.04.

Yesterday being "above" 663 by 4 cents wasn't enough for me to close my shorts.
This isn't to say by Friday the market will be higher.

We went to 673, and that is materially above 663, and because of this I turned bullish into 2026 , simply because I need to look at the charts and honor what it is telling me.   I recommend if you are a bull, to look at the charts and use 663 as your bull/bear target.  In addition the US stock market is the most expensive in US history, you know what they say, buy low, sell high, and its high!

For now, I am shorted and closed out most longs, and today I'll reduce exposure to HIVE, etc. 
I will keep core bitcoin, gold, international ETF, etc for non-usa play.
Some videos to consider, one how the USA is moving to dictatorship economy, that will make trading near impossible once the corruption is fully into the system.
A few videos for your consideration.

Good luck!

Rocket running out of Fuel?

 

The market cleared all bear hurdles so there was no real bears left, hence my post yesterday.  It worked, I had lightened up my shorts and went long. 
Today SPY broke below the warning level of 663 with conviction.  I lightened up on my longs materially, and  I took on some decent short positions into the weekend. 
Any close of 664 or higher and I'll become bullish again.   Good Luck!

If you are long, take some off the table, but one day isn't a full market decision.  

Rocketing into 2026

While the entire US Economy crumbles, it seems like America and the world will be betting on a small sector with massive speculation.  The charts and the politics all point to no holds barred suck everyone into a market uptrend that will make the last 2 years seem quaint.

The only reservation I have is the American consumer and middle class are being marginalized.  But in the new world ahead, I don't think American middle class matters to the financial markets.

What will matter is using AI to reduce labor, increase productivity, and advance capabilities in a winner take all run.  The number of relevant public companies in this sector is small, with a material amount of private equity funding the core beneficiaries.

With less stock to purchase that is relevant, with massive money waiting fora  downturn that never came, I can see upwards of a 25% market gain from here to EOY, as insane as that sounds to you, its even crazier for me.

So while I can't advise go all in on this sentiment, I can say, you have to be in it to win it.

My last post listed some of the companies I am in, I will be closing out my shorts (most against specific companies) and look for long opportunities.  I didn't bet big on IREN and CIFR for the AI/Bitcoin datacenter play (I sold early), I am eyeing up HIVE as it hasn't made a run yet.

Stocks I like still is HIVE, FBTC (Bitcoin), SMR, TSM, URA, OKLO, SLDP.

Best I can say is good luck! Unless SPY closed below 663, there is absolutely no reason to be bearish.

Rocket into 2026

Today is "Turn around Tuesday" closing higher than Monday any day this week, and I agree with below.

The S&P 500 (SPY) has closed above 666 for multiple days, solidifying its advancement.

The red line is the SPY relative to dollar value, and the green/red bar line is the SPY.  Last week the market made a new high in US Dollar value terms.  That means up until last week, the most global purchasing power your life saving was lower since January of 2025  even though the SPY was much lower.

In any event, everything points upwards.  We may in-fact see a market parabolic up into 2026.  The consumer and employment numbers are not good, inflation is being sticky, electric energy prices are poised to remain high and continue higher.  But none of the USA negative attributes matter.  At the end of the year is when the US spends beyond its means (borrows) into the economy, and the market is showing signs of bullish.

I expect crypto to explode upwards, energy stocks, and the current fad sectors.    The only thing I see negative is even I have materially reduced shorts (not zero).  The market tends to top when even the bears buy in.   Big money, such as investment funds, have been selling and reduced their market exposure.  It is possible they give in, and start buying to not miss out into the end of year.

This all changes nothing about the end game, this ends in tears, the us economy is in shambles, people are bankrupt, unemployed, priced out of housing, the staple costs exploding up, healthcare about to double.  In effect the US as the worlds consumer is about to end, and that was a key attribute the world had become dependent on.

Key holdings: FBTC, RGLD, HMY, BKKT, CIFR, FETH, FBTC, SMR, TSM, URA, INTC, OKLO, SLDP. buying HIVE

Key international:  INDA, SHLD, EZA, EWW, EFAV, EWL (Switzerland, not a growth play), 

Key shorts (limited size): LOW (option bear call spreads), STLA (puts from Sept 2024),  CNI, SLG, FNGD.

SPY 666

Back in March 2009, spy exact bottom was 66.6#.  I still remember that day.   Tuesday, SPY hit 666.##.

As my previous post, a material close above this number for a couple of days indicates we are facing a crisis event with a market collapsing up.

Alternatively, some sort of universal anomaly with an odd market top.   Either way, I am looking over next few days for the decision .

Part of the market driver is the under reported collapse of the dollar.   Everyone should be aware that people buy dollars for wealth storage due to their confidence in USA future.  What has changed ?!?!?

Decisions being made

Parabolic Blowoff

Strap in, the market may have an uncontrollable epic parabolic move up, with a terminating event.
Long the market should be excellent, providing you can get off at the right level.

If we end above S&P500 666 today, there is really no reason for the market to go down until everyone is in, with full saturation of buyers.

Challenges Ahead

The Federal Reserve under Greenspan in the 90's made a fatal mistake.  He signaled the Federal Reserve moved from stability to helping the economy.   Most people see nothing wrong with the Federal Reserve helping the economy.  But in a capitalist society, and wanting to avoid government intervention into the public sector, the Federal Reserve should have maintained its disposition.   Once he lent a helping hand, politicians and the public switched to view the Fed is the driver of the economy.

This lead to politicians not being accountable for the economy, and to point to the Fed.  Stock market, Bond rates, asset processes are suppose to reflect the economy health as signals to politicians.  Then Politicians adjust policy and lead the country forward. 

Leadership is hard, easier to ask someone else to kick the can.  That has landed us to today.
At some point, can kicking won't work.  There IS one exception to this view, if the economic model changes.  AI has the potential to be so impactful the economic rules I am viewing no longer apply.
Until AI has invaded the economy sufficiently, the older economic model is the guide.

There IS the possibility that the can kicking is sufficient to switch to a newer AI economic model, though I give this a low probability mainly due to multi-front resource constraints.

To me, Ray Dalio is the most articulate of the future view excluding AI rewriting the economic model.  And I completely agree we must suffer in the USA and UK economically to force change.  This will happen when the fed tries to kick the can, and it can't.

Banking Sector Timebomb

We see complete disregard for the US Constitution (Executive, legislative,  and Judicial) separation of powers, and each branch not fighting to retain legal boundaries.   It is reasonable expected that legal lines in US financial markets will not be honored.   I do expect extend and pretend to be financed by the federal government.  China is on the precipice of financial failure due to their corrupt financial markets.  The US looks to recreate that mistake, however, it may take a few years until the markets fail.  I do expect the US Dollar to reflect this through relativity, and value of the dollar to Bitcoin, Gold, and some countries.

It is very rational to be 100% invested in the US stock market right now, providing you can time stepping off the elevator before the cord is cut.  I am trying to hedge US financial system reliance with investing in the world and alternative assets, and yes, target US companies.

This is quite a detailed video, but he is trying to communicate some of the shell games going on.

AI Investment Bubble

We have the makings of the AI investment bubble popping.  The popular news is sending out information reflecting a negative POV for AI development.   Without AI excitement, there is not much else to promote US stock market upwards.  

Inflation is crunching all US citizens, and inflation is going to be here for years.  Until US administration decides to tax the rich instead of put heaver taxes (tariffs) on the bottom 99%..   Further USA debt spending and war efforts are not abating, but the safety net for US citizens is being dismantled.  Lastly, with expulsion of cheap labor, and AI data centers demanding energy and water, food prices will continue to skyrocket.
All of this ends with US stock market going down as profits pullback.   But this time is different.

With all the negative about AI, one thing is clear to me, it will be immense efficiencies to corporations faster than the internet did.   It will be hard to capture this in a GDP number, but make no mistake, companies that can leverage AI to improve their efficiencies will be rewarded in the stock market.  

The problem is, the larger the company, the harder to actually manifest this benefit.  I expect after this drawdown an EXPLOSION of new businesses powered by AI.  People of 1-5 in a company providing the value of 20 people.  These companies can adjust much quicker than large companies.  Large companies will return to outsourcing to many small companies to get the work done.

Eventually this will massively benefit large companies.  I have huge optimism for some companies after this next downturn.  Buying general ETFs wont be a winning strategy.

Keep your ears open, the more negative AI news you hear is a signal that the bubble is popping.