1970’s Style Inflation To Decimate Markets, Where Still Stocks, Bitcoin Go? | Gareth Soloway

*This video was recorded on February 16, 2024

You’re being watched RIGHT NOW and the only way to stop it is by using a VPN. Avoid hacks and protect your privacy before it’s too late! NordVPN offers 65% Off on a 2-year plan +4 extra months! Try it for 30 days or GET YOUR CASH BACK!
https://nordvpn.com/davidlin

FOLLOW GARETH SOLOWAY:
Verified Investing: https://www.verifiedinvesting.com/
Twitter (@GarethSoloway): https://twitter.com/GarethSoloway

FOLLOW DAVID LIN:
Twitter (@davidlin_TV): https://twitter.com/davidlin_TV
TikTok (@davidlin_TV): https://www.tiktok.com/@davidlin_tv
Instagram (@davidlin_TV): https://www.instagram.com/davidlin_tv/

For business inquiries, reach me at david@thedavidlinreport.com

*This video is not financial advice. The channel is not responsible for the performance of sponsors and affiliates.

0:00 – Intro
2:30 – Inflation
10:27 – Semiconductor sector
11:30 – Fed policy
14:45 – Recession outlook
18:31 – S&P 500
21:35 – NVIDIA
24:20 – Tesla
27:05 – Bitcoin
35:17 – Commodities
37:10 – Dollar

#investing #trading #stocks

Higher inflation is bad for Equity markets is that a good generalization to make yeah right now it absolutely is right so and really in all situations because because any sort of uptick in inflation makes the probabilities of the Federal Reserve cutting interest rates as much as the market is pricing in uh

Less and less likely so if we look at just a few months ago it was six rate cuts that the market was pricing in even though Jerome Powell was saying hey guys we’re not going to start cutting till the second half of the year and we’re

Only going to do three I think if you look at the FED funds Futures tool the watch tool it’s now down to four rate Cuts this year this the first one starting in June now so the markets are slowly adjusting to that reality Gareth Solway is back he is the chief Market

Strategist at verified investing.com first to work from our sponsor nordvpn on this show we regularly cover how to grow and protect your assets but one of your most important assets is your privacy every investor needs to protect their digital privacy and footprint against hackers and of potential viruses

According to chain analysis 2022 was the biggest year ever for crypto hacking with hackers stealing $3.8 billion do in cryptocurrency and according to Duke University more than 80% of us companies claim to have been successfully hacked one of the best ways to protect yourself uh and your privacy online is with

Nordvpn not only does nordvpn hide your identity online from malicious actors and criminals but it also comes equipped with malware protection nordvpn also prevents you from accessing dangerous websites allowing you to enjoy your favorite Financial content securely and the best part is that it is easy to use

Just download and click nordvpn is available for your phone or computer and they’re currently offering 65% off on a two-year plan plus four extra months simply click on nordvpn.com David Lin in the description down below to learn more we’ll be talking about all things to do with the market starting with the

Economy and specific stocks that Gareth is following and of course Bitcoin welcome back here it’s always good to see you happy um middle of February yeah really amazing how we how fast the year is flying and thanks for having me back David is always great to talk to you A

Lot has already moved in the first six weeks of the Year let’s start with the economy PPI numbers came in this morning on Friday hotter than expected I’ll just read a few paragraphs from the CNBC article wholesale prices moved more than expected in January further complicating the inflation picture according to a US

Department of Labor uh report on Friday the producer price index a measure of prices received by producers of domestic goods and services Rose 0.3% for the month the biggest move since August Economist surveyed by Dow Jones have been looking for an increase of just 0.1% so yes did certainly beat

Expectations by quite a bit the market seemed muted today didn’t move by much but it did move a lot uh stock markets didn’t move quite a bit earlier this week Gareth when the CPI numbers came out um so what do you what do you think is going on with inflation is it coming

Back is my first question yeah so so just from the past times we’ve talked I I’ve been pretty adamant saying that I do believe that we’ll get down to that 3% handle and then getting from three to two is always the toughest thing and and I continue to see the the reminiscences

Of of what happened in the 1970s and in fact I can show my chart right here and we can just kind of take a look at it but basically what we see here is this was the 1970s and you had that initial uptick and then the FED obviously kind

Of stepped aside and and inflation came down and then we had another wave of inflation went higher the same thing pulled back we had another wave higher as well and then finally it got back under control and I really think that you know as much as the FED has said

They don’t want to repeat what vulker did if you look at the 10-year yield right the 10-year yield the FED funds rate still at 5 and a quarter to 5 and a half yet interest rates on the 10e are back to the forish percent level in fact

We were below four so you’ve seen those those interest rates come back down even without the FED lowering rates and what that does is it starts to initiate inflation again it starts to Kickstart that inflation because borrowing money is getting cheaper again and I think you

Have to look at many things right so just a couple things I want to point out is that you know you’ve seen the balance sheet of the Federal Reserve drop just a little bit it was nine trillion it’s down to to 7.5 trillion so the the FED

Has kind of started to contract that a little bit but the kicker is if you look at all these auto loans credit card debt US public debt they’re all surging to the upside and so that’s making up 10 tenfold the amount of the the the pullback in the balance sheet again just

To show you in comparison this is the pullback here right this is where we were we were trading around $9 trillion they’ve only been able to reduce their balance sheet to about $7.5 trillion and that’s while the US deficit has risen multiples of that over just the couple

Years right so again my point being is that when it comes down to it you’re in a scenario where the FED yeah they’ve tried to tighten but the market has actually loosened and then you talk about the extra money in the system from credit card debt to auto loans to the US

Deficit and it really hasn’t been that tight and I think that’s probably why the stock market is at all-time highs as well okay so the 70s was a major period in uh economic history there was a huge uh spike in oil prices as you know from

The OPEC oil crisis um it’s going to take a lot to bring back that era in the sense that we’re going to have to have a major Supply crunch or some sort of major shock in the economy um to bring inflation up to those levels right and

And and to be fair to be fair David I don’t think that’s going to happen like I’m I’m not anticipating inflation going to 10 and then to 20% but the kicker is this right is that the Fed was banking on inflation getting to three and going below 3% so that they could stimulate

And cut rates when the economy slows if we’re starting to even uptick from 3 to 4% how does the FED start to cut rates aggressively at that point knowing the repercussions of cutting rates is to stimulate inflation again and so I think that the more important thing here is

Just if you can’t get the inflation rate in this period below 3% and we start seeing an economy that’s weakening and by the way Cisco laying off 4,000 people I mean we’ve seen layoffs starting to to compound we’ve seen um the retail sales just came out a couple days ago and

Those are starting to get weak and one other chart I’d love to show you guys is um the U6 right and this is something I follow as a leading indicator and if you take a look going back to the 2000.com bubble before the recession hit U6 which

Again for those of you that don’t know out there U6 is underemployed right so it’s people that want full-time work but they might only be able to get find a part-time job or two part-time jobs but if we look at this prior to recessions there’s about a 12- Monon period where

U6 begins to uptick even before the unemployment rate actually upticks and you can see it right here in in 2001 to 2002 before that recession and you can also see it here in the 2006 to 2007 period before 2008 now covid it didn’t really happen because obviously that was

More of a of a Black Swan but we are seeing if we go right here you can see an uptick in the U6 even though we are not seeing unemployment rates start to jump higher just yet but again these are warning signs to me that have on high

Alert right yeah I think uh if you go back to that chart just one remark um adding on what you’re saying here uh the unemployment rate has ticked up historically during a recession it’s not before it’s not after it’s when a recession officially hit6 is before U6

Is before well I mean a significant increase right it starts to take up a little bit and then it moves up a lot during a recession so corre you’re right you’re right we’re seeing warning signs of a Rec session if history indeed repeats itself now I want to go back to

Trading CPI because earlier in the uh week when the CPI numbers came in at 3.1% the medium forecast I think was 2.9% so even though 3.1 is like a big jump from the last month’s numbers it did beat Expectations by a lot which is why I think the stock markets fell a lot

That day right I think it was Tuesday Yeah Tuesday cor CPI uh Consumer Price Index came out and and I think the like like you said the Assumption here that the FED won’t lower rates anytime soon because CPI is not moving down so generally speaking then would you say C

Higher inflation is bad for Equity markets is that a good generalization to make yeah right now it absolutely is right so and really in all situations because because any sort of uptick in inflation makes the probabilities of the Federal Reserve cutting interest rates as much as the market is pricing in uh

Less and less likely so if we look at just a few months ago it was six rate cuts that the market was pricing in even though Jerome Powell was was saying hey guys we’re not going to start cutting till the second half of the year and

We’re only going to do three I think if you look at the FED funds Futures tool the watch tool it’s now down to four rate Cuts this year this the first one starting in June now so the markets are slowly adjusting to that reality the interesting thing about it is the stock

Market’s still pretty close to the all-time highs we really haven’t seen a pullback yet and the kicker for this is simple right you have a market where everyone is starting to chase this is exactly what we’ve seen going past to like you know you look at a scenario

Like what we saw in 2021 where there were a lot of bad signals out there of what was going to come in 2022 but money was just saying I don’t care about valuation I don’t care about technicals I am just going to jump in and it creates these Bubbles and a good example

Of the bubble right I mean take a look at smci this is one of the favorite out there of the meme crowd right if we look at this today look at this I mean this runup was incredible Up Up and Away we’re talking about from $300 at

Basically mid January so 1 month ago and where are we as of this morning we were trading at 1080 before a collapse back down this is bubble territory and by the way I’ll even go on record and say this is this is the same sort of thing the

Atmosphere in the market is the same as when I called the top in Bitcoin in six at 69,000 in 2021 it is exactly the same psychological sentiment out there uh this is just for this one particular stock or all semiconduct doors no it’s it’s generally most most semis I mean

Obviously the leaders are um you know you have Nvidia which is is one of those and then you have other ones like smci and a few others armm is a big one as well but we’re also seeing this in other things as well I mean if you look at a

Microsoft I mean Microsoft has gotten way out of control uh I can bring up that chart we can see and exactly what’s going on there but these type of moves that have just created these behemoths you know well over $3 trillion valuations you know they’re getting extended because the money flow is

Focusing in on just this group and I think it’s important to remember that if you look at which sectors there’s 11 sectors in the S&P right there’s only one sector that has been hitting new all-time highs and that’s technology everything else has been left by the

Wayside in fact I believe I just read earlier this week 39% of the S&P is still below its 50 moving average um which is astounding for a market that is hitting new alltime high right uh I want to come back to stocks and semis in just

A bit but I want to close off on the fed you earlier you said said something really important which is that um the FED is unlikely to cut rates if inflation is high yes that’s a good point Gareth uh but what if let’s say U6 unemployment rate that you pointed out

Continues to go higher wouldn’t that incentivize them to cut in other words wouldn’t higher unemployment numbers be actually good for stock markets because it signals that the FED would need it start cutting yeah so and that’s where things get tricky and honestly no that’s not a good scenario for the stock market

Because if you have higher inflation but then you start seeing unemployment Spike yes there’s going to be pressure on the FED but the FED has to weigh the risks of causing inflation to have another Super Spike by cutting too much and creating too much liquidity versus obviously having a slightly elevated

Unemployment rate like so for instance if you told me that we were going to have a 10% unemployment rate heck yeah the FED would be cutting like crazy but if it’s an uptick from the threes where we are now to 5% the FED may be a little

Res kind of you know holding back in terms of cutting because they don’t want to create that next wave of inflation like we saw in the 1970s the other thing to keep in mind is why is why is rate Cuts in a recessionary environment maybe not the best is because it’s actually if

You have a recession it’s actually telling us that stocks like Microsoft and Apple people aren’t going to be able to afford buying their products the consumer is going to pull back which means earnings start to drop and obviously the forward-looking PE ratio for the S&P starts to get less and less

Or in terms of of too lofty valuation so so so to be honest it’s not necessarily A a linear line with just all rate cuts are good it has to be under what circumstances so what the market was prepping for initially before CPI and PPI this week was we’re going to have a

Perfect Landing there’s no Landing the economy is going to stay strong and the FED is still going to cut rates that’s a great scenario for stocks right that’s like the best of all worlds but now it’s getting a little bit trickier and this is where things that have gotten into

Bubble territory may start coming in very very quickly well what is going to Drive inflation um perhaps even higher or just keep it at elevated levels above 3% Gareth that’s a great question so I think if we started to see a really bad recession then inflation does get down

To the point where it could be deflationary but if we go into kind of one of these stagnant markets where you know for the most part we’re in a slight recession it’s kind of things are slow things are kind of a for a long period of time where you’re not really seeing a

Huge draw down in the economy where it’s a deep recession then I think you have the pressure of increases in wages that still get passed through and we’ve seen that by the way I think the PPI is showing us that the CPI is showing us that that that producers they’re paying

So much extra you have people that were making a minimum wage that are now making two to three times that minimum wage that has to be passed on to the consumer to keep the earnings flowing from a lot of these big companies and so it’s not a one-year event right I mean

If you pay someone $20 instead of $10 an hour you can’t really just double the prices that you’re charging your consumers but what you do is you say okay well I’ll I’ll raise it by 33% this year 33% the next year and the next year as well to bring my profit margins back

In alignment so so I think that’s the kicker is how bad is the recession and what do we see let’s summarize your economic Outlook are you still projecting a recession to hit because we were making the assumption that a recession would cause uh deflation if not disinflation so is a recession still

Happening based on current economic data yes in fact based on what we’ve seen recently and I’m throwing my S&P chart I’m actually more confident that a recession is on the horizon the retail sales this week alone showing a consumer that is slowing down much quicker than expected you look at again credit card

Debt and all these other factors including the government spending right I mean government spending Can Lift Us for a certain amount of time but it’s at some point there has to be handcuffs even put on that where otherwise it’s going to cause major issues down the

Line so so I am confident that we will see a recession the question is is it second half of this year or is it before then but I do think by the end of this year we will see that recession on the S&P 500 again to see these type of runs

Very very unusual to see a run this vertical on the S&P 500 again if you look at the stocks in the NASDAQ what’s been leading there’s been a few stocks that have been carrying this Market higher everything else is struggling and that is also a concern so again then you

Look at China you look at what their economy is doing and obviously they’re stimulating but what are they going to export in terms of a Slowdown to us because it is global we are in a global environment at this point Point um I just one push back on the recession call

I saw somebody tweet this I don’t I can’t remember who I I I can’t find the Tweet but I remember seeing this and I thought okay this is an interesting argument he said all you have to do is go outside I mean go to a Taylor Swift

Concert or go to a restaurant there’s no recession right right respond to that as long as yes and that’s fair as long as you have people that have credit cards you’re right but look at the savings rate the savings rate was Skyhigh during covid it has gone negative at this point

There’s no doubt people are running out of money but right now it’s hard to change your living standards until the credit card companies cut you off and they will do that once things get bad enough and again then look at retail sales just recently why weren’t retail sales even better that were just

Reported earlier this week so so again I agree Taylor Swift is going to have fans right it’s going to take a major recession for people to actually stop spending those whatever they charge like $500 pops or whatever but but ultimately start looking at the underbelly of the

Economy there’s still I mean and again this is kicker two right you have basically two economies in in this in this country and really in the world you have the people that have been in the stock market that have been making money hand over fist and those are a lot of

The same people that are going to Tailor Swift concerts and they’re doing fine but what about those other people because again the middle class just like before the Great Depression it started to shrink more and more and you had this huge Divergence between the rich and the

Poor and we know how that ended well that that that’s a great Point uh the wealth Gap is is increasing we we’ll go back to the stock markets after this but the wealth Gap has been increasing it has been doing that for quite some time ever since Co really uh don’t you think

That that the wealthy is just going to carry the rest of the economy they’re the ones spending well I mean the interesting thing is we’ve actually seen the wealthy starting to pull back I mean you know a little funny antidot antidotal story here is that I I bought

You know stupid me you know thinking I’m I’m a genius investor outside of the stock market in crypto I went and I bought a couple horses right you know you know TR you know these these these show horses well guess what the the the sale market for these things literally

Dried up um as soon as interest rates started to pop and stuff and I haven’t been able to unload them and I was the goal was to actually flip them and now they the rich are like staying away from buying horses Believe It or Not which is

Which is crazy but to me that’s another signal so so again in real world situations that’s one good example that even the rich are starting to pull back I don’t know if it’s political because they’re worried about the coming election is it because of the economy is

It because of other things but there is a pullback in the rich spending as well interesting uh all right well let’s talk about the stock markets uh if you pull back if you put back the S&P 500 chart Gareth where you got the wedge pattern here um look I think the first question

Job on nailing that term by the way I I’ve talked to you for years Gareth I’ve been learning a few things from you you know I picked up a few terminologies here and there after a couple years working with you Gareth but yes this wedge pattern look

The first thing that people would ask you looking at this chart is how can you still be bearish looking at this chart right I I’ll just leave you to respond to that yeah so so number one is it’s been a great uptrend there’s no doubt

About it folks and and I’ve been short a fair amount of this distance to the upside but having said that ultimately what we know is that when everyone else is euphoric that’s the time to be careful go ask Michael bur in O in ‘ 07 and what he was doing when everyone was

Telling him he was a nut job um these are the times when you have to be more careful and I think you also have to look at the the data points and that’s what we’ve been talking about here and for me it’s not a matter of if this

Collapses it’s a matter of when could we go a little bit higher certainly if the if the liquidity in the system continues if the economy continues to stay strong with with people having jobs yeah we’ll probably grind higher but there will be a cliff dive at some point all of what I

Showed on smci there’s only so far you can push things before they have these monstrous corrective moves and again you know I just want to show you a few stocks out there look at Hershey look at Hershey’s you know this this look at the drop on this thing where this thing is

Trading down here I mean you look at a lot of stocks out there they have really come uh crashing back down here’s WBA what about this great you know CVS Walgreens and there’s obviously other factors going into these but there’s a lot of stocks that are very close to 52-

We highs versus 52- we lows excuse me 52 we lows versus 52e highs and things continue to deteriorate on the internals and that’s why I stay with my call of a recession and a market that will come down hard at some point this year we have to remember the FED hasn’t cut

Rates yet once they do Gareth won’t won’t the stock markets just rip higher well actually historically speaking that’s when the stock market actually drops so again I wish I had that chart pre-loaded to show you guys but but in reality if you look at history that’s when the market actually declines and

The reason this is great education the reason why the market declines when the FED starts cutting rates is the Fed is cutting rates because things have gotten very very bad to the point that they have to cut rates and the market gets fretful meaning they start to worry that

The FED is behind the curve that they tightened too much and they didn’t start cutting early enough so what they do is when the FED says oh let’s cut 25 basis points the market says oh my God this is horrible we’re going to go into a crazy

Recession they should have cut 50 or 75 basis points and we actually roll over and by the way same thing for the yield curve inversion we are still inverted on the yield curve and the technically we look at history and it shows us that when that yield curve uninverted that’s

When the recession tends to hit can we look at Nvidia for for uh for a minute I think this is a good Master Class where case study in uh in technical analysis with fundamental analysis so just from a pure technical standpoint I think look it’s gone up in a vertical line in in

The last six weeks uh I think I know what you’re going to say but before I let you say what you’re GNA say um fundamentally the stock is hot right now the company’s doing well it’s been beating earnings everyone needs their chips the AI boom is still in full swing

You know it’s i i people not me but analysts have argued it’s still a good company so how do you B bance out possibly sound company fundamentals with a vertical line right right so so and this is a great point so this has been one of those narratives it’s it’s Alla Tesla in

2021 um and I love you bringing up this point because it shows us how Bubbles ultimately end and you could say oh AI is not a bubble but yeah well look at Cisco look at Sun Micro Systems back in 2000 when the dot bubble was by the way

Cisco Systems has never gone back to the highs that it was trading in in 2000 since then yet Cisco Systems was the high of stock back then it was the backbone of the internet it was the only game in town allaha the AI chips from Nvidia and what ended up happening right

Let’s talk a little bit about this what ends up happening is that all the other semiconductor companies and by the way there are hundreds of them out there you know from Micron to to Intel to to AMD they’re they see the margins that Nvidia is getting right now 80% margins and

They’re saying holy crap we want a piece of that and so before you know it just like with Tesla all these companies start producing these AI chips and the competition is going to crush margins just like it has in the history for the semiconductors and so ultimately what

Ends up happening is their margins collapse and Nvidia will come crashing back down now it doesn’t mean it can’t go to a 800 or 900 or a th000 first but at some point it comes crashing down and just to show us this right let’s go to

Tesla let’s go to Tesla during 2021 here and take a look so we were all remember this run I mean it’s one of the most incredible runs because the EVS the car cars that that Tesla were producing they were the best in the business they were the the only ones that really people

Wanted yeah you could get an EV from somewhere else but it got like 50 miles to the charge it was crappy but Tesla was the best what’s happened every other car company out there is now coming out with fantastic miles that you can get per charge great cars and Tesla’s cut

Cut prices over and over again and their margins have collapsed and here we see Tesla now I mean and you just look at the collapse that we saw here right if we take the high of 2021 to the low it dropped 75% before getting this recent bounce

And again markets by the way alltime highs Tesla shouldn’t even be in the Magnificent 7 anymore based on its performance frankly yeah I was going to ask about Tesla why it’s it’s been it’s been a lagered now on a technical basis if you were to this is one here I’m

Gonna throw out a counterargument tell me if it makes sense or not so if you group Tesla in The Magnificent Seven stocks and you think to yourself well look it’s peers in the large Tech stock space are all doing well so you know comparable to its peers it

Should also be doing well but it’s not therefore undervalued we should buy Tesla does that make sense to you it it doesn’t make sense yet there’s always going to be a price where something like as good a quality of company as Tesla is that it will make sense okay for me it’s

Got to come in more before I mess with it again you know think about this the issues that they’re having with China right we know China’s economy is crushing them because China is is hurting so bad right now there’s the risk of China what if they invade Taiwan

And what what do people do or what restrictions are put on in sales in China right there and then you have obviously the competition that’s that’s just continuing to put out EVS after EVS after EVS which are quality ones now so I would say for me I have this I have

This trend line going back to the 2020 Co lows right through this low in in December of 2022 for me that would be where I would start to think about it around this $135 level if it comes down there which I think it will when the stock market

Corrects um I think that’s where you start to get interested in Tesla at that point but but again you know learn from these history historic lessons about bubbles folks I really want to stress that to people because I want to show you just a few others do you guys

Remember the um the 3D printing bubble there was a 3D printing bubble back in in 2014 3D was going to change the world and it ran up 3D DDD the 3D Systems ran up to 95 to 100 bucks that collapsed down to six bucks $93 drop remember

Solar when it came out in 2007 uh this stock Sur First Solar unbelievable excitement over solar stocks they all ran up 73% drop and so I do want to just impress people upon this because don’t look back and say like like with Bitcoin with my call on bitcoin at 69,000 it was

Going to go to 20,000 you know you have to start to recognize things that occur doesn’t mean Nvidia is not a great company by the way it’s a fantastic company but things get overhyped and reality eventually does set in uh yeah you’re you’re right there but I mean

That was 08 9 I mean everything everything crashed so yeah but but I mean even so I mean go out a little bit further you know years’s 2012 markets were recovering and it went to 13 bucks on that I mean you know you can go as a

Dime a dozen of these type of situations by the way another one I love pointing out this one remember how hot the uh marijuana stocks were marijuana stocks in like 2018 or so look at the runs up on on canopy growth and then look at the

Collapse that these things had too so I mean again everything goes through its hyped mode as an investor you have to be early in these things or at least midlevel otherwise in my opinion there’s too much risk to be buying something like Nvidia after it’s up x% this year

Alone okay um let’s talk about Bitcoin uh Can’t Ignore Bitcoin I don’t think you and I have spoken since the ETF launch no we haven’t because I was in a conference and anyway you remember my call what I said was going to happen on the ETF launch I said it would pull back

And coll correct yeah you were right there yeah it did um but okay so that’s exactly what happened but then something else happened in the last couple of days so it’s now uh squarely above $50,000 a coin huge move um first of all let’s recap what happened and then we’ll give

Your outlook sure so so we had the ETF launch and that hype again hype is hype whether it’s in Bitcoin whether it’s in inv video whether it’s in any of these things it drives it to the these crazy levels overbought and then you get kind of the sell the news event and that’s

Exactly what we saw on that um I happen to be short at that time we got out just around this just below 39,000 down here and the beautiful thing about this is it created this look at this channel you have the highs here connected to these highs and this low connected to these

Lows and look at what we just hit on on um Bitcoin so believe it or not I initiated a new short just up here very small position just to kind of a dipping the toe in the water type thing but again the idea being is we’ll see a

Pullback off of this and now the recent run in Bitcoin to me it’s not so much about the ETF anymore that’s out there I think there’s still a lot of hype about it it’s partially about the having coming up but it’s also about money right it’s about risk assets when you

See smci going up hundreds of percentage points in a couple weeks when you see Nvidia doing what it’s doing and the tech sector doing what it’s doing money is going to find other risk assets to participate and I think that’s what’s Driven up Bitcoin recently now is there

Fundamental long-term reasons to be long Bitcoin absolutely but again my thesis is that if we see a 20 30% correction in Bitcoin excuse me in the stock market which would be kind of running your Mill after the nasdaq’s up what 60% since October of 2022 you then have to talk

About Bitcoin possibly coming back to 30 to 32,000 on the charts well wait wait wait a minute so same same question as the S&P right just fundamentally basically speaking someone’s looking at that chart and says says to you it’s obvious we’re in a bull Rally or it has

Been in a bull rally um how can you still be bearish how would you respond to that well I think the kicker is this right is that is that I’m a Trader so number one so so again right here I have a trend line I short it I buy support if

It comes down to the lower level we’ll buy support as well but I think my point is this is that when you look at the the kind of the froth in the system and and remember what I said earlier in this interview folks it’s one of the biggest

Calls I’m known for of nailing the Bitcoin top at 69,000 is that when I see social media behaving like it is behaving it is exactly like that in stocks not so much in crypto but in stocks in particular um as those same indicators back back then and that is a

Warning sign of you know the people saying hey you can just close your eyes and throw a dart at a dart board and you’ll get a winning stock and you’ll make money and that’s a concern to me so I do think we’re com coming into a risk-off environment how big of a

Pullback I don’t know but I do think on that Bitcoin will just sell off just naturally as a risk asset okay so when there’s a lot of hype generally that’s when things get frothy be prepared to sell can the reverse be applied so I’ll give you an example last year you and I

Both attended the Bitcoin Miami Conference uh attendance was slow um I think that may even be an under uh understatement uh it was a very quiet conference U not a lot of people there are not a lot of exhibitors there either compared to the previous year when you

Look at a situation like that do you think it’s time to buy yeah absolutely absolutely they you know again I wouldn’t call it blood in the streets back then but that’s that’s the idea right when there’s blood in the streets you buy when everyone’s when the pizza

Guy is telling you the next stock tip that’s when you’re supposed to sell right that’s the the old Wall Street adage and and it’s very very true is that you know you have fundamentally something like Bitcoin 21 million will only be ex in existence so longer term I

Think it performs really really well but again for me I look at shorter term time frames and right now we’re kind of in the frothy Zone mainly on the stock market but I think with the stock market pulling back Bitcoin likely would get a pullback here as well do you think uh

Bitcoin will reach its previous all-time high before a pullback I don’t think so I personally don’t think so I think that there’s so much money that got burned in 2021 that unless this stock market continues up for another 10 to 20% Then probably we don’t do that and I don’t

Think the stock market has another 10 to 20% before a bigger corrective move of at least 10% to the downside here now again I will be a buyer right now my major Line in the Sand is that 30 to 32,000 level so if we can retrace there I’ll start accumulating pretty heavily

On the Bitcoin chart uh so any chance that we can have Bitcoin and stocks diverge so let’s say the stocks correct Bitcoin keeps going up for Yes they they’re absolutely is a scenario I think that’s what’s happening slowly but again it’s something that until you get get

Bitcoin to really be accepted as a digital gold it won’t fully diverge from stocks but again slowly I mean there are people out there including myself that are looking at it more and more like the digital gold I just think that there’s a lot of people in there that are trying

To make easy money and those are the people that have to kind of be flushed out first and those will be the ones that kind of cause the selling when the selling does come in um Bitcoin having is happening in a couple months now I just want to point something out and

I’ll let you comment on this okay so I don’t know what’s going to happen in the stock market or to the stock markets in a couple months oh who knows right but let’s let’s let’s assume the stock markets continued to grind higher before correction before recession Bitcoin um

All else being equal should also continue to grind a little bit higher along with the stock markets people are going to say well it’s because of the happening that the Bitcoin price is higher like no it’s because markets are higher in general right so I’m just really curious to see what will happen

To the Bitcoin price post happening if the stock market crashes I’m just really curious to see what would happen yeah and and I’m curious with you I still think it’ll sell off um historically you actually do see some selling pressure after the having it’s almost like a

Hyped up thing and then you see the kind of the the relaxation the following the spot ETF and those will continue to happen in Bitcoin uh I even think again if the stock market really gets in a risk-off period we’ll get a bigger correction in Bitcoin potentially

Down to that 30 to 32,000 level what are you bullish on these days bullish all right well so you got to be bullish on gold and gold miners and again I’m sure people aren’t super super surprised to hear me say that I do have some other stocks out there that I think are

Worthwhile but I love the price action in Gold here it’s so close to the all-time high lineup here which again going back to 2020 that was that High Line right across we actually are up again today consolidating beautifully I would guess within a month or so we are

Breaking out to the upside on gold gold miners are so cheap down here if gold can break out I say if because because again if it doesn’t then gold miners aren’t going anywhere but I love the price action on the GDX today getting a good move again beautiful double bottom

Right down here uh Newmont mining a uh baric gold are all interesting plays I’m generally sticking with best of breed right now cuz I think those will be the first ones to be the recipients and then the the Juniors might be next um a couple stocks that I think are

Worthwhile keeping an eye on I think something like Hershey Hershey is if you look at this and I kind of highlighted this earlier as a stock that hasn’t participated in the rally but look it’s holding this breakout line and one of the reasons why this Stock’s been under

Pressure is because of the chocolate price right if we go to this I mean look at this run on their their main core commodity that they have to do look at this run up it’s incredible chart but it’s starting to correct and as price comes in their margins Hershey’s margins

Should increase and I think that’s one of a that’s probably one of the great plays here going into the next couple months um as a value play as well and maybe a defensive play for a market correction interesting I mean the the Bloomberg commodity index is down

Overall this year so a lot of companies using Commodities as inputs would probably have the same narrative right are you are you are you generally speaking bullish or bearish the Commodities yeah so I think it depends on which commodity right I I love the chart on wheat wheat is continuing to

Consolidate it actually broke below this trend but I mean at these levels wheat is getting to points where we’re talking about the covid lows you know back when when people thought the world was ending that’s where wheat was trading back then and and one of the kickers with commodities something like wheat that

People need to understand is that when wheat was at these highs when these crazy highs up here farmers overplanted and that causes an over Supply which then causes a crash in price with price down here farmers are cutting back on planting which will just naturally right

It’s not worth their time it’s not worth their their energy they’re not making money on it but that by default will then push price back back up when there’s less Supply out there so you know again it’s not to say it can’t go a little lower here but we’re getting to

Reasonable levels on these Commodities where where it does make sense to be long are you concerned about oil breaking out to the upside um for you know people are talking about uh the Red Sea um crisis spiraling out of control block supply lines um you know that hasn’t happened yet and oil hasn’t

Skyrocketed yet but could happen right yeah I’m not I’m not hugely worried about a mega spike in oil because the US is just such a behemoth in terms of of production but having said that we are at a major level of resistance here at around $79 if if oil gets through 79

You’re probably headed to about 85 and now you have to start talking about what does this mean for the CPI for next month right I mean so it’s it’s it’s really watching oil is very very important for the month-to-month CPI numbers um you know and then and then

That can obviously put handcuffs more so on the FED excellent overview we think I think it ran through every oh no let’s uh didn’t didn’t touch the dollar let’s close off on the dxy I’m not letting you off the hooking until we cover everything no problem no but thanks for

Your time Gareth thexy uh you know it it follows uh interest rates quite closely especially the FED funds rate um the the the two the two year especially so uh given your read on the Federal Reserve given what we’ve talked about what’s your read on the dollar so the dollar

Based on what I’m seeing here guys is it just hit resistance in the last couple days even with the PPI numbers coming in hot this morning we are still seeing the dollar giving up all its gains and coming back down so to me this is resistance I think we’re actually going

To see a fall on the dollar in the near term here one trend line to watch on the Dixie take a look at this one right here right just connect this low to this low if we take this low out which is around 10390 I think you could fall all the way

Back down to test this support at around 101 so so I in general I am a little bit on the bearish side on the US dollar I also think that rates are getting to their maximum here and I think we will start to see a kind of a curve over in

Rates as we start getting more and more weak economic data right perfect where can we follow your work these days Gareth you’re all over the place but uh where where where where should we go just come to verified investing we’re just about to launch our new website um

I’m just participating with many other investors and Traders that are going to have services on there so my service will be one of many services on there I’m trying to kind of create this best of breed a website with the most information that anyone could ever dream

Of in terms of economic data charting data education and again it it’s I love being the the idea of me just being one of many on there that are great so everyone can come you can see track records you can make decisions on who best fits you and that’s the way it

Should be so thank you so much David it’s honestly always I have a great time with you man yeah it’s it’s it’s a great great start to my Friday uh afternoon uh good to see you again Gareth so I’m looking forward to this website when when is it launching do you know you

Have an idea we’re hoping by March 1 but uh you know it’s always a tricky one we got to make sure it’s working perfectly before we let it out yeah you sound like Elon Musk right now but that’s okay uh great we can we can wait for a great

Thing thanks long my net worth goes in that direction I’m happy thanks very much for your time as always Gary we’ll see you again soon thank you uh thank you for watching don’t forget to follow Gareth in the link down below and and uh don’t forget to subscribe we’ll see you next time