Long Gold And Short Semis Into Year-End? | Weekly Roundup

Bitcoin

Across the shows: 31 speakers in other episodes, 24 bullish and 13 bearish calls, past 30 days

• Tony Greer · TG MacroBullish

  Bitcoin chart still intact with blue-sky breakout despite a $6B hack; he holds a modest position.

  A $6 billion hack hurt crypto's credibility and he feels bad for people in it. He still looks at the chart and sees a blue-sky breakout that is intact. He holds a position, but not a large one, because he is a little scared of Bitcoin.

  “But I look at the chart, and I'm like, this thing, my blue sky breakout is still intact. So I've got that position on.”at 21:39

CoreWeave

Across the shows: 85 speakers in other episodes, 25 bullish and 90 bearish calls, past 30 days

• Tony Greer · TG MacroBearish

  CoreWeave's credit is coming undone; Goldman's buy initiation looks like cover.

  CoreWeave's credit was coming undone, but Goldman Sachs initiated coverage with a buy anyway. He mocks this as 'don't ask questions', suggesting the sell-side is supporting the stock while credit deteriorates. The argument is thin and largely sarcastic.

  “Core Weave credit is coming undone and Goldman Sachs comes out and says, now we initiated with a buy.”at 32:16

Oil & fuels

• Tony Greer · TG Macro

  Energy is one of the most interesting trades now; oil is holding its ground and his long energy is working.

  Oil is holding its ground while semis sell off. His energy trade has been working, after oil services took off earlier this year. He expects energy and E&P names to be among the few survivors of the tech sell-off into year-end. He notes that a peace deal could knock oil down $10 to $20.

  “And I think in energy now, the most interesting... One of the more interesting trades, I'm trying not to get memorized by the semi sell off.”at 16:15

• Tony Greer · TG Macro

  Crude oil is worth buying near its 200-day average; Iran peace talk headlines are not reliable.

  Oil opened the week near $105 after Trump signalled Iran wanted to talk. Crude was then sitting at its 200-day moving average. Tony does not trust the peace-deal narrative, citing the repeated pattern of announced talks and the risk of another refinery strike over the weekend. He says if you believe the peace push is real, you should be long oil, but he will be long a little crude with the 200-day average just below as a small-risk trade. He also says he doesn't want to pass up the chance to profit from a possible rebound if the rhetoric fails.

  “If you believe that he's full of shit number fortieth time, you gotta be long oil here.”at 44:46

• Quinn Thompson · Lekker Capital

  Quinn is strongly bullish on oil and agrees with Tony's long-crude trade.

  After Tony argues for a long crude position while Iran peace headlines remain unreliable, Quinn says he agrees and describes himself as one of the biggest oil bulls. He does not give detailed evidence in this passage, but the position rests on the same geopolitical uncertainty and the oil price rebound Tony described.

  “I'm probably the biggest oil bull in the...”at 45:35

US stock market outlook

• Quinn Thompson · Lekker Capital

  2018 midterm analog and flipped seasonality point to a selloff into late December.

  In 2018 the S&P fell steadily from the day after the midterms to late December, which looks much like this year. Midterm seasonality charts, inverted, peaked in early October and then fell, bounced and fell again into year-end. He also expects the midterm uncertainty to keep the market choppy.

  “The last Trump midterms twenty eighteen, this exact thing happened. The S and P puked from day after midterms all the way to late December.”at 6:09

• Tony Greer · TG Macro

  Anthropic IPO could push the Nasdaq 5-10% lower or more within weeks.

  The AI sell-off is starting, and the S&P is floundering below its 200-day. He expects the Anthropic IPO, a couple of weeks away, could be used to heave the sell-off into a Nasdaq that is 5 to 10% lower or more. He is wary of the index because the cross-currents make a broad view confusing, and mega-cap tech could fall another 10%.

  “we've got Anthropic ahead a couple of weeks away from this now. Maybe. Like, they could be heaving this into a Nasdaq that's five, 10% lower from here by then or more.”at 10:24

US rates & the Fed

• Quinn Thompson · Lekker Capital

  December Fed hike is unlikely; market bottoms when hike odds collapse, as in October.

  Markets still price about an 80% chance of a December hike, which he does not think will happen. In 2018 the market bottomed once hike odds came out. In October, Fed speakers talked hike odds from 72% down to zero before the midterms, and he thinks there is political incentive to talk the market down.

  “there's still 80% chance of a hike in December, which is just like, I don't think it's going to happen.”at 17:51

• Tony Greer · TG Macro

  December Fed hike odds should collapse if the sell-off continues; he cannot see another hike.

  Energy-driven inflation should not matter much because inflation-adjusted energy is cheap. The bond market also ignored the last hot PPI print. With tech breaking down, he cannot see how the Fed gets another hike onto the tape, so the odds of a December hike should collapse unless stocks fully recover.

  “So I kind of agree that that chances of hike in December are gonna collapse if this continues at all.”at 31:30

Gold & precious metals

• Tony Greer · TG Macro

  Gold is holding its range and gold miners look set to bottom; he is staying long gold.

  Gold made a new range low, then bounced back, so he reads it as a 'no follow-through seller' bottom. He says gold is doing what it should while everything else breaks, and expects gold miners to fill gaps and bottom. He sees gold as a trade that benefits if the liberals return to power and debasement resumes. He wants to keep his eye on gold into the last two months of the year.

  “Meanwhile, if you ask me, gold's doing exactly what [it's] supposed to be doing and not really going anywhere while all hell is breaking loose.”at 22:37

• Quinn Thompson · Lekker Capital

  Gold is his favorite trade into year-end; it can front-run Fed moves amid a growth scare.

  Quinn names gold as his favorite trade from now to year-end. He thinks gold can front-run the Fed: if the Fed hikes again or stops hiking, gold will price that before it happens. He frames this against a growth backdrop that is in a tough spot, which makes gold a hedge in his view.

  “I think it's gold. I think it's gold. ... But I think gold can front run that. Like I think gold can say, Hey, you guys want to hike one more time?”at 37:56

AI infrastructure & data centers

• Quinn Thompson · Lekker Capital

  Democratic state policy could hit data center buildout and create a chip glut, adding AI uncertainty.

  Post-midterm uncertainty includes Texas data centers under a Democratic governor and AI capex. A moratorium across 40 states could create a chip glut. He says there is so much uncertainty that markets cannot price it in a day, so he discounts what he thinks he knows by about 50%.

  “What's gonna happen with data centers in Texas under the blue governor? What's gonna happen with, you know, all the AI trade and CapEx spending? And is there going to be a chip glut if all of a sudden there's a moratorium in 40 states”at 7:14

AI bubble & tech valuations

• Tony Greer · TG Macro

  Tech and AI have run too far; expects tech to reprice lower while resources hold up.

  He has been calling the semiconductor bubble for a while and finally profited from a short in the sell-off. Tech 'got so far over its skis', so he expects a repricing. He expects natural resources and commodities to survive the sell-off, so he is positioned bearish tech and bullish resources.

  “I think in the end, we're gonna learn though that natural resources and commodities are gonna live through this, and tech is just gonna have to reprice because it got so far over its skis.”at 10:39

US Treasuries & yields

• Tony Greer · TG Macro

  Bond market bottomed in October; he is buying the dip in bonds.

  Sentiment hit an extreme in October, with max bearish sentiment, an economist cover and the long bond's RSI around 8. He says that is a historic, drawn-out sell-off, so the low is in. A bond bounce may take longer to recover, and he would need a sustained move above $110.20 before bonds approach that low. He says he is looking to buy the dip in bonds.

  “And that bottom that we saw in October, you know, I mean, we saw max bearish sentiment. We saw the economist cover.”at 15:42

Commodities (broad)

• Tony Greer · TG Macro

  Stays bullish basic materials and natural resources while tech reprices lower.

  He sees natural resources and commodities surviving the market turmoil while tech reprices. He is positioned to stay bullish basic materials and natural resources, one of the few trades he wants to pursue. Positions in gold, energy and resources are the trades he says are working.

  “I wanna stay bullish in basic materials and natural resources.”at 16:56

AI chips & semiconductors

• Tony Greer · TG Macro

  Semiconductor chart has broken down; he is short semis with further downside toward about $350.

  Semis had a year-long consolidation that has now broken. He caught a big down move on his short and says the chart 'just started to come undone'. SMH is down from the 600s to about 455, with room to about 350 before there is support. He had flagged semis as 'do not touch' at the top, and sees room left in the semi short into year-end.

  “The semiconductor sell off... [SMH] is trading [$455] down from the 6 hundreds. There's room to three fifty before there's support.”at 21:03

US dollar

• Quinn Thompson · Lekker Capital

  Dollar's upward momentum may top out as growth and inflation fade.

  DXY is in bull-market territory, but USDJPY is struggling at the 200-day underside, and the yen is acting as a safe haven as bonds are bid. If growth and inflation both fade, the dollar's upward momentum should top out and yields should have found a top.

  “If that's sort of petering out with growth petering out and inflation petering out, it's probably generally good that yields have found their top in terms of the dollar's upward momentum.”at 27:27

US inflation

• Tony Greer · TG Macro

  Energy-driven price pain is 'false inflation'; no real major CPI inflation, and bonds ignore PPI.

  Inflation-adjusted energy is still cheap, so energy should not drive inflation. Pain at the grocery store and for farmers paying $7.50 diesel is real, but it is not showing up as major CPI inflation. The last PPI print that came in a little hot was ignored by the bond market, so he calls it a 'mind virus' rather than real inflation.

  “there's, like, this false inflation... there's no real major CPI inflation. The last PPI inflation that came in a little bit hot, the bond market totally ignored.”at 31:08

US growth & recession risk

• Quinn Thompson · Lekker Capital

  Growth is in a tough spot and he is nervous about the growth scare until the Fed shifts.

  Quinn sees growth as being in a tough spot, which makes him nervous about the current growth scare. He ties the outlook to Fed behaviour, saying he is wary until the Fed gets off its horse. He suggests the Fed may hike one more time, which is why he thinks gold can front-run the decision.

  “I'm a little nervous about this growth scare until the fed gets off their horse.”at 38:02

US housing

• Tony Greer · TG Macro

  Homebuilder stocks look set up well: flat on the year despite 7% mortgage rates, and bottoming with bonds.

  Tony argues homebuilders have absorbed a heavy set of headwinds this year: diesel around $7, mortgage rates near 7%, and oil around $110. He notes that if someone had listed those conditions, he would have expected homebuilder stocks to be down about 20% on the year. Instead they are unchanged, forming a flat bottom, and they have rallied on the bond market bottoming. He sees homebuilders as a possible trade that could avoid a semiconductor collapse and ride through energy volatility between now and year-end.

  “Don't sleep on that because in my opinion, man, the setup in those are this year, they got the kitchen sink thrown at them.”at 38:43