THE PUMP IS THE CURE

Sentiment is a funny thing. When markets are on sale, very few people want to buy. However once assets start moving, investors, analysts suddenly have a new story ready to justify higher prices, and why “this time is different”. The current stock market run has a lot of similarities with the Covid rally, with excess liquidity and fervent narratives pushing one asset class after another. Fundamentals take a back seat to front running the next slept-on sector before retail steps in to provide exit liquidity.

In my last update we looked at the potential for the market to correct and provide a buyable dip over the Yom Kippur holiday, and it followed the path almost exactly. From there it’s continued the rally unabated, and the S&P looks like it will hit 6860 before any real breather, that level is a giant measured move from the Oct 2023 and April 2025 lows. Divergences are piling up on lower timeframes, and risk builds every day – taking stock of how much risk is in your portfolio and selling into strength is wise here…

Markets have exceeded mine and most peoples’ expectations this year. Ultimately, it’s important to remind ourselves that stocks, gold, and crypto are all about RELATIVE VALUE. Yes they are expensive, but what is the other option? What are they denominated in? That’s why I love charting bigger picture relative to the M2 money supply. If we rise another 10% or so in the S&P, we’ll be as expensive as 1999, relative to US liquidity… and that will probably be the time to consider heavily reducing exposure, particularly in high beta.

Not all markets look so overbought however – The Russell 2000 has just* broken it’s ATH and could run 20-25% here, leading the next phase of the bull. While I am not advocating getting max long R2K here, on a relative basis, it’s got a better R/R than Nasdaq or S&P.

Bigger picture – The USD is driving a lot here and it’s downtrend has bolstered risk assets for months. I do believe we are carving out a bottom here, and I have potential timing for a November final bottom in the DXY.

This may coincide with a top in Gold as well, which is looking precarious up here, although we could argue one last push to $5k is feasible given the strength of the trend.

Big Picture, I’ve been selling into this gold run, and will likely convert a considerable amount of my firm’s equity into USD denominated investments by year end.

In the last update I gave a 127k~ target zone for BTC which we hit, and we’ve now seen a healthy pullback into the 120k~ zone. We should chop around for a few days here, and then run to 135k~ by the end of the month.

Crypto has been a tough market this year, especially altcoins. The one standout for me for a safe buy and hold is SUI. Set and Forget – they have one of the best teams around and their network activity continues to grow. A $6 target is very feasible on this name

For new trades – I’ve been accumulating OPERA. It’s a legacy web browser that’s had tremendous growth in the last year, reaching 10% of the Monthly Active Users as google, and trades at an extremely low market cap given the tech stack and user growth they’ve been experiencing. Their crypto wallet, Minipay, was the fastest growing non custodial wallet last year, and the browser has a suite of AI services built in. I believe this company has limited downside risk and will eventually be revalued into the $30+ range.

I’ve also been accumulating POET tech – another sleeper which has the fastest optical connectivity tech for GPU’s and AI data centers. Effectively they provide the mycelia that connects all the hardware in the hottest industry in the world right now increasing speeds and efficiency… and both their tech and manufacturing is patented. The only frustrating part is literally as I was writing this newsletter they announced a major investment and the stock has rocketed 40%... so do not chase here and if we pull back into the $7 zone this is a buy. I am targeting $12 then $22+

TLDR;

1. S&P should run to 6860-6900 before any major correction concerns

2. Added OPRA, POET Tech (wait on POET ideally $7~)

3. BTC can continue higher with a 135k~ target

Trades:

LULU isn’t moving well so I may cut this in half (still up 40%)

SUI is a buy here in spot

A Note: Want to see anything charted? Sectors? Stocks? Feel free to email me. I may actually switch to substack so I can chat with everyone here. Cheers and have a good rest of your week!