#958 - What to Expect From Earnings Season With Tony Greer

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0:35What to expect from earnings season. Welcome to Real Vision Daily Briefing. It's Tuesday, January 23, 2024. I'm Ash Bennington, joined today by Tony Greer, editor of The Morning Navigator and a contributor to our RV Marketplace, I should say. So if you're a Real Vision member and want to see more of TG's research and trade ideas and who wouldn't, head over to Real Vision Marketplace right now to check that out. TG, Tony Greer, dude, it is so good to be back with you, man. I've missed the show. It really is. It really is, Slash. How are you doing, my man? We're going to get down and get into it today.

1:07I can't wait. I'm doing great. Since it's been a while, since you and I have done this, catch me up. We got record-breaking closes on S &P 500 and the Dow Jones Industrial Average. I mean, it's been an extraordinary kind of like whipsaw whirlwind week. It has been, and it's going to continue to be fighting with, it's hard to make money at the highs kind of thing, Ash, and that's all the market is offering right now. The S &P is just grinding away towards 5K. Nothing wants to really give in or go down, despite the fact that the market is in perhaps overbought territory technically. I'll give you that.

1:50Perhaps sentiment is a little bit greedy. I'll give you that. Perhaps there are still too many people that are long, the NASDAQ and CTAs that are in the market. That's also true. What's also true is that it could be a case of this overbought condition going on a lot longer than the bears can stay solvent. And it could be a case of all those CTAs and NASDAQ longs being absolutely correct. Right. So that's just something that we have to consider there because the market doesn't want to seem to back off. And it's been given every chance. And what's interesting is about today and the last couple of days is that the market's done that with rates retracing higher.

2:32and with the dollar retracing higher into resistance, which has been a headwind for commodities. And the S &P is still sticking its chest out behind the strength of technology, semiconductors, NVIDIA, AI, that whole thing. And so today we're getting a little bit of a gut check where they're buying some of the weaker upside sectors. And I'm talking about the sectors that have been beat up. And if anything, long short guys are probably short things like solar and airlines and maybe industrial miners. And those stocks are rallying sharply today, alongside consumer staples up between one and 3%. S &P is just gently making its way towards 5K.

3:15It seems like that's what's going on, if you ask me, Ash. Yeah, it sure looks like it's rolling up to that number. Tony, so much to unpack. There's so much good stuff to get into. Let's start with something that you said early on in that, where you were talking about what you see on a technical basis looking potentially overbought and some of the sentiment factors. What are you looking at there and what's it telling you specifically? Sure, Ash. You go to the CNN Fear and Greed Index and that sucker was pinned to extreme greed while the S &P has been on this run. The AAII Bulls Index, we reached a peak of around 50, which means everybody in the ring is bullish.

3:51That has backed off to around 40, but still pretty elevated, right? We are getting readings from CTAs that are long S &P futures. We're getting readings that CTAs are long NASDAQ futures in enormous quantities. And so that's usually the recipe for a waterfall, right? That's when the market gets over its skis. And then we have one of those garden variety sell-offs where the S &P is negative three or four days in a row, maybe five. The bears have their chests out, pulls into moving average support. We get a couple of tick index extremes that are enormous that show some agnostic selling. We get the VIX into the 20s.

4:31And next thing you know, that's the end of the sell-off. But as I wrote sort of last week before the market cracked 48.50 to make a new high, it seems like one of two things is going to happen right now. Either the stock market is going to go up or it's going to back off just a little bit and then go up. So to me, it seems like one of those two pick your poison and that's what trade we're going to be in for a little while. Seems like it's just going to go up. Yeah, you know, it's interesting. You mentioned those conditions. I mean, look, it didn't sell off today. Obviously, it's a mixed day on the U.S.

5:07equity indices. S &P 500 up about, oh, call it three-tenths of 1%. NASDAQ up just shy of half a percent. Dow Jones Industrial Average off about 100 points on the day, down about a quarter of a percent. So mixed return here, but certainly not anything that looks like a directional or sentiment change. No, man. It's just, you know, it's rotation at the highs. The market finds the weak points in every sector at some point, you know. And when the market's kind of on its heels, that's when they have the technology space into support and things like that and kind of commodities curling over. And when the market is sticking its chest out times like now, it's got NVIDIA going 600 bid that refuses to back off.

5:50The Q's quietly pounding to a new high. And quite honestly, I think one of the issues is if you're long stocks right now, you don't really have that many reasons to hit the sell button other than the fact that the trade is definitely getting a little bit crowded. You know, so you can pick your spots where you can lighten up on this sector, lighten up on that sector. The reality is that the institutions are really still in buy mode, because if you recall, we just raised rates 500 basis points. And now it looks like we're going to lower them 500 basis points. I'm not saying that's what's going to happen.

6:25I'm saying that's what the market is telling me it looks like. So with that sea change, portfolio managers have to adjust. And then we set ourselves up, you know, with the way I look at it, the way we rallied into the turn of the year after sort of having a rocky sort of New Year's Eve transition. We're now set up for a performance chase because you're going to start to have stocks and NVIDIA and technology start to outperform everybody's 5 % money market funds early in the year. and as we know, that's now like a$9 trillion gorilla. And I'm going to tell you that by the end of 2024, some of that money is going to find its way into the stock market.

7:04So that's what I'm expecting to happen, Ash. Yeah, talking about rates, I ran into a buddy of mine last night who's an economist who said that, boy, bond market really got ahead of itself here. This idea that 100 % chance that we're going to get 100 basis point cut by March of next year. He was like, dude, they're just way over their skis on this trade. It sure sounds like it, but I'm not here to argue with it because that's the sort of atmosphere environment that the market is responding to. You know, like the Bloomberg Commodities Index can't get off of its rear end. And why is that? The market is pricing in rate cuts.

7:40That is largely deflationary. And if we're looking at a deflationary scenario, all the portfolio managers that are a little bit too long commodities have got to make some sales now. Right. It's OK to be long commodities when we're in that inflation atmosphere. We're expecting CPI blowouts. That's the atmosphere to be long commodities in. That's like the sort of self-fulfilling prophecy. Now we're looking the other way. What are we looking at? The market is looking at a tape where rates are going lower. Big tech, interest rate sensitive sectors of the market like home builders and retail and biotech, all of that stuff is rallying.

8:19So, you know, Ash, this is a kind of a tough recipe to fade if you ask me You know, if anything, we're just definitely fulfilling that old floor adage Where it's hard to make money at the highs Either you came in long and you're smiling Or you're looking around trying to figure out what to buy And it all looks too expensive So it's a little bit difficult to, you know, it's really difficult to just Pick and choose and kind of make money out of thin air And know exactly which is the next lane you're going to go in it's going to be the market's going to have to sort it out. But right now it's picking a different sector every day, every couple of hours and saying, let's see what the upside has to offer in this one.

8:55And that's where they're running them now. Hey, everyone, we're going to take a quick break right now to hear a word from our partners. We'll be right back with more of the day's top analysis on the Real Vision Daily Briefing. Have you ever wanted to trade Bitcoin but haven't dared try? With Plus500 Futures, you can trade crypto without the hassle of opening a wallet. With just a few clicks, you can register and start practicing with their free and unlimited demo. See a trading opportunity? You'll be able to trade it in just two clicks. Feel ready? You can move to real money with as little as$100 once your account is approved.

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10:08Tony, it's great to be able to get to do this catch-up. I just want to ask you about everything, because it's been a while since we've had one of these conversations. You mentioned commodities. I'm looking at a chart right now on my screen, WTI, up nearly 6 % on the year here last 23 days or thereabout. What's your take on what's happening in oil markets and energy more broadly? You know, I tell you, I don't have a dollar of energy risk on my pad right now, right, neither in stocks nor the commodity. It was fun to trade from the long side on that little kerfuffle last fall up to 95. It was fun to give the money back on the way down.

10:45And I don't really see another reason to enter that trade right now. Right. It's got like, you know, we're hearing the rumor that the Biden administration is going to buy some SPR, you know, wherever they're going to do that. We're getting a really unclear picture, I feel like, from the Saudis. I feel like they want to keep the price bid, but they just had a lower prices to their Asian clients, which took the piss out of oil price right back to the lows again. And to me, there's sort of as much risk as a$10 bottom out just to see what's down there as there is a$10 short covering rally in case the market got too short at the bottom here.

11:22Neither of those trades are something I have an edge on or really care to participate in. I'll have my popcorn on and popcorn out and I will be watching both of them carefully. Man, there's just nothing for me to pursue in the energy markets right now. Let me take that question from a slightly different direction. Where would you need to see clarity before you were comfortable taking a position one way or the other in the energy markets? I get excited. 85 bid and I get excited. 68 offered. And, you know, maybe it's 68 offered. We can slide to 50 and maybe 85 bid. There's another, you know, 15 bucks to 100 if the conditions are real.

12:00You know, maybe if a bomb goes off or something like that. I mean, I'm not really looking forward to trading through something like that. But that's kind of the condition that I think would have to happen now because commodity markets are still pricing that sort of Middle East hooty rebel risk at zero. Right. So they're writing about it in the newspaper. They're droning things. They're attacking shipping vessels because of the attacks in Gaza. None of it makes any political sense. That's what's going on. And the market is calling it a zero in terms of risk. Go figure. There seems like there's so much geopolitical risk that's just not being priced anywhere.

12:39I mean, you just can't find it. Not priced in the gold market, not priced in. You know what you could argue, Ash? And this is a great segue. You could argue that you know where I'm going. I'm coming right at you, man. And this is what, to me, what has been sensitive to things like that is Bitcoin. Now, this coincides perfectly with the ETF launch. In fact, it was like an unbelievably predictable setup where Bitcoin went berserk right into the ETF announcement. We reached a psychologically huge number at 50K. we got the sell the news event and right back into the moving averages. Now, my question for you, Ash, because you're the Bitcoin expert, not me, is this the pullback into moving averages that we're going to buy?

13:27Or was that the perfect, as I illustrated in this chart here, was that the perfect 61.8 % retracement of the sell-off from 70K to 17K capped with an ETF cherry on top, and now we go back down. Tell me what you think, sir. Well, I'll tell you two things that I've been thinking about. One was that I know that we had a lot of folks on who were really passionate about Bitcoin, who were extremely bullish about the price in the short and intermediate term. And I literally was pounding the table saying, guys, you don't know if this is going to be a sell the news kind of event. And sure enough, that's what we got.

14:05The other point that I would make is that one of the big stories that folks out in the nerdosphere here who love Bitcoin like me are talking about is the story by Ian Allison that came out yesterday. talking about how there was a direct correlation between the declines from this cycle peak in Bitcoin and the billion-dollar sell-off of grayscale GBTC by the FTX estate that seems to be potentially a driver of this. Now, whether or not that's going to have a sentiment influence, whether or not that's going to have legs, I don't know. But that's one of the things that folks in the space are talking about.

14:39Totally fair. Totally fair, but how does it play out? Well, it's interesting. You pointed out that Fibonacci retracement, and it does seem to be something of a perfect match, doesn't it? Yeah. You have to consider if you're open-minded to both sides, you have to look at that being a potential scenario. I mean, I want to be bullish, too. I think that Bitcoin has been trading amazingly since the Hamas attacks, since Sam Bankman-Fried was arrested at least back in, what is it, November? Let's pull that chart up again because it's a great one. It's so long term and you got it labeled, which is always nice.

15:14Yeah. So, you know, Brent Donnelly was one that pointed out that the rest of Sam Bankman-Fried relieved the Bitcoin market of this skeevy variable that everybody hated. And I picked up on that right alongside him, giving him full credit for making that call on the spot. But it was kind of like, you know, that's a real thing in markets, right? That's a real thing when there's an albatross around a market's neck and it throws it off. They trade differently. And that's what we saw. So that was really exciting. Then we had the Hamas attack in Israel, which was a horrible event. And Bitcoin woke up like it was the only asset to grab in that scenario.

15:54You know, oil went straight down on that event, you know, in the wake of that. The stock market has been sort of rallying alongside it. But Bitcoin was up and gone and sort of right into the ETF launch. And so you have to consider that layout that that was the top of the rally. And maybe this is a little bit dangerous to buy here into the moving averages. But if you ask me, Bitcoin is finding a place in the macro scheme this year more than ever. After last year's recovery, the ETF is only going to draw more mom and pop capital and wealth manager and family office capital. So I can remain bullish.

16:29I just have to consider both sides at all times. Well, I think that's right. And that's broadly consistent with my view in the sort of intermediate to longer term. I think I don't follow the technical factors as closely as you do, Tony, but no question about it. The idea that you can buy this in your brokerage account now, I know there are a lot of people out there who are looking for exposure to this asset class who've heard about it, who've understood the thesis, who've heard about it in a variety of places here on Real Vision and elsewhere, who are like, if I can own this in my brokerage account, if I could call up my RIA and buy it, I would.

17:00But they don't want to take on the additional sort of aspect of having a custodial wallet or dealing with those things. So I think it's hard to see how this is not a net positive on the demand side for this asset class. You know, I could easily see it becoming something, you know, thought about similarly to gold, where, you know, you want to have the exposure on your balance sheet or you want to have the exposure on your pad. and you kind of don't really want to use the physical, but you know it's the right thing to have on your pad. And Bitcoin will be a lot easier to use than gold for sure. But to me, gold is like, if I trade it, it's like I'll buy it.

17:43You're long in your own physical. You never really want to have to resort to the physical, but you have it on, right? The same way Bitcoin might be like, give this a chance for people to buy the security, not really ever have the physical and just know that they have the position on. So hoping that they never have to go to the physical. So that's just a thought. Who knows, Ash? Yeah, I would add to that, as someone who is obviously quite enthusiastic about this space, I see Bitcoin as something that is going to get progressively easier to custody yourself. There's going to be continued development of the software, hardware wallets.

18:15All of these solutions are going to make this easier to use. And I expect if we're having this conversation in 2029 rather than 2024, it's going to be much easier to actually use in custody and transfer the physical asset. That along with the fact that we have continued development rapidly on the layer two side, talking about the Lightning Network and all of those associated technologies are going to make it easier to transfer money back and forth the way you would with, for example, Venmo. So I think that development in the longer term is also clearly something that seems like it's quite constructive for the asset class.

18:45By the way, I would add one more thing. If you're thinking about this in a longer term context, I did a conversation with Brian Estes. If you're a Real Vision Pro member, you should go check it out because Brian put together There's some very compelling data over the long term, things like sharp ratios, volatility changes with allocating, say, 1%, 3%, 5 % of your portfolio over to Bitcoin, just to see what that would have done retrospectively, ex post. But I think it's worth checking out and worth looking at. Couldn't agree more, Ash. Couldn't agree more. Tony, do you own it directly? Have you physically gone and played around with this stuff?

19:18Yeah, I have an extremely shrewd member in my Slack channel that actually gifted me physical wallet. And then we did a call one day and he showed me how to transfer some on there. So I do own actual physical Bitcoin. I have, you know, the Coinbase Pro account. It's not, you know, it's not a substantial amount of money compared to my trading account in any way, shape or form. I tell people I have, you know, blackjack money that's on cryptocurrency. And that's where I stand still. So, you know, I'm I still I'm very much eager to adopt. I think it'll make a lot of worlds easier, you know, and especially in the financial world, et cetera.

19:56So I think that'll be a great addition to the sort of palette there. And I'm hoping that, you know, it stays as exciting a vehicle to trade, you know, as it is right now. And I think it's only going to get more exciting on the other side of these ETFs once we shake off this initial, you know, sell the fact event and things like that. So that's my idea. There's definitely been no shortage of excitement in Bitcoin over the last 10 years. That's for sure, man. It does read like an amazing movie someday, right? Yeah, it sure does. Tony, we got questions absolutely flooding in. Anything else you want to talk about before we switch over some of these questions from our viewers?

20:33We got some good ones. No, I want to stay bullish. The stock market here at the highs is easy as it is to say, you know what, let's make a sale and cash out. But that's like one of the strongest gut feelings that I'm getting so far this year early. So that's how I'm playing it. All right, then. And first question comes to us from Roy Blanchard. WTI is now about the same price it was a year ago. What will it take to move that price seriously one way or the other? You know, you would think with continued record gasoline demand, you know, like we've been seeing, that it would have a problem sitting at these low levels, you know, given where some of the inventories are.

21:13It's just not happening. I think one of the variables is the US pumping, oddly enough, during the Biden administration with a big push toward electronic vehicles. We are hitting record numbers of oil and gas pumping production every day. So we're north of 13 million barrels. It's satisfying the enormous demand that there is. And that might just be the reason why price can't get going. On top of the fact, like we said, geopolitical risk is priced at a precise donut. So, man, I don't know what it takes. Your guess is as good as mine. You know, maybe inventories draw down organically and spreads go backwardated again, and maybe we get it on the run one more time.

21:56But if we don't get it on the run again, it's going to be here or lower for the time being. Tor Chan on Twitter asks, thoughts on GDX? This, I believe, is the VanEck Goldminers ETF. That it is, Ash. That it is. You know, it's lagging like a dog, right? Gold miners, gold prices at, you know, close to a record high or call it, you know, within$100 bid offer of a record high. Gold miners are well off of their highs, sort of struggling to break through moving average resistance, which defines the middle of their range. So if you want to make a bet that gold miners can catch up with a stock rally, perhaps, and perform as well as gold, then maybe it's a good sector.

22:43For me, I think it's more important to stay in the metal itself, since metal itself is proving to be the one that's going up, performing, carving new highs, demand bid for by central banks, and has a pretty good story for this year, too. too. It's another one of my core bullish positions for this year. So I'm bullish gold. I'm more bullish the metal than I am the stocks just because they're lagging and have been lagging. So I don't really know what turns them around unless somebody decides to make a drastic change in their gold miner allocation. So in the absence of that, though, gold miners are kind of a neutral laggard to the precious metal itself.

23:22And I'd rather be in the metal if that's a fair answer to the question. We're going to take another quick break to hear a word from our partners. We'll be right back with more of the day's top analysis on the Real Vision Daily Briefing.

23:37This one comes to us from the Macro Butler. Tony, what do you make of the rebound of WTI toward 75? We just talked about that. Meh. I make it meh. You know, it doesn't do anything technically. You know, it's off the lows, which is nice, probably because, like, there's probably a new slug of shorts right at the bottom. So, yeah, a rebound to 75 is nice. It doesn't do anything for me until it goes 85 bid. It's a long way away. You know what I mean? So I'm just not, I don't see an explosive trade in oil either way, right? I think there's buyers on the way down now because the market got short. I think there's probably sellers on the way up to get out of, you know, stale longs and get flat.

24:20And man, you know, with open interest, you know, in the hole where it is, it just doesn't seem like anybody's terribly interested in making a big bet either way in WTI, including me. Yeah. Steve Kronberg. Oh, this is a question for me. Ash, how many Bitcoin are trapped in the BlockFi bankruptcy? Great question, Steve. Don't know the exact answer. Don't know the number of Bitcoin, but I do know this. Public filings, November of 2022, when BlockFi filed$10 billion in assets and liabilities based on the public filings. I think New York Times reported on it November if you want to go check that out.