Up, Up, Up

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0:47Hey, everybody. Welcome back to Three Ideas. It's been a minute, but I'm super excited because we have a legendary chartist, Peter Brandt, with us. We're both here in Arizona, if you couldn't tell from the U of A shirt that Peter is donning. Great to have you with us. You're enjoying the sunshine out here, Peter? Hey, I'm enjoying the fact that my Arizona Wildcats were moved to the number one ranking in college basketball over the weekend. So go Cats! Not bad at all. The sun is shining on lots of us here. Listen, this is a bit different from usual because three ideas. First, we like to talk about people's global macro outlook before we get into their specifics.

1:27I know you're going to talk about U.S. equities, Bitcoin, and gold. But it's hard to ask you about your global macro outlook because you're so chart-based. That's what you're legendary for, and that's what you're going to do with us today. So if I ask you that question, you're not really going to respond, are you? Yes and no. I mean, in a way, no. I mean, the reality is I draw lines on charts. I keep bar charts for just every conceivable commodity and financial asset in the world, not individual stocks. But yeah, I make my decisions based on how charts look to me. And the interesting thing is I usually don't like to create, you know, I first look at the chart, then I kind of think of what's going to drive this, right?

2:19And so I come at it from the wrong way. I don't have a global macro outlook and say, based on that outlook, this market should do this, this market should do that, this market should do something else. I look at the composite of the charts that I see and then try to think, what could make all this happen? And so I flip it around and I know the three ideas that we may talk about today, there is a common denominator. And the common denominator is the fact that when I was born, a dollar was worth$1 and a dollar now has the purchasing power of$0.04. And for people born today, when they are my age, the dollar may not be worth anything at all.

3:10So really, the global macro thing that ties the things together today, the markets that we might want to talk about, are really the fact that fiat currency will lose value to anything that has some semblance of being real, whether it be Bitcoin or gold or the U.S. stock market. All financial assets are purchasable in U.S. dollars. And so we're looking for the US dollar over a multi-decade period to continue to lose value in terms of purchasing power. My global macro is really short dollar bet. And before we launch into your first idea, you and I have been talking behind the scenes, and I thought you said something really interesting.

3:59If you're a fiat bear, you should be invested in the US stock market. Just flesh that out for us before we jump into that first idea that you have around U.S. equities. Oh, you know, you hear that all the time, don't you, Sam, is people who look at the U.S. debt load. They look at this, you know, three, you know, third trillion debt and growing, growing by leaps and bounds. And they say because of that, the economy is going to go into recessionary periods. economy could hit periods of trouble. Because of that, US dollar really is going to lose its value greatly. But when you think about that, in order to buy stocks, you're really shorting the US dollar.

4:50Ownership of stocks is a long stock short dollar position. And so it's a real asset that one takes greenbacks, which ultimately will become more and more worthless, and converts it to something with real value. A corporation that's growing, has good ideas, will have earnings power in the future, may develop new technology, and so forth. So I've really never figured out how you can be bearish on the US dollar and also bearish on the US stock market. To me, there are the opposite sides of a trade. Well, that's really good underpinnings for the ideas we're about to talk about, given the fact you're pretty agnostic on all of these ideas in theory, just letting the charts tell you where to go.

5:39And if anybody has any questions for Peter for any of these ideas as we go throughout the show, I'll be taking your questions live here and putting them to Peter. So with that, let's jump into your first idea, Peter, and that's going long U.S. equities. I know you've got this NQ056 NASDAQ futures and nearby contracts chart, and that's the principal chart that you're looking at for this thesis. It is. I'm assuming you're showing that overhead. Is that it? That's right. Yeah. Thank you, Sam. I don't necessarily see that part. But yeah, I mean, we have a classic chart pattern, a well-known chart pattern called the cup and handle, where we rallied up in NASDAQ in December of 21, then spent really a number of months through 22 with a big correction, which formed a cup, rallied back into the July 2023 high, and we've been since forming this handle.

6:43So William O 'Neill is kind of the inventor of the cup and handle. It's a well-known pattern. And what we see in the NASDAQ is a massive cup and handle pattern. You know, the breadth across stocks has become really quite remarkable here. We roll ourselves back a couple of weeks. Everybody was talking about, you know, there's upside movement, seven stocks and nothing else. Well, au contraire, you know, if you're paying attention to the stock market last week, Dow Jones Industrial Average, The big heavy blue chips ready to rage in the new all-time highs. S &Ps aren't far behind it. And here we have the NASDAQ with this cup and handle period pattern.

7:28And as we complete that, I would think that we could, at that point, see a pretty significant rally in the NASDAQ up to the 22 ,500 level, possibly toward 25 ,000. So that's a bullish development for me as somebody who looks at big patterns and big patterns in stocks. This, to me, is a big pattern in the stock market. And usually I would ask people time horizon here, but given the chartist nature, I can't really ask that it really is just a price horizon. You're agnostic about the time horizon. No, I'm not. I mean, not at all. I don't really deal in time. I deal in price. I deal in the price scale.

8:16That's either on the left or the right side of the chart, not the calendar that's underneath it. And I would say this. Should we see a decisive breakout in this cup and handle, the risk of the trade really is the low of the handle. And should we go back down below the handle, for me, it's back to the drying board. But as long as we don't, we continue going sideways to up, I would think that when you look at the dominant trend, which has been up, you kind of advance that. And we'd be looking sometime late 2025, early 2026 as moving into kind of the target zones for the NASDAQ. And another way to look at this, U.S.

9:04equities, is the Russell Index. It's interesting because you say just like in the 90s, we could get small cap stocks. So let's just bring up that chart. That's our second chart of the Russell Index. And walk us through exactly what you're seeing there and what it means for those of us investing. Yeah, I mean, when you look at the Russell chart, again, I look at charts through the prism of geometric configurations of construction. What's the construction on the chart? What are the implications? The Russell, we've been in just a massive rectangle or trading zone, a flat trading zone, really going back to early 2022.

9:44So we've got quite a bit of gunpower that's been compressed, compressed, compressed into this trading range in the Russell that's between 1650 and the 2030 level. But as long as the Russell's not going up, I prefer to be long as a futures trader. The indexes of the NASDAQ and the Dow, my rule as a trader is when I'm long, I want to be long the strongest. When I'm weak, I want to be short the weakest. And the Russell really is not the strongest. You know, should the Russell decisively complete this rectangle bottom, I will definitely then take a look at the Russell as a futures contract, trading the Russell in the futures from the long side.

10:37Until we can resolve this trading range, for me, I'm just kind of a look and see in terms of U.S. small caps. And just to be clear, your upside target on the Russell index would be? Oh, I would think Russell, the Russell index could get back to 2250, back to its all-time highs. Wow. And if we break out to the downside, a target? Well, yeah, I guess, you know, again, as a chartist, I'm willing to accept the fact that, hey, if the market's going up, I want to own it. If it's going down, I want to sell it. I want to short it. And so for those of you who really want to be bearish U.S. stock market, I would say keep your eye on the Russell.

11:23The Russell has been the weakest. Weakest tend to stay the weakest. And so should we really break out through the downside of the Russell, which is that 1650 level, decisively, and roll over and stop showing weakness in NASDAQ, Dow, they start rolling over. You know, for me, I switched gears at that point and would really look at the Russell as my candidate short trade. I just want to jump back one chart, go back to that NASDAQ NQ056 chart, because we have John Kitcher. Good morning to you, John, if you're in this time zone. Good morning. He says, re-cup and handle on that original chart we had up.

12:04What are your thoughts about the double top? Do you put more weight on the double top and potential pullback, or do we break out in the first attempt, Peter Brandt? Well, you know, I would have to go back to Edwards and McGee and Schaubacher and really make sure that I know a double top is really exactly what it is. Generally speaking, my two comments to that is we have no double top. We have two tops, but a double top is only completed when we get a decisive close below the midpoint low, which at this point is the cup. And so I have to deal with the pattern that presents itself before me, not the pattern that I dream up in my mind to support the narrative in the back of my mind.

12:54You know, I'll let the market help define my narrative. I don't want to predict the market based on a narrative that I've already decided must come true. So, yeah, should we fail up here in the NASDAQ up in the 16, 16, 5 level, start rolling over, then, yeah, all of a sudden we start talking about a double top. But there is no double top at this point. We have two highs. We do not have a double top pattern. and even if we do have a double top pattern and close below the midpoint low, which is the cup, we could still have 50 % rallies from there according to the rules. The other thing is this is a little bit too stretched out to be a double top.

13:39If you really want to look at textbook double tops, there are really patterns that do not take multiple years to develop. There are patterns that tend to take place over months or quarters. 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.

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15:04A pretty clear answer to your question there, John, and worth noting, you know, this isn't investment advice. This is, you know, Peter looking at charts through his experience. And speaking of that narrative question that you targeted there, Peter, someone named Slimy Tom says, hey, everyone, after a great weekend, crypto is holding up nicely today amidst US stock sell-off and rising VIX. Time for the pause that refreshes or a shallow correction in the markets? Now, that might also be a narrative question, which I think you'll answer with the chart. So let's jump in to your view through the charts of going long on Bitcoin.

15:42And I think we have this graph with the gray boxes and the red lines to our direction. We can start off there, Peter. Yeah, I mean, I could spend the next two hours even talking about that chart because, you know, as the person to put it together, all of those things have meaning to me, which may seem lost on the people that we're talking to today, but perhaps they'll pick up on the theme. Let me just point out on Bitcoin is what you see is a chart that goes back 12, 13 years in Bitcoin. It shows really the history of Bitcoin since it was priced under a buck. But Bitcoin is a market unlike any other market that I have traded.

16:26It has a chart unlike any other chart I have ever seen in a couple of different ways. You know, Bitcoin, when you look at this chart, this is a log chart. This is not a linear chart. I have a hard time finding parabolic advances in most assets, almost all assets, even one or two in the entire lifetime of that asset on the linear chart. And on a log chart in Bitcoin, we have one, two, three, four completed parabolic advances. And in case people are new to this space, parabolic advance means a huge distance in a short amount of time. Yep, it's an advance that accelerates. It's shown there by kind of those upward sloping, accelerated red lines where you have a parabolic advance that eventually gets broken.

17:28And in Bitcoin, we have had the tendency to have multiple X advances, 2X, 10X, 20X, 40X advances that take the shape of a parabolic curve. those parabolic curves get violated and Bitcoin then experiences corrections of 80 to 85 percent. Now, throughout the life of Bitcoin, that's ranged. I mean, it's ranged from a 78 percent correction, which has been the most recent correction in Bitcoin from the 2021 highs, back to a 94 percent correction when Bitcoin is really still a young, almost virgin asset. And so we have these 80 % corrections that last many months prior to a new all-time high. This, Sam, is really my model for Bitcoin pricing that I developed a number of years ago.

18:24And it has helped me really keep my pulse on the bigger picture of Bitcoin because we have then these corrective phases, which are grayed out in those boxes. which again last an average of three years before we see a new all-time high. So 80%, we get a multiple X parabolic advance, parabola is broken, you have a three-year correction before you make a new all-time high, and that is then in the process of another multiple X advance prior to the same thing. Wash, rinse, do it all over again. And that's where we are right now. And I think that we are now in Bitcoin in a new parabolic advance. And that parabolic advance began at the November 2022 low second contact point for what I believe will be the dominant parabolic advance was October 23.

19:28And what we will see, based on the modeling that I've done, is a new all-time high in Bitcoin sometime in late the third quarter, early the fourth quarter of 2024, followed then by new all-time highs that could carry prices, I think, somewhere up in the$150 ,000 zone. which then would take about the period of time that most big bull market parabolic advances take in Bitcoin. And that's generally 24 to 26 months from the low point of a bear phase to a new all-time high, which then is broken as a parabola. So that's my look at Bitcoin from a longer-term perspective. So just to summarize, parabolic advances often result in these 80 % corrections.

20:31And then you see a time cycle of about three years, which would put us around looking at these charts, third quarter 2024. And you're thinking of some type of first objective of about$150 ,000, I heard you say. Yep, yep. And that I would be looking for somewhere in the second quarter of 2025. That lays out a clear timeline. I want to jump to the next chart. This is the Renco chart. This has the tables on it for our director. Renco charts are a type of chart where they filter out small price movements so that traders can focus on the larger trend. So walk us through what you see here and how that fits with the previous chart that we saw in Bitcoin.

21:12Yeah, I mean, Sam, even from the very beginning, when I got involved in Bitcoin, which incidentally was because of a chart that I received by email from your founder, Raul Paul, who back in January, February 2016, sent me a chart of this thing, which is called Bitcoin, which I had never traded. I had heard about it, of course. I just thought, hey, this is some coin that 20-year-olds are buying pizza with, maybe a pair of tennis shoes. But I didn't know much about it. But I looked at this chart that Raul sent me. I went, this is just unbelievable. I've just never seen a chart. I hate to call charts sexy.

22:02I mean, it almost kind of tells you, you know what us old dinosaurs really think about things. But it was a chart that just blew me away. And of course, I became immediately interested in Bitcoin. Raul introduced me to who he was buying his Bitcoin from. I continue to do my trading with that recommended source by Raul. Bought my first Bitcoin then in March of 2016. And I guess I bought it and then I became interested. And so I started learning about it. But even from the beginning, I felt Bitcoin had a chance to go 50 % chance to go back at the time, 20 ,000, which it did, 50 ,000, which it did, 100 ,000, 150 ,000.

22:49I have a million. OK, I mean, name the price. But it had a 50 % chance to go to zero. because something along the line, and it could just be absolute frontal attack by every form of government in the world to shut it down. Or it could be new technology, just to think that Bitcoin will never be exceeded in its nature as a store of value. Because I look at Bitcoin as a store of value, not something to trade, but something to own to store value of US dollars. convert to US dollars to be stored. But that things could take place. It might not be the ultimate in mankind's achievement. And even now, this week, we have major announcements by IBM of quantum computing, that quantum computing could eventually hack the Bitcoin code.

23:47So a lot of things could happen. But nevertheless, I just have always looked at Bitcoin as an asymmetrical trade. If it could go to zero, I lose$40 ,000. If it can go to a million, I make$960 ,000. So you got to look at that. So I developed what I felt was a charting model that would keep me long relative that could be very sensitive and not get whipped around. And so I I developed this weekly Renco, and what you see there is that it's had a very, very good track record at keeping me long during the advances, but sidestepping during the declines. Because I still give a 50 % probability that at some point Bitcoin really loses its attractiveness as an asset.

24:42So I wanted some sort of way that told me it's time to be all in or it's time to really be defensive. And this model has done very well. As a matter of fact, during the life of this model, it's captured$70 ,000 in net travel distance by Bitcoin, even though Bitcoin even today is, what,$40 ,000,$41 ,000. So it's almost doubled a buy and hold position in Bitcoin. Just a tool that I happen to use personally, Sam. That gives us a great perspective. And I want to jump in to your third idea, and that's around gold. A lot of people on this show talk about gold. Larry Lepard, someone you know well, one of our best performers on this show.

25:29But he's looking at it from a totally different perspective. He knows the history of these mines, the players who are looking at these mines. You're looking at it through these charts. But maybe before we jump into that chart, you think that the paper gold argument is bogus. I've been talking to some folks in the lead up to the show. So I just want you to kind of lay that out. Yeah, well, yeah. I mean, that's what we've heard in gold, right? Especially silver, is there's a difference between paper and physical, that you want to own physical. You don't want to own leverage positions. Well, futures position.

26:11The futures position is just paper.

26:16That's a long argument, Sam, not one that I necessarily think we should get into here. But nevertheless, as a trader, I like paper gold because it gives me leverage. I am not arguing against physical gold at all. In no way. I'm just saying as a trader, I think the futures market are better markets for me. And quite frankly, if you look back at the history of physical gold versus paper gold, the charts are the same. They look the same. With some changes relative to the cost to carry, it's for all practical purposes the same chart. And so the chart you're looking at in gold, I believe, is the one that goes back to the beginning of futures trading in the US, which is early 1970s, tracks gold from there.

27:07And what I see in gold really going back to September of 2011, similar really to what we looked at in the NASDAQ, big cup and a handle. And as a cup and handle, standard cup and handle pattern, a little bit unconventional in that the handle is sitting up above the high prior to the cup, which technically places the cup and handle interpretation into a little bit of doubt, but I don't think serious doubt. But again, we have a cup and handle. We talked about that this pattern last week on the phone prepping for this salmon. We haven't broken out yet. And of course, since we've talked, we have seen new all-time highs in gold and have officially completed this cup and handle pattern.

27:59Now, part of that conclusion was this huge advance in gold over the weekend. So we came in here this morning in gold and saw gold open sharply higher. All it's done during the day now so far is sell off. And so we may have some people say this new all-time high we saw last week and early in the day is a big false breakout. And, you know, it's a bull trap of all time, bull traps. Well, I don't happen to think so. I think the market got ahead of itself. And we may have to digest the kind of gains that we've seen in gold from the early October lows. We've gone pretty much straight up through those lows.

28:44So, you know, we may have some digesting to do. but nevertheless even when we took and you have a chart which blows up the handle itself might want to throw that on where it's just the handle where you look at just the handle what you really have there could be interpreted as as continuation rectangle or even you can take The March 21 lows as a left shoulder low. You take the October 22 high as the low of a head, and you take the recent low we made in October 23 as a stunted right shoulder. So you could even call it an inverted continuation head and shoulders pattern with an abbreviated right shoulder.

29:34We have broken out. And oftentimes when you have abbreviated right shoulders, you have very powerful patterns. And that's the type of thing. So I'm bullish, but I think gold goes 2 ,800, 3 ,000. We're on our way to 36 ,000 in gold. I think by the middle of 2025 that we are in bull markets that with gold and Bitcoin really will represent, I believe, a sustained multi-month store of value play against the purchasing power of the US dollar. And so these are three trades that I'm involved in. I'm long gold, I'm long Bitcoin, I'm long US stocks as a proprietary trader. And I think we're dealing with very, very strong chart story here.

30:34And of course, the purchasing power and the timelines that you have may be very different from folks in our audience. So it's not just some caveat or legal cover when we say this isn't financial advice, because everybody's pockets are different and the horizons you have or the ability to maintain those horizons might be different. I just want to follow up. Some of your notes have talked about gold eventually going toward$4 ,000 in mid to late 2026, I believe, was one of your notes. You still hold there? Yeah, I mean, I do. Again, market's gotten ahead of itself. It's going to It's going to digest gains.