Are We in a BUBBLE? Biggest Tech Earnings Week of the Year

The speaker begins by welcoming viewers and outlining a packed agenda, including discussions on Paul Tudor Jones, the California wealth tax, Ben Pasternak, and the busiest earnings week in history, coinciding with an FOMC meeting. Transitioning to Bitcoin, the speaker notes that not much has changed since the last video, but a daily close above a prior high has occurred. This creates a higher high, strengthening the argument for a higher low. While a three-day SFP (swing failure pattern) exists, indicating potential bearishness, the daily chart shows a bullish structure break. This highlights the inherent ambiguity in trading, where both bullish and bearish arguments can be made depending on the timeframe and chosen indicators. The speaker emphasizes that a trader's goal is not to be right every time, but to identify compelling setups with asymmetric risk-reward profiles that align with their edge. The speaker leans towards a bearish thesis for Bitcoin, despite the daily bullish break, due to the high-timeframe monthly, weekly, and three-day charts still trending downwards. They would be more interested in shorting opportunities if the bullish move fails. For ETH, the speaker is already short, having identified a clearer bearish setup with a weekly SFP, three-day SFP, and a 12-hour break and close below. They are not interested in longing Bitcoin at current levels, preferring to wait for a reclaim of prior resistance before considering a long position. The overall message regarding Bitcoin and ETH is to avoid forcing trades and to wait for clear setups that align with a top-down analysis, starting with high-timeframe trends. The conversation then shifts to the broader market, particularly equities. The S&P 500 has broken out, and the critical level to watch is 7000. Falling back below this level could indicate a distribution pattern. A significant portion of the S&P 500 companies are reporting earnings this week, including four of the "Magnificent Seven" tech giants, coinciding with the FOMC meeting. The speaker advises caution for traders on such volatile days, noting that even beating earnings can lead to stock price declines, as seen with Spotify and Robinhood. They prefer to observe rather than actively trade during these periods. The discussion moves to altcoins, using Pengu as an example of a coin that has completed four stages: aggressive downtrend, less aggressive downtrend, sideways range, and breakout. Many other altcoins are currently in stage three (sideways range), presenting potential buying opportunities for those looking for breakouts. The speaker reiterates the importance of identifying coins in later stages of this progression rather than those still in aggressive downtrends. A significant portion of the discussion is dedicated to the perceived "frothiness" in the market, particularly in the tech sector. The speaker highlights a tweet from Brian Armstrong, CEO of Coinbase, shilling a low-market-cap "shitter" coin, which the speaker views as intellectually dishonest and a sign of market top behavior. This anecdote serves to illustrate the dangers of blindly following influential figures and the prevalence of P&L (profit and loss) posting that often accompanies market peaks. The speaker then presents data on Nvidia, which has significantly outperformed Ethereum over the past five years. This is used to underscore the massive gains in the semiconductor sector and to question the narrative that crypto is always the best investment. Further data reveals that semiconductor stocks now constitute over 16% of the S&P 500's market cap, exceeding the dot-com bubble peak. Valuations are at record highs, with the SOX index trading at a P/E ratio of 60 times trailing 12-month earnings. While acknowledging these signs of a potential bubble, the speaker cautions that bubbles can continue to inflate for extended periods before collapsing. Paul Tudor Jones, a renowned investor, is cited for his views on the current market. He believes the U.S. stock market is overvalued, with market capitalization to GDP at 252%, significantly higher than previous historical peaks. He warns that a 30-35% correction could severely damage the economy due to the country's dependence on equities and the impact on capital gains tax revenues. However, Jones also views Bitcoin as "unequivocally the best inflation hedge" due to its finite supply, surpassing gold in this regard, despite acknowledging risks like cyber warfare and quantum computing. The speaker provides an update on the Ben Pasternak situation, where he released a video alleging that his ex-girlfriend Evelyn was physically abusive, with corroboration from another ex. The speaker finds it notable that Pasternak chose to address personal matters rather than the legal charges related to his alleged blockchain crimes. Finally, the speaker touches on the proposed California wealth tax, a one-time 5% excise tax on residents with a net worth exceeding $1 billion. They express skepticism about its effectiveness, citing historical failures of wealth taxes in Europe due to capital flight. The speaker argues that such taxes often lead to successful individuals and businesses leaving the state, ultimately reducing overall tax revenue and economic activity. They advocate for less government control and taxes, suggesting that addressing fraud within government systems would be a more effective approach. The speaker draws parallels to Canada, where high taxes and a "brain drain" of talent are negatively impacting the economy. The episode concludes with a reminder of the upcoming FOMC meeting and earnings reports, anticipating a busy day. The speaker encourages viewers to engage with their content, including the "whiteboard series" educational videos. They also mention a sponsor, Nato, a DEX for spot and perpetual trading, and briefly discuss the UAE's exit from OPEC, which could impact global oil markets. The speaker also touches on prop betting markets, particularly regarding sports and predicting Jerome Powell's speech, highlighting the potential for finding an edge through research.