I’m sure by now you’ve seen a headline or two about Nvidia’s latest earnings, and their massive beat. The company reported a 600% profit explosion, largely due to AI-driven segments of their business. In response, the stock gapped up and is now trading at new all-time highs. The company is now worth more than Germany’s entire stock market, and more than Tesla and Amazon combined. If your first thought in response to these facts is, “this stock’s in a bubble”, I would agree with you, and here’s why: How to Play NVDA Stock Bubbles get a bad rap in the financial world, mainly because of two reasons. The first is that people that think they are smarter than the market refuse to participate, and the second is because those that actually do participate often end up losing their shirts when the bubble finally bursts. But guess what? Bubbles are actually

It happened again. Meme stocks like Gamsetop (GME) and AMC Entertainment (AMC) had a round trip again, leaving countless retail investors in the dust. The apparent culprit behind the boom-bust in these names was an anonymous poster named “Roaring Kitty.” Whether or not this individual was responsible for the rip (and subsequent rug- pull) in these stocks is up for debate. But in my most recent TheoTrade evening newsletter, I warned traders to stay away from these stocks. Listen, I’ve been around in this business long enough to see a disaster coming before it happens. It doesn’t take a crystal ball to realize that a stock that rips more than 100% in a single day is bound to give back a fair amount of the rally. The only way to last in markets in the long run is to have a set of timeless principles, and these three are some

My time over in Europe has finally come to an end, and as I fly over the Atlantic Ocean heading back towards the United States, I was just thinking of some economic word play behind the word currency. I’ve also been working on a new Mastermind class and trading pattern that I’m eager to show you in the coming weeks. So stay tuned…  Periodically, I like to modify the spelling of words to hammer home a point. One example of this is when I spell patience as “pay-tience” to reinforce the importance of always making decisions with a level head in financial markets. So, now, I want to introduce you to my modified spelling of the word currency as “current-seas.” At first thought, you might be thinking – what the heck does this have to do with financial markets?  But hear me out on this, because it bestows an important

There’s a Lot More the Ancient Romans Can Teach Us About Modern Banking My travels in Italy are still ongoing, and I decided to come out of the countryside and head to the capital for a few days. It’s been about 10 years since I last visited Rome, and, of course, my life has changed quite a bit since the last time I was here. I decided to stay in a hotel right in the center of the Roman ruins; I can see all the monuments on the tourist Top 10 lists from my room.  Admittedly, for someone who has spent most of their time in Italy in rural areas, Rome’s a unique experience for me. Rome’s topography is famously marked by seven hills. One of the most famous, if not the most famous, is Capitoline Hill. Today, the hill is well known for its piazzas and museums, but it actually

  I’ve been over in Italy the past couple of days, enjoying the geographical and time-difference arbitrage to the United States’ markets. It’s rather peculiar having the market closing at 10 o’clock at night instead of 4 o’clock in the afternoon, but it gives me much more freedom during my mornings, so I can’t complain. Granted, as a futures trader, the market is open 23 hours a day, but the volume is nowhere near as high as it is during the main trading hours in the U.S.. Not to mention, it’s become much less expensive as an American in Europe since the dollar has been so strong, and the good news for us stateside is that I think it will become even more economical in the near future. The “friendly” exchange rate, slower pace of life… and the omnipresence of 2,500-plus years of history… have put me in a contemplative

  Real markets matter. They dictate everything.  The bond market has a reputation for where the “smart money” plays, but it pales in comparison to the size, magnitude, and importance of the currency market. In fact, I would argue that everything that happens in financial markets is ultimately downstream from currencies. I’ve said it before, and I’ll say it again – capital is like matter (from science class). It is never created or destroyed. It merely transfers from one country, asset class, and sector to another. And it all starts in the currency market. So, if you’re not paying attention to this one important currency right now, you could be oblivious to the biggest crisis, or even better, opportunity of the year. (jump here) People love to rag on the Federal Reserve for their experimental monetary policies over the years, and for good reason. But here’s the thing – although

If you’ve been around in this business long enough, I can almost guarantee that you’ve heard the saying, “The trend is your friend.” This is undoubtedly true, but I’ve taken the liberty to add a second-part to it, which goes like this, “The trend is your friend, until the trend ends.” Sounds great, right? It even rhymes nicely, but does it have any practical implications for you? Absolutely. You see, markets move like the seasons, and as it turns out, we are actually able to observe which season the market is in. After all, you wouldn’t want to be planting seeds in winter, or trying to harvest in early-spring, so why would you buy a stock in a downtrend unless you knew that the season was about to change? I’ve been fortunate enough to be pretty connected to the land for most of my life. I’ve grown all sorts of

It looks like we have a victor from the latest battle in the bond market, and this round goes to the bears. After last week’s stronger-than-expected payroll report, we saw interest rates spike, and bond prices were crushed lower. My cyclical factors were pointing to the dangers of this move, and while I still think there’s more immediate-term downside, we need to be alert for a temporary bottom to form in the next couple of weeks too. That said, I am looking for interest rates to eventually exceed their October 2023 highs, and in a way, the bond market is doing the Fed’s job for them. Some might take issue with that statement, but let me explain. The yield curve is still inverted… And, the 30-year Treasury is only yielding around 4.50%, while the 90-day Treasury Bill is still paying 5.50%. Once the Fed eventually pivots and cuts rates, they’ll

Well, that’s a wrap for Q1 2024! Markets did not disappoint in the slightest, as stocks across the board hit new all-time highs (save for the Russell 2000).But as we are in the precipice of a new quarter, there are some notable shifts taking place, not only within the stock market, but also within the bond market. Remember, bonds are a much bigger market than stocks. And many consider it to be where the majority of “smart money” plays.So, what does this mean for you and your portfolio? A lot, actually. You see, we’re caught between two key cycle scenarios in the bond market. One of them is long-term, the other, short-term.Let’s start with the long-term cycle and consider the possibility that the October 2023 bottom in bonds was it. If it was, then I’m looking at bonds rallying into summertime (at the very least). But if October 2023 wasn’t