Last weekend we talked about a pair of charts that I thought were instructive to watch concerning the state of the consumer economy in the United States of America. I referred to them as pending breakouts and they certainly broke out this week.

Here’s Delta:

…and here’s Marriott:

The day after the election was one of the biggest one-day rallies in response to an election ever. In the 30 days leading up to it we hadn’t had a single back-to-back two days of declines in the S&P 500. Which is funny because the consensus call on Wall Street all summer was that the fall was going to be volatile heading into the election. Nope. It was the opposite. And when it became apparent that a Red Wave was upon us, the surprise factor led to an incredible follow-through. Risk was rewarded.

Investors began pondering a situation where industries were deregulated and the Tax Cuts and Jobs Act was extended before the scheduled sun-setting at the end of 2025. It was an upside shock and the investor class pounced on the opportunity. I think we would have rallied regardless of who won the White House but the added surprise of Trump getting both houses of Congress was a bigger story.

The Bitcoin President is here

This past July I talked about the consequences of a second Trump presidency from the standpoint of digital assets. I referred to Donald Trump as “The Bitcoin President” and everything we’ve seen so far bears that out.

The talk I heard at the New York Stock Exchange on election night this week centered around the idea that this administration was likely to create a Bitcoin Strategic Reserve of up to one million BTC - the federal government already controls 210,000 BTC stemming from the Silk Road bust and several other scams that have since been prosecuted. If any of this talk turns out to be true, there is a now a more substantial tailwind for the price of Bitcoin and related assets than ever before. What do you think sovereign treasuries and central banks do in response to the US government stockpiling BTC? You think they just sit there watching?

The Republican sweep owes a lot to the crypto lobby and Donald Trump is now surrounded by people who are very much in favor of the continued mainstreaming of the asset - Peter Thiel and Vivek Ramaswamy and Elon Musk and thousands of other large donors and supporters. I wouldn’t sell if I were you. This week BTC made a new all-time record high in US dollar terms and that’s before any of these people’s grandiose plans have been implemented.

Here’s BTC, Coinbase and MicroStrategy, which can best be viewed as a leveraged play on the price of the coins, over the last month:

If Wall Street believes that the government is about to become an accumulator of this asset, it’s tough to imagine anyone wanting to cash out anytime soon.

Permabear Elegy

It was great to see my friend Joe Fahmy while I was out in Vegas last week. One of the things we got into was the way in which someone’s professional circumstances can color their views of the market or the economy (or both, as is often the case). This is one of the big themes of my new book You Weren’t Supposed To See That and I think understanding the idea is the key to know whom to listen to (and who we should ignore).

There’s a very specific type of market commentator out there who revels in the misery of others because of his or her own dissatisfaction. This is typically a person who experienced the fame that comes along with having made a big negative call that’s played out. For the rest of their career they’re constantly in search of recreating that same euphoric feeling of being right while everyone else loses money. It’s like a drug and I have witnessed this yearning firsthand. If you were the guy who famously “called the crash” it’s hard to look for the next opportunity to be that guy at all times. And then, when it doesn’t happen over and over again, your whole persona devolves into a Gollum-like figure, desperately searching in the dark for the precious. Where is it? Who stole it from me?

JC Parets says these people are mentally ill. I would put it a bit more charitably - they’re just regular people who’ve become twisted by the pursuit of a feeling they can’t quite recapture. For the last fifteen years we’ve only had one recession and it lasted for two months. All the rest of that time has been spent in an expansion with only fleeting moments of panic and volatility, leaving them relentlessly frustrated.

You can watch the key clip below…

The full video is here at Joe’s channel.

Post-Election Breakdown

Thanks to Ben, Michael and Callie for their amazing contribution to The Compound’s first-ever Post-Election Special this Wednesday night. We took a look at the market reactions and took note of some of the things Wall Street had to say about Trump’s new mandate. If you missed it you can listen here or watch it below:

Katie Bar The Door

Lastly, our friend Katie Stockton stopped by for an all new episode of The Compound and Friends and we had lots to talk about.

Katie is one of the most highly regarded technicians on The Street, having spent over twenty years educating and informing institutional investors on the short- and long-term trends.

You can listen here or wait for the video to pop up on our YouTube channel tonight.

Okay, that’s all from me today. Have a great weekend, talk soon! - Josh