Thoughtful Money with Adam Taggart

Buy the Yen ETF (FXY) as a Hedge Against Dollar Weakness

-3.68%current return

"I just say buy the yen. And you can do it very easily if you're saying, well, I don't know how to do that. You can buy the FXY, which is the yen ETF."

David Hay indicates that the US dollar is breaching key support levels and remains overvalued, suggesting that investors should consider buying the yen, preferably via the FXY ETF. He draws on historical precedents, such as the Plaza Accord, to support the notion that a significant devaluation of the dollar relative to the yen could occur, making the yen an attractive trade in risk-off scenarios.

Cautionary Commentary on Credit Risk at Tricolor

"I honestly haven't had a lot of time to deconstruct the Tricolor story. My understanding is that it was a subprime lender in the auto space, and it appears to be one of those collapse overnight stories where the company just surprised all of its lenders."

The panel discusses the unfolding issues at Tricolor, a subprime lender active in the auto space. The unexpected collapse signals potential credit risks in the sector, raising investor caution over similar exposures that could indicate broader systemic weaknesses.

Trim Profits and Hedge Precious Metals Exposure (GDX & Silver)

-0.41%current return

"We rebalanced to our model weight of 10% and took chips off the table by hedging half of our precious metals position with a covered call out to November. If you are overweight, say more than 15-20% in metals, consider selling some into this ramp while the sentiment remains extremely rich."

The panel discusses the recent run in precious metals and gold mining stocks, notably GDX, which has advanced significantly from its base. They suggest that investors who are overweight in these assets should trim some profits by hedging via strategies such as selling covered calls. The commentary points to technical indicators (e.g., GDX trading below the 21-day moving average) and set targets (potential to reach levels around 100 for GDX and an all-time high near 50 for silver), which makes this an actionable tactical move for managing profit and risk.

Cautious Crypto Positioning Ahead of a Near-Term Pullback

"I haven\u2019t seen the sentiment yet, but obviously, as you said... my own target for Ethereum is, you know, 5,500. And for Bitcoin, it\u2019s about 130,000. ...I think the time to be long is right now and really look to exit by end of year."

In his commentary on cryptocurrencies, Mark Newton sets clear price targets for Ethereum (around 5,500) and Bitcoin (around 130,000). While he remains bullish on Ethereum in the coming year, he expects a pullback in crypto, particularly in late October/November, advising investors to take profits before the final leg of the rally ends.

Crude Oil Correction as a Buying Opportunity in Energy

-2.54%current return

"I sense that crude likely gets down to probably $58, $59 from 63. And thereafter, I think we probably are going to bottom in crude and start to push higher... I still think we have one big flush to the downside in energy. And I probably want to use that to buy."

Mark Newton provides an actionable trade call in the energy space, expecting crude oil to decline from current levels (around $63) to the vicinity of $58-$59. He anticipates a bottoming process after this decline and suggests using such a pullback to initiate long energy positions.

Buy the Dip in the Broad Market on a Near-Term Pullback

+4.49%current return

"But I think at least 5% move probably starts in October into November. At that time, I think you do want to buy dips. And I think the market likely goes higher into year end..."

Mark Newton outlines a near-term trade call where he expects a 5%-10% pullback in the market starting in October into November. His suggestion is to buy on the dips during this choppier period, anticipating that the market will resume its upward trajectory into year end or early next year.

Short-Term Bullish Trade on 30-Year Treasuries via Futures

-8.66%current return

"I have a position in the 30-year treasury right now, just full disclosure, that I've had for a couple weeks. I did it through futures. And I wouldn\'t buy a 30-year treasury to hold for the next 10 years because I\'m looking to capture a short-term move as yields come down with a slower economy and disinflation."

George Gammon explicitly articulates a short-term bullish trade call on 30-year treasury futures. He uses his own position as an example to highlight the expected decline in yields due to an economic slowdown, advising against long-term holdings given potential rebound risks.

Rebalancing Trade Call: Trimming Overweight Google

-0.55%current return

"In our core portfolio, we own Google. It’s now over 5%, around 5.5% in weight, so we’ll trim that back to 4% to maintain our targeted allocation as the performance has pushed it higher."

The portfolio managers are executing a rebalancing trade by trimming their overweight Google position from approximately 5.5% back to their target of 4%. This move is part of their disciplined risk management strategy, ensuring that the portfolio remains properly diversified despite the strong performance of large-cap tech stocks. The action suggests a cautious stance amid market exuberance.

Technical Overextension and AI Risk in Google

-0.55%current return

"Google is trading at a forward PE of 23 and a peg of 1.82, which suggests it is fairly valued on an earnings growth basis. However, technical analysis shows the stock is pushing three to four standard deviations above its long-term moving averages, highlighting an almost 99% probability it will correct."

Google is seen as fundamentally strong with solid earnings growth and share buybacks, yet its price action has become extremely overbought on technical measures. There are concerns that the ongoing AI developments might disrupt its traditional ad revenue model, despite its current valuation. Investors are advised to monitor for a technical correction which seems statistically likely, even if the fundamental story remains positive.

Short Squeeze Risks in Small/Mid-Cap Stocks

-31.94%current return

"This portfolio is up 16% in 45 days. In that portfolio, Bloom Energy is up 125% since August and it has a 20% short position. These are massive moves in heavily shorted stocks, and such parabolic moves cannot be sustained without a correction."

The discussion highlights a group of small and mid-cap stocks – including Bloom Energy, AEHR Systems, AppLov, Lattice Semiconductor, and Accelis Technology – that have rallied sharply (e.g., Bloom Energy up 125% in a short period) amid heavy short interest. The implication is that these parabolic moves, driven by short squeezes and exuberant buying, are unsustainable and likely to face a significant correction, urging investors to be cautious or consider taking profits.

Long Silver via Breakout Above the $40 Resistance

+25.75%current return

"But it broke when you broke out over 40, because, yeah, I think that's the spot price you're looking at there. But I know that silver futures yesterday were over 42 at one point."

Silver is showing a technical breakout above the key $40 resistance level, with futures reaching over $42 briefly. This breakout, in combination with basing patterns observed over a substantial period, suggests an actionable opportunity for investors to take a long position in silver, using instruments like the SLV ETF.

Overweight Energy Exposure with Petrobras

-4.47%current return

"Petrobras is one of our favorites, and double-digit yields selling about three times earnings."

Amid a market rotation away from overvalued tech and cyclical stocks, the energy sector is highlighted as undervalued. Petrobras, noted for its attractive valuation (approximately three times earnings) and double-digit dividend yields, is presented as a compelling trade idea for investors seeking exposure to undervalued energy stocks.

Short Homebuilders ETF (XHB) Amid Recessionary Housing Signals

+9.80%current return

"I'm short a bunch of XHB. And I've had a kind of mixed success with it because it had a big breakout a couple of years ago. And then I shorted a bunch when it was up and covered."

Due to a deteriorating housing market with starts and permits down roughly 20% YoY and a widening gap between new and existing home prices, the fundamentals for homebuilders have worsened. XHB is cited as being near all-time highs despite these recessionary signals, suggesting traders could consider bearish positions (such as short selling or buying puts) on the homebuilders ETF.

Hedge Extended Exposure in Gold Mining ETF (GDX)

+21.06%current return

"We have half of it written with short covered calls on GDX to bring in income because we know at some point we're going to have a pullback. GDX went from 52 to 65 in just a few weeks, and now it is trading well above its 21-day and 50-day moving averages."

GDX, a gold mining ETF, has experienced rapid gains from 52 to 65 over a few weeks. Due to its extended condition above key moving averages, the recommendation is to hedge the position by writing short covered calls. This approach is intended to secure income and mitigate downside risk in a potentially volatile market environment.

Trade Silver ETF (SLV) on Technical Breakout

+18.98%current return

"if you take, from a technical analysis standpoint, if you take the height of this triangle from top to bottom and then add it to the breakout level, it brings you up to around this line here. 38 on SLV. That would be a first target. And that's around 42 or so on spot."

Based on technical chart analysis, the speaker recommends trading the silver ETF SLV. The chart shows a triangle formation with a calculated target of about 38, suggesting an attractive exit point for overextended positions, with spot silver expected to reach around 42. Investors who are overexposed in precious metals should consider taking partial profits into this structured rally.

Buy NVIDIA on Pullback Opportunity

+6.89%current return

"I would love this thing to pull back to somewhere in the, you know, the 150 area would be awesome. Give you a great opportunity to add, you know, add more into the portfolio at that point."

NVIDIA has experienced a significant rally, up nearly 100% from its April lows, and is currently trading around $174. The discussion highlights that the stock appears overbought and suggests a buying opportunity if NVIDIA retraces to the $150 level, providing an attractive entry point for investors looking to add to their positions.