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Saturday, August 22, 2026

The Breakout: First Gold Then Bitcoin - Double Whammy

The breakout in gold, and gold miners was no surprise - after watching it consolidate in a downturned triangle for most of the summer. The breakout of the pattern was followed by several more important technical signals, on August 10th. 

1.

2. 

 3. 8/22 Today Saturday -  Gold still has room to run.             


What I didn't see coming, was the perfectly scripted narrative:

  • "Yield driven sell-off in Equities" - with the $VIX trading below 16? I don't think so. 
  •  National Debt reaches $40 Trillion (headline grabbing round number) 
  • Treasury's failed attempt to sooth the bond market - a Gloomberg favorite! 

But first came an article published by Barons - pumping not gold but the gold bugs' favorite ETF the $GDX (Gold Miners), just as money started fleeing US markets (again). Yep, it's the return of the rotation trade that Mike Wilson helped coordinate... Remember he specifically mentioned gold miners. 

Tweet August 6th 

What I believe happened is the rotation into the Dow came to an abrupt end, and the rotation did a hard left back into gold and gold miners, but also, after the S. Korean chip rally was vacated, the Bank of S. Korea signaled a pivot into gold. Look, BOK buying physical gold isn't a strategy, it's a hostage video. Above my paygrade.   

The Rotation The Talking Heads Finally Copped To - Energy: That's the kiss of death. 

The other new all time high that's already begun to unwind. Healthcare. Because bankrupt nations can't afford things like higher Medicare costs.  

Semiconductors remain volatile af, and not too easy to predict. You're on your own there.    

The kicker is that the cycle seems to be wrapping up right around a key Options target:

August Options Expiration Friday

 Like I said: I think we'll see another breakout on Gold, and it could take some time for the smart money to offload their gold miner shares to unsuspecting retail investors.

Same goes for Bitcoin: You don't typically see a parabolic 3 day move - like we just saw - come to an abrupt end. For instance, the top in S. Korean chips took several weeks to gain any downside momentum.  

How long can rotation trades continue to fuel the broader rally? Not much longer, I'm afraid. 

In fact while the talking heads continue to fan the flames on dollar weakness, I'm hiding out in bonds, which continue to consolidate just below the 50 week moving average. 

 

CAVEAT EMPTOR 

P.S. is a Latin phrase that means "let the buyer beware". It is a principle in contract and commercial law which states that the buyer takes the risk of a product or property having defects or poor quality unless a warranty is given or fraud is involved. Source: AI Overview

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Monday, August 17, 2026

Market's Trading Near All Time Highs - Trade It or Fade It?

Spoiler: I'm Fading it. When I see the $VIX being hammered to new recent lows - for no other reason than because low summer volume makes it easier to manipulate the $VIX... I get nervous.  

The rotation in and out of AI related micro sectors (chips -> mag7 -> $NVDA) continues. And when that trade isn't working money flows back into the drill baby drill trade (energy) - as we saw again on Friday. 

$DJSOEP (Dow Oil Exploration & Production Index) Trades to new all time highs. Bloomberg shrugs.


To be honest we haven't seen the Nasdaq lead stocks higher, since that 4 day rally - after the last FOMC announcement. 

$COMPQ (Nasdaq Composite) trades back to the top of the range. Struggling. Energy takes over. 

  


This morning we're seeing US tech being lifted by S Korea (again). Not interested in catching the next falling knife in chips.    

Now that earnings season is behind us - except for a few retailers (we don't trade): Watch for financials to unwind:  

Financials flashing warning signals on Friday, and the $VIX gap back to the 15 level - points to more manipulation for the time being, but like I said last week. You're better off enjoying the rest of the summer, and returning once the $VIX starts breaking out again.

My carpentry project is really coming along, and I'm hoping to have this wrapped up in time for the Labor Day holiday.   

We got the midterms coming up and Wall Street seems to be betting on another Republican win? That could be the catalyst for the next snap-back rally, but not until after we see retail hands shaken out. That offers a 2.5 month window for a sell off. 




 

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