If you're like me and you have a bullish long-term bias towards Bitcoin and other Crypto assets, then you're constantly looking for opportunities to get exposure.

But with equities in the middle of a bull market, we also don't want to be in something that isn't moving.

This is the time to make money. So we want to make sure we're in the things that can make us money NOW, not "one day hopefully in the future..."

Take a look at the price of Bitcoin still working on completing this multi-year base.

We're just one week away from the earnings report for one of the most important companies in the world.

We will be LIVE Streaming the earnings call and trading any opportunities that may come from the volatility after the earnings release.

This Live Trading Stream will be on Wednesday August 28th @ 3:45PM ET. 

We use sentiment to help put the behavior of the stock market into context.

When looking at markets, it's easy to see what stocks are doing. All you have to do is look.

But what are people thinking? That's what we want to know.

When everyone is bullish, it's hard for stocks to go up in price at the same rate. When everyone turns bearish, that's historically a great time to be putting money to work.

Coming into August, sentiment was running hot. The VIX was at 10, the put/call ratio was muted, newsletter writers were giving us some of their most bullish readings of all-time, and our sentiment composite was as complacent as it's ever been.

Boy did that change quickly.

We just saw the largest week over week spike in bears among individual investors since 2022, just as this bull market was getting started.

Look at that spike this week:

I love it when a group of people dislike a stock for reasons that have nothing to do with the stock itself.

In some cases it's because they don't like the CEO, or they don't like the politics of the players involved, or they think the stock is some kind of fraud.

In the case of Palantir, you're getting all 3 of these.

We love it when a stock hitting new 52-week highs makes people sad.

That built-in short-squeeze scenario is just added fuel to the fire to send stocks much higher, much faster.

Here is PLTR hitting new multi-year highs this week:

BlackRock just filed for a "Nasdaq Top 30" Stocks" ETF.

That's the top

This is the company that runs the iShares ETFs.

NOW is when they want to launch a vehicle for investors to buy ONLY the top 30 Nasdaq stocks?

Now?

Where was this 10 years ago?

To me, this type of sentiment is just further evidence that Technology has peaked as a percentage of total market cap in the stock market.

This sort of top-heavy hype is confirming what price is already suggesting.

Look at Technology hitting new 10-month lows today relative to the S&P500:

In order to have a bear market, or a correction of any kind, the prices of stocks need to fall.

That's just math.

But you know what hasn't happened? We really haven't seen the new lows list blowing up at all.

You would think that Monday would have seen a lot of new 52-week lows, considering the VIX practically tripled overnight, for the first time in the history of the stock market.

3 Things to keep in mind during times likes this:

1) For long-term investors, this is what you want. Many of us have long-term accounts, retirement stuff, kids college funds, etc. This sort of market action is great for those types of accounts and strategies. And if you're a young investor, just getting going in this business, nothing could be better. Pay attention and take notes (you'll thank me later).

2) For more tactical portfolios, this sort of volatility provides new opportunities, that certainly did not exist in the low volatility regime that we've been in for so long. This is not the time to implement low volatility strategies. This is a time to benefit from the high volatility.

3) When shit hits the fan, just get smaller. Markets are moving fast, so you can get away with much much smaller position sizing in order to accomplish the same goals you had with a VIX at 10, just a month ago.

The rule of thumb for me is you take the VIX and divide it by 16. That gives you the expected % move for the market that day - particularly the S&P500.

What's driving stock prices?

Remember, over the short- to intermediate-term, stock prices don't move based on the fundamentals. They move up and down based on positioning, or in many cases, a lack of positioning.

When no one wanted Tech and mega-cap growth at the end of 2022, that was when Tech and mega-cap growth really got going.

Before that, when everyone wanted high growth Tech, Cathy Wood was the next Warren Buffett, and that's when Tech stopped working for a while - and is still not working in many of cases.

That's sentiment driving those things.

The market hates it when bonds are making outsized moves.

It's less about when rates are rising or when rates are falling.

The bigger point here is that when interest rates are making very aggressive directional moves, that's what brings the volatility to the stock market.

And that's exactly what's happening:

We've been here before.

It's been 24 years since we've been here. 

But this is familiar territory

We saw historic underperformance from Technology stocks immediately after the sector reached the same levels it just reached last month.

Should we expect the same? In other words, should Tech keep underperforming, paving the way for other sectors like Financials, Industrials, Energy and Healthcare to outperform for a while?

Is that why the equally-weighted S&P500 just closed the month at new all-time highs? Because the largest weighting of the Market-cap weighted version is struggling to make any progress?

Here's Technology relative to the S&P500 getting back to those former highs from early 2000:

This is where it all starts folks.

The story starts and ends with the Bond Market.

You may not like it. I know I certainly don't. But that's the world we've always lived in. And it's the world I would expect us to be in for a long long time.

The bond market is $130 Trillion. That's compared to a mere $50 Trillion US Stock Market. The total Global stock market is slightly over $100 Trillion, for perspective.

Does it feel like everything is working in this market?

Most things are.

And the strongest industry groups have already been making new all-time highs.

Look no further than Aerospace & Defense coming out of this multi-year base to new record levels: