🗞 Re: Your Cart is Empty

WHILE YOU POUR THE JOE… ☕️
You Thought He Was Kidding?

If tariffs are so bad, as every news outlet has said recently, then why are our trade partners willing to retaliate so quickly and willingly with tariffs of their own?

Goes to show, tariffs are not a bad thing, if anything, they’re the natural way of global trade, which had been subsidized for decades by our taxpayer money. 💸 

Look, if Trump really wants to abolish the personal income tax, defund the IRS and other vampire government agencies (such as Milei did in Argentina), then tariffs are a fair tradeoff in my view.

Think about this, Dubai has some of the most expensive food, real estate, and services in the world. But people pay no taxes there, and there are similar setups, such as Singapore.

If you can save a dozen thousand dollars in taxes and useless programs like Social Security and Medicare, then who cares if you have to pay more for that Costco hot dog eventually??? 🤷‍♂️ 

Speaking of paying more, let’s get on with today’s email 📧…

INVOICES ARE IN
Saw It From a Mile Away

This is the price segment coming out of the most recent manufacturing PMI index for the month of February.

Notice that recent spike this month, which is not a bad thing necessarily, let me tell you why: ⬇️ 

• Most people think that tariffs are going to be the worst thing ever for the United States economy, bringing on crazy inflation.

• While this might be true to some extent, we see this as the second consecutive month of bullish data supporting the domestic business sector.

This is the exact theme we were calling for in our latest YouTube video, as the recent PMI data showed the beginning of a potential shift away from services (recessionary) into a more defensive nature.

This being another month of confirming data, we think that businesses are now starting to see the tide shift into domestic production and capacity demand.

But, there’s one issue.. 👀 

New orders have suddenly declined for some industries, but that’s not as important as it would seem on the outside. 📉 

This is exactly the type of nuances we like to make you aware of inside our training program The Sovereign Trader: 5 No-Sweat Tools Taken From Goldman Sachs.

We only take 5 traders per quarter, after a fitting process of account size and trading experience, and this is only one of the 12 pillars we cover in order to help you cut out painful drawdowns.

If you’ve been stuck with generating consistent ideas, profits, and a steady equity line in your P/L, then you might be suffering from Idea Purgatory. 💡 

We’re looking to end that. I’d encourage you to apply below, and whatever ends up happening, we can still hop on a call personally to review your latest trades and process, so you can walk away with an actionable plan and free tools that same day.

Apply here.

Anyway, back to PMI.

In this post about housing and residential contractions, we gave you a short idea in furniture, and as you can see here, it was only the cyclical industries (including furniture), that saw contracting New Orders.

Others? They expanded continuously, which is why we’re still bullish on the following areas: 🐂 

• Oil and Gas

• Primary Metals

• Starting to look at Wood Products for commercial construction

In the coming weeks, we’ll be posting the specific stock ideas that show up in our stock selection process to really take advantage of these breakouts. 📰 

TRADE OF THE WEEK
Redemption Table?

Can’t believe I’m saying this, but I like NVIDIA here at $110-$115. 🫰 

Just a couple of weeks ago I was calling for it to go down from $140, based on its declining EPS growth forecasts for 2026 which drew the market to discount the stock on a forward P/E basis.

This is never good, as it signifies lost confidence in the future of the company and the stock. 📉 

However

Based on the bar chart above, with the market profile underlaid in turquoise, we are at a massively important pivot area, which might call for responsive buyers to come in.

The spreads between the Russell 2000 ETF $IWM and the $TLT bond ETF, which are now at an extreme cyclical low, could offer some insights here. 📈 

First, this could call for a potential convergence to bring a balancing force back to this risk and risk appetite view.

That’s English for bonds decline and small caps rally.

And, one way for this to happen is if a new risk-on attitude is born in the markets. Considering that Bitcoin (essentially a risk appetite gauge nowadays) has sold off again below $90,000, it doesn’t look like markets are after risk today.

But, get this one.. ⬇️ 

The chart we show you several times a week, I know, but it’s for a good reason trust me.

In white, you can see the equity risk premiums for the S&P 500, and right now, it looks like they’re coming in to a potential pivotal area as seen in previous wicks and volatility pockets.

Since volatility right now is so overextended (short-term wise), a convergence could cause equity risk premiums to tighten again, bringing the S&P 500 back up. 📈 

Our levels would be set on a swing back to $6000 first, but then a reasonable expectation for $6150-$6200. 🎯 

After that, I would start looking to sell and locate some short opportunities for $4900.

That helps NVIDIA stock, as it is one of the biggest bets in the market still.

$138-$145 is my target, of course placing a very light position based on all the outstanding risk, such as this:

When you compare NVIDIA to other names in the industry, it becomes clear that this is the most overextended stock.

Don’t get me wrong, we love buying stocks that trade at premiums, since there are always reasons behind these premiums, which typically pay us big on swings.

However

When you look at the forward PEG ratio on NVIDIA, at 38x and well beyond anything else in the industry, the answer is clear.

Nothing can justify this premium, and the stock needs to come down hard. 🐻 

Which is a major risk to the S&P 500 and the reason why I’d look to go light and careful on this. 🫰 

GO AND MAKE IT HAPPEN
To Our New Subs

There are about 27 of you this week alone, so I want to re-recommend one of my favorite books here.

I want you to keep one theme in mind as you go through it: Global Macro.

Today’s book recommendation 📖 will show you how most successful hedge fund managers typically follow the same strategy and approach to the market.

One you will become more familiar with by sticking around with us.

To your success,

G. 🥃