Ep. 306 What Makes Trump 2.0 Different And Why DeepSeek Is Not The End Of The AI World
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Hello and welcome to another episode of the Investing with IBD podcast. It's Justin Nielsen here, your host, and we are coming to you live at 5 p.m. Eastern. Let's see, this is February 5th, 2025. We come every Wednesday for you. And we've got a returning guest on the show for you today, Jeffrey Hirsch, who is, of course, the editor-in-chief at Stock Traders Almanac, something that was started by his father, Yale. Gosh, how long ago was that? I don't know.

58 years ago. 58 years ago. And yeah, so he just came out with the 58th edition of the Stock Traders' Almanac. I have my copy right here, signed even. So that was really nice. Thank you so much for that. But...

We've got a lot to cover, Jeff. I mean, usually we like to come on with you at the beginning of the year to kind of get an outlook for 2025. And, you know, we've got the trifecta. We've got the election. I mean, there's there's some things that are a little bit different about this election cycle. Yeah.

Your data doesn't go back to Grover Cleveland, right, when there was a non-consecutive presidential term? Yeah, it does. Some of it does. Some of it does. Okay. Well, maybe we can look at the, you know, what it was like for number 22 and 24. Yeah, back before indoor plumbing. Right.

Yeah, when the mugwumps made a difference for everybody. So let's kind of start out. And again, for those that aren't familiar with what you do at the Stock Traders' Almanac, I just want to have you give people a brief overview. Sure.

So many people, so many traders find this information critical to decision-making and seasonality. But kind of talk about your process here. Well, it is a source of pride that there are so many people, top money managers, advisors, investors that have been using the book for as long as I've been alive.

And continue to have it on their desk. I have mine here as well. I got one at the home desk. But the process is...

Kind of like a take on my philosophy is a little take on the Santiana philosophy that those who fail to remember the past are condemned to repeat it. I like to think that those who understand market history are bound to profit from it. So, you know, we look at fundamentals, technicals. I love – was it Market Gauge now or used to be Market Smith? We use the charts there and the analysis that you guys put out at IBD.

I look at sentiment. I'm a big fan of investors' intelligence as a long-running sentiment gauge, monetary policy, and politics, geopolitics. But our foundation is cycles, seasonalities, patterns, and trends. Stock Traders' Almanac and our newsletter service, we drill down on some level to half-hourly trading patterns, intraday trading patterns.

But a lot of it is month over month, seasonal swing trades for sectors and the indexes. So it's a combination of, you know, looking at investor behavior and how it has repeated over time and where the consistent patterns are, whether it's.

you know, October bottoms or February weak spots or the beginning of August being a weak period or trading the best six months of the year or natural gas coming into season in February, which is setting up well. We can get into that a little bit. But we look at history in relation to where it is, what's going on in the present market environment for any particular asset class. And we make trades and build portfolios accordingly.

Yeah. And again, there's a lot of, in addition to a lot of numbers and charts, what I really like is that you, you kind of walk people through it a little bit, you know, some, you know, a little context, what does this mean? And especially your introduction at the beginning really kind of does a nice overview of that. But, um,

Yeah. Yeah. Yeah. So, you know, just for people that haven't really kind of seen it, um, you know, you, you, you can go by month, you can go by, you know, you can slice and dice the data kind of however you want. Um,

you know, or what you want to look at because you've already done the work for folks. They don't have to go through decades and decades of my father did it back in the sixties that we all get to stand on his, his broad shoulders. Yeah, absolutely. So yeah, there's nothing, nothing wrong with that. And, you know, just for folks that might be, you know, thinking about the, the, the random walk ideas you know, this is, this is a little bit different, right? It's like, you know,

When you kind of look at how some of this stuff is correlated and just happens over and over. I mean, one of the great things about when you come on this show is you kind of share, okay, based on

Based on history, this is what the expectations are, and it doesn't always follow. But I got to say, you know, the last few times you've been on the show, you've been pretty spot on with some of the projections that you've used just based on the historical data. Market's been cooperative with the cycles the last bunch of years.

So maybe what we can do is we can start out with your trifecta indicator. And again, this is something that your father, Yale, had done. A lot of people are familiar with the Santa Claus rally. It's really entered the trader's lexicon. But it's not always used the way that your father originally defined it. So maybe you can start with the Santa Claus rally as element one of the trifecta. For sure.

For sure. I mean, back in 1972, Yale, Hirsch created the Santa Claus rally and the January barometer and published it in the 1973 Stock Traders' Almanac. I have...

a picture of that table of contents, which is, you know, just a nice little memory lane trip there. But he discovered it. And the Santa Claus rally is not any rally at the end of the year, December or whatever anyone wants to make up. It's the last five trading days of the year and the first two of the new year based upon the S&P 500. And it's not from the open on the fifth to last trading day. It's from the close on the sixth to last trading day to the close on the second trading day of the new year.

And basically you've seen a short sort of sweet little rally there. It's when the traders and people who are minding the shop or the rest of us are out –

celebrating or picking up stocks after tax loss selling is done and profit-taking is done, and you get this little rally. And when you don't get that rally, it's about 1.5% of the S&P, nothing to write home about. When that doesn't happen, it's often a time when the markets will be lower at some point in the year or even bear markets begin. So Yale's famous line,

If Santa Claus should fail to call, bears may come to Broad and Wall. And for the young ones out there, Broad and Wall is the intersection of Broad Street and Wall Street, where the New York Stock Exchange still exists, even though now it's pretty much a TV studio.

But it's still a magnificent place to visit. And, you know, people have events there. It's still there's still an aura there. Oh, absolutely. Yeah. And then the January barometer is the full month January barometer, also based on the S&P 500. Yale discovered that as January goes, so goes the year. I'll give you the big stat right off the blocks here. When January is up.

40 out of 45 times since 1950, the year is up. That's an 88.9% bat or an 889 batting average. And it's an S&P average of 17% per year when January is up only down five times in the 45 instances since 1950. So.

So then there's this old first five days. On these tables here, it's FFD, Santa Claus Rally, obviously, SCR, JB, not James Bond, but January Barometer. And FFD is the first five days. It's an early warning system. It's not the first week of the year. It's the first five trading days, which can overlap more than one week. You know, the calendar is a little tricky. But –

What we did, what my partner Christopher Mistel and I did back in 2013 when Yale was still with us, we – looking at this combination – and there's a page in the Almanac. I think it's page 18 or 20. It's 20 where –

You know, we took – we stood on Yale's shoulders. We took all three of these indicators and put them together. When all three are up, when you hit the trifecta, that's where the name comes from, the S&P is up 90.6 percent of the time, even a little bit more than just the January brown bear itself, only down three times in 32 years for an average gain of 17.7 percent. We didn't hit the trifecta this year.

But the situation that we had now is we had a very small data set. That's why I kind of mentioned the full month January barometer, 40 out of 45 is a pretty solid statistical data set there. But here we had – this is only the fourth time in the history since 50 that we've had a –

First five, a channel college rally down, first five days up, and a January barometer up. Pretty solid history. I know it's small, but it's really all about the January barometer to me. And it enabled me to reaffirm my annual forecast, which was initially written about back in June when we put out the almanac that you have there in your copy in my outlook. But we also put out our newsletter forecast yesterday.

you know, to our subscribers just before Christmas, the Thursday before the holiday. And then we wait until we get trifecta results, which we just had at the end of January. And we're still looking at an annual forecast of 8 to 12 percent, which is our base case scenario. And I think when

When you when you and I discuss the I'm just pulling up the chart on my side, when we discuss the the post-election year seasonal pattern, you'll see where I get that eight to 12 percent change.

Now, a lot of folks might be saying, well, gosh, we've had two really strong years back-to-back on the S&P 500. How often can it do it again? I mean, 8 to 12 is – I mean, it's not 20-plus, but it's –

It's no slouch. It's kind of an average market gain. It's in the historical average, which I think speaks in and of itself that it's pretty much a standard year. We've also seen post-election years much better since World War II. I know there's an old saying going back to past Grover Cleveland and even Andrew Jackson's time with some of the old cows and to see stuff that we have data on where the post-election year used to be bad.

Um, it, it's has been worse for Republicans because they tend to come in like current president is doing to try to take care of things early. But, but overall post-election years, like 2017, Trump's first post-election year, um, a lot better. Uh, and the best of the four year cycle since 85, um, up 17.2%. Uh, you know, yeah, you go to, go to the, go to the, the next chart there. And, um,

Since 85, it's been much better. Eight up and two down. The third year is still great. A little bit lower average, but up nine years out of the last ten post-election years. But this is, you know, something that we've got to keep an eye on here. We've actually just updated this version for our members earlier today.

But everyone knows that we've gone a little bit into February. We've been chopped into the little gold, the yellow line there is 05. So the red line, you know, we're going to sort of put that in the background for now. But it's something we're tracking and we've got to keep an eye on. That's the incumbent party loss trend. We're not tracking it now. We did a little bit out of the blocks when we were selling in January. But that's sort of what happens after we have a change in administration policy.

Changing party in the White House. The other lines, the other groupings are all post-election years since 1949. First full cycle after World War II. Incoming party wins in green. The pink year is the fifth year of a presidency. I know we had that Grover Cleveland situation again, but it's still the fifth year of a president. He's not going to have more years after this term.

And then there's the aggregate cycle, the composite, whatever you want to call it. It's all years since 1949, post-election years, and fifth years of the decade all combined. And if you go over to the right side, you'll see the 8 to 12 kind of just –

Right there. And as long as we keep tracking, I'm pretty comfortable with... You know, we also call for some first quarter chop. It's one of the weak spots of the four-year cycle, as well as the weak summer months, the August, September. You can see all of the different...

Groupings there have some weakness in that, you know, worst six months. People call it the sell in May period. Well, guess what? It's not sell in May. It's reposition in May. We've got some rally. You know, we're seeing that mid-July peak a lot these days, which we had last year. But basically, this is the foundation of the forecast and outlook. We had confirmation from January, and we're tracking. We've come back.

And the updated chart I have shows the kind of really coming right back in here to where the pink and blue and the green lines are conjoining there in February. So we're really sort of reverted to the mean here, and it's just uncanny how we're tracking this pattern again.

Yeah, so you know what? I can actually, I think, show that. I sent you that deck, did I not? Yeah, yeah. So I'll... Let's see, that is... I'm just making sure I get the right one. So... Slide four. Yep. Okay, there we go. Let me... But I've got to try and find my... Where you're at. So let me stop the share on this one and start the share on...

There's Yale right over here. Right, exactly. Oh, here we go. Here we go. He's watching us. Yeah. See? Yeah, there's your reversion of the mean that you were talking about. Precisely.

Yeah. Perfect. I got there eventually. We're on track. You know? Yeah. That's the main point there. And, you know, kind of going back to some of the stuff that you were talking about in terms of

Tell Congress to guard your card.

because Americans lose when politicians choose. Learn more at GuardYourCard.com. The cycle, again, okay, so this is the first year, you know, post-election. Yeah.

So, you know, let's maybe talk about that a little bit. Or, yeah, let's talk about that a little bit since we're kind of talking on the presidential side. So here's your data going back, you know, again, 1949 to 2024 and where things stand in terms of the average, you know, performance data.

Post-election, midterms, pre-election, and election year. So walk us through what kind of usually happens. Well, we've seen weakness in Q1, highlighted in the pink there. And then we, you know, there's a little bit in Q3 of post-election year, but not as much. And we tend to move a little sideways until we get into the fourth quarter of the election.

Post-election year, we rallied towards December. I mean, another thing, the annual highs are very frequent in December, you know, unless it's a bear market, which are fewer and farther between. But then, you know, after we sort of – and this is what had us – when we spoke in 22, you know, I was bearish early on because of this –

four-year cycle, this midterm year. And the weak spot, the real weak spot of the four-year cycle is the Q2, Q3, the midterm year, which is something I'm getting already concerned about. We're already starting to think about the 2026 almanac here and planning for that. And then there's that sweet spot, which gets set up. You've got the midterm year. October is a great time to buy stocks, tech stocks, small stocks, beaten down stocks, stock market in general. And the best

October is the midterm October, especially after we had a correction or a bear market like we did in 22. And then you got that sweet spot where from Q4 midterm year to Q2 pre-election year, you get this about 20% Dow and S&P on average and about 30. I think it's 19, 20, and 29% for NASDAQ. And then that's the best year of the four-year cycle.

What is it? Only one loss since 39 when we had in 2015 for the Dow, two for S&P. And then there's the election year, which, you know, again, has gotten better. We have a page in the election year edition of the Almanac, which was 24, which I know you have a copy of. It's called How the Government Manipulates the Economy to Stay in Power. Yeah.

You know, it's it's not it's no secret there. I mean, they want to get reelected. And both sides do it. Right. It's not like it's a Democrat or Republican thing. It's just no. You know, I mean, the current administration is definitely trying to get a lot done now more than than we've seen in my memory. But, you know, there is the midterm year, which is.

The incumbent party in the White House tends to lose seats. So they really only have two years to get things done before the other side gets annoyed or people get disappointed that they didn't deliver on the stuff they didn't deliver on. And they tend to lose their whatever control or margins or thin the margins that they have in Congress, which is – Congress is really what's important because they hold the purse jinx.

So the reason I mentioned earlier why the post-election year has become so much better is because it's kind of like a pre-midterm election year. So you've got the sort of prime of the pump for the midterm year as well.

Yeah. Well, then, you know, post midterms, I mean, how often do you kind of get that disconnect between the incumbent party or, you know, the party that's in control on the executive side versus the party that's in control on the legislative side? When they're different, a lot of times that tends to be good for the market, right? Gridlock. It's not any combination. It's OK. It's not just I mean, Republican president, Democratic Congress, not the greatest combination.

Republican Congresses are what I mean, I have a I have another slide that that's on the ones I sent you. I mean, the best combination is a Democratic president and Republican Congress. OK, when you've got, you know, somewhat more potentially progressive, open minded executive working with a conservative, fiscally conservative legislative party.

But it's really all about Congress. Republican Congress is 15 percent average since 49 on the S&P. Democratic Congress is 7.1 percent.

Combination of a Republican president and a Democratic Congress, 4.9%. That's the worst combination, which, you know, you were sort of wondering about. 12.9% of the S&P for Republican Congress, Republican president. Right.

Yeah. And so here's here's some of the Republican Congress and Republican president. You know, as you said, some pretty solid market history there. So the whole divided government is not necessarily binary. It's not one dimensional. There's a little more nuanced history.

Yeah. No, that's history. It can change. I mean, this is this is what's happened. Yeah. And look, each administration is different. And we do have a very unique situation here because it's not like this is Trump's first time to the rodeo. Right. You know, you've got someone coming in. And it's also a different kind of second term. It's a different kind of president. There's a whole populist wave going.

Not just in the United States, but around the globe. We've seen it in other places. You know, if I could quote Fiddler on the Roof, it's a new world, Golda. You know, I mean, it's different. You know, we're coming off of COVID. I know that feels like a long time ago, but there's still some...

We're still dealing with some of the inflation that came off of the spending from that. And that goes into my super boom outlook, the long-term forecast, which I know you want to get into a little bit later. We can save that. Well, you know what? Since you brought it up, maybe we kind of give a quick rundown.

A quick teaser on that. This is the long cycle that Yale came up with back in 76. I was 10. But I remember it because there was t-shirts. There was...

Dow 3420 was his forecast he made in 1976 by 1990. And it was based upon this long-term chart, which I know you've seen, Justin, of the secular bull and bear markets surrounded by World War I, World War II, and then Vietnam. And coming out of Vietnam with...

The military government spending was really based upon the word you have inflation and peace and some functional government member in 82. And we had Reagan and Tip O'Neill actually doing things, compromising. Right. Again, with with Clinton and Gingrich, you know, warts and all they did come to some agreement on things. Right.

But the super boom is these long booms where the market or the Dow specifically in these forecasts, but the S&P also, rises 500% or more.

war and inflation. And then, you know, I did a book on it. The super boom, uh, came out in 2010. We had a forecast in may of 2010 on the newsletter for a Dow 38,820 by the year 2025. You all know now we've hit that already. We did it a year early. Um, we've upgraded that, um, to a little bit more, uh,

Again, I think we're in that – something I also call as part of the Super Bowl equation called the culturally enabling paradigm shifting technology, which I believe – That's a mouthful. I don't know. I like it. I'm sure there's – it's a tech innovation. It could be the microprocessor, the personal computer, the internet. We got AI now.

Back in the old days, it was things like indoor plumbing and air travel and the interstate highway system and refrigeration, all kinds of technological innovations that changed the world collectively as a whole and everyone's life individually. Yeah.

Right. You know, and it's interesting because a lot of those things, it's not like it was just one industry. Right. It was a trickle down it like, oh, it affected so many different things. And of course, productivity was one of the big things for for a lot of that. I mean, look at look at Palantir and, you know, those type of companies that are affecting productivity with AI across, you know.

multiple, countless industries. I mean, what is it? Kathy Wood just said something the other day, which I'm already in a healthcare AI stock. She said healthcare is like, I guess, the new frontier for AI. Right.

And that's something I don't think Palantir has really touched on. I'm talking about all the data, all the stuff that you give the doctors that's out there. It's all analog. It's all not digitalized. They can cull through that stuff and put it through an AI co-pilot or bot or something and really figure out what works.

or therapy or drug or clinical trial you might be a candidate for if you've got some weird thing going on or some just nuanced thing that's not yet. RXRX, that's one of Kathy's ARCs holdings there, yeah. They're not pure AI, though. It's definitely they're doing drug discovery using it.

Yeah. Well, even Moderna, I mean, when they came out with the vaccine, a huge part of it wasn't just that RNA technology that they were using, but there was an AI component to it. Yeah, we had some of the folks from Robo Global on, and before One Medical got bought by Amazfit,

Amazon, even the care, using AI to kind of take some of the strain off of the doctors. Yes. So they could spend more time with the patient. They've got to get the notes and data in there digitized. Yeah. And uniformed.

across many platforms. I know my doctor, you know, they switch, you know, whatever firm from, you know, Westchester this or whatever, Montefiore to whatever, and then they lose your records because it doesn't upload to the new system. That's a problem.

So, again, early stage, I put us at maybe equivalent of 1993 for this super boom. But AI tech is that, you know, potential Internet, Windows, PC, you know, tech stack that launched us in the 90s. So people are thinking we're coming to the top already. It's 1999, you know. I'm thinking more like 93. Yeah, and I guess the trick there to kind of, you know,

I mean, since we opened the can of worms, we might as well get down this path. Hey, you said we could wait, but I just couldn't. You know, there was this, you know, this kind of flat period here. But we really, I mean, it's not even looking at weekly charts or monthly charts. Sometimes it's looking at yearly charts to see this super boom cycle. So, you know, some might say… It's very hard to draw…

What's that? It's very hard to plot because of the, I mean, the change. I mean, we have the whole cycle going back to 1914 in the book. I don't have it. I mean, it's on the, I may have updated it on my website. Yeah, I didn't see it in your slides. No, it wasn't in there. We didn't talk about this today with the subscribers. But I'll tell you, I think it was 24 April 11th, if memory serves, on my, yeah, Superboom update.

Yeah, the big chart. You want me to send you the link to it? Well, you know what? Maybe you can try and share. You know, there's a little share screen. I'll share it. Yeah, let's see. Let's see. Let me put it over here on the other side. This is the fun part of being live, you know, so hopefully you don't have anything that you don't want people to see. No, I mean, I close down stuff just for clarity. Yeah. You know, for...

Let's see. Screen. Which one? Window. All right. That'll work. How's that? Yeah, there you go. So this is a tricky log chart. This is looking all the way back to 1913. These are the sideways patterns. This is the CPI. And then you got your super boom.

A lot of people talk about these cycles where it's an 18-year or 17-and-a-half year or whatever year. It's based upon events. So we got Duke Ferdinand getting assassinated, the armistice, World War II, Germany invades Poland, Japan surrenders, Gulf of Tonkin, Saigon falls.

The war on terror, U.S. attack. We have the combat ends in Afghanistan. This is a little bit trickier. And I was trying to get to the back here was government spending, military spending for these wars. The COVID spend, we had inflation lagging for a while, but the COVID spend was of military, you know, it was of that level.

That kicked in that inflation that we had in – We got to throw money at it. Right. So here we have the sideways pattern. We came out with that forecast in 2010, and we're up more than that now. And you can see the boom from –

Vietnam from 82 was up over 1,500%. You can take it to 98, it's up even more. So that's why we sort of readjusted our outlook. It's even mentioned on page 11 in my outlook in the almanac of 62-430. I think that's what it says in here. 62-430. And so again...

While I think a lot of people are saying we're in early innings on the AI side, on the technical chart here, it seems like we're a little bit further along

In terms of how we came out of the, you know, after the great financial crisis. So do you kind of think of COVID as offering a reset and kind of a restart? Think of COVID as like the 81-82 double-dip recession. High inflation and...

When Reagan came in and Volcker broke the back of inflation and all that kind of changed things. It's never an exact correlation, you know, never an exact, you know, analogy. But, you know, we got this 93 period I'm talking about. This 82 is probably like 2013. We had that –

The 2015, 2016, August to February 2016 sort of little, you know, Ned Davis bear market that was kind of that, you know, mini bear that signaled the breaking out to new highs there, you know, above this range. So it's a little bit of art, you know. Yeah. Pure science. Yeah.

But, yeah, this is one of those – I should put this on the wall, I think. Right. And it's one of those things where, again, because you're taking such a big-picture look, 40,000-foot view, you're not going to be looking at the people. You're not going to be looking at the details. You're looking at that overall. 40,000-dow point view.

Right, exactly. Perfect. Well, you know what? If you want to go ahead and stop your share real quick on that, and I'll go back to just one more thing that I kind of wanted to make sure that we covered before we got to get a little bit more detail into the current market now that we've gotten that overview. And that is just kind of a little bit of a comparison to how 2021-2024, that four-year cycle, how well it tracked.

In terms of, you know, versus the historical from 1949 to 2020. A little scary for me. You know, it's like almost too perfect. You know, like I've said, like it's going to break at some point. It hasn't yet. And we're still tracking, as we showed earlier with the post-election year, you know, but it was uncanny.

what a guide this was, especially, you know, I know we had a little extra dip here in 22 from, I'm trying to point to it, but my mouse isn't working here, at the end of, for NASDAQ and the thick blue line there. That sort of broke away from it. So maybe there's a little, you know, the end of 22 when we had that sort of, the December low for NASDAQ, you know, that was a little bit,

sort of breaking from the cycle, which is, you know, when things aren't perfect, it keeps it going. You know, like if, if everyone was, was believing it, it wouldn't work. You know, if everyone was, was tracking it, it, it, it wouldn't, it wouldn't be able to function because people would, would know what's going to happen and they would front run it or anticipate it. Right. Um, uncanny how we tracked, uh, from the whole four year cycle, right along with the, the general trend of this four year cycle going back to, um,

Post-World War II. I mean, and it doesn't work as well before World War II. It's a different economy. You know, I talk about how the seasonal pattern also was different back in the first half of the last century where you had a more agrarian economy driving things. So you had sort of a kind of a buy in May, sell in September type of thing with the harvest and everything being driven there. But –

So things do change. And then, you know, like we referenced the 90s, you know, they were straight up, the late 90s. The four-year cycle was – there was no midterm bear markets. Excuse me. So it hasn't always worked. But it's – if it is tracking, it's helpful. And that's the thing with cycles in history. If it's tracking, you got something to look at. Otherwise, you know, we can revert to other technical analysis and other –

and fundamental analysis. I know there's some people who think it's all tactical. As we kind of talk about the current market,

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See if you qualify at oracle.com slash wallstreet, oracle.com slash wallstreet. As we kind of shift there, and again, I'm showing 2000 right now just to kind of show what the 90s looked like, especially how the slope really changed there at the end. You were kind of going at one level and then really kind of shifted to another level. But

In terms of the overall where we're at right now, just looking at the S&P 500, you already said you expect a little bit of a weak February, but then there's that reset in May. Are there ever any...

trends that you look at in terms of cycles with oil, natural gas, you know, things like that. There's a whole focus in the Almanac and in our newsletter about sector seasonality, including commodity and overlapping with stock sectors. You know, it's interesting we're having the drill, baby, drill, you know, discussion coming out of D.C., which, you know,

You have more oil. Prices are going to go down. It's going to potentially adversely impact the stocks that make money off of the companies that make money off of the price of oil. So your XOM sector or your XLE or whatever you like is definitely struggling a little bit.

There's an oil trade that we get into in late December. I picked up the XES, which is the equipment stocks. I think they will be less –

impacted by lower oil prices because there'll be more drilling so people will be using these companies to do this stuff. The old picks and shovels idea, right? Correct. Thank you. Make the money. They don't need to strike oil. Which was a big trade for AI too, the picks and shovels, which has got turned. It's got...

It's gone the other way a little bit now with all the infrastructure stuff. Now it's all software is where it's sort of shifting there with AI. But this is just, you know, a play on the seasonality of oil and gas and energy and exploration. Then, you know, natural gas specifically for, you know, supply and demand issues. Yeah, the UNG there –

tends to have a low point if you go to try the daily there okay tends to go um tends to bottom in february uh right at the uh midwinter um as they start to restock things um but uh you know gas is still one of the cheapest um forms of of energy you know electricity generation natural gas um

It's clean. And you see this recent dip here. I don't know what the charts there are looking at, but I think it was a little bit. So this is UNG, the ETF. But I can switch to your slide if that will kind of make it easier for you. Yeah, because that's got the futures on it too. Yeah, let me switch over there. But this, UNG tracks it. And it's just kind of setting up for the seasonal trade trend.

In the UNG. And, yeah, we got the MACD on there, which is looking like it's ready for a crossover. You got stochastics turning, relative streets coming up off the mat there. And we're sort of bounced off that up in the top pane, the green dotted line from last month is the one last month is the pivot point support, monthly pivot point support.

And, you know, the pink is 50-day and the red line is the 200-day. So we're kind of right in between this area. We've come off of this run. It's...

I don't have the seasonal line on this chart, but we'll be looking at that tomorrow for subscribers. And we'll be looking to get into gas as it sets up nicely with the history and the seasonality and the current trading. And the technicals are all kind of aligning here for this seasonal gas trade. And that's kind of a textbook example.

of how to use these seasonal patterns for a particular asset class, particular sector to make a trade or to, you know, make... I mean, it's a swing trade, you know, a seasonal trade here, but this is a pretty good setup. Right. And then, you know...

Also, I guess no market discussion would be complete necessarily without a little bit of a chat about the 10-year treasury because it's certainly been on the minds of folks, you know,

as the 10-year Treasury yield has really come up quite a bit. But, you know, it paused right around the same area, you know, kind of came up to five again and then started retreating in a big way. Yeah, you see, the blue line here is the S&P. You see, you know, we had 4.3% as this line in the sand earlier.

you know, for a while. Uh, and then the four and a half, it seemed to become a little bit more frightening because once we got through that back in, in December or we headed towards it, you see the SMP started to come down. Um, and then as we retreated, you know, it's almost a pretty, pretty direct correlation with the peak of the 10 year up at like near 5%. Um, and then the bottom of the SMP in early, mid early January, um,

And now it's retreating a little bit. I think there's some other news that moves the S&P that we've been talking about coming out of Washington, D.C. and elsewhere. But, you know, we're looking – I think this is from yesterday's close. So we were a little weaker today. I think we were down at 4.4, which is nice. And the 10-year is kind of like the –

They say Copper is the economist or Dr. Copper. I think Tenure's got a PhD in economics and interest rates, obviously, and it's kind of a combination roughly of...

Economic growth, GDP, and inflation, say the PCE deflator, which was 2.3 GDP last reading and 2.6 on the PCE. So you're looking at 4.9, 10 years, telling us that rates are going to come down, what, about a quarter? Probably June.

The Fed may have screwed up in 22 with the transitory inflation stuff, but they seem to have found religion and have been on top of things. I wasn't real happy with that 50 point. I think that was a bit wacky. Back in September, the 50 point cut. I think they paid for that a little bit. I think it should have been a quarter. But maybe they were just trying to like –

And what they did in December was reset expectations. Yeah, right. And that's what had the market going down as rates went up, just like we just described in this chart here. So if –

the economy softens a little bit or inflation pulls back. It's been pretty steady. I run an inflation chart off of the FRED database with the PCE, the PPI, and the CPI on there. It's still inched up a little bit, but it looks like it's going to go in sideways. And if

If that remains calm, maybe the Fed will give us a little more cut and surprise the market on the upside with a little upside boost, a little bit under the market there. In that regard, it seemed for a while all of the –

there was such a focus on every single CPI report, PCE report, jobs, you know, jobs report, jolts, everything. And, and even the, even the Fed, you know, meetings was, you know,

A lot of volatility. And then it kind of seemed like after September, it turned into a little bit of a non-event. And then, of course, December happened. And it was like, oh, now we're watching this again. You know, all the investors are kind of. So do you think that was just a temporary thing? Or is it back to every CPI report is the most important one of your life thing? I think it's going to ebb and flow.

There are going to be periods like the softer CPI number in January was kind of the low. I mean, one of my themes from today was, you know, tune out the noise. There's just too much. Turn off the TV, you know,

You know, unless you're, you know, day trading and really hitting these things and you're good at it, then you really need to just, you know, stick to your guns. I mean, we've had a couple of things get stopped out in the newsletter portfolio. And I personally haven't sold much of it because I'm just being a little patient, you know, and so if it's bounced up, I know there's a lot of volatility right here. You know, you got to be a little calm and patient and, you know.

Check your emotions at the door here. I think everyone's keying on way too much. I mean, one thing that's good about all the tariff threats and negotiations and knee-jerk reactions and revisions and rescissions and retractions is that it's taking people's –

you know, focus away from some of these nitpicky wonky economic numbers that you're, that you were talking about or that we're talking about. So maybe that's a positive, maybe that's part of his art of the deal is to get people not focused on that stuff and to look at me, look at me while I deal with everybody around, around the world. And don't worry so much about the up one percentage point uptick or basis point uptick in a CPI or, or a fed funds or, or whatever. Yeah.

Well, you know, and I also wanted to kind of cover, you know, we talked a little bit about AI and, you know, kind of the infrastructure picks and shovels that's been happening. And so before this latest tariff volatility, we had the deep seek news. And, you know, you and I were chatting about this is, you know, when these kind of things come out with this technology that is on the newer side, and you've got to expect that there's going to be new technology and, you

upgrades and just efficiencies that happen, how worried should we be about deep seek or someone building a better mousetrap? Is that necessarily a bad thing? No. I think it's positive. I mean, I jokingly call it the deep seek, deep fake.

But, you know, a lot of what they claim is probably not fully true. There's part of me that wonders about the hedge fund that's behind it. Maybe they were short NVIDIA or something. But the good news is, is that, hey, we can get innovation out of guess what?

you know, bootstrapped, low budget innovators, you know, in a new technology as opposed to the, you know, mega cap behemoths that are trying to control everything. I mean, Dell computing, he came out of his dorm room. Yeah. Bill Gates and Paul Allen were in a garage. I mean, there's a Packard, same thing. It started in the garage. It goes on. I mean, all of these innovations, they don't come from the big players. There's a, there's a,

a quote I have in the almanac from Cisco that I was about, you know, I got to look up. It's one of those almanac quotes, but it's along the lines of the innovations don't come out of the big boys. So this is sort of a reminder, a little canary in a coal mine or whatever, that it's not, it's not all about having all this hardware and all this processing power. Maybe it's about innovation and people finding ways to write some code and some software. So it kind of,

It's encouraging to me that we're going to be able to see some innovation. Aside from the Chinese-backed company shenanigans, that it really just sort of means that, hey, there's a real good opening, and we should encourage and nurture the small company, budget-strapped companies.

Yeah.

How many people knew that the Internet and all this processing power was going to be used for phones and, you know, and all the things that, you know, that Wi-Fi brought? You know, I mean, heck, we were starting with that broadband, you know, type thing. Remember when we called it the World Wide Wait?

Yes, exactly. You've got to get your newspaper while you're waiting for the thing to dial up and connect. Yeah, I couldn't even imagine how long it would take for a video like this to play and download. It would be like three days or something. It wouldn't play.

Yeah, absolutely. Yeah. So, yeah, again, I think I absolutely agree with you. There's there's a lot still left to figure out here and who those leaders are going to be. I mean, the leaders in the 90s, you know, there's a whole host of.

companies that no one even remembers anymore and those were the greatest things and it's not just about leaders it's just about some companies that innovate and use it to make some money and there might not be the leader of the ai industry that might be some trucking company that uses it or some health care company that uses it to you know get better treatments for people and they make money that way by making it more efficient making doctors more efficient well jeff i i

I tell you, every time you're on, I just have a great time. I love, again, the way that you have this organized on the Stock Traders Almanac. It's a data junkie's dream, what you put together there. And so for folks that, again, maybe haven't tried your newsletter and your subscription, you basically send out an almanac as part of the subscription. And that's at StockTradersAlmanac.com.

Anything they should know about that? I mean you just did a presentation. You're doing presentations all the time for your subscribers. Yeah, we do a monthly members-only webinar. We recap everything and give our whole outlook and run through. Some of what you put up today was from that. It was a bit of a tease on that. But there's more. There's more. There was a whole thing on Bitcoin seasonality, gold, etc.

Oil. And we also spend a good half hour or more on Q&A, taking any question. And if I don't know, hey, we don't know. We'll look into it. But we do have a nice back and forth, and people seem to appreciate it. We get some ideas from people as well. So if you go to StockTradersOmenak.com, you can click on one of the things that you might be for subscribers only. You can take out a free trial. GetSTA has a –

savings code everyone gets a free almanac with the subscription and if you want to see the webinar you subscribe and you know you'll be able to get the slides and and and the the replay and then i should also mention that you share a lot of information on your your uh twitter feed or x feed um and that's at almanac trader uh a great follow there and uh you you're doing videos with a lot of folks uh you're on cnbc you're you're kind of everywhere so yeah we get around

Yeah, very good. Well, Justin, I always appreciate chatting with you. Thanks so much for taking the time and coming on the show again. Always a blast. Thanks, Justin. Okay.

That's going to wrap it up for us this week. Please join us next week. We're going to have another returning guest. It's going to be Will Ryan from Granite Shares. Last time Will was on the show, we talked a lot about the innovations that he was doing with some of the single stock ETFs, ETNs, ways to get leverage in single stocks in a kind of a different way. So,

it's going to be great to talk to him a little bit because a lot has changed since he was introducing those things for Granite Shares. So it'll be great to talk to him. We hope you join us. Thanks for watching this time around. See you next time.

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