Daily Newsletter 12/01/25

Index options activity this morning shows balanced positioning with a put/call volume ratio of 0.9 ahead of the market open. This neutral reading reflects cautious trader sentiment amid expectations of a Federal Reserve rate cut. Activity focuses on volatility plays and hedging in tech/semiconductors, with institutional flows seeking both protection and selective upside. Overall, options positioning remains even-handed.

Our takeaway:

The key question is whether the semiconductor and tech rally will continue this week. We believe it will, although a slight slowdown or directional shift is likely today and tomorrow. Following this, the rally is expected to resume, supported by bullish signals despite overvaluation and driven primarily by Fed rate cut expectations, particularly in semiconductors, until market conditions change. We anticipate significant profit-taking initially, followed by a surge of FOMO driving further gains. Our medium-term outlook for gold and silver remains positive, while we continue to monitor Bitcoin closely as a key indicator of overall market liquidity.

Is the market signaling a shift toward quality stocks? Likely yes, given mounting concerns about a potential tech bubble, widespread overvaluation, circular financing practices, and growing investor impatience with high-risk names. We agree these issues warrant caution. However, alternatives like gold and bonds are in similar positions—also overvalued to some extent and certainly overcrowded with capital inflows. The core question, in our view, is whether investors—predominantly retail participants—will actually listen to these warning signs this time around. We doubt it. This momentum, whether viewed as a bubble or sustained upward trend, is poised to continue until external forces decisively halt it.

We are maintaining our positions in tech and semiconductors alongside gold and silver, while continuing our longstanding focus on sovereign ETFs. As shared for several weeks, our emphasis remains on Argentina, Japan, China, and select European ETFs. Diversification remains key, and currently we are balancing our high-conviction tech, semis, gold, and silver exposure with these sovereign plays.

OUR TRADES

We share all our short-term trades in the Tactical Portfolio exclusively with paid subscribers, showing the exact entry time and price for every trade below. Subscribers receive timely buy and sell alerts via chat. Our approach is eclectic, blending macroeconomic insights with a quantitative methodology. We do not limit ourselves to specific markets or sectors, seeking to profit from any short or very short trade that fits our strategy. We use sophisticated option strategies to capitalize on short-term market movements, ensuring full transparency and prompt exit updates.