Market Sets Trap; Most Crowded Trades Revealed | Jason Shapiro

Nobody's worried for their job, but they're all worried about everybody else's job, right? And the truth is, it's probably going to take all of our jobs. It's not a bubble like historical bubbles have been. It's just not. It's almost the opposite. There's a fine line between being contrarian and just being stupid. And I am very aware of that fine line because I have been on the wrong side of that line many, many times. It's Tuesday, September 22nd, and we're back Jason's a veteran trader, and he's been in the game for decades. He was featured in Jack Stryker's book, Unknown Market Wizards, the best traders you've never heard of. Well, we've heard of Jason on the show, and he likes to take or identify the most crowded trades and do the contrarian bet, which is to go against the crowd, or at least identify where the risk return tradeoff is not there anymore and stay away. So that's what he's going to do with us today. Right now, traders on Caushy, a prediction market, are bullish right now on the NASDAQ. Sentiment is rather bullish, not extraordinarily bullish, but rather bullish. Jason's going to give his view on the indices and whether or not he agrees with how traders are positioned in prediction markets. So on Caushy, we have a 59% chance that the NASDAQ 100 will get to 31,800 above or above by the end of the year. It's currently just under 31,000 at 30,600 points. If you agree with this particular market, a $50 trade can yield a payoff of $76 if you're right. This video is sponsored by Caushy. It's the largest prediction market in the United States. Unlike a sports book, you're trading peer-to-peer on real world events, from economic data to political outcomes, and the price moves based on public opinion, not a house. Go to the link in the description down below, scan the QR code here, and use my code LIN, L-I-N. New users who use my code can get $25 in app credits when they trade $25. Caushy is CFTC approved and available in all 50 states, including California and Texas. Welcome back, Jason. Good to see you. Good to see you, David. Let's start with what's crowded and what isn't. The 10-year yield has been making waves on the mainstream media pretty much most of last quarter. At 5%, it has a lot of people worried. Let me just pull up a chart of the 10-year yield. Let's start with the bond market, and then I want to move on to oil. And then Bitcoin has been surging in the last 48 hours as well. We're speaking today on the 22nd of September. Okay, Jason, take a look at my chart here. Straight line up. And yeah, this speaks to a global sell-off in the U.S. treasuries. What's your take? Yeah, it speaks to a global sell-off in the U.S. treasuries. It's not just the U.S. treasuries, by the way. It's about every treasury bond market in every country other than China. A lot of people are focusing on the U.S. and what the treasury secretary wants to do and all that stuff, but that's just not what the problem is. The problem is all these government bond markets, and I think people maybe are forgetting that a little bit, right? This guy can buy all the U.S. treasuries he wants, but unless he plans to buy Japanese, German, British, you know, everybody's treasuries, I don't see how he's going to stop it, right? And if he keeps, for whatever reason, U.S. rates lower than where they theoretically should be, then the dollar is going to suffer, and if the dollar suffers, then, you know, you're going to have an inflationary problem, and if you have an inflationary problem, then it goes right back to the start, which is a rate problem. So, they're kind of, I believe, stuck between a little bit of a rock and a hard place here. I think the only solution, I don't think there's any traditional macroeconomic solutions. Well, there are, but none that will actually be done, you know? The easiest solution is what any normal person does when you are spending more money than you're taking in, which is you tighten your belt, but that is not something that governments do anymore, right? They don't tighten their belt, and it's not something the U.S. government has the ability to do, I don't think, because they have to be elected, and nobody's getting elected on the back of that thought, right? I'm not going to get up there and start making speeches that, you know, I'm running for Senate, and what I want to do is give you people less money and charge you people more in taxes at the same time. No one's going to elect me on that. So, therefore, the idea of tightening their belt is never going to happen. We've become completely drunk on the idea of, you know, of this for a very long time, but in particular since 2009. So, that's not happening. The only way that I can see something happening to solve the problem is this whole idea of creating demand for U.S. government T-bills through the issuance of, you know, these coins, right? And that was why it was such a big deal for the legislation to go through, which didn't go through, but most likely will at some point, and I'm no expert on this, okay? So, I can't speak to the validity or not validity of the idea, but from what I have read and listened to and understand about it, that seems to me like the only viable option for them to increase at least demand for T-bills. So, then, therefore, they can, if they can increase the demand for T-bills and they can fund using short-term rates and use that money to buy back, you know, possibly some of the long-term debt, which is kind of what they're doing now. So, maybe that's the answer. And what I kind of like about that answer is it's not one that anybody that looks at traditional macroeconomics or somebody that looks at economic history, people like me, for example, could ever understand, you know, because we're too old to understand that and it's too new to understand that. No traditional economist is ever going to really understand that because it doesn't show up in your old economic, you know, books, you know, because there's never been such a thing. So, I kind of like that idea. Again, whether it works or not, it's beyond my scope, but I think that's the only thing that can really help. What would make you a buyer of bonds at this point? What would make me a buyer of bonds at this point? If we saw a complete capitulation by people, they gave up and they said, forget it, it's over. The U.S. government is going broke and is never going to be able to make these payments. And, you know, if we saw something like that, then I would be much more interested in buying bonds than I am now. As it is, we are seeing... Sorry, Jason, in that scenario, wouldn't yields go up even more? They would. And then I would be like to buy them. I don't want to buy them before everybody gives up. I want to buy them after everybody gives up, right? And quite frankly, that's not what I'm seeing at all. I'm seeing the opposite, what I'm seeing and hearing. And it's not just me and it's not any kind of bias. I would love to buy bonds here. I would love to be contrarian and buy bonds here. But what I'm seeing all over the place and what a lot of the people on our Discord are reporting, they are seeing and hearing and what a lot of the people who I am talking to are saying is that there are a huge amount of people trying to be contrarian here and buy bonds. And I think it's a mistake. I have, again, I say it all the time, but there's a fine line between being contrarian and just being stupid. And I am very aware of that fine line because I have been on the wrong side of that line many, many times, which has helped me to develop my whole contrarian process in different ways to keep me from hopefully being stupid rather than just being contrarian. And what I'm seeing is people that are doing something that they think is contrarian, but I think they're being stupid. And like I say, the only reason I recognize that is because I've done it so many times myself that I recognize the thought process. So we're not seeing, I don't believe, capitulation. I think we're seeing the opposite of capitulation. We're seeing a bunch of people trying to be contrarian and buying bonds. And even if I'm reading that wrong, the truth is getting run over doing it. So the market is telling you that they're wrong for doing this, at least for now. So that's kind of how I'm seeing it. All right, let's move on to equities and commodities. So every day when I opened up the mainstream news, CNBC, I like to read CNBC before Bloomberg and WSJ, but Nasdaq climbs to fresh highs. And then they always mention oil. For the last couple of weeks, they've consistently mentioned oil. I don't want to say as a reason for why stocks have moved, but they put it in the same title, in the same article. For example, you see here the Nasdaq composite rose to fresh all time highs on Tuesday. And then third paragraph, oil prices move lower. So it makes me think that oil has been trying to, sorry, let me put it this way. It makes me think that oil has been moving the stock market. In other words, the stock market is trading up when fears of inflation goes down. And certainly, the oil market has been falling in the last couple of days. Anyway, do you see it that way? Are the stocks kind of intraday responding to oil here, Jason? Certainly on a shorter term basis, you can make that argument. Obviously, oil equals inflation, equals bond yields going up, equals bad for stocks is kind of the process. And oil being the big one. But listen, oil went from, I'm just trying to look, from the mid 70s in the beginning of August to over 100. And the S&P went up in that period, whether you like it or not. The S&P is at a new all time high today. Sure, oil is off its highs, but it's still a hell of a lot higher than it was. So on a short term basis, clearly that probably sells a lot of newspapers, that whole idea. But look, the stock market has been extremely resilient. I think that's the main story. Been resilient to oil, it's been resilient to higher yields, it's been resilient to the crazy things that can come out of Donald Trump's mouth on almost a daily basis. And it's been resilient now to the idea that AI is going to end humanity, which was the word that we got basically last weekend. And the stock market went up last week after that. Opened down on Monday morning and never saw those Monday morning lows again. So the stock market has been very resilient to all this stuff. All right. Well, I pulled up the Commitment to Futures report for energy markets, options and futures combined. Just tell us how you would be reading this here. I mean, it's hard to read. I've got it on my screen. I've got it on my... Oh, yeah, it is a little bit hard to read your screen. So I've got it on my... They haven't really looked. The bottom line is what we're seeing, the commitments of traders data. Well, I'll just show you the numbers here. Just let us know if it means anything to you. So you've got almost 30,000 contracts and then long... Let me see. Total long, 13,000 positions. Total short. Oh, that's producer merchant, 25,000. Swap dealers long, 1,800. Short, 400. Managed money, nothing there. Other reportables, 10,000 long, short, 400. When you see something that's overwhelmingly on the long side versus short, is that a contrarian indicator to you? It is, but I don't read this as overwhelmingly on the long side. From the way that I read this data and the way that I use this data, it's actually been quite surprising, not just in crude, but in Brent crude, in WTI, in heating oil, in unleaded gas. What's been surprising is the lack of chasing by speculators that has gone on in energy, quite frankly. In my view, they should be, given the move in the markets, I think that they should be a lot longer than they are. So it kind of scares me a little bit that they're not. Now, in fairness, I trade the traders across all my markets, and the worst sector, for whatever reason, in the 20 plus, 26 years that I've been doing this, has been the energies. Sorry, what do you mean by worst? Yeah, go ahead. The one that's given me the worst trading results using COT is the energies. Don't know why that is. Don't know if that just happens to be a coincidence for the period that I've done it. I don't know. But I will say that it has not been great. The COT has not been great for me in energies. But if you ask me what it reads, from the stuff that I look at, it reads that speculators should be a hell of a lot longer than they are, which means they have a lot room to get longer, which means that maybe we're not done going up just yet. We're entering October now. Before we go back to the stock markets, is the October effect a myth? The idea that October is a month for selling, basically? I think that I'm not... Look, everybody does what they do. I'm not here to judge how anybody trades. If what you do works, then that's all you need to know. I am not personally a user or a believer in seasonality stuff. I see it all the time. I mean, look, September was going to be a horrible month. September is supposed to be the worst month, right? Seasonality-wise. How's that worked? The seasonality stuff that I have seen come across Twitter, across my screen on Twitter the last year or two has just been absolutely not good. And I think it's because the market is a discounting mechanism. Once everybody can see that, then it's not going to work anymore because everybody's on it. And on that same subject, I know you're going to want to touch on Bitcoin here. And I will sort of talk about the seasonality thing to get into the Bitcoin thing, because I think it's the same type of thing. Why has Bitcoin rallied the way it has? And I know that people will give you a million fundamental reasons and this, that, but in my view, and what I've been talking about, about it is that we have this four-year cycle thing that these people like to talk about, right? Which again, to me, is complete garbage. We've had two four-year cycles. So now all of a sudden, everybody thinks that that has to happen for the rest of mankind, which is garbage. B, once something happens twice, all of a sudden, everybody thinks it's a seasonality or it's this thing. And so therefore it's going to work. And I've seen a ton of people who I know who are Bitcoin bulls, who believe in the Bitcoin story, which is fine, but have either stayed out because they've been trying to time the low at the four-year cycle, which is supposed to be sometime in October or November. And so they have completely missed it. So there's like this underlying bid in Bitcoin now by people who have missed the low and now need to chase. And I think that's why Bitcoin is so strong. What's going to be interesting is come December when we have passed the four-year cycle low officially, what happens then? That's what's going to be interesting to me. But for now, I think that there is without a doubt an underlying bid in Bitcoin by these people who have missed the four-year cycle. I can't comment on the cycles, but I know what you're talking about. I can just comment from a media perspective because I follow this stuff. So Bitcoin surged middle of August. On August 19th, when the Treasury first announced it was going to start intervening in the bond markets here. Surged for two days. Everybody in the Twitter sphere concerning crypto and Bitcoin commented that it would be the start of a new bull cycle. Then it flatlined for a couple of weeks and that rhetoric went away. Just in the last 48 hours, Bitcoin surged by, let's see, 13%, 14% again. So we're seeing the same pattern again right now. I'm not really sure what caused it. If you're watching this, comment down below what you think this seemingly very random surges because there wasn't an announcement for the Treasury in the last two days that I know of. So what's been causing this? We can talk about that. But what I want to talk about is now people are coming back out of the woodworks again and saying now is the start of a brand new bull cycle, once-in-a-lifetime opportunity to buy right now. And it's interesting because that bullish conviction kind of goes away when it goes sideways. Whereas where it's different back in 2021, almost every single day in the bull market of that particular time, almost every single day, despite where the market's going, everyone was talking to mainstream news as well as podcasts like this one about how bullish they are on Bitcoin. But now it seems like people are following the price. What does that tell you? That's become a normal market, just like every other market. And people just get emotionally tied one way or the other based on price. I mean, you, if I remember correctly, the last time we talked a few months ago, you nailed it. Bitcoin was basically on lows back then. And you were like, you went to this Bitcoin conference and there was nobody there. Whereas you used to go before and there would be thousands and thousands of people there. And that was the low, right? But personally, I really think the closer we get, I don't know what the exact four-year cycle low is supposed to be, but it's supposed to be somewhere in October or maybe early November. The closer we get to that, the more people have to get involved because they are out. I even have seen some people who have been super bullish Bitcoin have missed this low. And so we're now in classic bad trading behavior, are now shorting it as a way to make up for the fact that they didn't catch the long, right? Which is just such bad behavior. And that's why it's squeezing higher. From a trading perspective, that's why it's squeezing higher. The closer we get to this ultimate four-year cycle low, the more these people have to buy into it. And so this underlying bid is just, it's just there, right? And like I say, what will be interesting to me is when that's gone. Have they all gotten in now? Okay, now it's December. The four-year low has passed. So now if you're going to be in Bitcoin and you believe in Bitcoin, you've got to be in. There's no excuse not to be. So that's going to be the big question to me. Well, right now, are you staying at a Bitcoin or would you be buying right now? I'm not a trader of Bitcoin. I own some Bitcoin from when that big blow up happened at SPV or whatever his name was. Yeah, Sam Bankman freed SPF when he blew up and the Bitcoin ETF was trading at like a 40% discount. I bought some of that then. That seemed like some good risk reward then and I still own that from then because why not? But I don't actively trade Bitcoin. I do actively follow it because it's an active market and we discuss it a lot. Is there a particular reason you stayed out all this time? There's a lot of particular reasons, but one is that the history of the commitments of traders data is not long enough for me to make any decent conclusions. And I use that data very much in deciding what trades I'm going to put on. All right, let's turn now to equities and we'll talk about the indices. The Nasdaq is flat today. Let me just double check the price. Yeah, Nasdaq. Yeah, it was up a lot yesterday. It's flat today. S&P is flat as well. Yeah, S&P is within striking distance of new all-time highs. Traders on Caoshi prediction markets are pretty bullish, but not extraordinarily bullish. So 87, 89% chance that the Nasdaq will close above 31,000 by the end of the year. Nasdaq 100. This is the Nasdaq 100 currently at 30,600. So about current levels or above. No one's saying it's going to go to 40,000 or anything like that. But right now, sentiment is relatively bullish, I would say, just looking at these odds here. You look at the commitment of traders report. Does this sentiment more or less line up with the data that you've been looking at? I think so. I think it shows positioning is bullish, if not out of control bullish, just like you said. Sentiment might be bullish, but not out of control bullish. I'd say positioning lines up exactly as that too in the Nasdaq. I would make the observation when talking about the Nasdaq, and I only make this observation because it just so happens. The last weekend, I was reading a book, and they were discussing a lot. And it wasn't even a market book. It was a psychology book. But they got into the talk of the South Sea bubble. And it was a whole long thing about the South Sea bubble and the whole stories and everything. And what I got out of that was that this is not that. Can the Nasdaq and the AI thing, can it go down? Yes, it can. Markets can go down for a lot of reasons. But what I'm telling you is it's not a bubble like historical bubbles have been. It's just not. It's almost the opposite. You think about it. We have people, my wife, who's a teacher, my daughter, who's a 20-something-year-old hippie, all they talk about is they hate AI. People going to their town hall meetings saying, we don't want you to build a data center in our town. They hate AI. People coming out and saying that it's going to end humanity. This is not bubble talk. Bubble talk is when everybody in the world loves it for every single reason. And in the meantime, as much as my wife likes to say she hates AI and this and that, I don't think she even knows, but the vast majority of the things that we do, I'm using AI to do. We redid our kitchen. We redid our bathroom. It was all done with the help of AI, which saved us time, saved us money, got the job done the best and most efficient way that it could ever be done. So I just don't see it as a bubble. Does it mean that it can't go down? No. Markets go down without them being bubbles. You want to argue to me that they're overvalued or that the financing is drying up or whatever other reasons you want to come up with to be bearish? I'm not going to argue with you. But just don't say it's a bubble because it's not. It's not the classic bubble that we have seen in the past. And if you think it is, then do some reading on what it looked like when these things were actually bubbles. The frenzy is a thousand times more than what this is. Do I think it could become a bubble? I do think it could become a bubble, but if by chance it becomes a bubble, you want to be long this stuff, not short it. Yeah. And I'm just going to pull up, okay, just something to support what you're saying here. This is from Ed Yardeni. He's bullish. I have him on the show sometimes and he goes on mainstream media as well. This is an interesting, I get his subscriptions and so I get this email in my inbox and I had to click on this title. Tech is top dog again as investors conclude it is cheap. And at first I thought, okay, he's rage baiting me to click because it worked. Because nobody I talked to on my show think it's cheap. But he has a point. If he's making the argument and I won't read the entire thing. If an analyst or an economist is making the argument that forward guidance or at least analyst expectations for earnings is picking up, then the valuations are coming down. So I guess from that perspective, it's becoming cheaper than what it was last year. Do you look at forward estimates for earnings at all? No. No? No. No, because they're never accurate. So why am I going to look at something that's nothing but a interesting, hey, earnings this. But they're never accurate. But you know why they're never accurate? Because people don't know what the future looks like. And if there was ever a future that people don't know what it looks like, it's the future now with AI. You're telling me somebody knows what the AI future is going to look like? The outcomes are so all over the place. And there's almost no way even the people that are the head of the AI companies are saying that they don't know what it's going to look like. It's silly. It's an exercise in futility. So is it cheap? Is it expensive? I don't know. Can you tell me what the earnings are going to be for the next 10 years? Because if you can, then we can talk about whether it's cheap or expensive. But I don't think you can get anywhere close to telling me what the earnings are going to be. Were you telling me five years ago what the earnings for NVIDIA and Micron were going to be now? Because if you were, you were nowhere close, I can guarantee you, to what they actually are. I just brought up Yardeni as one example of somebody who does not think it's as much of a bubble as other people. So that's somebody who would agree with you on that. But you know, he's looking at it from a more fundamental valuations perspective. Now, I think some of the rhetoric about why AI is a bubble comes from the valuations of companies that we do know. 21 times, 31 times EV to revenue. Anthropic is at $2 trillion valuation right now. It hasn't even IPO yet. I've actually talked to people who work in Silicon Valley. And they're actually, this is a private conversation. They're contemplating working at some of these AI labs. And my friends are talking him out of it and saying, well, look, I don't think these valuations are going to stay up for that long. And so your options are going to be worth a lot less a year later after you take the job. This is kind of an internal conversation that people in Silicon Valley are having. So it's moved beyond Wall Street. And I don't know what they're basing that off of. Do they have any ability to? No. You know what I mean? They could be right. I'm not saying they're wrong. I'm saying they could be right and they could be wrong. And the more people are betting against it, the more chances they're going to be wrong. Because that's just how markets kind of work. I want to come back to what you said earlier. This doesn't feel like a huge mania. Tell us about an actual mania you've seen in your career and how it's different. I mean, just go back to the 08 one. We've all seen the movie, The Big Short, right? Yeah. And what was the big scene in The Big Short when they figured out that this was a mania and a They went to a strip club. And the stripper owned five condos, right? And didn't even know really what her interest rate was. Didn't care about any of that, right? Okay. I know you like to go to strip clubs, David. Who was the last stripper you spoke to? Was she telling you that she owned Micron Leverage 10 times and she owned NVIDIA Leverage 10 times? I'm going to bet the answer is no. All right, everybody go do some market research right now. Go to a strip club. Write in the comments down below and tell us what the people there are buying right now. And we can go short it. No, I'm kidding. But you have a point. What they're talking about, I'd be willing to bet, is the idea that AI is going to end humanity. That's what they're talking about. They're not talking about how much stock they own, leverage and all that. My bet is they would be talking about, because that's what's all over. The top thing on Netflix, my wife made me watch it this weekend, was this thing this weekend about AI and ending humanity and all that stuff. This is the headline of what this is. That was not the headline in the 2008 bubble, was not how housing prices were going to crash and everybody was going to go broke and the government was going to have to bail out every institution by inventing a new way of creating money. That was not what people were talking about. That's what happened, but it's not what people were talking about. The bubble that's called the internet bubble, that is not what people were talking about. In fact, in the internet bubble, what they were talking about was they were right, that the internet was going to change the world. And it did, but it didn't stop the stock market. A lot of these internet stocks are going down 80, 90, in some cases 100% first. This goes back to one of your wife's fears, and I wonder how this is, you know, regular people perceiving AI. I wonder how this translates to trading. This is what impact do people think AI will have on jobs. So at the top, we have pretty much the wealthier countries around the world, Australia, South Korea, US, Greece. Fewer jobs are in blue, not make a difference. More jobs are in green. And if you go down the list, you'll notice that the developing countries, interestingly, have higher hopes of AI adding jobs than destroying jobs. This is from Pew Research, it's a survey. And, you know, teachers, lawyers, professionals, probably fall into the blue category. But does this have any, when you look at something like this, do you think to yourself, gee, does this have any impact on how AI will be perceived in the markets? It has to. Listen, I went to a dentist a couple weeks ago, and she was a young dentist. You know, a nice young woman who just came out of dental school recently and did a great job on my mouth. And, you know, she was a little young, a little sort of unsure of herself, but she did a great job. And I said it to her on the way out the door. I said, you know, you did a great job. I said, you explained everything to me, which is very appreciated, you know, and I've been to a lot of dentists in my life. I've had horrible teeth and gums, and I'm telling you, you did a great job, and you're going to be a great dentist. Yeah. And she was like, thank you. I said, but I don't know, of course, I have to say this, which is the wrong thing, but I said, I don't know if that's going to be any help to your life after five years from now. She's like, well, what do you mean? And I said, well, I mean, I'm probably going to be doing all the dental work anyway, so I don't know if being a great dentist is going to mean anything. And her answer, of course, was, oh, no, AI can't do what I do. You see what I did with your gums and how I did this? They can't do that, which personally, I think is inaccurate. I would believe that they would be able to build machines over time that can do a much better job than a human can, right? Stick a bunch of lasers. And that's how everybody feels. My wife, she's a preschool teacher. Oh, nobody's going to want robots taking care of their toddlers. They want human interaction taking care of the toddler. Probably. Forget about my wife. Forget about the dentist. What about me? Oh, AI's never going to be able to get a judgment on the psychology of the underlying traders in the market and be able to fade them and understand all that like I can. I think the same thing. Everybody thinks that AI is going to affect jobs, but it's not going to affect their job. My brother's a lawyer. Tells me the same thing. Oh, I do AI and all it ever does is give me the wrong answers. So I'm not worried, right? Nobody's worried for their job, but they're all worried about everybody else's job, right? And the truth is, it's probably going to take all of our jobs. Again, I'm no expert on it, but if it's even close to what is being advertised, then it's going to be a lot smarter than all of us. Let's think about your trading. I mean, definitely smarter than me, but let's think about how you trade. In theory, we might be able to construct a robot or an algorithm that trades using the kind of metrics that you look at. However, your human judgment still kicks in. So if we were to build a set of rules around how this robot trades, according to your style, market signals, contrarian sentiment, what would you say gives you a human edge? In other words, when you step out of the rules sometimes and it works for you, how would that be? Well, again, I don't know if it does, but again, the bond thing, okay? Rules based on COT and all that stuff would have had you looking to get long bonds probably three to four weeks ago. I avoided that. Why? Because my read that people whom I over time have found to be pretty inaccurate, not every time, but over time, individually, but certainly when they all start to do the same thing, it even increases the percentage that they're wrong. Those people have all been doing this contrarian by the bond trade. So that has kept me from doing it. Can AI suss that out? How did I learn that? Well, I listened to the YouTube video of this one guy and he was saying he thinks that buying bonds is a great contrarian trader. This was a month ago. That was the first thing that sort of pricked up my ears about this is a bad idea because that happens to be my favorite fade because he has proved himself wrong a vast majority of the time. And then, okay, I have people on my discord. Now there can be some biasness in this, both in my view and in their views, but suddenly everybody on discord is talking about how their friends are all buying bonds because they all think it's the contrarian trade. Then I ended up talking to one of our institutional clients. I had a zoom meeting with him for about an hour and he trade for a pretty large hedge fund up there in your area of the world. And he trades nothing with fixed income. And he said to me, and I didn't bring it up. He brought it up. Okay. He said to me that the people that he talks to in the market and other hedge funds that do what he does, trade bonds, trade fixed income. He said, almost every single one of them is trying to make the contrarian trade and buy bonds here. And they're all getting run over doing it. Okay. So when I hear all one thing is one thing, but when I hear all of a sudden, all of these things, and then I watched the TV and I hear people saying that all day as well, right. When all these things are happening at once, I'm saying to myself, okay, it can't be the contrarian trade if everybody is calling it the contrarian trade. Can AI do that? Can they pick that up? That would be my question. And I would assume that if their intelligence is a thousand times more than me, that they should be able to pick that up. Yes. Will they? I don't know. Well, what right now is the most crowded traits or are the most credit traits for you, there's more than one. The most crowded trades are in the market that most people probably don't care very much about, but it's sort of the agricultural sector. We've had this super El Nino thing come up in the last few months. And we've also obviously had worsening of the war in Ukraine and all that, which is where a lot of wheat comes from, a lot of grains come from. And the grain markets and sugar, those types of markets have gone up a lot based on the back of all that stuff. And with it going up a lot, we've had a huge chase by speculators into that stuff. So those are the most crowded traits. Sugar, corn, soybeans, soy meal, those are the most crowded traits. I wonder if that signals a peak in inflation as well, at least for food at home. Think about it. If we're fading that trait, assuming you're right, then I'm optimistic about food prices plateauing. Well, David, I hear what you're saying. Let's take the other side of that idea just for the hell of it. Just because a trade is crowded does not mean that it has to turn. 70% of my trades lose money, which means they're wrong. All the crowdedness does is give you an asymmetric risk return. If they turn, they have the potential to turn and move a lot because so many people are long that if they start going down, it starts going through the 20-day moving average, the 50-day, the 100-day. All of a sudden, everybody else will start liquidating. You can get a big move the other way. It doesn't increase your chances of getting the move the other way. It just means if you get the move the other way, it can be big. In other words, you're flipping a coin. It doesn't change the fact that it's going to be 50-50 heads or tails. It just changes the payout that if it comes up heads, you're going to get 70 cents and if it comes up tails, you're going to lose 30 cents. That's all crowdedness does. Let's remember that first of all. In other words, it doesn't mean that it's going to go down. Two, a lot of these trades last three to four weeks. They go down. Let's say I short corn or something. It goes down for three or four weeks, let's say 15%, 20%. All the people that were massively long get out. I cover my short, I make money, and then the market just goes right back to where the fundamental was to begin with, which means it goes straight back up. There's that as well. Even if the trade works, there might be a three to four-week respite, but it doesn't mean that ultimately things don't go where they're right. It just means it got a little bit too crowded, it pulls back, and then the fundamental continues from there. There's that risk as well to what you're saying. Having said that, I hear what you're saying. I think that's a good way to read it. If this means that this inflation trade will come down, then that could be good. I don't look at commitment of traders data like you do because I'm not a trader, but I do gather narratives that are commonly discussed in the media. I don't want to put a label on it and say they're overdiscussed or overcrowded in terms of sentiment, but they're everywhere. I'll give you a few just so you can judge them before we go. One is that there's a copper shortage everywhere, or there's going to be one inevitably, and the copper or base metals buildout is going to be the next big oil because of the data center buildout. The narrative that AI grids, EVs, defense, electrification, on and on for years will create this massive shortage in copper and to some extent aluminum, that's popping up all over the place. What do you think? There's no doubt that that's popping up all over the place. There's little doubt that it's 100% true. As long as this AI buildout is going to happen, unless they find some new thing, but it's true. What has happened? Obviously, copper has gotten pretty damn crowded because of that. What has happened? It hasn't gone down, but it hasn't gone up either. Copper is basically trading at the same place that it's been for two months since it got super crowded. Now, it had this big fall last week or the week before, had a pretty decent size fall, which took out about 15% of the longs. This is what I'm talking about. The fundamental doesn't change, but the positioning does. Because you have people who are not necessarily trading the fundamental, they're just trend following. All of a sudden, the thing goes through its 20-day moving average or whatever they're trend following off of, they get stopped out. Now, it's not as crowded anymore. Now, the fundamental can take over again. I believe that that copper thing is right, but it did get super crowded about two months ago, for which it stopped going up because of that. It doesn't mean it has to stop going up, but it makes it a lot harder for a market to go up when you have a huge amount of people already long. It takes money to push something up. That's how I actually- Create a cognitive dissonance. It's like, what do I do when I, let's say, I believe in the narrative, it's 100% true, but at the same time, like you said, it's already gone up a lot and it's starting to get really crowded. Now, I have to think to myself, okay, I want to be positioned in some way because the future is not here yet, but like you said, it's long. It's crowded. How do you talk yourself into either taking action or not in this particular case? It depends on what your investment process is. If you are a fundamental investor and your fundamentals have told you exactly this, then you've got to be long copper in some way, shape, or form. You can be long copper stock, or you can be long copper itself, then you can do that. If that's what you want to do, you still should be using basic trading principles, which is you should be long the one things in that universe, in the copper universe, that are showing the best relative strength. That's what you should be. The things that are trading the best, that's where you should be. For me, I could care less about the fundamental of copper. I trade against things that are super crowded. That's my investment process. I could never be long copper here. I can't be short anymore either because a lot of the length was taken out in the last couple of weeks, but I can't be long, but that's okay. That's not what I do. My clients are paying me and are counting on me to have negative correlation to their trend followers. The trend followers are going to be long copper here. It's almost a new high again. The trend followers are going to be long. My clients are going to have exposure to copper where they should have exposure to copper, which is in their trend following portfolios. That's not my job. That's not my job, so that's not what I'm in. Okay. I'll give you one more thing before we close off. Gold has been moving sideways for quite some time, and even at relatively high prices, I mean relatively relative to last year, exactly one year ago, people have been talking less about gold just simply because it hasn't moved up in a while. That's an interesting case of price level in absolute terms, still relatively close to all-time highs compared to a year or a year and a half ago, but sentiment has waned simply because price moved sideways. Is that an opportunity for you? Not yet, but I think it could be. It could be, but it's not yet. It doesn't trade well. It's not positioned any kind of crowdedness at all. Clearly, there was a semi-frenzy late last year into early this year in gold, and that has, like you say, has waned as the price has waned. It doesn't mean it has to come right back. Sometimes things go a while without anything happening. We wait. We sit in the weeds, and we wait for the injured dough to limp by, and then we pounce. We want the easy meal, and I don't think that gold is the easy meal here. Again, if you're a fundamental person and you believe that the fiat currency system is garbage and that the world is going to come to a financial ruin because the governments have borrowed too much, and they're addicted to borrowing, and eventually that's going to come to an end, and it's all going to collapse, well, then you got to be long gold, but know that that doesn't mean that you have to be right, and know that that doesn't mean that it has to go up all the time, but having a piece of your net worth. Again, it depends where you're coming from and what your goals are, but if your goal is over the long term, I have to have a diversification in my portfolio against these things, and sure, you should own some gold. No question about it. Okay. Excellent. Jason, where do we find you and sign up to, I guess, your services, read your work, follow your trades? The easiest place to go is YouTube, Crowded Market Report on YouTube because there's a ton of free stuff there, hundreds and hundreds of videos and interviews and all kinds of stuff that are 100% free, so that'd be the best place to go, and once you go there, if you like us and you want to become a part of our community and all that, then the YouTube videos will probably direct you there, but you can go to our website, CrowdedMarketReport.com, and do that, and just so you know, we recently brought on some people who have been part of our service for a few years so that people who want to join can make a phone call or book an appointment to have a phone call with these people to talk to them about whether or not it's right for them because what we have found, and these people don't get paid, by the way, they're not getting commission to close you or anything, what we have found is that our service is beneficial for a certain group of people, and it's really not beneficial for a certain group of people, and we don't want that, you know, if it's not beneficial for you, quite frankly, you know what I mean, this is not my source of income, you know, my source of income comes from being a hedge fund manager, and we have found that it actually hurts the community as a whole when people join who are not really right for this, so like I say, you can call up, have a 10-minute conversation with people, hey, does this seem right, and it's not going to be, oh, it's right for you because of this, sign up, it's not going to be that at all, it's going to be, what are your goals, what are you looking to do, and you're talking to somebody who has been a member for a number of years, you know, and can tell you what they got out of it, what they didn't get out of it, and you can kind of decide if it's for you or not. All right, excellent, please do follow Jason and the Credit Market Report, links down below. Thank you, Jason, we'll speak next time, take care for now. All right, David, thank you. Thanks for watching, please do like and subscribe, follow Jason in the links down below, and please use my code Lynn, L-I-N, when you sign up to Kaoshi. Remember, new users who use my code can get $25 in app credits when you sign up and trade $25. Link down below, scan the QR code here.