Market sentiment shifts—why now could be the time to purchase shares and Bitcoin.
Regardless of the market’s pullback that’s persevering with as I write Monday, let’s get bullish.
On Saturday, fellow Digest-writer and InvestorPlace’s Editor-in-Chief Luis Hernandez highlighted the most recent AAII Sentiment Survey confirmed solely 19.4% of respondents are bullish.
This is the most lopsided report we’ve seen in several years…which makes it a contrarian’s dream.
Let’s jump to master trader (and frequent contrarian) Jeff Clark, editor of Jeff Clark Trader:
Again on November 13, 2024 – following the big, post-election rally that pushed the S&P 500 above 6000 for the primary time ever – bulls outnumbered bears 50% to twenty-eight%.
From a contrarian perspective, that was bearish. And shares have struggled to make any headway since then.
Now, with the S&P 500 nonetheless caught close to 6000 and buying and selling down simply 2% from its all-time excessive, the overwhelming majority of buyers have turned bearish.
It’s outstanding that two months of uneven, back-and-forth motion can create that drastic a shift in sentiment. That is the kind of bearish studying we’d usually get following a ten% to fifteen% decline out there.
So, there’s loads of gas to energy the inventory market increased from right here.
Jeff highlights three indicators: Transferring Common Convergence/Divergence, the Relative Energy Index, and the Commodity Channel Index, all of which have been buying and selling just lately in impartial territory.
Whereas such readings imply the S&P may break decrease, Jeff believes it’s extra probably that bulls will reassert their dominance:
We’re getting into the seasonally bullish month of March. And the Volatility Index simply generated its first purchase sign of 2025. So, the bulls have a slight edge right here…
Returning to the AAII Sentiment Survey, keep in mind, the emotional pendulum swings each methods.
Extreme worry all the time offers option to new bullishness…finally. And up to date, heightened ranges of worry recommend {that a} bullish reversal may very well be quick approaching.
Again to Jeff for what he’s doing about that:
If shares begin to transfer increased, then we may see a dramatic rally over the following few weeks as bearish buyers flip to bullish and chase inventory costs increased.
Merchants ought to use any weak spot over the following few days as an opportunity so as to add lengthy publicity to the inventory market.
One sector to be bullish on at the moment
Photo voltaic.
Earlier than we dive into these particulars, for newer Digest readers, Eric is our world macro professional and the analyst behind Investment Report.
He’s additionally one of the crucial profitable analysts within the e-newsletter trade, having recognized 42 totally different 1,000%+ returning investments over his multi-decade profession. That’s greater than anybody we all know of in our enterprise.
In Eric’s newest difficulty of Funding Report, he made the case for why it’s time so as to add solar stocks to your portfolio.
From Eric:
No different home power supply is rising sooner.
Final yr, photo voltaic installations accounted for a record-high 64% of all new U.S. electricity-generating capability – up from 36% three years in the past and 23% six years in the past. This renewable power supply now produces sufficient electrical energy yearly to energy one quarter of all U.S. properties.
In the meantime, home solar-module manufacturing capability can also be ramping increased.
Over the last two years, manufacturing capability has quadrupled, from lower than 10 GW to almost 40 GW. This yr, capability is on observe to surge once more to 66 GW.
However what about President Trump’s disdain for what he’s known as the “Inexperienced New Rip-off” and his plans to “Drill, child, drill” for fossil gas power? Is that not a headwind to photo voltaic?
Again to Eric:
Most of this new [solar] manufacturing capability is popping up in “purple states,” which is one among many explanation why the Trump administration may deal with the trade kindly…
[Plus, Trump] has acknowledged a number of instances that he “hates wind.” Against this, he famously acknowledged final yr that he’s “an enormous fan of photo voltaic.”
Eric goes on to focus on a second cause why solar energy will proceed to thrive throughout the present Trump administration…
Development is the trail of least resistance.
The U.S. desperately wants extra energy. The nation’s hovering demand for power – led by the info middle development increase – would require an all-hands-on-deck answer.
Bear in mind, final week, Nvidia CEO Jensen Huang stated that next-generation AI will want 100 instances extra computing than older fashions as a result of new reasoning approaches.
From Huang:
The quantity of computation vital to try this reasoning course of is 100 instances greater than what we used to do.
Photo voltaic is likely one of the most cost-effective methods to energy such computing wants. So, even when Trump favors insurance policies that encourage oil and gasoline growth, he’s unlikely to enact insurance policies that actively discourage photo voltaic.
As common, Eric consists of much more particulars that make the case for why he’s bullish on photo voltaic at the moment. When you’re an Funding Report subscriber, click here to log in to learn your Month-to-month Difficulty.
For a simple option to play the photo voltaic alternative, take a look at the World X Photo voltaic ETF, RAYS. It holds main photo voltaic shares together with Enphase Power, First Photo voltaic, and Sunrun. Simply bear in mind that of your high 10 holdings, six are Chinese language firms. So, be careful for commerce wars.
As to how Eric is enjoying it, his most well-liked funding is buying and selling close to a four-year low, and Eric believes “a double is nicely inside attain.”
You may learn more about it as an Investment Report subscriber by clicking here.
Lastly, has Bitcoin bottomed?
Bitcoin rallied over the weekend after President Trump introduced the creation of a “strategic crypto reserve” that can embrace bitcoin, ether, XRP, Solana’s SOL token and Cardano’s ADA.
From Trump on Fact Social:
A U.S. Crypto Reserve will elevate this vital trade after years of corrupt assaults by the Biden Administration, which is why my Govt Order on Digital Property directed the Presidential Working Group to maneuver ahead on a Crypto Strategic Reserve that features XRP, SOL, and ADA. I’ll be certain that the U.S. is the Crypto Capital of the World.
In a follow-up publish, Trump added:
And, clearly, BTC and ETH, as different helpful Cryptocurrencies, might be on the coronary heart of the Reserve. Bitcoin popped over $93,000 within the wake of the information although it has pulled again to about $90,000 as I write Monday morning.
Stepping again, Bitcoin has fallen sharply in current weeks
After notching an all-time excessive in December close to $108,000, the grandaddy crypto fell under $85,000 final week. In the meantime, many main altcoins have full-on crashed 50% or worse.
Regardless of the sector positive factors over the weekend, many bears proceed to foretell Bitcoin’s demise. Maybe they’ll be proper (although they’ve all been fallacious to date).
But when they’re going to be proper, they’re preventing an uphill battle towards at the moment’s incentive construction.
Contemplate this…
Who’s incentivized for Bitcoin’s worth to rise? Concurrently, who is able to assist create the circumstances for that rise to occur?
We obtained a clue over the weekend.
Trump.
However he’s not the one one. Listed here are just a few different such people…
- Vice President JD Vance: He’s acknowledged as the primary Bitcoin proprietor to carry the vice presidency
- Secretary of the Treasury Scott Bessent: This former hedge fund supervisor and multi-millionaire is understood for his pro-crypto stance
- Secretary of Commerce Howard Lutnick: He’s the previous CEO of Cantor Fitzgerald, the place he invested considerably in crypto. He’s quoted as saying, “Do I personal Bitcoin? After all, I do. Does Cantor Fitzgerald personal Bitcoin? A shitload of Bitcoin.”
Backside line: Whether or not you’re keen on or hate Bitcoin… whether or not you’re keen on or hate the present administration… whenever you observe the inducement construction… you’ll see a cause to stay bullish on Bitcoin.
And it’s not simply Bitcoin. We count on choose altcoins to reward buyers handsomely right here in 2025. Trump talked about just a few in his publish, however there might be others.
In truth, our crypto professional Luke Lango believes this may very well be the yr of big altcoin positive factors, just like 2021 when dozens of altcoins rallied greater than 5,000% in a single yr.
To assist him establish probably the most profitable alternatives, Luke is utilizing a quant-based buying and selling algorithm he and his group just lately created. It places the main focus squarely on the one factor that issues whenever you’re buying and selling altcoins – worth.
Particularly, the instrument is engineered to establish worth breakouts that recommend a continuation of positive factors primarily based on momentum. To learn more, click here.
We’ll hold you up to date on all these tales right here within the Digest.
Have night,
Jeff Remsburg
