Published on: September 14th, 2020

Analysing the anatomy of a bubble can be like performing a post-mortem. The cause of death is obvious to the pathologist. Cold comfort for the corpse. Below Julian looks at some techniques for tracking bubble-like behaviour and tactics for trading after the initial downdraft. This seems especially relevant given the early September market leader wobble.


  • nw
    nicholas w.
    18 September 2020 @ 18:32
    Can anyone help me in understanding JB's Mexico/EWW position. I could just leave it alone, but its nagging at me- Ive tried going back through the Trade talks, but have not found the case he made for it yet.
    • JW
      J W.
      19 September 2020 @ 07:25
      If the dollar goes down, Mexico being the US' largest trading partner, it should improve competitive position, plus if economy reopening accelerates it helps industry. I thought it was something along these lines. Personally I exited the trade as I believe it's too early for EM to shine - there was no momentum and money can be deployed more effectively elsewhere. It's all about time horizon's of course.
    • nw
      nicholas w.
      21 September 2020 @ 20:05
      Thank you JW. Thats sort of what I thought, but am very new to trading these things- always before my focus has been very top down and long term. So I am learning, and so far getting paid to do so- but its all quite small numbers- albeit still quite stressful- and based on my own views formed by reading and watching. I let the EWW slip through my filter, and it's sitting there annoying me. I'll probably trust my stop loss and try and forget about it- but it uses up margin. Thanks again. N
    • HM
      Harry M. | Real Vision
      24 September 2020 @ 08:09
      Exactly so JW. Mexican stocks have lagged US stocks. Mexico is a big beneficiary of a weaker dollar. And Mexico would be a beneficiary of the deteriorating relationship between China and the US. Worth bearing in mind there is a stop on the position at 30. The overall environment looks poor for stocks right now. Indeed risk globally looks very much under pressure. JB put out a flash update recently.
  • CM
    Christopher M.
    14 September 2020 @ 21:00
    Can someone explain why reflation would make bond yields go up and prices down when the Fed's policy is still "we're not even thinking about thinking about raising rates"? Is the thesis that there is an element of the bond market that is beyond the control of the Fed that will make the bond prices drop regardless of Fed policy?
    • AP
      Adam P.
      15 September 2020 @ 02:57
      All three QEs resulted in higher rates as investors move out the risk curve.
    • HM
      Harry M. | Real Vision
      15 September 2020 @ 09:42
      So Christopher, to some degree, yes. Bond yields go up when there are more sellers than buyers. If the Fed isn't yet prepared to back its story with hard, freshly printed cash, then how much can we rely on the story? Particularly at the back end of the yield curve. But there are other good reasons as well. Even if the Fed is right, and even if it were prepared to back its argument with buying (YCC), why would an investor want to own 30y bonds at 1.5% yields if the investor believed that US inflation would average 2% over the next 30 years? That's the same as being willing to have a real return of -0.5% over 30 years. Surely you can do better than that? This is basically a variant on financial repression.
    • CM
      Christopher M.
      15 September 2020 @ 13:48
      Harry, Sorry for being a bit confused on this, I'm a newbie here. Basically you're saying negative real rates should drive people out of bonds, correct? Are there enough investors who hold them to maturity for that to be what drives the bond prices down? I thought low yields correlate with high prices. Or does that correlation only apply to nominal prices? Bond prices go down with increasing nominal yields but also go down with decreasing real yields? In response to your first paragraph, should we expect bonds to go down if the Fed comes out tomorrow from the meeting and says they are going to let inflation run hot until 2023 without intervening but they are not going to expand their balance sheet any further?
    • HM
      Harry M. | Real Vision
      18 September 2020 @ 08:56
      Sorry for the delay in getting back on this. So yes, negative real yields mean that even if you made money nominally, the purchasing power of that money can come down. That wont matter to you if you buy futures (for example). In that case you only lose value cos of inflation on the margin you post. Similarly if you borrow the money to invest in bonds you will only care about the change in the value of the bonds. You are not directly exposed to inflation. However the expected change in value of the bonds IS a function of the starting yield. The lower that yield goes (even assuming it can go negative), the greater the probability (cet par) that the next change in value is negative not positive. This is particularly so if you expect the government will pull stunts like massive fiscal stimulus to deal with debt deflation, or massive fiscal and monetary stimulus. I guess that there is an implicit bias to assuming that there is a minimum level of interest rates. It might not be 0, (i.e. it might be negative) but it probably isnt as low as -5% if you believe Federal Reserve economists. Now there is also an argument that the Fed does not control the bond market. The Fed can buy bonds but ultimately buyers might just choose not to buy the 30y end of the curve because its perceived as a bad investment. This is where we start to touch on MMT arguments (controversy warning). Conventional wisdom is that the Fed cannot control the long end of the curve. MMT theorists would argue that the Fed can control the long end. All they have to do is buy enough bonds. I take the view that we know the Fed can control the long end of the curve cos they did it during the 2nd world war. But they have to do what is necessary, which is to stand ready to buy ALL long bonds offered at the price. And so far, YCC is NOT the formal policy of the Federal Reserve. They argue they will cross that bridge when they come to it. I would argue that they clearly dont want to cross that "rubicon" till they have to, and investors may need to force them by refusing to buy bonds at the current price. What if the Fed did implement YCC? Would it prevent you losing money on bonds? Well yes it might, if the bonds were funded by borrowing. However you would always be at risk that the Fed changed its mind, and stopped holding the curve down.
  • DB
    Daniel B.
    15 September 2020 @ 15:12
    The move in Tesla had nothing to do with the pandemic or a stock market bubble. Tesla's upswing began at the end of 2019 after trading sideways for 5 years. The move in Tesla had more to do with the stock catching up and being severely under valued. Tesla was being valued as a traditional auto maker when, in fact, Tesla represents a fundamental shift in automotive tech. The market should assign some value to Tesla's robotic and AI tech. I suggest using a company such as Nikola or Hertz to represent your bubble views.
    • EF
      Eric F.
      15 September 2020 @ 19:51
      The company is surround by fraud. 420 securities fraud. Balance sheet fraud. SolarCity fraud. And that’s likely the tip of the iceberg. It makes shitty quality cars out of a tent and completely relies on subsidies and capital raises (2 this year alone!) to survive. It cannot keep top talent - especially in finance & legal positions - multiple massive red flags. It is lead by a drug addled carnival barker who keeps shouting ‘Roll up! Roll up!’ to distract everyone from this. But exploiting vulnerable people with ailments & disabilities is a step far too far IMO. Shame on anyone who supports this huckster, you deserve to lose your money.
    • DB
      Daniel B.
      15 September 2020 @ 21:08
      Might be a bubble, but you would have done just fine in the long run if you bought Apple or Amazon in 2020.
    • DB
      Daniel B.
      15 September 2020 @ 21:11
      Not sure how I would lose my money when I'm up 1000% on my original position.
    • HM
      Harry M. | Real Vision
      15 September 2020 @ 21:45
      Congratulations on your very sizable profits in Tesla. I guess one can always view the stock market as a market for stocks. But I think one might make the case that monetary policy does affect the valuation of future cashflows. So regardless of whether one believes or disbelieves the Tesla "story", the value of the upside will partly depend on Fed policy. After all, the Fed has a significant influence on the value of the currency we price Tesla stock in.
    • DB
      Daniel B.
      16 September 2020 @ 21:48
      I agree. The treasury added 30% to the money supply so I guess I'm only up 970%. I know Tesla very well and I don't recommend buying above $300/share. You should factor in a risk premium due to the pandemic, which could even bring your price down to $200. At the current price, Bitcoin is the better play. 5x to 10x returns in the next two years.
  • AA
    Alberto A.
    15 September 2020 @ 18:31
    Trying to get my head around the TLT reco? If we are in a stagnation stage then interest rates would continue to fall further. Then why short TLT at this stage? Unless we are entering a deflationary where i rates increase....but even at a deflationary stage with negative growth, real rates will increase therefore bonds will also increse.....any thoughts??
    • HM
      Harry M. | Real Vision
      15 September 2020 @ 21:55
      The policy response to the stagnation stage. The US Government is NOT going to "go gentle into that good night" to quote some Welsh poet. Now this might be a little early. And there can be a lot of twists and turns before it becomes clear what Julian is arguing, and whether he is right. In particularly we have just had word that CARES 2 may not be happening, and that would represent quite a fiscal tightening. But ultimately, JB argues that the US fiscal and monetary authorities cannot allow a significant deflationary spiral to develop, and will act to prevent it. Or put another way, we will get inflation because the US will do enough fiscal policy to ensure inflation. They dont really have any other choice, because the alternative is terrible.
    • AA
      Alberto A.
      16 September 2020 @ 02:11
      Thank Harry. I really appreciate your response and explanation. It makes complete sense.
  • RW
    Robert W.
    15 September 2020 @ 22:04
    Any way to print this out
  • JL
    J L.
    15 September 2020 @ 11:20
    I infere from previous JB commentary that the silver target should be extended to 50ish by reducing position size as necessary. What is the point of a target at 30$ with silver coiling around 28$?
    • HM
      Harry M. | Real Vision
      15 September 2020 @ 14:25
      You are absolutely right!. The level was moved in a video, with the target extended to 50 (a previous high) and also a partial profit take, but we have managed to fail to update the target in the reports. Apologies.
  • KH
    Kavi H.
    15 September 2020 @ 03:16
    Hi Jullien, Thanks for the update. Does NVDA's break above the 516 level today negate the possibility of it being a Pop or is that still a possibility as long as it doesnt go much higher ? Thanks Kavi
    • HM
      Harry M. | Real Vision
      15 September 2020 @ 09:36
      Guys, Im gonna copy these question to JB and get back to you.
    • HM
      Harry M. | Real Vision
      15 September 2020 @ 13:57
      Ok I spoke to JB and this was what he suggested. "I think we can question Nvidia altogether because a massive corporate action is at play and just watch and wait to see if its ARM acquisition runs into anti-trust issues at home or abroad. The bulls will argue that NVDA has successfully tested the 50-day SMA support and is now above the 20-day SMA. I think the ARM acquisition, if successful, is probably accretive. In fact, just as for Softbank, ARM will be the jewel in their crown. So one might expect the 20-day to be tested again and maybe even the 50-day but if the uptrend remains unbroken you can argue to be a buyer on another successful test of the 50-day SMA For a short thesis, weaker price action looks precarious but confirmation only comes when a significant sell-off is followed by a bull-trap rally and the neckline holds as upside resistance. Here we are mainly just guessing whether the first downdraft has gone far enough. So ideally you would get a chance to set a high probability short at the neckline. Ideally. Where is that neckline? Well this is really something an individual trader should determine for themselves. Its a terrible thing to be spooked out of a trade by a tick. You should set your own levels. but one could argue for 532 for example."
    • HM
      Harry M. | Real Vision
      15 September 2020 @ 14:08
      Just spoken in more detail, and ideally for a bear thesis, you would want the stock to trade up to 3000 again, and then fail. Which would then give you a much clearer bear neckline at 3000.
  • AP
    Adam P.
    14 September 2020 @ 21:28
    Julian, Do you think the price action in AMZN looks like a popping bubble? We took out 9/4's swing low Friday and confirmed it today.
    • HM
      Harry M. | Real Vision
      15 September 2020 @ 14:07
      I spoke to JB, and as with NVIDIA its a long answer. "AMZN isn't as clean as some charts. But a couple of observation 1) We had a false break above the channel. So in theory we could test the bottom @ 2700 ish. The stock has broken the 50-day SMA and so it must confirm a positive test of the 50-day or it is vulnerable down to the 50-week SMA at 2300. Good chart support here but unless the 50 day is positively confirmed, AMZN should remain vulnerable. As for a precise neckline ...my guess would be 2930-3000". Worth reminding you that as with the NVIDIA answer above, "for a short thesis, weaker price action looks precarious but confirmation only comes when a significant sell-off is followed by a bull-trap rally and the neckline holds as upside resistance."
  • MG
    Miguel G.
    14 September 2020 @ 19:19
    Julian, while I understand why you're taking your shot at short TLT, wouldn't your macro frame work have you hold off til maybe Nov/Dec as inflation bottoms late this year and heads to a possible 2.5% to 3% next year? I like the trade, but I wonder if patience here is needed because inflation hasn't bottomed yet and the position in the 30 year bond for example is extremely net short. I envision a scenario where your CPI forecast of -.8% clears the sentiment in the 30 year bond market as rates fall and then I think the short TLT set up becomes much more favorable from a price point, inflationary data point and sentiment point perspective.
    • HM
      Harry M. | Real Vision
      15 September 2020 @ 09:54
      Miguel, JB has a tendency to be early. Its almost a requirement in this line of work because if you wait till the last minute you will be unable to get the message out to clients in a timely and actionable manner. So, yes, you might well want to see how things pan out over the next few weeks given Cares II appears to be dead which means we are about to see an effective fiscal tightening. Of course, eventually we will have elections and the new government will come in and deliver a new round of fiscal stimulus. But until that happens we might be in a temporary policy void unless the Fed is brave enough to act pre-emptively.
    • MG
      Miguel G.
      15 September 2020 @ 11:09
      Thanks for the explanation Harry, makes perfect sense
  • JK
    James K.
    14 September 2020 @ 16:33
    Instead of shorting TLT, what about buying TBT .. ?
    • ES
      Edward S.
      14 September 2020 @ 17:23
      That instrument trades very oddly. Stick with the TLT short.
    • AS
      Alan S.
      14 September 2020 @ 17:46
      Correct me if I am wrong: Leveraged ETF, long or short, are inherently poor investments if held for anything more than a few days?
    • CM
      Christopher M.
      14 September 2020 @ 21:00
      He actually says in the report if it's easier to short by buying TBT, buy TBT.
    • CD
      Chris D.
      15 September 2020 @ 05:23
      Why go against the Fed's ACTUAL buying (i.e. Put) which is they buy $80B of T's per month, and $40B of MBS. This is the Fed Put that every day they are further enabling the Put :) They can't let T-bond yields fly up, it would crash everything Follow what they (i.e. the Fed) does :) (bond yields could go down a lot, and normalise with other G-7 countries, or perhaps they just chop in a range, but highly unlikely they fly higher) My $0.02
    • WM
      Wai M.
      15 September 2020 @ 09:04
      why not buy TBF the inverse -1x ETF, but TBT?
    • HM
      Harry M. | Real Vision
      15 September 2020 @ 10:01
      Good points from Chris D. The counter argument is that the Fed isn't promising to love and protect you forever. They don't want yields to go up, but they do want inflation to go up, so you get a negative long term return if the Fed gets their way. That might well be better than the alternative in a very deflationary environment, but if the Fed is successful in the long term, they are really promising to ensure that you lose money if you invest in 30y UST over the long term. In many ways it reminds me of the Odysseus story about Scylla and Charybdis. You can choose to either short the 30y and experience short term losses to the extent that the Fed maintains QE or YCC, or if you believe the US authorities will be successful in the longer term, then you know that inflation will eventually hurt you in these bonds in the longer term. This seems to be an important distinction between RPs views, and JB. Can the Fed/UST stave off deflation in the medium term? JB thinks yes they can. RP thinks that ultimately they will fail, or at least in a reasonable time frame for our trading horizon.

Mark Yusko

Morgan Creek Capital Management, Co- Founder, CEO, & CIO

Mark Yusko is the Founder, CEO and Chief Investment Officer of Morgan Creek Capital Management. He is also the Managing Partner of Morgan Creek Digital Assets.

Morgan Creek Capital Management was founded in 2004 and currently manages close to $2 billion in discretionary and non-discretionary assets. Prior to founding Morgan Creek, Mr. Yusko was CIO and Founder of UNC Management Company (UNCMC), the Endowment investment office for the University of North Carolina at Chapel Hill. Before that, he was Senior Investment Director for the University of Notre Dame Investment Office. Mr. Yusko has been at the forefront of institutional investing throughout his career. An early investor in alternative asset classes at Notre Dame, he brought the Endowment Model of investing to UNC, which contributed to significant performance gains for the Endowment. The Endowment Model is the cornerstone philosophy of Morgan Creek, as is the mandate to Invest in Innovation.

Mr. Yusko is again at the forefront of investing through Morgan Creek Digital Assets, which was formed in 2018. Morgan Creek Digital is an early stage investor in blockchain technology, digital currency and digital assets through the firm’s Venture Capital and Digital Asset Index Fund.

Mr. Yusko received a BA with Honors from the University of Notre Dame and an MBA in Accounting and Finance from the University of Chicago.

Anthony Scaramucci

SkyBridge Capital, Founder & Co-Managing Partner

Prior to founding SkyBridge in 2005, Scaramucci co-founded investment partnership Oscar Capital Management, which was sold to Neuberger Berman, LLC in 2001. Earlier, he was a vice president in Private Wealth Management at Goldman Sachs & Co. In 2016, Scaramucci was ranked #85 in Worth Magazine’sPower 100: The 100 Most Powerful People in Global Finance. In 2011, he received Ernst & Young’s “Entrepreneur of the Year –New York” Award in the Financial Services category. Anthony is amember of the Council on Foreign Relations (CFR), vice chair of the Kennedy Center Corporate Fund Board, a board member of both The Brain Tumor Foundation and Business Executives for National Security (BENS), and a Trustee of the United States Olympic & Paralympic Foundation. He was a member of the New York City Financial Services Advisory Committee from 2007 to 2012. In November 2016, he was named to President-Elect Trump’s 16-person Presidential Transition Team Executive Committee. In June 2017, he wasnamed the Chief Strategy Officer of the EXIM Bank. He served as the White House Communications Director for a period in July 2017. Scaramucci, a native of Long Island, New York, holds a Bachelor of Arts degree in Economics from Tufts University and a Juris Doctor from Harvard Law School.

Michael Saylor

MicroStrategy, Co-Founder

Mr. Saylor is a technologist, entrepreneur, business executive, philanthropist, and best-selling author. He currently serves as Chairman of the Board of Directors and Chief Executive Office of MicroStrategy, Inc. (MSTR). Since co-founding the company at the age of 24, Mr. Saylor has built MicroStrategy into a global leader in business intelligence, mobile software, and cloud-based services. In 2012, he authored The Mobile Wave: How Mobile Intelligence Will Change Everything, which earned a spot on The New York Times Best Sellers list.

Mr. Saylor attended the Massachusetts Institute of Technology, receiving an S.B. in Aeronautics and Astronautics and an S.B. in Science, Technology, and Society.

Alex Saunders

Nugget's News, Founder & CEO

Alex Saunders is the founder and CEO of Nugget’s News, a digital media company focused on all things crypto. Alex has been captivated by cryptocurrency since 2012 and in 2017 he began educating globally on the benefits of cryptocurrency and how to safely acquireit. Nugget’s News has been listed as a top-20 podcast by Business Insider, ShapeShift and Lifehacker and has over 120k YouTube subscribers with 9 million total views.Alex is also heavily focused on his cryptocurrency education platform Collective Shift which currently serves over 4,500 members. provides his unique perspectives by utilising his expertise in fundamental analysis, technical analysis and market sentiment. He is working towards his mission of making it easier for everyone to understand the financial world.

James Putra

TradeStation Crypto, Inc., Sr. Director of Product Strategy

James helped launch TradeStation Crypto’s offering which utilizes a true online brokerage model that self-directed investors and traders have come to expect for equities, futures, and foreign currency markets. He is a reputed crypto asset specialist and blockchain thought leader focused on helping people find innovative ways to participate in this space. He is active in the blockchain community with speaking engagements, TV appearances and mentoring. James has over 15 years of experience in the Fintech industry.

Raoul Pal

Real Vision, Co-Founder & CEO

Raoul Pal is the Co-Founder and CEO of Real Vision, the world’s pre-eminent financial media platform, which helps members understand the complex world of finance, business, and the global economy.

Real Vision members also have access to Real Vision Crypto, a cryptocurrency and digital assets video channel watched by over 80,000 people. In addition, Raoul has been publishing Global Macro Investor since January 2005 to provide original, high quality, quantifiable and easily readable research for the global macro investment community hedge funds, family offices, pension funds and sovereign wealth funds. It draws on his considerable 31 years of experience in advising hedge funds and managing a global macro hedge fund. Global Macro Investor has one of the very best, proven track records of any newsletter in the industry, producing extremely positive returns in eight out of the last twelve years.

He retired from managing client money at the age of 36 in 2004 and now lives in the tiny Caribbean island of Little Cayman in the Cayman Islands. Previously he co-managed the GLG Global Macro Fund in London for GLG Partners, one of the largest hedge fund groups in the world. Raoul moved to GLG from Goldman Sachs where he co-managed the hedge fund sales business in Equities and Equity Derivatives in Europe. In this role, Raoul established strong relationships with many of the world’s pre-eminent hedge funds, learning from their styles and experiences.

Other stop-off points on the way were NatWest Markets and HSBC, although he began his career by training traders in technical analysis.

Peter McCormack

What Bitcoin Did, Journalist

Peter McCormack is a full time journalist/podcaster covering topics such as Freedom, Human Rights, Censorship and Bitcoin. Peter created and hosts the What Bitcoin Did Podcast, a twice-weekly Bitcoin podcast where he interviews experts in the world of Bitcoin development, privacy, investment and adoption. Launched in November of 2017, the podcast has grown to over 100 episodes with a guest list that is a testament to the diversity of knowledge and opinions that represent the broader Bitcoin community. Expanding his growing list of human interest recordings, documentaries and films Peter has recently launched the Defiance podcast and DefianceTV.

Caitlin Long

Avanti Financial Group, Founder & CEO

22-year Wall Street veteran who has been active in bitcoin and blockchain since 2012. In 2018-20 she led the charge to make her native state of Wyoming an oasis for blockchain companies in the US, where she helped Wyoming enact 20 blockchain-enabling laws. From 2016-18 she jointly spearheaded a blockchain project for delivering market index data to Vanguard as chairman and president of Symbiont, an enterprise blockchain start-up. Caitlin ran Morgan Stanley’s pension solutions business (2007-2016), heldsenior roles at Credit Suisse (1997-2007) and began her career at Salomon Brothers (1994-1997). She is a graduate of Harvard Law School (JD, 1994), the Kennedy School of Government (MPP, 1994) and the University of Wyoming (BA, 1990).

Hunter Horsley

Bitwise Asset Management, CEO

Hunter Horsley is Chief Executive Officer of Bitwise Asset Management. Prior to Bitwise, he was a product manager at Facebook, working on advertiser products including the multibillion-dollar sponsored content ecosystem and ad breaks in videos. Before Facebook, Horlsey was a product manager at Instagram, responsible for multiple advertising products generating several hundred million dollars of revenue. He is a graduate of the Wharton School at the University of Pennsylvania, with a B.S. in economics. Recently, Horsley was named a member of Forbes’ 2019 “30 Under 30” list.

Luke Gromen

Forest For The Trees, Founder & President

Luke Gromen has 25 years of experience in equity research, equity research sales, and as a macro/thematic analyst. He is the founder and president of macro/thematic research firm FFTT, LLC, which he founded in early 2014 to address and leverage the opportunity he saw created by applying what clients and former colleagues consistently described as a “unique ability to connect the dots” during a time when he saw an increasing “silo-ing” of perspectives occurring on Wall Street and in corporate America.

FFTT caters to institutions and sophisticated individuals by aggregating a wide variety of macroeconomic, thematic and sector trends in an unconventional manner to identify investable developing economic bottlenecks for his clients. Prior to founding FFTT, Luke was a founding partner of Cleveland Research Company, where he worked from 2006-14. At CRC, Luke worked in sales and edited CRC’s flagship weekly thematic research summary piece (“Straight from the Source”) for the firm’s clients. Prior to that, Luke was a partner at Midwest Research, where he worked in equity research and sales from 1996-2006. While in sales, Luke was a founding editor of Midwest’s widely-read weekly thematic summary (“Heard in the Midwest”) for the firm’s clients, in which he aggregated and combined proprietary research from Midwest with inputs from other sources.

Luke Gromen holds a BBA in Finance and Accounting from the University of Cincinnati and received his MBA from Case Western Reserve University. He earned the CFA designation in 2003.

Meltem Demirors

CoinShares, Chief Strategy Officer

Meltem Demirors is Chief Strategy Officer of CoinShares, an investment firm that manages billions in assets on behalf of a global investor base, and is a trusted partner to investors and entrepreneurs navigating the digital asset ecosystem. Meltem oversees the firm’s managed strategies group and its New York office and leads corporate development.

Previously, she was part of the founding team of Digital Currency Group. As a veteran investor in the digital currency space, she has invested in over 250 companies in the ecosystem.

Meltem is passionate about education and advocacy, and teaches the Oxford Blockchain Strategy Programme and co-chairs the WEF Cryptocurrency Council.