Dale Pinkert: "The bears feast on Thanksgiving and the bulls feast on Christmas"

TradeGateHub's Dale Pinkert on his 3 Ps, why he shorted Google, the risk he sees going into the end of the year, and more.

“I'm worried about the fact that everyone thinks it's smooth sailing into the end of the year - I'm looking for a sell off,” TradeGateHub’s Dale Pinkert told me on Talking Markets on Friday. As ever, Dale was not afraid to make big, specific calls, so let’s get into it:

Bitcoin

Last time he joined us on Talking Markets, Dale forecast Bitcoin at $100,000, which is pretty damn close to where we are now. His outlook on where we go now is a little different. While he says “we could still go higher,” he sees a bear case for Bitcoin “when we have problems in other legacy markets that is going to create the need for people to raise cash.”

“We’re not there yet,” he said. “There's no signal saying it's over. The only thing that, is a little bit concerning is we're not confirming the highs. But I would trail a stop and protect your profits, because we could have a strong reversal.”

💡Everyone has to decide their own stops, of course, but Dale says: “You could just trail a stop underneath the nine day moving average. And if it breaks that momentum, that'll be a warning signal that a correction is underway.” 

Nvidia and Google

Nvidia had great earnings and took out all the shorts, but Dale sees in the charts that “momentum is breaking and rolling over in Nvidia.” “I guarantee you there’s a lot of people long,” he said. “The low after earnings was $138 - If we start taking out $138, the trap door opens for Nvidia.”

As for Google, Dale shorted it before the news that the US Justice Department is arguing that it must sell its Chrome browser to bring back competition in online search. “The reason I shorted it was S&Ps were making new highs, and I was looking for candidates that weren’t. This an easier short for a senior citizen than Bitcoin.”

Dollar/Yen

Dale said “a short in US dollar/yen” is “probably setting up” and “hasn’t been exploited yet.” He’s looking for the Bank of Japan to move in December. “That would mean a stronger yen,” he said. “I’m thinking yields are going to come down maybe back to 4%. That’s all I’m looking for. And then I think we’re going to challenge 5% late in the year.”

Bonds

“We’re going to see the Fed start to begrudge interest rate cuts,” Dale says. He thinks we could get a pullback in yields and a pullback in the dollar, and then”another resumption of the trend to the upside.”

💡”I look at TLT her and it looks to me like we’re going to have a problem,” Dale said. “We have to get back over $94. We could have a rally, but I think what this market needs is a sell off in risk for people to come back into bonds. Otherwise, I hate to even bring up the number because it would be like a sovereign bond crisis, [but] we're talking about 74 in TLT sometime next year.”

Jumping Jack Flash, It’s a Gas Gas Gas

Last time Dale was on Talking Markets, he called for a natural gas rally. He nailed it - nat gas was $2.49 at the time, now it’s around $3.36. “This was a home run ball,” he says. “It’s no longer the widowmaker here.”

💡Now, Dale says “we’re approaching some weekly resistance, but I’d buy a pullback in nat gas to around $2.60 to $2.80. Even if we just correct this big move that we've had, $5 or $6 natural gas is not unreasonable.”

Everyone’s In the Pool

Dale is feeling a bit cautious about markets, partly because “everyone’s in the pool.” “The boomers have 76 % of their assets in stocks. It's never been higher. The US households, I think it's 60 % or so. Historic highs.”

He says the post-election rally was a “buying climax,” and says that $6,100 is where he would want to sell the market.

“There is an expression that the bears feast on Thanksgiving and the bulls feast on Christmas,” Dale said. And he’s seeing some chinks in the market’s armor: “The NASDAQ looks a lot weaker. Semis have been declining. Apple hasn’t made a new high in a while. Meta is giving back from $600. So there is some damage done in NASDAQ and I’m worried about the fact that everyone thinks it’s smooth sailing into the end of year. I’m looking for a sell off.”

💡If the S&P takes out $5,800, that’s going to line up a break to $5,400, and looks like a “megaphone” formation, which would open the door for a break to $4,900, Dale said. After that, we could go to $6,100 and then have a sell-off, followed by a huge rally;

“So I think that there's going to be a cleansing in the market in most assets and I think that you could mainly wait until you know late December, January to look to be a buyer again,” he said.

Dale’s 3 Ps

The 3 Ps Dale teaches are:

1. Probe the Market

2. Partials: Take something off the table and bank some money.

3. Protect: Protect your remainder by trailing a stop at the minimum to break even where you got in.

“So the worst thing that happens is you make money,” Dale said.

That’s a pretty great final word on it all.

To watch the full episode, right this way.

Enjoy,

Maggie

Important Disclaimer: It is crucial to remember that this article is for informational purposes only and should not be considered investment advice. Consult with a qualified financial advisor to assess your risk tolerance, investment goals, and overall financial plan.