Category Penny Stocks

Jeff Clark on How to Profit From Market Volatility

There’s a key signal tracked by the Federal Reserve – one that has correctly foreshadowed every U.S. recession since 1969.

It triggered a few years ago.

Now, according to Fed data, that signal has just reversed. But history shows this shift back to “normal” isn’t a sign of safety – it’s often when the real trouble begins.

But for trading veterans like Jeff Clark, this isn’t a cue to panic or hunker down in defense. It’s a signal to prepare for a prime window of profit, driven by heightened volatility.

You see, Jeff’s trading approach thrives in any market – up, down, or sideways. And he has the track record to prove it…

He called the 2008 crash, the COVID plunge, and the 2022 bear market. During each period, he helped readers trade that volatility successfully – whether markets were roaring higher, crashing, or sleeping. He racked up more than 1,000 winning trades during these bouts of volatility.

Today, in my video interview with Jeff below, we dive into the details about the volatility Jeff expects for the market. You’ll hear his predictions, how he’s planning to trade it, and why he’s exciting about a “generational buying opportunity” that’s fast approaching.

Most importantly, Jeff tells you exactly how he racks up double- and even triple-digit gains – sometimes in just one or two days.

For example, during the recent market rollercoaster, he gave his subscribers the chance to make…

• 78% in three days on Marvell Technologies (MRVL)
• 132% in nine days on the VanEck Vectors Gold Miners ETF (GDX)
• 74% in one day on Target (TGT)
• And 117% in one day on the SPDR S&P 500 ETF (SPY)

Finally, Jeff previews his free Countdown to Chaos event next Wednesday June 11 at 10 a.m. ET. In that presentation, he’ll go into additional detail about how to turn market volatility into a wellspring of trading profits.

To watch our interview, click on the play button below.

To reserve your seat for next Wednesday’s Countdown to Chaos event, just click here.

Here’s more from Jeff:

If your goal is not only to survive upcoming market volatility but profit from it, you need an approach to building wealth that isn’t purely about buying and holding stocks for the long term.

That’s why, next Wednesday, June 11, at 10 am ET, I’m hosting a special briefing about how you can profit using my “chaos pattern” strategy.

It’s these violent swings that allow us traders to potentially make HUGE profits in just a handful of days.

Here’s the sign-up link again.

We’ll bring you more details over the coming days.

Have a good evening,

Jeff Remsburg

Editor’s Note: Illegal tariffs, steel taxes, court rulings… Now Trump and Musk going head-to-head in fiery spats on the world’s stage. 

The headlines scream about skirmishes. But this week’s “Being Exponential” unpacks the noise to reveal the signal underneath… 

Because while D.C. weighs tariffs, a much bigger transformation is unfolding at lightspeed: in the labs, factories, and data centers building the future.

We dissect the Q1 GDP pullback and why markets stalled – even as Nvidia (NVDA) posted jaw-dropping numbers. And we spotlight the tech megatrends you can’t afford to ignore: humanoid robots, quantum breakthroughs, and, yes, flying cars.

Forget the geopolitical tantrums. The bigger story is exponential: machines learning to reason, move, and fly.

If you’re hunting for the next 10x opportunity, this episode breaks down what matters, what doesn’t, and where the smart capital is heading next.

Listen now.

Not long ago, U.S. President Donald Trump and tech mogul Elon Musk were deep in their political honeymoon phase. 

Trump was publicly praising Musk’s Tesla (TSLA). Musk was showing major support for Trump’s economic agenda, praising Trump-era tax reforms, advocating for reduced regulatory burdens, and emphasizing the importance of U.S.-based manufacturing. 

Rumors even swirled about backroom deals: protection for EV subsidies, fast-tracked robotaxi launches, government contracts funneled toward SpaceX and Starlink. 

And investors took note. Tesla stock and the Destiny Tech100 (DXYZ) fund – an ETF with a stake in SpaceX – both surged. 

But after this week’s fiery social media battle?

It seems likely that the bromance is over – bridges burned. 

Trump and Musk have been trading public blows normally reserved for the worst of enemies. Trump has called Musk ‘ungrateful,’ saying he went ‘crazy’ and hinting at punitive action against his companies. Musk, meanwhile, is mocking Trump’s flagship bill, suggesting Trump is part of the Epstein files, and retweeting calls to impeach him. 

This is a full-scale political divorce with billions of dollars in market cap hanging in the balance.

While the media focuses on the soap opera – and let’s be honest, it’s quite entertaining – we’re more concentrated on this fallout’s financial consequences… 

Because this may be one of those rare moments when political chaos creates a powerful asymmetric investment opportunity.

Why Trump’s Turn on Musk Is a Big Deal for Investors

Given Trump’s first term was marked by aggressive deregulation, corporate tax cuts, and emphasis on American manufacturing, markets assumed that a second term would be good for Elon Musk. 

That assumption powered massive gains in TSLA, as investors believed Trump would protect domestic EVs, fast-track robotaxis, and go soft on regulation. Similarly, DXYZ – the pre-IPO fund that holds SpaceX – soared on the idea that the president would keep feeding SpaceX juicy government launches and Starlink contracts.

But now that entire narrative is under siege. In fact, it has made a complete 180.

If Trump follows through on his social media threats against Musk – and history suggests he will – we could see:

• An EV subsidy rollback, which would tank margins across Tesla’s core product line
• Regulatory delays or legal action against Tesla’s robotaxi launch, especially in politically charged states like Texas or Florida
• A shift away from SpaceX in DoD and NASA launch contracts
• A freeze or reduction in Starlink’s government integration, particularly in defense and telecom resilience projects.

This assumption is based on plain pattern recognition. As we’ve seen many times before, Trump rewards loyalty and punishes dissent. 

He’s issued pardons or commutations for loyalists like Roger Stone, Michael Flynn, Paul Manafort, and Steve Bannon, all of whom either refused to testify against him or stayed loyal despite legal trouble.

Often, he has elevated those known for personal loyalty over traditional qualifications, such as appointing Mark Meadows as Chief of Staff and Ric Grenell as acting Director of National Intelligence.

He has also dismissed people who have contradicted or criticized him openly, including James Comey of the FBI, Alexander Vindman of the NSC, and cybersecurity personnel Chris Krebs, who defended the integrity of the 2020 election.

Now Musk has publicly defected.

And Trump won’t respond lightly. 

Which Stocks Could Win Amid This Political Divorce

So… what happens when the most dominant company in not one but two innovative industries – autonomous vehicles and commercial space – gets politically kneecapped?

Competitors rejoice.

And that’s where we see opportunity emerging. (Forget EVs; they’ll get bruised because Trump will likely kneecap the whole sector by removing subsidies entirely.)  

The true winners are in AVs and space. That’s where Trump could personally hurt Tesla and SpaceX by giving competitors a leg up. 

On that note, let’s talk AVs… 

Musk has pinned Tesla’s future on autonomy. He wants all of the company’s vehicles to be fully self-driving. And further, he wants to launch a global autonomous robotaxi service within the next several years, making Tesla the epicenter of the Autonomous Vehicle Revolution. 

That future requires regulatory approval… 

More or less, it requires Trump’s blessing. 

Autonomous cars can’t operate on roads with human cargo unless they have strong regulatory approval. And Trump can make it very difficult for Tesla to get that approval. 

That would be a huge win for Tesla’s AV competitors, since many already have regulatory approval and are operating on roads across California, Texas, and Florida. If those firms keep growing and expanding while Tesla remains stymied in regulatory red tape, then those competitors could run away with the AV race…

Rare earth minerals are at the heart of trade discussions… why they’re so important… are rate cuts coming or not?… why learning to trade volatility is critical

This morning, President Trump and Chinese President Xi Jinping held a 90-minute phone call to discuss trade.

From Trump on Truth Social:

I just concluded a very good phone call with President Xi, of China, discussing some of the intricacies of our recently made, and agreed to, Trade Deal.

[It] resulted in a very positive conclusion for both Countries.

In the President’s post, he highlighted the key stumbling block in trade negotiations…

Rare earth elements (REEs).

According to reports in recent days, both sides have been ready to roll back much of their respective retaliatory levies, but the sticking point is rare earth elements.

In short, China has them… the West desperately needs them… and unless something changes, we’re about to feel the economic sting of their absence.

Back to Trump on Truth Social:

There should no longer be any questions respecting the complexity of Rare Earth products.

Let’s back up to make sure we’re all on the same page…

Rare earth elements (or minerals) are a group of 17 elements that can be difficult to find and extract

These elements contain unique magnetic, heat-resistant, and phosphorescent properties that make them critical for, well, the next generation of just about everything:

• Consumer products: They’re needed for all your favorite tech-products such as smart phones, computers, electric vehicles, LED lights, flat screen TVs, you name it…
• Tomorrow’s AI advancements: AI relies on powerful hardware components like GPUs and ASICs, which use rare earth elements like neodymium for magnets in cooling systems and motors, and gadolinium for heat resistance…
• National defense: REEs are critical for wide range of defense applications, including aircraft, submarines, missiles, and radar/sonar systems. You’ll find them in everything from magnets that power electric motors and actuators in fighter jets, to lasers, to guidance systems in missiles…
• Quantum computing: REEs such as ytterbium and europium are being used to create more stable and efficient qubits, the fundamental units of quantum information.

Basically, no REEs, no technology.

The U.S. is in a bind because China controls 90% of the world’s refining capacity.

And, no, we can’t just flip a switch and begin producing REEs. Any legitimate domestic production (at scale) would need at least five, possibly ten years to get up and running.

But by then, the race to AGI, humanoids, and possibly quantum computing supremacy, will have been decided.

China’s slow-walk on REE restrictions spurred President Trump’s lash-out from last week

In last Friday’s Digest, we covered how President Trump was angry at alleged Chinese violations of trade agreements. Here’s what he wrote on Truth Social:

The bad news is that China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US.

So much for being Mr. NICE GUY!

At the time, the source of this violation was unclear, but we can now point to REEs.

Here’s The Wall Street Journal (it’s referencing rare earth “magnets” because the focus of the article is on their use in the auto industry):

China was supposed to have eased export controls on rare-earth magnets as part of a 90-day tariff truce agreement with the White House, but the country has slow walked license approvals for magnets.

Trump accused China of violating its deal with the U.S.

China has pushed back at the notion that it was to blame, alleging “discriminatory and restrictive measures” by Washington, including restricting exports of AI chips and revoking visas for Chinese students.

Unless trade talks are successful, the global auto industry is about to feel the consequences of the REE squeeze.

From Reuters:

Alarm over China’s stranglehold on critical minerals grew on Tuesday as global automakers joined their U.S. counterparts to complain that restrictions by China on exports of rare earth alloys, mixtures and magnets could cause production delays and outages without a quick solution.

German automakers became the latest to warn that China’s export restrictions threaten to shut down production and rattle their local economies, following a similar complaint from an Indian EV maker last week.

Auto sector troubles could be just a preview of what’s to come for other sector supply chains.

Bottom line: the world’s economic neck is exposed here. We must negotiate loosened restrictions on REEs or else we risk dangerous escalation.

We’ll dig into this potential escalation in greater detail in a coming Digest.

For now, if you want to invest in REEs, you have a handful of Western options. In this December Digest, we highlighted a few. Here’s how they’ve performed since as I write Thursday:

• Las Vegas-based Mp Materials Corp (MP): +9%
• Texas Mineral Resources Corp (TMRC): +94%
• Canadian-based Ucore Rare Metals (UURAF): +65%

To be sure, these stocks are volatile. Plus, recognize the binary bet you’re making…

If trade negotiations are successful, these stocks will likely pull back sharply. But if negotiations drag on – or fail – these players have moonshot potential.

We’ll keep you updated here.

Does the economy need rate cuts or not?

Earlier this week, we received conflicting data on the jobs market, raising questions about the Fed’s rate-cutting policy.

We’ll start with Tuesday’s JOLTS report.

Here’s The Wall Street Journal:

US job openings unexpectedly rose in April in a fairly broad advance and hiring picked up, indicating demand for workers remains healthy despite heightened economic uncertainty…

The rise in job openings, along with steady hiring and low unemployment, support the Federal Reserve’s assertion that the job market is in a good place…

So far, [labor market weakness] hasn’t shown up in the data yet, supporting the Fed’s posture to keep interest rates steady for now.

But then yesterday, the ADP jobs report showed that private payrolls increased just 37,000 in May, miles beneath the forecast for 110,000.

Here’s CNBC:

Private sector job creation slowed to a near standstill in May, hitting its lowest level in more than two years as signs emerged of a weakening labor market, payrolls processing firm ADP reported Wednesday…

“After a strong start to the year, hiring is losing momentum,” said Nela Richardson, chief economist for ADP.

So, which economy are we looking at?

One that’s “in a good place” that doesn’t need rate cuts? Or one that’s “losing momentum” with “signs [of] weakening” that desperately needs the Fed to come to the rescue?

This morning might have brought a tiebreaker…

The jobs placement group Challenger, Gray & Christmas released its May jobs report, titled:

May 2025 Job Cuts Up 47% Over Same Month Last Year; Cuts Spread to Other Sectors Than Gov’t for Other Reasons Than DOGE

Here’s Senior Vice President Andrew Challenger with the quick sum-up:

Tariffs, funding cuts, consumer spending, and overall economic pessimism are putting intense pressure on companies’ workforces.

Companies are spending less, slowing hiring, and sending layoff notices.

Digging into the data, through May, employers have announced 696,309 job cuts. That’s an 80% jump from the amount announced at the same time last year.

Futures traders are upping their bets on more rate cuts

Over the last two days, traders have assessed the incoming data and increased their bets on more cuts.

Traders now put the heaviest odds on two quarter-point cuts this year. Those odds clock in at almost 39%, ahead of the second-heaviest 31% probability of three quarter-point cuts.

I don’t think there’s any confusion about what President Trump wants…

From Trump on Truth Social yesterday:

ADP NUMBER OUT!!! ‘Too Late’ Powell must now LOWER THE RATE.

He is unbelievable!!! Europe has lowered NINE TIMES!”

Tomorrow brings the most significant labor market report that the Fed will be watching to navigate this complexity – the May jobs report.

Forecasters predict a slower pace of job growth yet a stable unemployment rate.

If the numbers surprise in either direction, the report could have market-moving potential.

How to profit if the market moves south

In yesterday’s Digest, we profiled analysis from master trader Jeff Clark. He believes we’re on the edge of bear market, with a potential bottom around 4,150 on the S&P this fall – after which, we’ll have a “generational buying opportunity.”

But even if Jeff is wrong, his strategy is still working in today’s “up” market.

Here he is explaining how you can be wrong and yet profitable with his trading style:

May was a great month for the stock market. But I was bearish.

I may have been wrong, but my readers still made 129% in a month. That’s because the stock market rallies are different this year than they have been in the past.

There’s lots of intraday volatility, lots of back-and-forth action, and lots of ways to trade profitably, no matter the overall direction.

I recommended four separate put option recommendations on the S&P 500 to my subscribers during the month of May. And, despite the broad stock market notching its best May gain in since 1990, we were profitable on all four trades.

The cumulative return was 129%, and the average time in the trades was just five days.

These weren’t one-off wins.

Since April 2 Liberation Day, Jeff has closed 25 trades:

• 19 winners
• 15 for double-digit gains
• 3 for triple-digit gains

We’d all be wise to learn how to trade volatility

Candidly, you may not have the time or mental bandwidth to trade volatility. Life gets busy, and for many, a buy-and-hold approach is simply more realistic.

If that’s you, make sure you’re holding high-conviction stocks – and that you have the stomach for a potential 30% drawdown, which Jeff sees as a real possibility.

But if you’re willing to sharpen your trading skills, volatile or bear markets become less of a threat and more of an opportunity.

By trading as markets decline, you can generate profits that you later reinvest into your long-term positions at the bottom – when prices are deeply discounted.

Yes, your long positions will still reflect the downturn after the selloff. But if you’ve been booking trading gains along the way, you’ll have fresh capital to deploy into your best ideas – at fire-sale prices.

If you haven’t been trading, you’re simply riding the rollercoaster with nothing to show for it but the ride down.

The best part about it is that Jeff’s trading strategy is simple and reliable.

Here’s Jeff:

Basically, we just wait until a stock or an index gets stretched too far in one direction or the other. Then we bet on the proverbial rubber-band snapping back. We look to buy stocks that are deeply oversold, and we look to sell/short stocks that have pushed too far into overbought territory.

Then, we exit the trades when conditions return to neutral.

This strategy paid off quite well during President Trump’s first term in office. It has been paying off again since the President has returned. And, I suspect it will continue to work well for the next 3.5 years – at least – no matter what the stock market does.

Next Wednesday June 11 at 10 a.m. ET, Jeff will get into more details. To reserve your seat, just click here.

We’ll keep you updated on all these stories here in the Digest.

Have a good evening,

Jeff Remsburg

There are four months of the year when we have efficient markets.

That’s during earnings season, when companies release their quarterly results to the public.

The other eight months of the year are what I call “mean reversion.”

That’s when markets consolidate, and selling pressure is created by big institutions and easily panicked individual investors.

During this period, it’s not about company fundamentals, but about the headlines that can cause short-term manic reactions from traders.

Following NVIDIA Corporation’s (NVDA) blowout results last week, earnings season is now largely over. That means we’re now in one of those periods of mean reversion. So, you can expect the market to knee-jerk react to headlines and trigger more volatility.  

We saw a perfect example of this recently, as a very public disagreement emerged between President Trump and Elon Musk over the congressional spending bill. Today, that rift grew into a chasm when President Trump threatened to slash government contracts and subsidies that would harm Musk’s businesses, including Tesla, Inc. (TSLA).

As a result, the stock is down roughly 15% today.

But there is some good news… the volatility can provide great opportunities for profits.  

Nobody knows this better than my colleague Jeff Clark.

You see, Jeff has made a career out of navigating (and profiting from) volatile markets. He’s accurately predicted every major volatility spike this century: the 2007-’08 global financial crisis, the COVID crash and the 2022 bear market.

Each time, he’s helped readers trade that volatility successfully. In fact, he’s racked up more than 1,000 winning trades during volatile times – and it’s all thanks to his “chaos pattern” strategy.

In January, when investors were enthusiastically embracing the inauguration of President Trump, he warned his followers to prepare for a bout of extreme volatility.

He was right, of course. The day after President Trump announced his “Liberation Day” reciprocal tariffs on April 2, the S&P 500 fell 4.8%, the Dow lost 4% and the tech-heavy NASDAQ declined almost 6%. All told, it was the single worst trading day since 2020.

More impressive than Jeff’s prediction is that he backed up his talk by playing that volatility into 19 winning trades, including several triple-digit wins.

I sat down with Jeff to learn more about his “chaos pattern” strategy and talk about what he sees happening next in the market. Specifically, why he expects more volatility, and why the culprit behind the chaos will be the bond market.

Now, you can click here or the play button below to learn all about it. You can also read the full transcript below.

While I firmly believe that the U.S. is an oasis in a world full of chaos and that more market gains are ahead, that doesn’t mean the market won’t be volatile.

When a seasoned pro like Jeff believes that the stock market could be heading for more trouble in the coming weeks and months, we should think about all the implications.

But the good news is he has 10 specific opportunities that to help investors thrive during all this chaos.

That’s why next Wednesday, June 11, at 10 a.m. ET, he’s going to share the details of those 10 trade setups. He’s also going to dig into the details of how his powerful new stock screener finds “chaos patterns” every day. 

This is a free event for you to attend, so I strongly suggest you make some time to hear what Jeff has to say. You can register here right now.

Sincerely,

Louis Navellier

Editor, Market 360

The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:

NVIDIA Corporation (NVDA)

*******************

Louis Navellier:

Hello, Louis Navellier here. Today I’m sitting down with one of the top traders in America, Jeff Clark.

For the past 40 years, Jeff has accurately predicted every major market event and helped his readers get in front of 1,000 different winning trades. He predicted the 2008 financial meltdown and helped his readers double their money 10 different times during the fallout with winners, like 490% in 25 days from Palomar Medical. He predicted the 2020 COVID crash and proceeded to hand his readers at least 10 different chances to double their money that year.

Once again, in 2022, he predicted the tech crash in advance, which sent the S&P 500, stumbling nearly 20% that year, and sent the tech-heavy NASDAQ down 32%. But that didn’t stop him from giving his readers 12 different opportunities to double their money that year and capture gains like 230% in 21 days from Pan American Silver Corp. (PAAS) or 333% in only two days from Citigroup Inc. (C).

Most recently, he predicted the rough start to 2025 all the way back in September of last year, and the following stock market rebound through today and his readers got in front of quick winners like 97% in two days from OSCR (Oscar Health Inc.) or 90% in only five days from Marvell Technology Inc. (MRVL).

His secret? Something he refers to as the chaos pattern, a unique pattern set-up, which can tip you off to any major move in a stock or the markets. Which leads me to where we are today.

Jeff has some compelling new research that shows volatility could soon be dominating the markets once again. So, I wanted to quickly meet with him today to ask him a few questions about what he sees coming and how he views and trades the markets.

With that being said, Jeff, thanks for sitting down with me today.

Jeff Clark:

Thank you, Louis. Thanks for having me here.

Louis:

Jeff, you’ve been trading professionally for over 40 years. What first drew you to the markets and specifically to your unique style of trading during high-stress periods?

Jeff:

Well, I got to say, I get this question a lot, but I was drawn to the markets very early on in life. Ever since I was a little kid, I was fascinated with the idea of using money to make money. And so when I was, I don’t know, somewhere around eight years old, my father decided I ought to be taking a look at the stock market. So from that point on, I’ve been paying attention to the stock market. And when I was 18, I got my Series 7 exam, became a licensed stockbroker and started raising money and managing money from that point on. And long story short, it’s been 40-some-odd years I’ve been doing this.

And the attraction or the strategy I use, marketing got ahold of this thought and called it a chaos pattern because they thought that would resonate. But really, it’s a rubber band pattern basically. I look for situations where we have extended conditions and then I look for a move or a reversion of the means.

So if you want to call it what it is, it’s a reversion to the mean strategy, where basically we look for situations where conditions get extended either way overbought or way oversold, and I simply make a trade that assumes conditions will go back to historical norms. And that’s what I’ve been doing for 40 years and we’ve got a fantastic track record of success with it.

And what I like about this strategy is it works best in very volatile markets. Last year in 2024, we didn’t really have a volatile market. We had a one direction market where any selloffs were relatively mild and the rallies were also relatively mild. It was just a steady grind higher.

So far in 2025, we’ve had the opposite. We have just wild moves in both directions. So you have situations where that rubber band gets super stretched, both oversold and then snaps back and overbought and then snaps back. So we have a lot of opportunities to generate a lot of trades in this type of environment.

Louis:

I’m glad you mentioned mean reversion. I’m known for saying that there’s four months of efficient markets, earnings are coming out and then eight months of mean reversion, and now that earnings season is drawing to a close, usually they mean reversion trading picks up. And I believe Citadel is probably the leader in the mean reversion trading, so I’m glad somebody’s trying to figure out what they’re doing.

Jeff:

Well, there is a reason there, the largest hedge fund on the planet.

Louis:

That’s true. And also they had a good first half of this year so far, from what I’ve seen.

You accurately predicted every major market crash of the 21st century: 2008, 2020, 2022 and now 2025. What sets you apart from the others on Wall Street?

Jeff:

I’m going to say age. I have the dubious distinction of having been doing this for a very, very long time. So there’s not a lot of situations that I haven’t seen before. The conditions might be different or the economic situation that creates these opportunities might be different, but the investors’ response to them are always the same. We always respond either with fear or with greed, and we wind up in situations where anytime you see a panic sell-off, it’s usually probably the best opportunity to buy. And often times when you see panic buys, and we’ve seen a lot of those lately, it’s usually a pretty good opportunity to sell.

And so when you utilize a mean reversion strategy where you’re looking for that rubber band to snap back, you look for specific indicators. And if you use technical analysis, there’s probably thousands you can draw from. But I have a handful that I like to keep in my toolbox, and I refer to them constantly, and they often times lead me to notice things that maybe a lot of folks. And yeah, like I said, I think it’s just a matter of having experienced it before.

Back in 1982 when I first started in this business, I didn’t catch everything right away. Now, not that I’m catching everything, but I can sort of sense when things are getting a little overheated on one direction or the other.

Louis:

I’ve noticed that when the VIX is low, it’s kind of eerie because usually a sell-off will emerge. So does your recognition of the chaos pattern wait for an event, or do you just wait for it to get quiet and kind of creepy out there?

Jeff:

Well, there’s both of those, but I try to anticipate chaos in the market. I try to anticipate that snapback occurring. And you mentioned the VIX, the Volatility Index is obviously a very good tool for noticing that when the VIX was down around 12 or 11. I think it dipped into 10 at one point last year. It’s kind of a caution sign.

And then of course, we had a situation not too long ago. A little over six weeks ago where the VIX was up around 45, 50, and that was often times proven to be a good time to be a buyer of stocks. And had you recognized the caution sign back in December and recognized the buying opportunity that we had in April, you probably did pretty well.

So that’s just one of the indicators that I use to sort of navigate where we are and where we might be headed.

Louis:

So most people associate volatility with danger, but you see it as an opportunity. Why is volatility actually your favorite market environment?

Jeff:

Well, part of the reason is I like to trade options.

So when you have a low volatility environment, usually it’s a pretty good time to buy options because the option premium is not that expensive. When the volatility is high, when the market is pricing in a large degree of back-and-forth action, the premiums on options are fairly expensive. In that case, I like to be a seller of options. Often times selling not covered puts is usually my preferred method of strategy.

And when, again, if you’re utilizing a reversion of the mean strategy, you’re really just looking for extended conditions that go back to normal. And using options in that manner when you’re buying them cheap or selling them when they’re expensive provides you probably a little bit more bang for the buck than you would get in just buying shares of stock.

Louis:

I’ve noticed that about 42% of options are just day options. They expire in a day.

Jeff:

And that’s a wild situation that’s developed recently over the past year or two, where you have these zero data equity expirations that folks are buying and selling constantly.

I don’t trade a lot of those, but I pay attention to how they’re trading because how people place their bets for an individual day. It does have an effect on how that market performs that day and in the very short term.

Louis:

Yeah, I call those day options the tail wagging the dog.

Jeff:

I would agree with you; that’s a perfect example of it.

Louis:

Yeah. When Citadel writes a lot of options on NVIDIA Corporation (NVDA) or some other stock, it actually seems to impede its appreciation potential because they’re writing calls and they don’t want to fill ’em. So think of a mean reversion program to take it down so they don’t have to..

Jeff:

No argument here!

Louis:

..pay 3 billion bucks or whatever they just wrote.

Jeff:

Yeah, it does have an effect, and it’s not just on the stocks, but on the indexes as well. The SPY, the S&P 500 Exchange Trader Fund, has the highest volume of zero day to expiration options, and that definitely has an effect on what the market does in the short term.

Louis:

Well, I’m glad you mentioned the market indices. My friends over at Bespoke documented that if you bought SPY at the opening and sold at the close, you don’t do very well. In fact, they say you do a lot better by buying it at the close and selling it at the opening.

Jeff:

They’re selling it the next day. Yes.

Louis:

Yeah. So in other words, the smart money seems to settle up about 15 minutes after the close, and it’s even worse for the QQQ. So those indices can be tricky. So people need your expertise on that.

Jeff:

Absolutely, and if you notice in the option market, it’s interesting because the option market is almost a predictor of what’s going to happen very short term in the indexes.

And so often times when you say that Bespoke has come up with this analysis that if you buy the S&P 500 at the close one day, sell in the morning, you do pretty well.

But if you’re to trade options that way, the options are priced to reflect that possibility occurring. So if you were to buy a call option on the S&P in the afternoon, sell it the next morning, you’re probably not doing that well because the options are already predicting that occurring. So you’re paying for that already.

Louis:

Got it. So help me out here. Obviously, markets are volatile. Do you see any seasonal patterns? I’ve seemed to notice that Mondays, Tuesdays are better. Wednesday’s okay, but come Thursday, Friday, there seems to be selling pressure. I don’t know if traders are trying to clean out their inventory for the weekend. Do you see anything like that or is it just all based on the premiums and everything you’re observing?

Jeff:

Well, I tend to weigh the premiums as stronger evidence of where the market might be going direction wise. Seasonal factors are definitely in effect, but a lot of folks pay attention to seasonal factors. So, going back to the idea of options predicting the movements already, often times those seasonal factors are priced into options.

So if you think Mondays and Tuesdays are typically good days in the stock market, the option prices on the end of the day on Friday reflect the potential for Monday’s and Tuesday’s to be strong. If Wednesday’s and Thursday’s are weak, the option prices on Tuesday reflect that Wednesday and Thursday’s are weak.

Don’t want to get too far into the weeds on that, but having an understanding of the way the option prices try to predict what’s happening in the broad stock market, it really helps to know whether or not you should be a buyer of options or a seller of options.

Louis:

Got it. So I have friends that try to do what you do, and they computerize it and they like to write covered calls. But they’ve uncovered that a call written every 12 days will make more money than if you write it every 90 days or 120 days. So, is there a sweet spot in call writing where you get the biggest premium?

Jeff:

Oh yeah. The development of these options that expire on a weekly basis is enormous. What that does is it allows you.. let me back up just for a second.

When you look at how option premiums decay, so when you buy an option, you’re buying some intrinsic value and you’re buying time. So if you buy a 30-day option, you’re paying more for it than if you’re buying a 10-day option because you’re buying extra time.

Every day that goes by, though, isn’t valued the same. If you have a 30-day option and you lose one day worth of time, it doesn’t go down by 1/30th, it’ll manage to hold onto that premium pretty well because you still have 29 days for that stock, the underlying stock, to do whatever it is that will help that option benefit. But if you buy a five-day option and you lose one day, you’ve lost 20% of the time value of that option, it’s going to decay rapidly.

So when you’re looking at selling covered calls or selling uncovered puts, which is a very good strategy as well, I like the idea of selling the five-day options, the one-week options. When I’m buying options, I like the idea of buying a little extra time, so I’ll buy 30 or 60 days that gives me time to be right on that particular trade, time for that rubber band to snap back as I might expect it to.

So the important thing to remember is if you’re trading on the short term, the odds benefit the person who’s selling options. If you’re trading a little bit longer term, medium term, the odds can swing to the benefit of those who are actually buying options.

Louis:

So when you sell your calls, are those naked or do you have to own the underlying security as well?

Jeff:

I rarely sell naked calls. Naked means you don’t own the underlying stock.

Often times, a better strategy, if you’re bearish on a stock, is simply to buy puts. If you sell uncovered calls, it’s like shorting a stock. You lose money as the stock goes higher. And since there is no last number, in theory, you can lose an unlimited amount of money.

It’s not always the case. I mean, obviously there are times where it might make sense for a sophisticated investor to do that, but for most people who are trading options, selling uncovered calls is not a really smart strategy, simply because of that potential risk that’s out there.

If you think back to 2020, you know, when all those meme stocks were just shooting to the moon, GameStop Corp. (GME) had no business trading over a hundred bucks a share. So you might’ve thought it was a wonderful idea to sell an uncovered call option on GameStop at a hundred bucks a share. Well, that damn thing went to $450. That would have crucified a lot of folks. So that risk doesn’t make any sense. Buying a put option limits your loss when you’re shorting stocks.

The downside of that though, not the downside, but trading the other direction, selling uncovered puts, I think, is probably the single best income-producing strategy you can have. You sell uncovered puts on stocks that you want to own, and it prices that you want to own them.

So if you like the idea of owning, I don’t know, say Intel Corp. (INTC). Intel trades around $20 a share, you like the idea of maybe buying it at $19 and you’d be willing to buy it at $19. Why not sell to somebody an option to put the stock to you at $19?

So you sell an uncovered put, which obligates you to buy the stock at $19. Stock gets down to 19, you would’ve bought it anyway. You wind up buying the stock at $19. Stock stays above $19, you collect the premium. That premium’s yours to keep, that goes into your pocket and you can spend it however you want to.

So that’s a viable strategy. And selling uncovered puts has the same risk reward parameter as buying the stock and selling a call against it. So it’s designed to be a conservative income-producing strategy.

Louis:

Wonderful. Well, let’s get more specific here. Even though you’ve already been very detailed, you’ve obviously helped your readers make 100% or more on over 120 different trades, and sometimes this happens in just a few days. Can walk us through one trade that really stands out as kind of a wow moment?

Jeff:

Well, there’s a lot of trades that stand out, but obviously it’s like my favorite trade is the most recent ones. They’re the ones that are freshest in the memory.

And we just recently closed a trade in Delta Report, we closed a trade on Oscar Health, OSCR is the symbol on that. And this was a quick trade. I think we held it for two days, maybe three days, and we made something like 97%. So we were close to a double-your-money trade, but not quite. We made 97%. But this was a stock I’ve been following it for several months.

Back in September, October, I was trading somewhere around $24 a share. It got hit along with everything else in the market early in 2025, and it was trading down around $14 just a few weeks ago. And at $14 a share, Oscar Health is in the healthcare business, they use artificial intelligence to produce economies of scale and make things a little bit more efficient in the healthcare business, not to get too far into the weeds with the stock.

Anyways, turning around $14. That seemed to me to be relatively cheap because they have $11 in share in cash sitting on their balance sheet with relatively no debt, and they’re a profitable company, and those profits are growing rapidly. I think they have a 25% growth rate year-over-year.

So it seemed to me maybe the stock is reflecting an oversold condition that is not justified. So I told readers, let’s take a shot at this. Before the company announced earnings, let’s take a shot at buying Oscar Healthcare calls. So we bought the June 15 calls, I think they were, maybe they were the 14th, now I think about it.

Company announced earnings. Our objective was to stop at $14. We thought it could move to $17 relatively quick. Company announced earnings, it did in fact move to $17. We took our profits off the table, went back to the sidelines on the trade, and a couple of days later, or actually now you can look at the stock, it’s right back down to $14.

So it was one of those situations where if you had bought the stock, thinking long term, this is a wonderful hold, you haven’t made any money because it shot up and it came right on back down. If you bought the stock in anticipation of a quick move and you were fast enough to act, you got out with, $14 to $17, $3, about a 20% profit. But if you did the option trade that I recommended, you made 97% in two days, and now we’re sitting here waiting for an opportunity to get back into the trade.

So that was a really good example of that rubber band theory, right? The reversion to the mean. You had a situation that was oversold. It was a fundamentally cheap stock. It had a potential catalyst. We recognized it and we thought, okay, we could make a few dollars on this trade if it works out. Rubber band snapped back, and we were able to take the profit.

Louis:

On April 9, of course, our Treasury Secretary, Scott Bessent, and our Commerce Secretary, Howard Lutnick, met with Trump. And Howard Lutnick, Cantor Fitzgerald, dominates Treasury trading, and apparently, they told him he’s no longer in charge. The bond vigilantes are in charge. It’ll be interesting how many of those meetings they have to have with him.

Jeff:

And dovetail that with the comments about the Fed Chairman being, as the president has called him, not the smartest person in the room. Then you have all sorts of possibilities there. And I really do think it’s going to wind up being the Treasury market or the excessive debt. That is what causes the next Black Swan.

Louis:

Yeah, Jerome Powell gave the commencement speech at Princeton. That’s where he went to college, and he said he didn’t get an econ degree, even though his parents told him to get one, and he got a politics degree instead.

I used to work for the Fed, and I’m shocked by some of the people they’ve put in charge. I like Neel Kashkari. I like Austan Goolsbee. I mean, they’re pretty good speakers.

But yeah, it is very interesting what the Fed’s doing right now. And it’s also interesting to watch the collapse in rates in Europe, and I wonder if that’s ever going to spread here, but so far it’s not. So, fascinating times..

Jeff:

You have the collapse in rates in Europe, but you also have a spike in rates in Japan.

Louis:

Oh, I know!

Jeff:

Some interesting things going on.

Louis:

I know, and China’s got lower rates than Japan, and there might be a currency devaluation. But yeah, the bond vigilantes, which are, of course, the big institutional investors for our listeners that buy all this government debt, seem to oscillate between the U.S. treasuries and the Japanese bonds. So it’s getting to be interesting to watch.

Jeff:

And if there’s an argument to be made for chaos, I think that’s where the argument rests.

Louis:

Yeah, yeah. And it’s sad because the whole world is shrinking. I think it’s just us and India are only really growing in population. It’s really hard on countries like Japan or Europe, because when you’re losing households and you’re shrinking in population, how do you service the interest and all?

Jeff:

Exactly.

Louis:

I know under Trump, he might take Vanderberg Air Force base and turn into oceanfront lots or sell the Presidio. That would happen under Trump, but that hasn’t come up yet.

Jeff:

Not yet!

Louis:

So anyway, so 2025 is clearly chaotic, and you said that this year could be more volatile than 2008 or 2020. Why do you think most investors are dangerously unprepared?

Jeff:

Well, because I think most investors have sort of taken their eye off of the risk ball. It used to be when you buy an investment that the first question or the first concern ought to be, how much risk is there to this? Now investors say, how much return can I get?

And so they look at some of the stocks that are probably relatively inappropriate for their portfolios, and they think, okay, I’ll buy, I’ll put my money in GameStop, I’ll put my money in Palantir Technologies Inc. (PLTR).

And there might be justifiable reasons to own those, but if you’re older, do you really want to buy a stock that’s trading at 170 times earnings? Do you really want to count on that growing even more expensive as we go through things and folks have, I think, taken their eye off of the ball.

I hate losing money. I despise losing money. That’s why I don’t go to casinos and play the table games where the odds are against me because it breaks my heart when a dealer reaches over and takes those chips out from in front of me.

My first question is always, what is my risk in this situation? So when I’m making recommendations to subscribers, my recommendations are always along the lines of the same sort of recommendations I would make to my own mom, and she is 84 years old. She’s not in a position to take on a lot of risks, but she likes the idea of making a little bit of money when the opportunity arises. And so that’s what I try to put into my recommendations to subscribers.

So most investors I think are ill-prepared for decline because they’re not asking themselves how much risk is there in this, they’re asking themselves, how much can I make? Because they look over at their neighbor or they look over at their Uber driver, they look over at the kid cleaning the pool, and they’re making all their money in Bitcoin and Ethereum and fart coin or whatever other thing that’s out there, and they think, gosh, I got to get in on that too.

That’s sort of an exaggeration, but when you look at the valuations of a lot of stocks right now, and you see how it’s the ones that are trading at triple digit price earnings ratios that continue to move higher, and the ones, the boring ones that trade at 6, 7, 8 times earnings that nobody pays attention to, can’t seem to catch a bid. That tells me that folks aren’t paying attention to risk. They’re paying more attention to reward. And most of the time when we wind up in that sort of situation, there’s a negative effect in the broad stock market.

I’m okay with that. I don’t see that as being a bad thing. I think corrections are necessary in the market. Corrections are actually what creates opportunities for folks like you and me and perhaps a lot of the viewers on the screen today to put money to work and to actually generate opportunities.

Louis:

I’m glad you mentioned crypto. I noted that Paul Akins, who’s our new chairman of the SEC, who’s obviously helping create all the crypto exchanges and the regulatory framework. I did notice in his disclosure documents, he had $6 million in crypto himself, but none of it was Bitcoin. So I assume he thinks that as they provide liquidity, that those prices of all the other cryptos will go up.

Jeff:

Yeah, there’s probably some validity to that.

Louis:

But there’s also, let’s face it, a lot of people are still buying gold now because there’s a lack of confidence in central banks. So there’s other options. You don’t just have to do crypto and you buy gold at Costco Wholesale Corporation (COST) now. So that could be it.

So you are going to be revealing your full research and your chaos pattern strategy during a special event. What can people expect if they attend?

Jeff:

Well, we’re going to delve into the whole idea of reversion to the mean a little bit more. Like I said, the guys in marketing got ahold of it and said, “Hey, let’s call it a chaos pattern and make it more exciting.”

So we’ll talk about what my thinking is as we go through 2025. We’ll talk about the vision that I see setting up in the stock markets, in the bond market as well. We’ll talk about the best opportunities that I see coming down the road and the best ways to trade those particular opportunities. We’ll talk about the strategy that I’ve used for 40 years now and try to perfect, tweak a little bit, do whatever as the case is and adapt to the current markets to make it something that we can use very, very well to generate profits this year, next year. And on down the line.

Louis:

So you’re also launching a powerful new screener that helps you spot these trades faster. How big of a breakthrough is your new tool, even for the beginning?

Jeff:

It’s actually a really large breakthrough. It used to be, it still is, sort of.

Every Saturday morning I get up and I go through charts one by one by one by one by one, and I would cover about 1,600 charts. So it would take me several hours, if not half the day on a Saturday morning. And I’d just try to figure out what patterns I like, which patterns presented opportunities. I look for specific parameters and different technical indicators to tell me if we’re seeing overbought or oversold conditions in these individual stocks.

That’s a lot of legwork, but I’m used to it. I’ve been doing it for a very, very long time.

I got together with TradeSmith. We talked about getting together for several years now. We finally were able to work out an arrangement, and I told them, this is what I look for in a stock pattern.  This is what I look for to tell me something is oversold or overbought. And they use those instructions to create an algorithm that is a screener that spits out, on any given day, probably 50 or 60 different stocks that fall within those parameters. So I’m looking at 50 bullish setups and 50 potentially bearish setups.

That takes care of a lot of that legwork. So I sort of have my Saturday mornings back, so I’m getting used to that idea. So every day, I get this screener, it’s sent to me well before the market opens. I can go line by line through each of the stocks that I like, and it doesn’t include any of the stocks that don’t fit within the parameters that I typically look for. For me, it’s an enormous breakthrough.

Louis:

Yeah, I track all my stocks on TradeSmith software. It’s a very powerful tool. So I would assume that because you’re on the TradeSmith system now, that it’s going to be a little bit more beginner friendly for new investors?

Jeff:

I think so, absolutely.

Louis:

So what kind of person is best suited for your recommendations and who it might not be for?

Jeff:

I would say because of the nature of how I trade, where often times part of the strategy involves selling uncovered puts, and most brokerage firms, you need to have at least $10,000 before you can do that type of strategy. So anybody who has $10,000 or more can participate in that type of strategy.

And I would say if you don’t have $25,000, you wouldn’t be able to properly diversify. So I’d probably set that limit. So, folks who have $25,000 or more can participate in the type of strategies that I utilize. If you have less than that, then work on building that up first, and then you can talk about coming on over after that.

The person that this is best suited for, folks who are looking for opportunities to increase the amount of return they get off of particular investments faster, while at the same time reducing the risk that they have off it. Because my entire strategy, it’s simply designed to focus on the risk. We try to eliminate that as much as we possibly can and then accentuate the rewards.

So when you look at a situation like the trade I showed you earlier, the Oscar Health situation, it was a two-day trade. We made 97%. Not saying every trade works out that way, but the alternative was you bought the stock and if you timed it perfectly, you made 20%, but if you didn’t time it well, you’re basically treading water off of it.

So that’s what I’m trying to do. I’m trying to minimize our risk, increase the potential return, and do it over a relatively short timeframe.

Louis:

Well, I for one am just ecstatic that you have essentially figured out how to capitalize on mean reversion. I should sign off here by telling folks a story.

So I’m in Palm Beach and I have a friend nearby that was a pension consultant, actually Wilshire Consulting, big fancy pension consultant. And he was affiliated with a Princeton professor who perfected this mean reversion system on the S&P 500. And his management firm exploded. He got up to $60 billion pretty fast, and then he sold out to Janus, and they got a bigger boat, by the way. He’s really quite a brilliant man. And every system has the liquidity limit.

But I think mean reversion is worse than ever now because of a Citadel. It’s clear what they do, and it’s clear how they will sell those day options and then try to knock the stock down so they don’t have to fulfill all the call options they just wrote.

So this is real, and I’m glad you have a powerful tool that everybody can use to monitor stocks and profit from.

Jeff:

Thank you, Louis, and thank you for letting me talk to your folks about this.

Louis:

Well, Jeff, I just wanted to say thank you for sitting down with me and telling my readers about your view on the markets and a little about your approach to trading that has made you so successful. You’re one of the experts I recommend people listen to during volatile market conditions.

Now, if you want to learn more about Jeff and his unique strategy for finding 100%-plus winners, often times in only a few days, then I encourage you to sign up for his Countdown to Chaos event on June 11 at 10:00 AM Eastern time. You’ll learn more about Jeff’s latest market prediction and how it could help you double your money at least six different times over the next 12 months.

Simply click the link at the bottom of your screen to read more about what you’ll learn. And thanks for joining us today.

Tom Yeung here with today’s Smart Money.  

On May 27, a gated home in Shanghai’s Changning District sold for 270 million yuan ($38 million), creating a sensation in the Chinese press. 

“How can it not make people drop their jaws?” one Chinese reporter asked. “It is like a boulder thrown into the market, stirring up waves.”  

It’s often easy to overlook this kind of news. Chinese is wildly different from English, making literal translations sound eye-rolling. The rest of the article mentioned the house’s “invincible” location and “irreplaceable humanistic value.” (It makes a lot more sense in idiomatic Chinese.) 

An “invincible” location, according to Chinese media.

Yet, this sale is far more important than most Western investors realize. It could mark the start a new commodities supercycle that has the potential to power stocks higher for years to come. 

So, in today’s Smart Money, let’s take a look at how that could play out…  

And at some of the companies that should benefit from China’s housing comeback… 

The $19 Trillion Growth Engine 

It’s hard to overstate how important China’s real estate is to global growth. The country is home to 1.4 billion people, and more than 70% of their household wealth is invested in real estate, compared to just 30% for Americans.  

Chinese savers use real estate instead of the stock market to store wealth, and it’s become their version of a consumer economy. Chinese parents often buy apartments for their children, who are then expected to buy homes for their kids, and so on.  

That caused a commodities supercycle between 2002 and 2015. During these peak years, commodity-focused funds like the iShares MSCI Brazil ETF (EWZ), a fund that invests in public equity markets of Brazil, saw prices surge 1,000%.  

At the same time, some more focused players soared far further than that thanks to insatiable demand for imports into China. For example, Global Ship Lease Inc. (GSL), a containership owner,rose 750,000%. 

In fact, Microsoft Corp. (MSFT) co-founder Bill Gates once famously noted that China consumed more concrete between 2011 and 2013 than the U.S. used in the entire 20th century. Shares of China’s Anhui Conch Cement rose 21,000% in the decade leading up to that period. 

And here’s the thing: Despite almost two decades of construction, China still lacks quality housing. Single-family homes remain rare, and average per-capita living space comes to just 473 square feet, or less than half of the 971 square feet per person the U.S. boasts for new builds.  

That means Chinese residential real estate still has plenty of runway for growth… and so do the companies that serve the country’s growing demands. Copper… steel… even consumer goods will benefit as a spillover wealth effect takes hold.  

We’re also seeing other signs that a new commodity supercycle could be on the way.  

On Sunday, property research group China Index Academy revealed that the average price of new homes across 100 Chinese cities rose 0.3% in May, almost double April’s increase of 0.14%. This represents the first significant uptick since 2023. 

Chinese residential real estate developers like Vanke and Longfor Group have additionally seen share prices stabilize. These highly indebted companies saw a crushing pullback in the 2015-2024 period after the Chinese government began clamping down on state-sponsored real estate lending.  

Their recovery is a lot like Wells Fargo & Co. (WFC) and Citigroup Inc. (C) clawing their way out of the 2007-’08 financial crisis. Once these developers recover, so will Chinese construction and all the consumption that comes along with it. 

How to Invest in China… Safely 

Of course, investing in China needs a great deal of care.  

Chinese real estate developers operate more like financing vehicles, and accounting tricks are easy to hide. (My first boss insisted I treat statements from Chinese financials like works of fiction.) The average Chinese property developer trades for under 0.5X book value, because no informed investor believes they’re worth the assets on their official books.  

Quality among other Chinese firms is also inconsistent. Auditing standards are lax, and many bad players use that as an invitation for outright fraud. If we ever recommend a Chinese stock, it will only be after an incredible amount of research.  

That’s why, in Eric’s Fry’s Investment Report service, we’re interested in the secondary winners that stand to gain from a resurgence of Chinese demand. These are Western-based firms held to higher accounting and governance standards that sell enormous amounts of products into China.  

They fall into two categories… 

1. Upstream Suppliers. The most direct impact will be felt by commodity suppliers like copper and gold miner Freeport-McMoRan Inc. (FCX), which sells much of its international production to China.  

   The country imported a jaw-dropping 65% of global copper exports in 2023 (a year when construction was still muted). A return to more “normal” levels of construction alone will create a mini commodities supercycle.  

2. Downstream Suppliers. We’ll also likely see improvements in demand for consumer goods and industrial products, benefiting companies that use Canada and the European Union as production bases. 

In fact, Eric recently recommended one such downstream supplier that serves China’s elite. Fry’s Investment Report members already have seen their shares of this Canada-based firm surge 60% in the past two months thanks to strong Asian sales. Plus, this company has already reported an 8% increase in Chinese sales in the most recent quarter.  

And we foresee even greater gains ahead as China’s economy heats back up. (To learn more about this company – and the other upstream and downstream Chinese suppliers that Eric recommends – click here to learn more about becoming a member of Fry’s Investment Report today.) 

Over the next several years, we’ll likely see the Chinese economy return to stable growth. And those who dismiss poorly translated news about Shanghai real estate auctions do so at the risk of missing out on one of the world’s greatest growth engines. 

And speaking of missing out… 

Finding Opportunities in the Chaos 

When most people see volatility in the market, they panic. And we’ve seen the stock market endure an endless assault of chaos this year.   

However, with every push and pull of the markets, opportunities open.  

And master trader and 40-year market veteran Jeff Clark specializes in finding unique opportunities amidst market chaos. (You’ll recall Eric talking with Jeff about this subject in Wednesday’s Smart Money.) 

In fact, 2008, 2020, and 2022 – three of the most devastating years for the average investor – turned out to be among the most lucrative years of his career.   

Jeff used what he calls a “chaos pattern” to anticipate wild those market swings – and hand his readers over 1,000 winning trades during those time periods.  

And his “chaos pattern” has just reappeared.  

That is why on Wednesday, June 11, at 10 a.m. Eastern, Jeff is holding the Countdown to Chaos event, where he will detail everything you need to know about this “chaos pattern”… and how you can use it to find opportunities while others panic.  

The event is free. But Jeff asks that you register for it now. 

Jeff has teamed up with our corporate partners at TradeSmith to create a new powerful stock screener that looks for his “chaos pattern” every single day. His is unveiling this screener for the first time during the event. 

If you have any money in the markets, or are concerned about what comes next, you won’t want to miss Jeff’s upcoming special event. 

It is less than a week away. So, be sure to click here now to reserve your spot. 

Regards,  

Thomas Yeung  

Markets Analyst, InvestorPlace 

Take a look at this chart – it may just change how you think about artificial intelligence…

At first glance, it’s just a timeline of notable AI systems over the years. But buried beneath the surface is a signal most people miss: the number of parameters that each system uses. And that figure is exploding.

As Our World in Data notes, these “are internal variables that machine learning models adjust during their training process to improve their ability to make accurate predictions.”

Think of parameters as the brainpower behind an AI. The more it has, the more nuanced and capable it becomes.

Basically: the more parameters a model uses, the better – and more humanlike – it becomes. 

In a way, this chart acts as a portrait of AI’s exponential growth. And we’re not at the end of the curve – we’re at the base of a vertical spike.

Let’s put this in context…

How AI Went from Predictive Text to Project Completion in Just 5 Years

In 2019, GPT-2 struggled to write coherent paragraphs. By 2022, GPT-3.5 could navigate menus faster than a human. Just a year later, GPT-4 cracked problems in seconds that used to take five minutes. Today in 2025, Claude 3.7, Sonnet, and O1 are solving 20-minute tasks in the blink of an eye with an 80% success rate. Meanwhile, OpenAI’s o3 has crossed a new threshold, completing coding problems faster than human engineers.

As this AI Boom continues to unfold, we’re witnessing exponential capability compounding in real time. 

We’re just about three years into this new AI-driven era, and the chart is already curving skyward.

Now project that same pace out a few more years…

Instead of working out 30-minute bugs, these models could handle multi-hour, maybe even multi-day, autonomous workflows.

We’re talking about AI that doesn’t just autocomplete your sentence but your entire project.

Agentic AI: The Next Evolution That Works Like a Teammate (or a Threat)

We’ve officially crossed into a new era: that of Agentic AI.

Instead of a model that can offer a clever retort or write its own poem, this iteration of AI can:

• Set goals
• Design workflows
• Initiate subtasks
• Self-correct
• Call external tools
• Track progress
• Report back or even act on outcomes

This is AI not as a tool but as a colleague and collaborator… and perhaps in some domains, a replacement.

These agents will take a vague objective – “launch a product campaign,” “revise the codebase,” “generate a pitch deck,” “run a growth audit” – and complete the task end-to-end.

And it’s already happening. Just look to Meta (META), one of the world’s leading AI companies.

According to a recent Wall Street Journal report, Meta executives say the company’s internal “AI Marketing Engine” can already run A/B tests, generate visuals from brief prompts, and allocate ad budgets dynamically – with plans to replace 90% of manual ad workflows within the next 18 months.

Not just targeting… every single aspect: writing copy, creating visuals, designing campaigns, assigning budget, monitoring performance, generating reports…

That’s a full-on replacement.

A business that once required entire teams of marketers, designers, analysts, and managers will soon be run by autonomous AI agents with prompt-driven brains and reinforcement learning feedback loops.

And you better believe if Meta pulls it off, Alphabet (GOOGL), Amazon (AMZN), TikTok, and every direct-to-consumer brand on the planet will follow.

It’s an exponential economic transformation all powered by AI.

AI in Hollywood: The Death of Traditional Filmmaking?

Let’s tie this to another stunning development we’ve talked about recently: Veo 3, Google’s latest generative AI video model.

A couple years ago, AI-generated videos were meme-tier at best. Distorted faces, jerky motions and transitions… Pepperoni Hug Spot.

Now? AI can create a near-masterpiece from one simple text prompt.

An entire hyper-realistic scene in 1080p – cinematic lighting, lifelike animation, synchronized audio – within just minutes or less.

Right now, clips are limited to eight seconds. But we know how this curve works. First 8 seconds, then 30… a few minutes… and suddenly, we’ve achieved feature-length films.

And combined with what Meta is building in ad automation, it’s not hard to see the convergence:

AI would write the concept; generate, place, and target the ads; evaluate return on ad spend; rework the copy…

All without a single human touching the process.

Jeff Clark’s bright red warning flag… the reversal of bond yields’ multi-decade direction… three major consequences… on a bear market’s doorstep?… how to trade volatility

Sir John Templeton once said:

The four most dangerous words in investing are: “This time it’s different.”

Perhaps.

But master trader Jeff Clark offered a visual of why today is “different” compared to the last 40 years – and the takeaway suggests that investors should be careful.

Here’s Jeff:

Most folks under 50 years old have no idea what’s coming next. They’ve never experienced a rising interest rate environment.

Look at this chart of 30-year interest rates…

Long-term interest rates peaked in 1982, with the 30-year Treasury Bond yielding 14%.

Rates then declined for the next 40 years – hitting as low as 0.4% during the COVID crisis in 2020.

But look at what has happened in the last three years. The 30-year Treasury yield broke out above a 40-year declining resistance line.

This is a tectonic shift in the market

This reversal in the direction of treasury yields has three primary consequences:

• Tighter economic conditions for Main Street
• Tougher investment conditions for Wall Street
• Heavier debt burdens on Uncle Sam

Beginning with “Main Street,” Jeff notes that Interest rates are up 60% since 2022 – and 1,100% higher than their 2020 lows. Borrowing money now costs 11 times more than it did five years ago.

Here’s Jeff with the significance:

Most folks manage their debt by taking out new loans to pay off older debt as it matures. And, for the past 40 years we’ve been able to do this at perpetually lower interest rates. This allowed us to borrow even more money without incurring larger debt payments…

There were no consequences to borrowing money. Deficits didn’t matter.

Now though, with long-term interest rates recently hitting the highest level in 20 years, it costs more to borrow money. Any maturing debt must be refinanced at higher rates.

Nobody is refinancing their mortgage anymore and taking out a pile of cash to spend on their lavish lifestyles.

Now, you might recall that in yesterday’s Digest, we profiled the recent resilience of the U.S. consumer. But that resilience doesn’t mean that there aren’t risks today.

To explain, let’s jump to our hypergrowth expert Luke Lango. In his Innovation Investor Daily Notes from last week, he dove into the “pretty ugly” second revision of U.S. Q1 GDP, then turned to the consumer:

The more-important personal consumption number was revised significantly lower from +1.8% to +1.2%. That’s a really low growth number for personal consumption.

Going back to 1995, the average personal consumption growth rate has hovered around 3%. We are at 1/3 of that today.

The U.S. economy is not in a great position right now.

Tougher investment conditions for Wall Street

Back in 2023, I wrote a Digest that suggested the economic and investment conditions that helped Baby Boomers and Generation X generate wealth were fading.

Yes, those generations faced bear market and recessions, but overall, “buy the dip” was a winning strategy. I suggested one primary reason for their good fortune…

The slow, steady decline of the 10-year Treasury yield.

It created a perfect environment for stock investors.

I wasn’t the only one who had arrived at this conclusion. Here was the “Bond King” Bill Gross, co-founder of PIMCO, from back in 2013:

All of us, even the old guys like [Warren] Buffett, [George] Soros, [Dan] Fuss, yeah – me too, have cut our teeth during perhaps a most advantageous period of time, the most attractive epoch, that an investor could experience.

Since the early 1970s when the dollar was released from gold and credit began its incredible, liquefying, total return journey to the present day, an investor that took marginal risk, levered it wisely and was conveniently sheltered from periodic bouts of deleveraging or asset withdrawals could, and in some cases, was rewarded with the crown of “greatness.”

Perhaps, however, it was the epoch that made the man as opposed to the man that made the epoch…

We’re no longer in that epoch.

To illustrate, in our 2023 Digest, we showed a very similar chart to the one Jeff highlighted above, except we chose the 10-year Treasury, not the 30-year.

Our bottom-line mirrored Jeff’s…

This time is different…at least in the bond market.

To be clear, this doesn’t mean life-changing stock returns aren’t possible (we’re looking at you, AI/robotics/humanoids). But it does suggest that if this bond direction continues, it will be a headwind to stock returns that we haven’t faced in about 45 years.

Heavier debt burdens on Uncle Sam

Let’s return to Jeff:

The U.S. government – with $9 trillion of its $36 trillion national debt due to mature in 2025 – for lack of a better word… is screwed.

All of that debt will be refinanced at higher interest rates.

Stepping back for context, our government is already paying through the teeth on interest expense.

The U.S. Treasury’s annual interest expense passed $1.117 trillion last year, making it the second-largest government expense on record.

Source: Bloomberg / Joe Consorti

But the spending that’s on the way dwarfs this…

Here’s the Peter G. Peterson Foundation, a non-partisan thinktank:

Over the next decade, the U.S. government’s interest payments on the national debt are now projected to total $13.8 trillion — the highest dollar amount for interest in any historical 10-year period and nearly double the total spent over the past two decades after adjusting for inflation.

The government has two options to finance this hefty price tag: raise taxes or issue more debt.

We’re not raising taxes. As we’ve profiled in the Digest, the Trump Administration’s “big, beautiful bill” (which Elon Musk calls “a disgusting abomination”) has passed the House and is now in the Senate.

It aims to make the tax cuts from the “2017 Tax Cuts and Jobs Act” (TCJA) permanent, including provisions like the higher standard deduction and lower tax brackets.

It also includes new tax relief measures, such as no taxes on tips, a deduction for auto loan interest, and tax relief for seniors.

So, that leaves “issuing more debt” – which is what we’ve been doing for the last handful of years.

As you can see below, we’ve had an explosion of treasury issuance since 2020.

Source: MacroMicro

When new treasury issuance floods the market, the oversupply results in lower prices to entice buyers. And since bond prices and yields are inversely correlated, this means bond yields rise.

That’s not good for stocks or for the federal government’s debt service (and eventually, the value of your savings in dollars).

Back to Jeff:

Some of us wrinkled, gray-haired, old folks remember what it was like living in the 1970s.

We’ve seen how financial assets perform in a rising interest rate environment.

So, what do we do?

First, while we won’t dive into it today, we’ve been pounding the table for months: We invest in AI, robotics, and humanoids.

These stocks may face volatility and go through significant drawdowns, but the long-term upside is massive given the seismic tech shifts ahead.

Second, prepare for volatility. As we’ve covered in the Digest, Jeff believes a bear market is at our doorstep, with a potential bottom around 4,150 on the S&P this fall.

Most importantly, we seek out opportunity regardless of the market environment.

Even in bear markets, Jeff has shown how explosive rallies can deliver double- or triple-digit gains in days. And of course, there are also big profits in betting on downside moves.

Bottom line: double- and even triple digit returns – as the market moves up or down – are in play over very short timeframes. But let me show you.

Here are five of Jeff’s most recent trades in his service Delta Report, both long and short. Notice how quickly Jeff is in and out of these trades, as well as their returns:

1. OSCR long trade on 05/06/2025, closed on 05/07/2025 for a profit of 97.10%
2. WGMI long trade on 04/15/2025, closed on 04/24/2025 for a profit of 81.13%
3. DELL short trade on 04/09/2025, closed on 04/11/2025 for a profit of 89.79%
4. C short trade on 04/04/2025, closed on 04/09/2025 for a profit of 76.39%
5. MRVL short trade on 04/04/2025, closed on 04/09/2025 for a profit of 90.72%

Now more than ever, you should consider adding this type of shorter-term, bi-directional trading to your toolkit. If you’d like to learn more about how, mark your calendar for next week, Wednesday, June 11 at 10 am ET for Jeff’s Countdown to Chaos event.

Jeff will dive into the details of how he trades. In short, it’s a “reversion-to-the-mean” trading strategy. Basically, when he sees that a stock or an index gets stretched too far in one direction or the other, he bets on the proverbial rubber-band snapping back.

Here’s Jeff:

We look to buy stocks that are deeply oversold, and we look to sell/short stocks that have pushed too far into overbought territory.

Next Wednesday, I’ll walk you through more details, as well as exactly what’s coming next… and how you can position yourself not just to survive but to profit in spades.

I’ll reveal 10 compelling opportunities flashing right now, as well as the powerful new tool I’ve built with TradeSmith to find them daily.

If you’ve ever wanted to turn volatility into your biggest advantage, join us for the Countdown to Chaos.

Stepping back, “this time it’s different” can be a dangerous assumption…unless it really is different

So, it is different today?

Back to Jeff to answer and take us out:

“Deficits don’t matter,” the younger folks shout at us older traders. “The national debt has grown from less than $1 trillion in 1982 to almost $37 trillion today, and nothing bad has happened.”

They ask, “What’s different this time?”

Take another look at the chart above…

This time, you’ll see the difference.

Have a good evening,

Jeff Remsburg