How to Save Your Self from What's Coming.
Weekly Plan 5.25.25
Despite the S&P500 ripping from 4850 to nearly 6000, I still think stocks are extremely overvalued over the long horizon. Bonds? Near generational lows and still unloved. And with the way things are shaping up, they might be in for an even rougher ride ahead.
So here’s the real question: how do you position yourself for the next 10, 20, 30 years?
A while ago here in the Substack I shared my personal views on what role do short term swing trades, options trades, even futures trading plays in our lives as traders and investors. I categorized all of these short term trades as just that— they can be thought of as means of generating monthly or annual income, speculating on momentum, news flow, orderflow— but I will not necessarily use them as a preferred vehicle of choice for preserving wealth for the long haul.
The reasons are simple: momentum does not last forever. Trend is your friend until it has bent. Yada yada.
So, what happens if I just go to sleep for 20 years? Do I wake up a bum. Or still financially sovereign?
Do I YOLO it all into NVDA and TSLA? Let cash sit in Treasuries for 5% a year for 20 years? Do I buy Bitcoin at $100K and hope it’s $5 million by 2050?
These questions have crossed my mind several times in last few weeks as we see a tremendous, once in a lifetime shift take place in the Global commerce and politics.
This post today is an attempt to share some of the answers that I came up with grappling with these questions in my own mind. Now know that this post is not focused on what the markets will do next month or next year or the year after. We are expanding our time horizon to what these markets may do decades down the road.
To answer the question “How to protect our selves from this seismic change”, we need to first understand first what the seismic change is.
While this is an extremely complex topic which will need a post or two to describe itself, we can explain it away by simply saying this change is a multipolar world. The change is divorce from the US hegemony and it is de-dollarization.
Now many of you may think it is no big deal, that it has been ongoing for over 2 decades now so it should not materially change anything.
I beg to differ.
While I agree with the first part of the assumption that this is something that has been going on for several years now, I submit that this change up until now was gradual. Starting with 2020, the rate of change of this change has gone parabolic.
It all started with the 2020 Coronavirus. The effects of this are still being felt today in areas like Central Bank Policy, a reset of 40 year low inflation rates, fundamental changes to how we work, how we travel, how and where we spend, and most importantly the relationship between sovereign nations.
The second nail in this coffin was the Russian invasion of Ukraine and how it was handled by the United States. The US and its NATO allies responded not by an all out military conflict but by very unconventional means- they used the US dollar as a weapon by not only imposing hard sanctions on Russia but by seizing their reserves and other assets. They cut off Russia from the inter-banking system and seized Russian reserves, denominated in US dollars and Euros. This has bred fundamental distrust by sovereigns when it comes to US dollars and bonds to a large extent as these are most liquid markets- the sovereigns trade them not 0DTE, when they want to move billions.
The 3rd and final nail in this coffin was an erosion of the political stability and trust here in the United States itself. Political events of last two years — they will have ramifications for decades to come where both prominent political parties here in the US will never be the same again.
Now very few people actually realize the gravity of these 3 major events which all pretty much happened in last 4-5 years.
These aren’t footnotes in history. They are foundational shifts, and yet the market marches on like it’s still 2013. The meme: “stocks only go up” was born in the aftermath of the Great Recession, and it’s blinding people to existential risks.
In my mind these are existential problems that if not solved soon risk the entire system. At the same time, I really do not think you can “position” for this, but you can hedge for this. You cannot make a trade for end of the world, but you can buy insurance for it. And this is something I will cover in latter half of the post. These are unpleasant conversations that no one really likes to have so we will park it towards end of the post.
For now, let me share my thoughts on some short term setups which are everyone’s favorites as they are usually the ones that lead to instant gratification!
Let us start with bottoms up, by revisiting some levels on S&P500 emini and then build our case for next few weeks from there.
Look at Chart A below.
This is a Year to Date SPY Daily Chart.
So you can see at the onset of the year, you have significant number of longs trapped at the highs — these are the longs who purchased with an expectation of a market that will moon due to Trump’s reelection.
So far this has not really panned out as they thought it will and most of them are underwater.
At the same time, last several days, there has been a conspicuous lack of institutional engagement at these levels near 6000 and the markets have in last one week rolled over from that 6000 which was my key weekly time frame resistance last week.
The whole narrative for this sell off is the new tariff news flow which you are no stranger to, so I am not going to rehash the old news today.
Yes, I still believe a lot of the uncertainty from these new tariffs isn’t fully priced in. But at the same time, there have been notable developments in a few key stocks over the past couple of weeks that, in my view, support the bull case.
Net-net, I think dips, if we get them are still likely to find support. Without further ado, let us dive into some short term levels and ideas for next week or so.
Big Beautiful Bill going to wreck the stocks?
So one of the things that stands out for me, and something which I have called out multiple times earlier in recent weeks is that when it comes to short term trading the SPX and SPY markets, it is becoming increasingly harder during the day, if you are not nimble.
One, the volume has been extremely anemic. Two, when the volume is so low, it is extremely hard to form a view not just about the general market but swing set ups in stocks as a whole.
And if this was not enough, I have reasonable confidence that tremendous amount of insider trading right now is going on— this is why we magically seem to see buyers and sellers of SPY CALLS and PUTS emerge, just at the perfect moment and turn a million or so in PUTS and CALLS to tens of millions of dollars, seemingly overnight.
This is insider trading at the very highest levels which makes it harder for rest of us who are not privy to sudden drop of major policy on Twitter and elsewhere.
Now this means you, and I , as operating without the benefit of insider tips, have to have extremely excellent levels to buy and sell where the insiders cannot inflict much damage even if they try. Fortunately, for us, we can see some patterns emerge on the tape that can forewarn us. Now this is precisely why I am hesitant last few days or so to trade short term setups because I have a reason to suspect this whole bullish move at 6000 was a trap. Only a few days later we will sell off to 5750, proving me right in the hindsight. Now regular readers understand this as they have been with me for a while now. This is mostly for newer traders and readers- I am just sharing the reality of these markets. If you come from a chart background, you may not understand this as all charts look all the same — green and red candles. But there is a lot more going on inside the guts of this market. There are a lot of hidden traps and landmines and by simply not trading during such times, we can save a lot of heartburn. For new trader he may think “ohh I am paying all this subscription dollars and there are no setups?” .
Believe me when I say there will be setups, there will be a ton of them, there will be favorable times to trade. It just cannot be predicted when. But we can react once it happens.
I want to talk about a couple of mega caps which I think look interesting and then from there go to levels on the main index for the week.
Let us start with TSLA.
So with TSLA, we recently traded to 350 and then softened a bit on Friday to close at 339.
If you have followed me for a while, this was my target for TSLA when it was trading 218 back in March. So the stock rallied more than 50% from those support levels.
With TSLA, their main business remains 3 fold- they sell cars, they sell carbon credits, they upsell software and services. This is their bread and butter— like it makes 90% of their revenue.
All 3 of these in my view are under severe danger. I think the car business will not recover from events of last few months and I think the Big Beautiful Bill (BBB henceforth) poses existential danger to the credit business.
Now I would say the BEST business TSLA operates right now is the energy business. I think this will grow rapidly and could one day be about a third of TSLA revenue and profits. Right now, it does not make a huge dent.
Now on the FSD, Robotaxi, and the Robot side of the house, I do not think it is vaporware but at the same time, I do not think Robotaxi or the Robot make a cent in profits for Tesla until 2028-2030. You can argue with me all you want, it will not change my view. In sections below, I share some names which I think will win big in this segment.
So the sum total of this analysis is that while I will not be a bear outright on TSLA at the moment, because I cannot overestimate the enthusiasm of uniformed traders chasing vapor, I personally think if I am gonna be a TSLA buyer, I will have to buy it at no more than 280-300 apiece and I am being generous here.
As far as the mega caps that do interest me, I do like NVDA, MSFT, GOOG and META, in no particular order.
With NVDA, it is just so hard to model this at the moment but I do feel firmly that any sell off in this stock could be supported. In terms of competition, I really do not see any, atleast for another 3 years. It is much more than just a GPU company, their CUDA offering is so deeply embedded into the AI architectures that it is going to be painful to unseat them.
I cannot be bearish on NVDA in the next few months to a year or so.
So they have these earnings on 28th. They are trading 130 at the moment. I think any dips, if there are any, I think they could be supported.
I like 115 level or so. I think if I get a fill here, we may be headed higher into 150s on NVDA.
With META, the primary advantage you get is two fold:
First off, they now have a very lean and mean operating side of the business so they could win big just from all the efficiency gains they have made in last couple of years.
You have also have a totally untapped market in WhatsApp which is one of the largest, if not the largest messaging platform in whole world. This is not monetized yet.
I will like to see any dips into META into 600, into 580, supported for the stock to move higher and retest its old recent highs near 700 dollars.
MSFT
MSFT has had a decent upside in recent days. I would not sleep on MSFT unless it were to start trading below 390 again. It is 450 at the moment.
I think MSFT can clear 500 dollar area to trade 600 shortly thereafter.
***Very Important***
Now everything I just said must be taken in context of the general market conditions. You have a lot of pressure on the general market potentially from the BBB tax bill, you have core PCE coming up ahead, you have the Core CPI on 11th of June and then you have the half year on June 30, bond yields surging.
In the weeks ahead I think we can perhaps lean on this 5850 level on the general market index emini.
I think if this holds as resistance, we could sell down into 5700 area. Once and if we get to 5650-5700, I do feel this is a good level from a risk to reward for the general market as well as these stocks I just mentioned.
Smaller caps
If you are a regular reader, you know all about many of my calls which have gone up 5-6 times, even 10 times. There are around a dozen or so such examples in recent few months which I would not rehash here but the subscribers can go read all about them in archives.
If a stock is going to 10X, like y’all saw with my exact bottom call in PLTR here when it was 6 and then 30, the key takeaway is that it comes with tremendous risk. So we are talking about a truly asymmetric risk profile where the stock can shed 50-60% or even more of its value but then there may be a chance that it can also perform ginormously to the upside.
So for instance, can an AAPL 2X from here, can it 10X from here? You tell me.
These big runner are usually smaller stocks which have fallen out of favor or the public does not care about them much.
In this regard, I continue to like MRNA (Moderna) which I do believe has a moonshot of being acquired. Last week I shared some options plays on this which did extremely well, at one point doubling. See below. I think Moderna continues to look good, but the context of risk to reward has been presented above. Please re-read if not clear.
Unity (U)
So I lost count of time that Unity has spent here going nowhere.
Sometimes it is not a bad thing. I will probably look at some LEAPS in Unity going out a year or so.
So this looks like these 25 dollar calls, going all the way out to January of 2026, I think look robust here at 3 bucks.
GOOG
Google is such a weird stock for me to valuate. One on hand, I think the technicals look really bad. Then you have the whole existential threat to its search business which at time of this post still brings in more than half the profits and revenues for this company.
At the same time, you have massive untapped potential in this company.
I personally believe in Sundar CEO and I think he is one of the more remarkable CEOs who really “gets it”. Yes they missed the boat on whole AI thing, yes they dropped the ball on first mover advantage but do not underestimate them. They own the whole ecosystem- platform, to software to their own in-house chips, and gigantic cloud business with 3 billion or so potential subscribers globally which are yet to be monetized. You potentially have a massive winner here in the Robotaxi with Waymo being the only Level 4 autonomy in the US (I do not really count GM as a threat), with our vapor salesman still at Level 2.
It may take some time for the normies to realize the inherent value in Google, and in meanwhile it may languish here between 140 and 170 may be, but I think this is a 250+ dollar stock, not a 150 dollar one!
Levels for the week
5850 or so on the upside and 5722-5724 on the downside will be my key levels for the week.
Scenario 1: I think for the bulls to return in full force we need to see a Daily close above 5850 in the emini index. If we stay above 5850 or so during the week, this is a plus for the bulls.
Scenario 2: Minus this, I think if we sell off towards 5722 or so, these levels could be supported for a move back into 5850.
Let’s wrap up the post by sharing my thoughts on how to preserve wealth across generational time frames
So if you ask me, I will say, I have money in the market that I do not need today, tomorrow or 5 years from now, for speculating and swing trading and intraday trading. That is not going to change. And if we drop 20%, I will buy some more.
Do I put 5-10% of my net worth in Gold?
100%. I do not think this is a bad idea as long as I understand a few things about nature of Gold markets.
First off, Gold is not an investment per se. It is an insurance. Now while I think Gold will one day trade 5K, and it will trade 10K one day, I do not think anyone can predict when.
In fact I am more certain Gold may trade 2500-2600 first than it trades 10000.
Gold is in favor right now by the retail. This is not exactly a perfect recipe for future price appreciation in the short term. I have gold which I purchased when it was 200 bucks an ounce. I have it at 1000 bucks an ounce. So you can see where I am coming from, if I were to make my first purchase here at 3500 bucks an ounce.
Generally I do not think it is a bad idea to allocate 1% of my income to Gold in form of some sort of Dollar cost average basis, and bring it up to may be no more than 10% of my net worth.
Think about it for a second..
If you are buying Gold for end of the world scenario, will it really matter if you have 10% or 100% of your net worth in Gold? I think even if you have 10%, it will just be as ok as someone with 100%. And if the world does not end, you will under perform the general market.
Now in such an end of the world scenario, even if I own my home or a 2nd home outright, that is not a bad idea. So another 20-25% of my net worth I could have in real estate to preserve my purchasing power over vagaries of time where the Dollar is certain to go down the drain over a very long term horizon.
This puts about a third of my net worth in solid, tangible hard assets. If the financial world ends today, I still get to have a roof over my head.
I could further have 20-35% of my assets in short term treasuries or bills anticipating a market correction so I can buy more later cheaper. There is no way I will buy longer term US government bonds even at 5-6% yields as the path they are on right now, you would have to pay me atleast 10% even to consider these bonds and tie up my money for 10, 20 years.
This leaves me with 40-50% of my stash to speculate, trade, invest, day trade — whatever. This is not the money I really need any time soon.
This allocation mix reflects how I see the market right now. If we crash to 4000 tomorrow, I’d likely shift; less in Treasuries, more in speculation and investments. But as of today, I’m content with where things stand.
This isn’t a formula. It’s not “the right mix” for anyone else. Your situation could be totally different.
Take a 22-year-old renting with eight roommates and living on ramen. If they’ve got 80% of their net worth in mega caps, even at these stretched valuations- do I think that’s reckless? Not necessarily. They’ll probably be fine. Worst case, they learn a costly lesson. But in the grand scheme, it won’t break them.
~ tic
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