Why Jeff Clark says it’s time to buy on weakness … the sector Eric Fry is recommending today … Trump fuels a bitcoin rally … Bitcoin’s incentive structure

Despite the market’s pullback that’s continuing as I write Monday, let’s get bullish.

On Saturday, fellow Digest-writer and InvestorPlace’s Editor-in-Chief Luis Hernandez highlighted the latest AAII Sentiment Survey showed only 19.4% of respondents are bullish.

This is the most lopsided report we’ve seen in several years…which makes it a contrarian’s dream.

Let’s jump to master trader (and frequent contrarian) Jeff Clark, editor of Jeff Clark Trader:

Back on November 13, 2024 – following the large, post-election rally that pushed the S&P 500 above 6000 for the first time ever – bulls outnumbered bears 50% to 28%.

From a contrarian perspective, that was bearish. And stocks have struggled to make any headway since then.

Now, with the S&P 500 still stuck near 6000 and trading down just 2% from its all-time high, the vast majority of investors have turned bearish.

It’s remarkable that two months of choppy, back-and-forth action can create that drastic a shift in sentiment. This is the sort of bearish reading we’d typically get following a 10% to 15% decline in the market.

So, there’s plenty of fuel to power the stock market higher from here.

Jeff highlights three indicators: Moving Average Convergence/Divergence, the Relative Strength Index, and the Commodity Channel Index, all of which have been trading recently in neutral territory.

While such readings mean the S&P could break lower, Jeff believes it’s more likely that bulls will reassert their dominance:

We are entering the seasonally bullish month of March. And the Volatility Index just generated its first buy signal of 2025. So, the bulls have a slight edge here…

Returning to the AAII Sentiment Survey, remember, the emotional pendulum swings both ways.

Excessive fear always gives way to new bullishness…eventually. And recent, heightened levels of fear suggest that a bullish reversal could be fast approaching.

Back to Jeff for what he’s doing about that:

If stocks start to move higher, then we could see a dramatic rally over the next few weeks as bearish investors flip to bullish and chase stock prices higher.

Traders should use any weakness over the next few days as a chance to add long exposure to the stock market.

One sector to be bullish on today

Solar.

Before we dive into those details, for newer Digest readers, Eric is our global macro expert and the analyst behind Investment Report.

He’s also one of the most successful analysts in the newsletter industry, having identified 42 different 1,000%+ returning investments over his multi-decade career. That’s more than anyone we know of in our business.

In Eric’s latest issue of Investment Report, he made the case for why it’s time to add solar stocks to your portfolio.

From Eric:

No other domestic energy source is growing faster.

Last year, solar installations accounted for a record-high 64% of all new U.S. electricity-generating capacity – up from 36% three years ago and 23% six years ago. This renewable energy source now produces enough electricity annually to power one quarter of all U.S. homes.

Meanwhile, domestic solar-module manufacturing capacity is also ramping higher.

During the last two years, manufacturing capacity has quadrupled, from less than 10 GW to nearly 40 GW. This year, capacity is on track to surge again to 66 GW.

But what about President Trump’s disdain for what he’s called the “Green New Scam” and his plans to “Drill, baby, drill” for fossil fuel energy? Is that not a headwind to solar?

Back to Eric:

Most of this new [solar] manufacturing capacity is popping up in “red states,” which is one of many reasons why the Trump administration might treat the industry kindly…

[Plus, Trump] has stated several times that he “hates wind.” By contrast, he famously stated last year that he’s “a big fan of solar.”

Eric goes on to highlight a second reason why solar power will continue to thrive during the current Trump administration…

Growth is the path of least resistance.

The U.S. desperately needs more power. The nation’s soaring demand for energy – led by the data center construction boom – will require an all-hands-on-deck solution.

Remember, last week, Nvidia CEO Jensen Huang said that next-generation AI will need 100 times more computing than older models due to new reasoning approaches.

From Huang:

The amount of computation necessary to do that reasoning process is 100 times more than what we used to do.

Solar is one of the cheapest ways to power such computing needs. So, even if Trump favors policies that encourage oil and gas development, he’s unlikely to enact policies that actively discourage solar.

As usual, Eric includes far more details that make the case for why he’s bullish on solar today. If you’re an Investment Report subscriber, click here to log in to read your Monthly Issue.

For an easy way to play the solar opportunity, check out the Global X Solar ETF, RAYS. It holds leading solar stocks including Enphase Energy, First Solar, and Sunrun. Just be aware that of your top 10 holdings, six are Chinese companies. So, watch out for trade wars.

As to how Eric is playing it, his preferred investment is trading near a four-year low, and Eric believes “a double is well within reach.”

You can learn more about it as an Investment Report subscriber by clicking here.

Finally, has Bitcoin bottomed?

Bitcoin rallied over the weekend after President Trump announced the creation of a “strategic crypto reserve” that will include bitcoin, ether, XRP, Solana’s SOL token and Cardano’s ADA.

From Trump on Truth Social:

A U.S. Crypto Reserve will elevate this critical industry after years of corrupt attacks by the Biden Administration, which is why my Executive Order on Digital Assets directed the Presidential Working Group to move forward on a Crypto Strategic Reserve that includes XRP, SOL, and ADA. I will make sure the U.S. is the Crypto Capital of the World.

In a follow-up post, Trump added:

And, obviously, BTC and ETH, as other valuable Cryptocurrencies, will be at the heart of the Reserve. Bitcoin popped over $93,000 in the wake of the news though it has pulled back to about $90,000 as I write Monday morning.

Stepping back, Bitcoin has fallen sharply in recent weeks

After notching an all-time high in December near $108,000, the grandaddy crypto fell below $85,000 last week. Meanwhile, many leading altcoins have full-on crashed 50% or worse.

Despite the sector gains over the weekend, many bears continue to predict Bitcoin’s demise. Perhaps they’ll be right (though they’ve all been wrong so far).

But if they’re going to be right, they’re fighting an uphill battle against today’s incentive structure.

Consider this…

Who is incentivized for Bitcoin’s price to rise? Simultaneously, who is in a position to help create the conditions for that rise to happen?

We got a clue over the weekend.

Trump.

But he’s not the only one. Here are a few other such individuals…

• Vice President JD Vance: He’s recognized as the first Bitcoin owner to hold the vice presidency
• Secretary of the Treasury Scott Bessent: This former hedge fund manager and multi-millionaire is known for his pro-crypto stance
• Secretary of Commerce Howard Lutnick: He’s the former CEO of Cantor Fitzgerald, where he invested significantly in crypto. He is quoted as saying, “Do I own Bitcoin? Of course, I do. Does Cantor Fitzgerald own Bitcoin? A shitload of Bitcoin.”

Bottom line: Whether you love or hate Bitcoin… whether you love or hate the current administration… when you follow the incentive structure… you’ll see a reason to remain bullish on Bitcoin.

And it’s not just Bitcoin. We expect select altcoins to reward investors handsomely here in 2025. Trump mentioned a few in his post, but there will be others.

In fact, our crypto expert Luke Lango believes this could be the year of huge altcoin gains, similar to 2021 when dozens of altcoins rallied more than 5,000% in a single year.

To help him identify the most lucrative opportunities, Luke is using a quant-based trading algorithm he and his team recently created. It puts the focus squarely on the one thing that matters when you’re trading altcoins – price.

Specifically, the tool is engineered to identify price breakouts that suggest a continuation of gains based on momentum. To learn more, click here.

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

Have a good evening,

Jeff Remsburg