The signal is clear

S2N spotlight

Don’t you just love it when you speak to traders who think they have found the perfect indicator that is telling them exactly where the market is going?

Today I am going to try my best not to gloat, as it is still early and the dislocations I have been forecasting may just be a pause before the “markets only go up” fire up. Having said that, you pay me the big bucks to hear my views, not my hedges.

I have mentioned a few times that I am building a sophisticated trading system framework in the background. The past 2 days I have been stuck trying to fix a subtle but persistent bug that was causing the framework to make the results go haywire. It reminded me how often systems — financial or digital — break not because we’re stupid, but because we’re too clever.

Remember the programmers who, to save memory, recorded years with just two digits? Brilliant — until Y2K arrived and the world almost ended. I had my own Y2K moment when futures traded at negative prices and the framework went meshuga. The code couldn’t compute a world where sellers pay buyers to take risk off their hands.

The moral? What looks obvious in hindsight was invisible in foresight. The only reliable way to turn hindsight into foresight is to understand history—to know the system’s hidden assumptions and recognise when the crowd is coding the same blind spots.

Which brings us to Bitcoin and its high priests. Fourteen years apart, a single wallet tells the story of belief and endurance: 10,000 BTC bought at $1.54 were sold yesterday for $1 billion.

The seller was later seen breathing normally outside. 

Before you think you could have done it, consider what the guy with the big pair had to endure—ouchh!

In case you missed it, Bitcoin traded yesterday below $100k at one stage, down more than 6% on the day. Of course that didn’t stop the Drunken Saylor from tweeting:

Take that in for a moment after professing to have discovered alchemy where MicroStrategy (Strategy) can produce a yield by issuing stock at a premium to the Bitcoin price and using that money to buy the underlying Bitcoin.

The definition of a yield in finance is: a yield is the income generated by an investment, typically expressed as a percentage of the investment's value. It represents the return on an investment in the form of interest or dividends.

When you are the high priest of a new religion, you get to redefine or create new things.

While I am sticking the boot into Saylor, why not comment on another spectacular market cheerleader, the ever bullish Tommy Lee from FundStrat who found religion at the ministry of Michael Saylor. His company, BitMine, is pulling a full-blown MicroStrategy — but with Ethereum.

As of late October 2025, they hold well over 3 million ETH (roughly $14 billion worth) and talk openly about acquiring 5 per cent of all ETH in existence. It’s the same gospel, different blockchain: leverage the balance sheet to chase a digital god. History doesn’t repeat; it just gets ported to a new protocol. There are a number of differences; the one important one is that BitMine has an average purchase price of $3,900, and ETH is currently trading at around $3,230 which equals losing money.

I wanted to bring to your attention how the rolling 6-month volatility in Bitcoin has been trending lower for more than a year.

Volatility is a mean-reverting feature in markets — a rare gift that punishes complacency and rewards patience. Take note of the VIX and MOVE (bond volatility) indexes. Don’t be complacent.

S2N observations

On Monday there was more begging at the Standing Repo Facility. Only $22 billion, though. Yesterday was more subdued at $4.8 billion. There are clear liquidity problems out there. Crypto’s route this week has put further strain on liquidity. Remember my letter a few days ago about all the money on the sidelines. There are no sidelines. Money never sits idle: it is always in someone’s hands.

There really is no greater investor in the world. Buffett is the goat of goats. While everyone has been climbing into the markets. Berkshire Hathaway has been building a pile of cash that would make King Midas jealous. $380 billion reasons to have every desperado knock on his door. I am thinking of opening a coffee cart outside his office.

S2N screener alert

I am overwhelmed today with debugging. I think I shared enough alerts above.

Take note the US Dollar is above 100 again.

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