⚡️ Smart Money Already Trading the Sector Rotation
Salt, Gold, Bitcoin — Same Story, Different Millennia
For our book club, we’re reading Salt: A World History by Mark Kurlansky. I went in thinking it was a book about seasoning. I came out thinking it’s a book about Bitcoin.
That sounds crazy, but hear me out.
Salt was the original scarce commodity. Before refrigeration and industrial mining, salt was hard to find, hard to produce, and something everyone needed. You cannot live without it. You needed it to preserve meat, maintain strength and survive winter. So for thousands of years, salt wasn’t merely a condiment. It was wealth. Governments taxed it, smugglers risked their lives for it, and Gandhi famously marched against Britain’s salt monopoly.
As a trader, I read that and thought: I know this story.
Scarcity plus universal demand creates value.
That’s essentially the same equation behind gold and Bitcoin.
All three are fungible, or at least attempt to be. One measure of salt from one reliable producer can serve the same purpose as another. One ounce of standardized gold is interchangeable with another. One Bitcoin is one Bitcoin. That fungibility is part of what allows something to function as a commodity. You don’t have to argue about which individual salt crystal is prettier. It simply works.
Kurlansky describes how Venice became enormously wealthy in part because its salt trade was reliable and standardized, allowing merchants to trust what they were buying. It’s the same reason standards matter in modern gold markets and why the Bitcoin protocol matters. Markets cannot scale without trust in what is being exchanged.
They are also divisible and portable, two characteristics that helped commodities become forms of money. Salt could be divided, carried and exchanged. Gold improved on that by concentrating tremendous value into a relatively small amount of material. Bitcoin takes portability to an entirely different level: enormous amounts of value can move around the world without moving a physical commodity at all.
Here’s where they diverge, and this is where it gets fascinating.
Salt is scarce but consumable. You use it and it’s gone. You eat it, preserve food with it, or dissolve it. Its value originally came largely from biological necessity.
Gold is scarce and extraordinarily durable. You don’t consume it. It can sit somewhere for centuries without rusting or disappearing, which is one reason humans decided it was an excellent way to store wealth.
Bitcoin is scarce but purely informational. Its maximum supply is written into the protocol: 21 million coins. Its scarcity isn’t determined by how many new mines we discover or how much material exists underground. It is enforced by code.
That was one of the most interesting parts of our book club discussion.
Salt’s scarcity eventually faded because technology changed the equation. Industrial mining made production easier and refrigeration reduced one of its most important uses. Something once valuable enough to shape kingdoms eventually became something we expect to find free on every restaurant table.
Gold’s scarcity has remained relatively stable because gold itself remains difficult to find and extract.
Bitcoin represents something different again. Its issuance was intentionally designed to decrease over time. Salt became abundant. Gold remained naturally scarce. Bitcoin was engineered to remain scarce.
Durability provides another interesting comparison. Salt can last almost indefinitely if you keep it dry, but water destroys its usefulness quickly. Gold can survive for generations. Bitcoin survives as long as the network, protocol and collective confidence supporting it survive—a completely different form of durability. It is not physical. It is technological and social.
What fascinated me most was realizing how sophisticated our predecessors already were about all of this. Chinese drillers were extracting underground brine thousands of years ago. European fishermen guarded valuable fishing and preservation knowledge because information itself created an economic edge.
It sounds remarkably familiar.
Different century. Different technology. Same human instincts.
After 25 years around markets—and after watching commodities, currencies and crypto evolve—the pattern becomes difficult to ignore. Humans discover something scarce that people either need or collectively agree has value. We standardize it. We establish trust around it. We create markets for it. Then entire industries, fortunes and sometimes empires grow around that market.
Salt played that role thousands of years ago. Gold has played it for centuries. Bitcoin is attempting to play a version of it in the digital age.
And that history feels particularly relevant to the market we’re trading today.
Oil prices are once again reminding investors that scarcity still matters. The Iran conflict and uncertainty surrounding global energy supplies have pushed crude back into the center of the inflation conversation. At the same time, investors are debating the value of dollars, Treasuries, gold, equities and digital assets while trying to determine what the Federal Reserve will do next. Markets may have become infinitely more sophisticated, but underneath all the algorithms and screens, we are still asking variations of the same ancient questions: What is scarce? What can I trust? And what will someone else value tomorrow?
With the VIX around 18 and the major indexes trading near their 50-day moving averages, those questions matter even more. Inflation, oil, interest rates and geopolitics are testing investors’ confidence at the same time. The commodity may change, but the forces moving markets—scarcity, fear, trust and human behavior—really haven’t changed very much at all.
So the next time you pick up a salt shaker, think about that. Something sitting almost unnoticed on your dinner table once helped determine trade routes, government policy and personal fortunes.
Different technologies. Different millennia.
Same market psychology.
Recent Trade Review: SPY Short
Last week, our DPT model identified the SPDR S&P 500 ETF Trust (SPY) as a short opportunity as broader market conditions were becoming more challenging.
That is where a structured process matters. A trade idea is only the starting point. We also want to see whether the setup is supported by macro conditions, technical price action, volatility and broader market momentum. Our models help identify opportunities, while expert analysis and risk-management tools help determine how to approach them.
Just as important is knowing when to exit. Paid members receive SMS notifications designed to communicate potential entry and exit points in a timely manner, helping traders stay disciplined as conditions change.
The goal is simple: identify the opportunity, validate the setup, manage the risk and know when to get out.
You can review the SPY trade from last Thursday’s Live Trading Room here:
https://yellowtunnel.com/live-trading-room-recordings#live-trading-room-recordings
The SPY short was also a useful reminder that even in a longer-term bullish market, tactical downside opportunities can emerge. Good trading is not about always being bullish or bearish—it is about responding to the market in front of you.
Current Trading Landscape
Markets are closing out a volatile week with investors balancing resilient corporate earnings against a much more difficult macro backdrop. The S&P 500 spent much of the week under pressure and briefly fell below its 50-day moving average on Thursday as rising oil prices, persistent inflation and surging Treasury yields weighed on risk appetite. The VIX traded around 18 during the selloff before easing toward 16 Friday, while stocks rebounded following the latest CPI report.
The biggest force behind this week’s volatility has been the renewed escalation in the U.S.-Iran conflict and disruption to Middle East energy supplies. Attacks around the Strait of Hormuz and other important shipping routes pushed both Brent and WTI crude above $100 per barrel, with Brent reaching nearly $110 before retreating Friday. Even after that pullback, oil remained on pace for a weekly gain of more than 8%. The market implication extends well beyond energy stocks: higher crude and fuel prices can feed directly into inflation, pressure consumers and businesses, and make the Federal Reserve’s job considerably more difficult.
That inflation problem was reinforced by this week’s economic data. August PPI rose 0.4% for the month and 5.4% year over year, with goods prices advancing 1.1%. Friday’s CPI showed headline inflation rising 0.4% month over month and 3.4% year over year. More importantly, core CPI increased 0.3%, slightly hotter than expected, while rising 2.4% from a year ago. The numbers were not disastrous enough to trigger another sharp equity selloff Friday, but they confirmed that inflation remains sticky and strengthened expectations that the Fed could resume tightening next week.
Bond markets may now be just as important as stocks. The 10-year Treasury yield approached 5% this week, briefly reaching roughly 4.99% before easing toward 4.9% Friday. I continue to view the 10-year as volatile within a broad 4.0%-5.0% range, but the upper end deserves close attention. A sustained move above 5% would raise borrowing costs throughout the economy and make Treasuries increasingly competitive with equities, potentially putting additional pressure on market valuations—particularly in technology and other rate-sensitive areas.
Trade policy remains another source of uncertainty. U.S.-Canada tensions escalated again this week, while the administration continues to consider additional tariffs on refined copper. No final decision has been made on copper, but the debate highlights the same problem confronting the Fed: tariffs designed to encourage domestic production can also raise input costs for manufacturers and ultimately contribute to inflation.
At the corporate level, earnings continue to provide an important counterweight to the macro uncertainty. Oracle’s results helped reassure investors that spending on AI infrastructure is still producing meaningful revenue, while technology stocks helped lead Friday’s rebound. That continued strength in AI investment, corporate profitability and the broader economy is one reason I am not abandoning the longer-term bullish case simply because the market has entered a more volatile stretch.
Next week could determine whether this pullback remains a healthy consolidation or develops into something more significant. The Federal Reserve meets September 15-16, with its rate decision scheduled for Wednesday afternoon. Markets have sharply increased their expectations for a 25-basis-point hike following this week’s inflation data. August retail sales will also be released Wednesday morning, giving investors an important look at whether higher fuel prices and borrowing costs are beginning to slow the consumer. Housing, manufacturing and labor data later in the week will provide additional clues about the strength of the economy.
I remain in the MARKET BULLISH camp, but this is not a market where risks should be ignored. The long-term trend remains intact, supported by earnings, AI investment and continued economic resilience. At the same time, the combination of oil above $100, sticky inflation, Treasury yields near 5%, tariff uncertainty and the possibility of higher-for-longer interest rates creates a much narrower path for the bulls.
For SPY, I continue to believe the broader rally can support the $760-$780 area, while $700-$720 remains an important support zone over the next few months. The immediate question is whether buyers can defend the 50-day moving average and whether next week’s Fed decision can calm—or further unsettle—the bond market.
The bulls remain in control of the longer-term trend, but this week was another reminder that the biggest risk to that outlook remains the same: interest rates staying higher for longer as inflation, oil and geopolitical uncertainty refuse to disappear.
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Look at your account. Look at the S&P. Both feel flat, right?
That's the story most retirees are living with right now — indexes going sideways, portfolios drifting, nothing much happening.
But here's what's really happening underneath.
Tuesday of this week, September 1st, YellowTunnel subscribers got two trades from our proprietary AI model:
XOM (ExxonMobil) — closed +154% MRK (Merck) — closed +104%
Two sectors. Two days. Both over 100%.
In a "flat" market.
See the Labor Day Sale →
Sector Spotlight: Semiconductors
One sector sits directly at the intersection of the two forces currently fighting for control of this market. On one side are higher oil prices, sticky inflation, Treasury yields approaching 5% and the possibility of another Federal Reserve rate hike. Those conditions can pressure high-growth technology stocks because higher rates reduce the present value investors are willing to pay for future earnings.
On the other side is one of the strongest fundamental growth stories in the market: artificial intelligence infrastructure spending remains exceptionally strong.
That is why semiconductors remain so important. Nvidia’s latest results suggested AI demand is not slowing nearly as quickly as skeptics feared. The company forecast roughly 70% revenue growth for its next fiscal year, while its data-center business more than doubled year over year. Demand is also broadening beyond the largest cloud providers into AI labs, enterprises and other customers.
SMH offers exposure across that entire semiconductor ecosystem, including Nvidia, Taiwan Semiconductor, Broadcom, Micron, AMD, ASML, Lam Research and Applied Materials. Nvidia alone represented roughly 23% of the ETF in VanEck's September 8 holdings, making SMH particularly sensitive to the continued AI buildout.
The important distinction is that the semiconductor story is no longer simply about selling individual AI chips. Building the next generation of computing requires GPUs, memory, networking, manufacturing equipment, foundries and advanced packaging. Recent industry developments continue to show capital flowing into that infrastructure, including increased demand for advanced memory and new AI-server architectures.
There are risks. If the Fed becomes significantly more aggressive, the 10-year Treasury yield breaks sustainably above 5%, or geopolitical and trade restrictions intensify, semiconductor valuations could remain volatile. This is a high-beta group, and when investors reduce risk, semiconductors often feel it quickly.
But I remain constructive on the longer-term trend. If inflation stabilizes and rates stop climbing, semiconductors could once again become one of the first groups investors turn to for growth. SMH gives us diversified exposure to the companies supplying the infrastructure behind the AI economy rather than requiring us to pick only one winner.
Trade of the Week: NVIDIA (NVDA)
Within that semiconductor theme, our Trade of the Week is NVIDIA Corporation (NVDA).
Few companies better represent the current tug-of-war between strong fundamentals and a difficult macro environment.
Nvidia recently delivered another powerful quarter, with data-center revenue more than doubling to $89 billion and total quarterly revenue reaching $96.22 billion. Even more importantly, management projected approximately 70% revenue growth for the next fiscal year, considerably stronger than Wall Street had previously expected.
That forecast matters because one of the biggest questions hanging over technology stocks has been whether the extraordinary AI investment cycle is approaching its peak. Nvidia's results argued the opposite.
Demand continues to come from hyperscalers, AI laboratories, sovereign customers and enterprises, while the company's next-generation Vera Rubin platform has begun shipping and is expected to become an increasingly meaningful contributor to the data-center business. Nvidia also expanded its relationship with Amazon Web Services, with plans for millions of additional Nvidia GPUs to be deployed across Amazon's infrastructure.
Nvidia is also becoming more than a chip vendor. Technologies such as NVLink are helping the company build an ecosystem around entire AI computing systems, allowing other processors and specialized chips to connect into Nvidia-based infrastructure. That ecosystem advantage could become increasingly important as competitors attempt to develop alternatives to Nvidia GPUs.
There are still meaningful risks. Nvidia faces competition from AMD and custom chips being developed by some of its largest customers. China remains uncertain, supply constraints and rising memory costs could pressure margins, and a continued rise in Treasury yields could compress valuations across the technology sector.
But those risks need to be weighed against extraordinary earnings growth and continued demand for computing capacity.
That is what makes NVDA our Trade of the Week. We are not simply betting that investors will continue paying higher multiples for AI enthusiasm. We are looking at a company whose revenue, data-center demand and technology ecosystem continue to expand at exceptional rates.
In the current environment, patience and risk management remain important. The Fed decision, Treasury yields and the Iran-driven oil shock could continue producing sharp swings in technology stocks.
But if the broader market stabilizes and buyers continue defending the long-term trend, Nvidia remains one of the clearest ways to participate in the secular growth of artificial intelligence—and one of the most important stocks to watch for the next leg of the market rally.
This week, I am adding NVIDIA Corporation (NVDA) to my portfolio.
And one more thing! Our track record speaks for itself from the standpoint of a Winning Trades Percentage, Average Return Per Trade, and Net Gain. Just take a look:
The consistent performance of our services is just incredible. My historical stellar performance is made possible by being right on 82.33% of all trades that I made, with an average profit of 39.95% per trade on our collective trade recommendations. To my knowledge, this trading performance is one-of-a-kind and stands alone in the marketplace for superior trading advice, where our numbers and results speak for themselves.
For the rest of 2026, the market is entering a more selective and demanding phase. On the surface, major indexes remain resilient, but underneath, investors are navigating a more complicated environment shaped by geopolitical tensions, tariff uncertainty, uneven megacap earnings, sticky inflation expectations, and renewed pressure from interest rates. At the same time, labor market data is beginning to soften at the edges, creating a setup where discipline, timing, and data-driven decision-making are becoming more important than broad market optimism.
This is exactly where YellowTunnel becomes essential.
In a market where leadership is narrowing and volatility can return quickly, investors need more than headlines and guesswork. YellowTunnel’s AI-powered tools are designed to help you cut through the noise, identify high-probability setups, track changing market conditions, and stay aligned with the strongest pockets of opportunity. Whether you are looking for real-time trade ideas, advanced stock and options analysis, predictive market data, or a more disciplined trading process, YellowTunnel gives you the structure and clarity needed to act with confidence.
As conditions tighten heading into Q4, the difference between reacting emotionally and following a proven, data-backed approach can be significant. Our goal is to help you stay prepared, stay selective, and stay focused on the opportunities with the strongest risk-reward potential.
Whether you are focused on short-term trades, portfolio positioning, options strategies, or improving your overall trading mindset, YellowTunnel provides the tools, insights, and guidance to help you navigate this market with greater precision.
Let’s work together to make the rest of 2026 a stronger, smarter, and more disciplined period for your portfolio. As always, successful investing begins with informed decisions, proper risk management, and a clear understanding of your personal goals and risk tolerance before entering any trade.
One more thing, I've had the opportunity to take additional action with a great organization supporting families in Ukraine directly. Gate.org is a foundation where fundraising is held for specific families, allocating funds to multiple families currently living in Ukraine. I am on the board of directors for this great initiative and encourage everyone to check it out and donate if possible. The war in Ukraine is escalating, and families are being negatively impacted and displaced daily. To learn more about this initiative to help families, please see the link below:
Wishing you a week filled with resilience, growth, and prosperous opportunities!