Thu, March 20, 2025 2:00 PM - 3:00 PM EST

https://attendee.gotowebinar.com/register/5871943393216130649

Episode 4

https://www.youtube.com/watch?v=fOxEVkvPaL4

Nice rally, ostensibly because we avoided a government shutdown, but more likely the market was just short term oversold. Nothing in this chart screams V shaped recovery…..

If Friday was a bottom you’d really like to see some follow through this morning, which we don’t have at the moment.

The administration continues to tell us that Trump 1 is not the same as Trump 2….

But we do have FOMC this week along with a NVDA conference. Both of those events should be bullish, but that doesn’t mean they will be.

A lot to like if you are a bull. NVDA pulled an undercut and rally…..

Seeing a lot of actionable charts on the long side, and not much left on the short side. The energy stocks I talked about on Thursday (more below) had great days, as did the P&C stocks I talked about Friday. I would love to get more precious metals exposure, just waiting for a pullback, but I am starting to eye other metals…..

If we did make a bottom, short term or intermediate term, then then quantum stocks could be in for another run. I picked up IONQ a couple of days ago on an undercut and rally at the 200 day…..

The mid cap defense names look like one of the strongest areas of the market. Been in KTOS for a bit….

And picked up RCAT Friday…..

And of course there are the European defense stocks…..

Can you just but stocks on auto pilot? Yes, over the long term the market goes up, I do not believe we have ever had a negative 25 year period on the stock market. However, we have had some pretty bad times and large drawdowns. Whenever I tweet about being more active with your investments someone inevitably hits me with the buy and hold always works statement. It depends on your definition of “works”. From the peak to trough in 2008 the market had a 60% drawdown. If you didn’t panic and sell, then it came back eventually but how do you not panic when you are down 60%? And, what about the lost opportunity cost of digging yourself out of that hole? Take 2000-2010, the market was flat over a 10 year period. Not my definition of “work”. Not saying you have to be a day trader but you should have some sort of strategy to shift to the most impactful themes and out of what isn’t working. You should also always have hedges for times like these. For more details on a way you can do this please register for our webinar on Thursday above.

In Thursday’s note I talked about the AI power names. This is the main way I want to play AI at the moment because I don’t think it matters whether China wins or the US wins, we still need more power. I also believe nuclear is the future,

but the present is natural gas and coal. Citadel venturing into natural gas therefore caught my attention. I had GPT analyze the move…..

Citadel, the financial giant led by Ken Griffin, through its affiliate hedge fund, recently announced the $1.2 billion acquisition of natural gas assets in the Haynesville shale region, according to Hart Energy. This strategic acquisition includes Paloma Natural Gas, LLC’s approximately 60 undeveloped locations within the prolific Haynesville basin, signaling confidence in natural gas as a critical infrastructure investment.

Citadel’s acquisition underscores a growing thematic recognition of natural gas as a foundational fuel in the ongoing artificial intelligence (AI) infrastructure build-out. The unprecedented computational power required by AI data centers demands substantial and stable sources of electricity—natural gas offers a relatively reliable, scalable, and dispatchable energy source that complements intermittent renewables like solar and wind.

AI-driven data centers consume enormous amounts of electricity—often equivalent to small cities. With the rapid build-out of AI infrastructure and data centers by companies like Microsoft, Google, Amazon, Nvidia, and others, energy requirements are expected to rise exponentially. Renewable energy alone is insufficient, as its intermittency creates risks for uninterrupted, high-demand computing needs. Natural gas, particularly from easily scalable and geographically advantageous fields like Haynesville, provides the stable, on-demand energy critical for consistent AI operations.

Citadel's investment sends a powerful signal to the broader market:

Citadel's acquisition likely signals a bottoming in natural gas market sentiment. Natural gas prices have faced sustained pressure over recent months, driven by:

However, these short-term headwinds may be overshadowed by longer-term bullish trends:

Citadel’s timing suggests that natural gas prices may indeed be bottoming, presenting a strong contrarian signal that smart money views current pricing as attractive.

Citadel’s Haynesville purchase validates your thematic thesis that natural gas is a key strategic resource underpinning the explosive growth in AI infrastructure. From an intermediate-term perspective, sentiment for natural gas equities appears to be bottoming, especially relative to coal, which is structurally disadvantaged due to ESG pressures and inflexibility.

Your existing thematic positioning in natural gas—specifically through high-quality exposure to Haynesville and other shale operators—should benefit significantly from this fundamental trend. Conversely, investors should remain cautious on coal equities, as any bounce might represent a technical rebound rather than a durable trend reversal.

Citadel’s sizable bet reinforces natural gas’s vital role in powering America’s technological future, particularly AI infrastructure. The strategic case for U.S. natural gas producers, especially those with prime shale exposure, continues to strengthen. Investors should consider tactical additions in natural gas equities aligned with the ongoing AI-driven energy revolution.

I do like both EQT and AR here…..

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