Episode Summary
Executive Summary: Milton Berg argued that rare technical signals in April 2025 marked a powerful stock-market bottom and still support a bullish long-term case for equities, though he remains tactically bearish short term after a December 11 sell signal and a January top in small caps and semis. He also called late-January 2026 a climax top in gold and silver, and dismissed Bitcoin as a valueless speculative token.
Main Topics: April 2025 stock-market bottom and bullish thrust (Priority: 5/5): Berg detailed a cluster of rare technical signals around the April 2025 panic low, arguing they identified a major turning point that launched the bull market and still implies more upside than the market has yet delivered. December 11 sell signal and current short stance (Priority: 5/5): He explained why a December 11, 2025 VXN-based sell signal led him to short equities, and why he has not yet fully covered despite a modest pullback and some signs of near-term exhaustion. Russell 2000 island reversal and topping behavior (Priority: 4/5): Berg used the Russell 2000’s one-day island reversal and gap behavior as evidence that small caps may be making a bearish top, especially as laggards began leading late in the rally. Gold and silver climax top (Priority: 5/5): He argued precious metals became extremely stretched relative to CPI and other assets, and that record volume, gaps, and parabolic action around late January 2026 marked a major top. Bitcoin skepticism and lack of intrinsic value (Priority: 4/5): Berg rejected Bitcoin as a monetary asset, comparing it to the Yap Island Rai stones only as a flawed analogy and arguing Bitcoin has no intrinsic value, earnings, or durable valuation anchor. Retail model for long-term investors (Priority: 4/5): He described a simplified retail service that stays fully long stocks until an ~8% decline triggers exit to T-bills, aiming to capture most bull markets while avoiding major drawdowns. Sector/portfolio rotation and technical stock picking (Priority: 3/5): Berg discussed specific institutional holdings and noted weakness in software while favoring select names and regions such as Korea, Argentina, energy, and certain cash-flow businesses.
Key Arguments: Rare, non-obvious technical anomalies around April 4-10, 2025 signaled a major market low, not just a tradable bounce. The April 2025 bottom has not yet fulfilled its historical upside range, so the broader stock bull market likely still has room to run. A December 11, 2025 sell signal based on VXN dynamics and other rare features justified a short equity posture, even though the market has not collapsed. Short signals can be noisy in bull markets, so he wants follow-through confirmation before covering shorts. The Russell 2000’s one-day island reversal is a highly unusual bearish pattern that often appears near major tops. Gold and silver are extremely overextended versus CPI, oil, and other commodities; their January 2026 peak likely marked a climax top. Bitcoin lacks intrinsic value, cash flow, industrial use, or reliable fundamentals, so it remains a pure speculative instrument rather than an investment. A simple long/T-bill rotation model for retail investors can capture much of the equity upside while sidestepping major bear markets. Technical analysis should be based on rare turning-point events and context, not on moving averages or Fed commentary. The model is designed to get long early in bull markets and out after roughly 8% drawdowns, because missing bottoms is the most damaging mistake for investors.
Data Points: Market gain since April 4, 2025 signal: 37.53% - Berg said the first buy signal from the April 2025 panic low had already gained this much by the January 27, 2026 closing high. SPX peak from April signal projections: 74.37 median / 75.99 average - His April 4-30 signal cluster implied more upside before a 10% correction than the market had reached. April 2025 oversold condition: Most extreme oversold reading since 1995 - Based on a combination of 18 oversold indicators, according to Berg. SPX decline from Jan. 27, 2026 high to Feb. 5 close: 2.58% - He said the market’s pullback was still minor, not a major bear market. NASDAQ decline from Oct. 29 high to Feb. 5 close: 5.92% - Used to argue the correction was modest despite tactical bearishness. Russell 2000 decline from high: 5.19% - Berg cited this as evidence the move was still only a correction. VXN three-day move: +35% - One of the rare fear signals that contributed to his concern about a short-term top/correction. NASDAQ five-day move: Weakest in 180 days - Part of the near-term sell signal environment in early February 2026. SPX maximum gain since Dec. 11, 2025 sell signal: 1.12% - He argued this limited upside was consistent with successful short-signal behavior. SPX performance at day 37 after sell signal: -1.49% - Used to compare current action with historical successful short signals. Historical short-signal examples: 1998, 2010, 2014, 2015, 2024 - He cited several precedents where similar signals led to corrections or peaks. Gold calls sold: Near the Jan. 29-30, 2026 high - He said he shorted gold/silver or sold calls right around the precious-metals top. Gold relative to CPI peak: Second-highest in history - Berg said gold was extremely expensive versus consumer prices. Bitcoin peak: Above 120,000 in Oct. 2025 - He referenced the prior cycle peak before the sharp decline. Bitcoin low: About 63,000-64,000 in early Feb. 2026 - He said a test of the prior low failed. Retail service fee: $10/month - Price point for Milton Berg Edge aimed at individual investors. Institutional service fee: Up to $12,000/month - Contrasted with the retail product. Retail model annualized return: 8.5% per annum - Berg cited the long-run compounding of the simplified long/T-bill strategy since 1957. Starting capital example: $10,000 -> $1,102,000 - Illustrative backtest result for the retail model from 1957 to 2026. Average trade frequency: One round trip every 1.25 years - He emphasized low turnover and simplicity for retail investors. Current institutional exposure: Over 100% short - He said his model portfolio was short SPX, Nasdaq, Russell, semiconductors, and midcaps at the time of recording. Current retail exposure: 100% long since early April 2025 - Retail newsletter clients had remained fully invested from the April buy signal. Gold fund performance in 1987: 66% - Berg said he managed a top-performing gold fund during that period.
Pivotal Quotes: "There’s no way the market could go down. It’s definitely going to go up." — Milton Berg (recounting his April 2025 stance): He summarized the strength of the April 2025 buy signals and the ensuing bull market. "We’re not looking at moving averages… we’re looking for rare occurrences that take place at market turning points." — Milton Berg: Explaining the philosophy behind his technical models for spotting lows and highs. "Bitcoin has no intrinsic value at all, at all." — Milton Berg: His core objection to Bitcoin as an investment or money-like asset.
Implications: Berg’s framework implies that investors should focus on rare turning-point signals, not headlines or conventional indicators. He sees equities as still in a broader bull market, but expects sharp leadership rotations, continued weakness in gold/silver, and lasting skepticism toward Bitcoin.
From the Transcript
With you, the feeling is mutual. Milton, about eight or nine months ago, shortly after the seismic panic in markets of April 2025, you and I did an interview and you were extremely emphatic that the market, the technical signals in the market you were seeing were extremely strong. And you used extremely strong language. This time I said we have a series of buy signals. There's no way the market could go down. It's definitely going to go up. How long it goes, I don't know because you had similar signals in. 1987 in January, and the market peaked three quarters of a year later. So, I can't tell you how long the market's going to rally, but I will tell you how high the market should go. That's what we'll discuss today. I said, definitely going to be bull market action. You promised bull market action, bull market action. We've had the indices are far higher now. Funny, you referenced 1987. That was a very good year for you. Then, in the background, people say you were the mutual fund manager of the year. Quite an accomplishment. Milton, what were the buy signals you saw in the market? How have they evolved?
Gained 10% for at least two days for two days in a row. And this is a very rare occurrence. We're looking for rare occurrences. In other words, we're not looking at moving averages and looking at what the Fed is doing or what the Fed is saying and the money supply. We're looking for rare occurrences that take place at market turning points. And on this day, April 4th, you had these three rare occurrences, which I just mentioned. This actually occurred in the past, occurred in October 8th, 1998, August 5th, 2024, and August 24th, 2015. And the gains, the maximum gains within a year over the Signals was 47%, 15.6%, and 23.2%. So far, so far, the April 4th signal through the high on January through the closing high on January 27th of this year, it's gained 37.53%. So it's outperformed two of the historical precedents. It's underperformed one of the precedents, up 47%. However, we're measuring one year out. We're looking at the maximum gains within one year. For all I know, we'll be up 47% by April 4th of 2026. So this was the first signal we got. However,
Things. I mean, he's a monitor as far as greater than anyone we know. But let's continue. So the app stones were different. The appstone wasn't money. It was just a way of recording transactions. And it was a small little town, a small little island where you look at it and you remind yourself of the transaction. It was nothing to do with money. Bitcoin has no intrinsic value at all, at all. You can't say it's cheap when it's at $60,000. You can't say it's cheap when it's at $10,000. You can't say it's expensive when it's at $10 million because there's no way of measuring money. Its value. There is no way of measuring its value on the way up. There's nothing in terms of overvaluation to prevent it from going up way more than you imagine. And on the downside, there's no valuation. There's no value. Money is a fallacy. Nakashomi, whatever his name is, who made a Bitcoin, he doesn't say what money is. Money isn't something simply because you have to pay, it costs money to mine it. Because I gave the example before Bitcoin even existed when I ran a gold fund in 1980, before.
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Jack Farley interviews the very best financial minds about macro, markets, and monetary matters. Follow Jack on Twitter @JackFarley96.