The Insider Report: How Long Can Bears Endure a Squeeze?

Market Overview

Bulls took the market by storm this week, notching big gains as the Nasdaq led the way. It closed up 6.73%, while the S&P 500 followed by finishing up 4.59%. The Dow Jones Industrial Average managed a 2.48% gain. Semiconductors and tech led the way, which produced the first real bullish signal in over two months for stocks. It's not enough to call "all clear," but it's enough to put bears on notice. Crypto also saw gains as a new bull market could be underway there too. Also looking for long-term rates to resume their decline in the coming weeks.

Stocks I Like

Coinbase Global COIN – 33% Return Potential

What's Happening

• Coinbase Global, Inc. (COIN) is a leading cryptocurrency exchange platform, focused on secure trading, storage, and management of digital assets, offering a diverse portfolio of cryptocurrencies and financial services primarily in the United States.
• The company's revenue has been volatile over the past year, but in the most recent quarter, it reported revenue of $2.27 billion and earnings of $1.29 billion.
• This valuation on COIN is solid. Its P/E is at 18.46, but its Price-to-Sales is high at 7.28. Its EV to EBITDA looks good at 12.44.
• From a technical standpoint, COIN just broke out from a falling wedge pattern. This could lead to some short covering in the coming days and weeks.

Why It's Happening

• Coinbase is exploring the possibility of acquiring a bank charter, signaling ambitions to offer traditional banking services such as deposits and loans. This strategic pivot could unlock new revenue streams and further differentiate Coinbase from pure-play crypto exchanges.
• Coinbase is actively expanding its institutional services, recently increasing its credit facility to CleanSpark—a move that cements its role as a key provider of digital asset services to large-scale clients.
• The company's fundamentals are strengthening, with annual revenue reaching approximately $6.58 billion and a healthy revenue per share of $31.33. Despite some short-term fluctuations, these figures underscore Coinbase's significant market influence and operational scale. Strong top-line growth provides the financial flexibility to invest in new products and geographic expansion, which can drive future stock gains. 
• Profitability metrics are improving, with a pre-tax profit margin of 14.8% and a solid profit margin contribution of 39.16%. While some operational inefficiencies remain, these figures indicate that Coinbase is efficiently converting sales into profit, a key factor for sustainable stock appreciation. 
• Analyst sentiment remains bullish, with Cantor Fitzgerald initiating coverage and setting a price target of $245, citing Coinbase's innovative strategies that extend beyond simple crypto trading.
• Analyst Ratings:
• Rosenblatt: Buy
• JMP Securities: Market Outperform
• Cantor Fitzgerald: Overweight

My Action Plan (33% Return Potential)

• I am bullish on COIN above $160.00-$162.00. My upside target is $280.00-$290.00.

Perpetua Resources Corp PPTA – 26% Return Potential

What's Happening

• Perpetua Resources Corp. (PPTA) is a leading mineral exploration and development company, focused on sustainable gold and critical minerals mining, offering a diverse portfolio of high-potential assets primarily in the United States.
• This company has been losing money over the past year, and in its most recent quarterly report, a loss of $4.3 million was shown.
• Valuation in PPTA is high. Its Book Value is 1.52, and since there is no revenue, Price-to-Sales and P/E cannot be observed.
• From a charting perspective, PPTA recently broke out from a saucer formation. It's trying to consolidate its gains now, which is bullish price action.

Why It's Happening

• Perpetua's Stibnite Gold Project has been selected as a "Transparency Project" by the White House's National Energy Dominance Council, highlighting its critical role in reducing U.S. reliance on foreign sources for essential minerals like antimony. This rare federal recognition accelerates permitting and interagency coordination, significantly de-risking the project timeline and enhancing investor confidence. 
• The recently completed basic engineering and financial update confirm the Stibnite Gold Project's world-class economics, boasting a $3.7 billion after-tax net present value (NPV) at a 5% discount rate and an after-tax internal rate of return (IRR) exceeding 27% at current spot prices. 
• Perpetua's project is expected to have an All-In Sustaining Cost (AISC) averaging $435 per ounce over the first four years and under $760 per ounce over the life of the mine. This cost profile is significantly below industry averages, positioning Stibnite as the lowest-cost gold producer in the U.S., Canada, and Australia. 
• Perpetua has commenced detailed engineering studies and signed a procurement contract with Idaho Power for powerline materials, marking tangible progress toward a construction decision. These milestones demonstrate operational momentum and reduce execution risk, signaling to investors that the project is moving from planning to development. 
• The company has an indication of interest from the U.S. Export-Import Bank (EXIM) for $1.8 billion to support project financing. With the new Executive Order empowering the Defense Production Act and financing programs aimed at boosting domestic critical mineral production, Perpetua is well-positioned to secure favorable financing terms.
• PPTA could experience a moderate short squeeze with nearly 10% of its floated shares being sold short.
• Analyst Ratings:
  • HC Wainwright: Buy
  • Roth MKM: Buy

My Action Plan (26% Return Potential)

• I am bullish on PPTA above $11.50-$12.00. My upside target is $18.00-$19.00.

IonQ IONQ – 26% Return Potential

What's Happening

• IonQ, Inc. (IONQ) is a leading quantum computing company, focused on developing and commercializing advanced quantum systems, offering a portfolio of high-performance quantum hardware and software solutions primarily in the United States.
• This company is still struggling with earnings, but it does have revenue to show on the books. Its latest quarter reported revenue of $11.71 million but a loss of $73.49 million.
• Valuation in IONQ is sky-high, but quantum could be the next big thing in tech. Its Price-to-Sales is at 118.84, while its Book Value is just 1.60.
• From a technical standpoint, IONQ is looking to breakout of a rounding bottom pattern. If successful, we could see a run to retest the former highs.

Why It's Happening

• IonQ recently unveiled an ambitious 2025 roadmap with accelerated technical milestones, including improving native two-qubit gate fidelity to greater than 99.9%. This leap in gate performance is critical for reducing errors and increasing the practical usability of quantum computations.
• IonQ plans to connect multiple quantum processing units (QPUs) via photonic interconnects, targeting thousands of physical qubits. This architectural innovation will enable scalable quantum computing beyond current limitations, opening the door to solving more complex problems and expanding market opportunities. 
• IonQ has recently deepened partnerships internationally, including a memorandum of understanding with Intellian and expanded collaborations in Japan. These strategic alliances enhance IonQ's global footprint, accelerate technology adoption, and diversify revenue streams. 
• IonQ's technology and growth have been recognized by prestigious rankings such as Newsweek's 2025 Excellence Index 1000 and Forbes' 2025 Most Successful Mid-Cap Companies list. Such accolades reinforce investor confidence by highlighting IonQ's innovation, execution, and market potential. 
• Unlike many competitors relying on superconducting qubits, IonQ uses trapped-ion technology manipulated by lasers, which offers longer coherence times and lower error rates. This technological edge enables more complex and accurate quantum calculations, making IonQ's systems more attractive for real-world applications.
• While IonQ is currently unprofitable, its revenue has shown a robust upward trend, with annual revenue around $43 million and projections indicating substantial growth ahead. Analysts expect revenue to grow at a compound annual growth rate (CAGR) near 96% over the next four years.
• A short squeeze could be in play here as nearly 15% of floated shares are being sold short.
• Analyst Ratings:
  • Benchmark: Buy
  • Goldman Sachs: Neutral
  • Craig-Hallum: Buy

My Action Plan (26% Return Potential)

I am bullish on IONQ above $21.00-$22.00. My upside target is $45.00-$47.00.

Market-Moving Catalysts for the Week Ahead

A Tempering of Tariff Tantrums

The market's price action over the past couple of weeks is a stark reminder about the dangers of trading around headlines. It seems that every few hours, there is a new tariff headline or update about trade negotiations going well or going poorly.

The fact of the matter is that much of this news is already priced into the tape. And based on what I've seen transpire underneath the surface of the market, it's highly likely that something "broke," which caused the Trump administration to walk back some of the high tariff rates.

I think a new deal will eventually come out of this that ends up working better for the entire world. Many of the economies involved in these trade agreements are operating based on rules that were established decades ago. All of the involved economies have evolved since then, so a modification is not a bad idea.

How Much Pain Can Bears Take?

Last week, I entertained the idea that the pain trade for markets was higher. I also talked about how sentiment follows price, not the other way around, and the overwhelming consensus has been bearish for a couple of months now.

Here's the thing – the more stubborn that bears are about this rally, the sharper the squeeze will be. Remember, every short seller today is a buyer tomorrow (not literally, but at some point they are). Covering shorts, by definition, entails buying back a stock.

Does this mean we are automatically out of the woods? Far from it. But underneath the surface, there are some internals that are making some great strides, especially when it comes to market breadth. It's a market of stocks, after all.

Sector & Industry Strength

Last week's broad rally saw communications (XLC) join financials (XLF) as the only sectors in positive territory going back to the start of Q4 2024. This is a step in the right direction for the market overall.

Perhaps the biggest development is how technology (XLK) jumped 3 spots higher. It moved from second-to-last place behind basic materials (XLB), and is now trading ahead of real estate (XLRE). Again, this is another positive signal.

The last positive signal that we saw is consumer discretionary (XLY) overtaking consumer staples (XLP) in the performance rankings. This is another good sign that the market is starting to send money into risk-on sectors.

Editor's Note: Bulls came back with a vengeance last week. Let's see how far they can run.

Inflation Still Isn't the Problem (Sector ETF: DBC/SPY) 

A lot of times I like to share ratios within the bond market to talk about inflation, but this week, I want to share another very important ratio – one that compares a basket of commodities (DBC) against the S&P 500 (SPY).

This ratio is important because commodities will outperform stocks when inflation is accelerating. But when inflationary pressures are coming down or decelerating, it's a great environment for stocks to outperform. Remember, in the long-run, stocks are the best hedge against inflation.

As a result, it's no surprise to see this ratio dropping in favor of stocks since peaking in June 2022. That was the exact moment with CPI data peaked too. If the ratio can break above the upper trendline of the channel, we can start talking about inflation becoming a problem. Until that happens, I have no problem taking the other side of the trade.

Is a Quantum Future Upon Us? (Sector ETF: QTUM/QQQ) 

This past fall, we were treated to an explosive rally in the quantum computing sector. It's still very much a technology in its infancy, and given what we went through with artificial intelligence in the past few years, everybody is looking for the next new trend. I don't think this one's going away anytime soon.

Let's have a look at the ratio between the quantum ETF (QTUM) against the Nasdaq 100 (QQQ). The ratio exploded higher late last year, when the sector came alive. More importantly, it broke out from the broadening wedge formation, and has held onto the gains nicely year-to-date.

In other words, when the AI trade was roiled earlier this year with DeepSeek, quantum held its own. As a rule, any consolidation near the highs of a move is considered to be bullish. This tells me that quantum computing could see some big inflows in 2025.

Bessent Needs this Ratio to Drop (Sector ETF: BIL/TLT) 

While it seems that some of the equity market volatility has finally rattled the Trump administration, we cannot overlook the importance of the bond market. In fact, the administration has explicitly stated that they're watching the 10-Year yield as measure of their success.

But let's put that aside for the moment and look at the shortest duration versus the longest duration bonds. We'll use BIL to measure short-term Treasury bills and TLT to measure long-term Treasury bonds.

When this ratio is rising, it means that investing in long-term bonds is a losing proposition. When it's dropping, it means that betting on longer-term yields to drop is going to pay you more. As you can see, the ratio has been sideways now for well over a year.

My Take:

The best thing for fiscal finances right now would be to do a massive refinancing wave with the longest duration and lowest bond yields possible. Former Treasury Secretary (and Fed Chair) Janet Yellen refinanced a lot of the debt in short-term Treasury bills, and now a lot of it is maturing and due to be rolled over.

To make this ratio drop, the government needs help from the Fed. There's no reason why Powell can't cut rates with inflation being as low as it is. In reality, it's a matter of financial survival at this point. Incentivize long-term bond yields to come down for as long as possible, because the reality is that they won't stay low for long.

Cryptocurrency 

Bitcoin is displaying a classic technical breakout as it surged above the critical $91,607 resistance level that has capped upside movement since February.

The price action since the March lows has been constructive, with Bitcoin establishing a clear uptrend marked by higher lows and higher highs. What makes this setup particularly compelling is the confirmation of the broader base formation between $76,000-$92,000 that’s been building over several months.

With Bitcoin now trading above key psychological and technical levels, the path appears clear for a potential challenge of the six-figure mark and possibly the all-time highs above $108,000. The magnitude of the breakout suggests this could mark the beginning of Bitcoin’s next major leg higher, particularly if it can maintain above the breakout zone.

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