Hello and welcome to Real Vision Alpha.

I am Chris Bulock. Today we have Caleb

Franson joining us once again. As many

of you know, Caleb was kind enough to

join us a few times last year and all of

those episodes turned out to be quite

popular with the community, so it's

great to get him back on the platform.

Uh Caleb, welcome. Thank you for being

here.

>> Happy to be back, man. And uh yeah, we

killed it last time. So hopefully we'll

uh we'll keep that momentum going. Huh.

>> Yes. Yes. I've been looking forward to

this. Uh in fact, I had to go back and

look. You were here last on November

26th,

which happened to be just a few days

after Bitcoin completed that first big

leg down to start the bare market. So,

it's been it's been quite a ride uh

since then. And um I I know you've got a

bunch of stuff prepared for us today.

But before we get into that, I wanted to

start by asking you some general

thoughts on like you have this really

amazing disciplined technical approach

and I want I want you to talk a little

bit about how that has served you over

the last like six or seven months in

this crazy bifurcated market where we

had stocks going one way, crypto going

the complete opposite um you know and

then all the volatility with the run and

things like that. So uh yeah, just talk

a little bit about how you've navigated

this with your approach that you use.

You know, I think price is the only

thing that pays us as investors. Quite

literally, what we're trying to do at

all times is manufacture arbitrage or

take or participate in arbitrage. And

that means we either need to buy low and

sell high or or buy high and sell

higher, right? And so that's really it

for me. And so everything starts and

ends with price because if I'm making an

investment, that's literally the thing.

It starts with what price I buy and it

ends with what price I sell. And so for

me, that comes down to studying

technical analysis, looking at different

statistical indicators. I hated coming

on the show last November. Of course, I

love the opportunity to come on and talk

to your audience, but I hated coming on

sounding so bearish on Bitcoin because,

you know, at the time uh or I should say

in October, it was the largest position

in my portfolio. And it still was even

in November. But for the first time in a

very long time, I had to sell Bitcoin uh

based on my rules-based system. And I

kept telling investors in 2025 what I

would do if certain conditions happened

for Bitcoin when the trend objectively

changed. And when that happened, I had

no choice. I had to follow the system.

And uh you know I think part of my

process of being an investor is

accepting that I'm going to be wrong a

lot and I try to identify these

inflection points based on technical

analysis based on statistical indicators

where at those inflection points quite

literally the cost for being wrong is so

small. So, if I was wrong in my bearish

outlook in the middle of October 2025,

you know, I could change that back,

excuse me, the middle of November 2025,

I could buy back my exposure 3% higher

than where I sold it. By definition,

that's a low cost for being wrong. So, I

think investors, first of all, need to

give themselves kindness. Uh, you know,

Steph Curry misses three-point shots.

Michael Jordan missed gamewinners. Show

Otani, you know, throws balls all the

time, right? And so as an investor, you

can't expect to have really high success

rates. I think there's an amazing quote,

you know, I grew up as a tennis player.

Uh I think Roger Federer has only won

like 52% of his points, you know, and

he's considered like the greatest of all

time. It's probably the same for

NovakJokovic. So as investors, I think

it's it's critical for us to to have

that process. Of course, I pay attention

to macro. I brought some macro charts

with me, but as it pertains to macro,

right, opinions are a dime a dozen. I'm

not here to be some armchair

macroeconomist. I'm not trying to become

some Nobel laureate or a PhD candidate.

So everything for me always comes back

to price.

>> Well, and I think that's important the

way you describe that. You know, you're

playing to your strengths and that's how

you win. Basically, it's when you try to

introduce other other things that you're

that, you know, areas where you're not

super skilled at or, you know, things

like that that you end up making

mistakes that you end up questioning

your decisions that you end up violating

your own framework and that's how you

lose, you know, and so I think it's

important, like you said, to just stick

with what you're good at and stick to

it, you know, and and it clearly has

worked out for you. Like a lot of us,

myself included, were were really

skeptical about uh this, you know, the

the peak of last year because none of

the macro lined up. You for the first

time in Bitcoin's history, none of the

macro lined up with the price action.

And everybody was just very confused. We

had, you know, we remember the four-year

cycle campers and then the macro campers

and it was just very, you know, one

against the other on on, you know,

crypto Twitter and things like that. And

um

fouryear cycle or not, the the people

that followed the technicals are the

ones that that won out in that that

argument. And um there's something to

that, you know,

>> for sure. And you know, so many people

ask me about the four-year cycle in

2025. I still get asked about it today.

And you know, I'm never going to invest

or have an outlook based on what month

it is in the Gregorian calendar, right?

Like for me, that's relatively

insignificant. Um, and so what I always

said was if the four-year cycle is

right, it's going to be reflected in

price. At which point, if I'm monitoring

price, I'll adapt if the four-year cycle

is actually true and correct. So, I got

asked about that, you know, last week,

you know, oh, like, is Bitcoin going to

bottom in October 2026? I was like, I

have no idea if it's going to bottom in

October 2026 based on the four-year

cycle, but if it does, what's it going

to do? It's going to re reassert itself

back into an uptrend. we're going to get

above a bunch of different uh you know

structural and dynamic levels that are

going to force me to get bullish and

overly optimistic again from a cyclical

perspect excuse me from a cyclical

perspective.

>> Yeah. I got to say too that last

conversation we had back in November uh

was really one of the ones was a

catalyst for me to uh take a step back

and really buckle down and stick to my

framework. I had a framework but I was

questioning it. I was questioning it

because the macro didn't line up. And I

was one of those that was just going

back and forth in my own head, you know,

what do I do here? And in the end, I

would have been better off had I been

more rigid with my my framework, you

know, and uh that was a learning lesson

for me. And like I said, it was in part

uh inspired by by the way you have

approached it. And so since then, I've

been much more strict with sticking with

my framework and uh calling myself out

every time that I, you know, think about

think otherwise. So yeah,

>> that's really awesome. And uh you know,

it reminds me of the phrase, right? It's

like the stock market is not the

economy. Um you know, I I I used to hear

that so often, but then I would use so

much macro data to try to create a

forecast for the market. And it's like,

but everyone's also saying that the

stock market is not the economy, so

which one do I actually kind of trust

here? And it's like, again, you just got

to focus on on price action.

>> Right. Right. Exactly. Exactly. So,

okay. I know you've got got a ton of

stuff for us today. So, let's uh let's

get into it here. Um yeah, where are we

at? What have you brought? [laughter]

>> You know, so so here I am dismissing

macroeconomics, but I actually want to

start with macro because look, you know,

I think I might might have mentioned it,

but as it pertains to macro, I think

less is more, right? For, you know, the

better part of four years, I've been

talking about the resilient and dynamic

nature of the US economy. Is it perfect?

Absolutely not. But has it been

sufficient to support the uptrend in

stock market? In the stock market, the

answer is absolutely yes. Right? that's

irrefutable. And um you know this past

weekend I was talking a little bit about

the CPI report that we were expected to

get today uh for June 2026. And um you

know there's been this all this talk

about reacelerating inflation. And you

know the key nuance here that we had to

embrace which was in my opinion excuse

my language but a bit like dumb

obvious is like we need to strip out

energy from CPI in order to actually

evaluate whether or not inflation is an

actual problem right now for all other

consumer items. And the answer was, in

my opinion, vehemently no. So if you

want to go to my chart on this, I have

the consumer price index for all urban

consumers stripping out energy. And so

we can see historically, you know, we

were kind of back in that average range

going back to the 1980s for this data

point. So, you know, this this data

point tends to be above 2% anyways. So a

little bit hotter than the Fed's 2%

target. And the key thing that I was

really noticing back here in this pocket

um while the Iran war uh excuse me while

the Iran war started was we were seeing

a modest uptick in non-energy CPI

inflation on a year-over-year basis but

nothing that was like systemic right

because the whole fear was is this

increase in energy going to have this

trickle down effect into all other

consumer goods and services and the

answer was in my opinion no and what we

got this morning was a resounding win

for the disinflation argument and so if

we look at this data point now we're

basically sweeping the cycle lows for

disinflation in the non-energy component

of CPI and so I think this is fantastic

because you know the market has become

overwhelmingly hawkish in terms of rates

the dollar you know wars is coming in

he's coming to shake things up all of

this talk right um you know but if we

get disinflation coming back in the

market is rapidly going to price out

those probabilities of rate hikes and if

that happens in a market environment

where the macro as a whole continues to

be resilient and dynamic and it is then

the market should continue to do well as

a whole and I'm talking specifically

about equities here because equities

continue to be rock solid. So this for

me was a a key win which continues to

support uh a bullish outlook on equities

and you know we're seeing great price

action in Bitcoin today getting back

above 64,000. I have a great chart for

Ethereum we'll get to later um which

achieved a key uh technical win for me

today. So, you know, I I have a pretty

nice little outlook here for a relief

rally in crypto and Bitcoin and Ethereum

specifically.

>> Good. Yeah, me too. What do we got next?

>> Okay, so I I kind of teased it a bit

here, but uh Redbook retail sales. If

you think about the resilient and

dynamic nature of the US economy, you

know, I I continue to see doomers doom

everywhere I turn, right? And so, we

continue to see this pessimistic outlook

on the US economy. But if we look at

redbook retail sales growing 8.2% 2% for

same store retail sales. By the way,

this does not include anything uh energy

related. So, this is really giving us a

pulse of actual consumption trends. This

is a nominal figure, but if we adjust

this for something like core PCE, um

which is what we should be adjusting

this by, then you know, real retail

sales is still growing like well above

5%, which is a rock solid figure. Um and

I also wanted to just briefly talk here

about initial unemployment claims uh

continue to be very rangebound over a

4-year period. um making new multi-deade

lows by the way on initial unemployment

claims. So if we think about

consumption, if we think about the labor

market, if we think about inflation

dynamics, all of this to me is

continuing to support a really strong

environment for let's call them risk

assets, but in particular equities. And

again, if we're looking at something

like the 3-month Treasury yield in blue,

the six-month Treasury yield in red, and

then the effective Fed funds rate, for

me, this is the best way to forecast

monetary policy dynamics. And so, yes,

the 3-month and the six-month Treasury

yield did get well above that effective

Fed funds rate. Basically telling us,

hey, within 6 months, there's the higher

probability that the Fed is going to

raise interest rates. But with this

disinflation print today, I feel pretty

confident that both of these uh blue and

red lines are going to trend back

towards 3.6 6 3.7% basically signaling

an extended pause which should alleviate

uh risk assets back to the upside.

>> Yeah, that makes sense. I want to get

back to the the last couple of charts

you had shared. Thinking about that uh

in terms of like the the bottom the

bottom half of the the K-shaped economy.

Does it seem like it's not

>> perhaps as bad as anecdotally people are

making it seem?

>> I have no idea. I really I really have

no idea. And maybe this uh maybe this

sounds um I'm a bit mute on this, but

like as it pertains to me being an

investor, I genuinely I'm not going to

preoccupy myself with that, right? If

anything, all it does is light more of a

fire under my ass to go out and buy more

assets for the long run, right?

>> Yeah.

>> Because we know what's what's causing

this K-shaped economy. Um it's monetary

stimulus. It's the increase in M2. And

it's going to reward asset holders and

it's going to reward the people who are

using debt and productive means via

inflation eating away at the amount of

capital that we need to pay back from a

nominal perspective. Right. Right.

>> Um so, you know, from that standpoint,

all it does is just yes, the K-shap

economy is here. It's likely going to

continue to get worse. I don't know at

what pace, but all that tells me is I

need to continue to be a net buyer of

assets every single year. That's

something that I I've been saying since

2022. Um when I start first started

having the opportunity to go on

different podcasts is I'm going to be a

net buyer of assets every single year. I

was saying that when I was what was I 27

now I'm 31. So you know I'm going to

keep you know beating that same drum

>> 100%. Yeah. Okay. Um I see the next one

here. High Oh yeah. High yield

>> high yield credit spreads. Um I think

this is really important. This for this

for me has been one of like the secret

weapons that I that I use in the market

to kind of sniff out um warning signs or

to reiterate uh bull market conditions.

First of all, what are we looking at

here? We're basically looking at the

difference between high yield junk

bonds, the yield on those junk bonds

relative to US treasuries of the same

duration. So we get this spread here.

That's why it's called high yield credit

spreads, right? And so what we're

looking here, what we're looking at here

is when this chart goes up, it's

indicating higher risk. If investors

think that junk bond companies aren't

going to be able to pay back the debt,

the yield on those instruments is going

to go up way faster than it is on

treasuries. In fact, Treasury yields are

probably going to fall in that

environment, causing this to dislocate

even further. And so, what we want to

see as bulls, as optimists, is we want

to see this line go down. And so, we can

see in 2022 when we started to really

get into that riskoff environment, what

was happening? This line was going up.

And since 2022, it's been going way

down. And so what I love to see here is

when credit spreads, especially on a

multi-month horizon, start making lower

lows. And I'll show you why here in just

a second, but we can see, you know,

since we kind of had that panic sell-off

with the Iran war, um, you know, various

things happening in Q1. uh you know,

credit spreads are making new lows on

that time frame, which I think is ultra

impactful because if we invert this

chart, if we just flip it onto its head

and we overlay the S&P 500, you know,

these aren't going to be perfect, but

generally speaking, major local lows and

local highs occur at the same time. And

so, what often gets me nervous is when

we're seeing a divergence here between

spreads uh and the S&P 500. And what

we're seeing right now is we're not

seeing that at all. If anything, credit

spreads are reaffirming that this bull

market is strongly intact.

>> Well, and not only that, not only are

credit spreads tight, they're they're at

like historically tight levels, you

know, going I mean, they weren't this

low

>> till back in like 2007, you know,

basically. So, [laughter]

>> I mean,

>> I think that's noteworthy also.

>> It is noteworthy. Um, I don't want to

use that though as like a just as like a

as a warning sign that we could be back

in like another GFC type of moment like

just before because as of right now,

we're not seeing the same warning signs

and spreads that we were seeing at that

time or what we were seeing going into

2020 or even what we were seeing going

into the end of 2021. Like you could

see, for example, at the end of 2021,

credit spreads here, well, let me go

back to this other chart if it's uh if

it's here. credit spreads here were

making these higher lows, right? And

then that continued going into the

middle of uh or Q1 of 2022. Right now,

we're continuing to make new cycle lows.

So, I don't know what this chart is

going to look like 3 months down the

line, 6 months down the line. But what

this chart does tell me, the fact that

we are not seeing a divergence here,

tells me that any material dips at the

index level for the S&P 500, for the

equity market as a whole, even for

something like Bitcoin, is just an

opportunity to produce a higher low or

an opportunity to back up the truck into

that dip because we're not getting some

macro signal here that, hey, the bull

market is over. And we just need to

recognize what do bull markets do? Bull

markets are just uptrends. Uptrends are

the sustained production of higher highs

and higher lows. If we as investors get

scared at every opportunity to produce a

higher low, by definition, we're going

to miss 50% of the bull market. And I

don't know about everybody else, but

it's probably a good idea to be invested

during bull markets, right? So, for me,

if because we're not seeing a warning

sign here in credit spreads, I feel

really reaffirmed. I don't know what the

S&P 500 is going to do next. I have a

chart on this. But if we do get a dip,

which I'm perfectly open to that

possibility, I'm going to view that as a

really strong buying opportunity. Before

you go, that was just the preview. The

full conversation goes much deeper.

What's really driving markets, where the

risks are, and how the best investors

are positioning. That's what we do at

Real Vision. We connect the dots before

they become obvious. So, don't stop

here. Watch the full episode now and

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