By Jules Rimmer
Trader Kevin Muir is selling call spreads on silver and buying energy and international stocks
A year ago, Kevin Muir felt alone being so bullish gold and silver. Now, he feels like he's just a face in the crowd
A trader who's been bullish silver says it's topped out, and that the action this week proves his case.
Kevin Muir, a former institutional trader and now author of the Macro Tourist blog, expressed his view on the metal in Maggie Lake's &#34;Talking Markets&#34; podcast.
Silver futures (SI00) have tripled over the last 52 weeks, to $93.61, in early action on Thursday.
Muir is at pains to emphasize &#34;this is purely the trader in me speaking&#34; and rather than a formal repudiation of the investment case for silver, he just thinks the price action looks tired. He said he'd like to see a $20 retracement before reconsidering the position.
For now, Muir's tactic is putting on the modestly bearish trade of selling a call spread, which is selling a lower strike call while simultaneously buying a higher-priced one.
Muir cited this week's price behavior in silver as justification for his hunch. While gold (GC00) has forged new highs amid the Greenland crisis, the silver futures contract has scarcely budged. Trades that are obvious usually feel wrong, Muir explained.
While still retaining a long-term fondness for gold  (GC00)- &#34;I could see gold going to $8,000, $10,000,&#34; - Muir displays the instincts of a contrarian and this informs his current enthusiasm for the energy investment theme. He reckons, &#34;energy is dirt cheap&#34; and energy stocks XLE are what gold stocks were like last year.
To reinforce his argument, he quotes Jim Grant's maxim: &#34;Successful investing is about having everyone agree with you - later.&#34;
While advocating unfashionable energy stocks, Muir is increasingly  concerned about what he thinks are mounting risks to betting on the technology sector and Mag7 MAGS in particular. He thinks they are over-owned and expensive. &#34;The optimism about the future is so well-priced in that there's zero chance that over the long run these end up being great investments,&#34; he said.
During the conversation, Muir makes it clear he abhors crowded trades. He thinks the Mag7 trade is &#34;broke&#34; and &#34;frothy.&#34; He looks at Nasdaq-100 NDX  index and finds it hasn't made a high for four months while the exchange-traded fund representing the next one hundred largest stocks on Nasdaq QQQJ is setting fresh records.
Muir also noted that while tech stocks crashed during the dot-com bubble's burst, investors might have forgotten is that other sectors, like utilities, insurance and transportation delivered powerful returns at the same time.
One other broad structural trend Muir identifies is that the U.S. is no longer the only game in town for investors. He stresses that last year, the S&amp;P 500 SPX index did moderately well but other markets from Europe XX:SXXE to Japan (NIY00) and emerging markets did much better, and better still when their returns are calculated in dollars.
Over the last 52 weeks, the iShares MSCI all-country world ETF has gained 30%, versus 12% for the S&amp;P 500.
Muir outlines his overall theory that in the past, foreign countries sold stuff to America, received dollars in return but rather than convert that money into their own currencies, they recycled it into U.S. financial assets.
That's no longer going to be the case, he warns. As an example, during this week's geopolitical tumult, the dollar was actually sold in favor of the euro (EURUSD) when investors sought safe-haven assets.
Going forward, Muir anticipates a much greater fashion for international investors to repatriate those dollars back into their own currencies as they try to boost their economies and be less dependent on U.S. growth. Buying stocks in the rest of the world, as fewer cash flows are recycled into the U.S., makes sense to Muir and his bearish stance on the dollar reinforces the opinion.
-Jules Rimmer
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(END) Dow Jones Newswires
01-22-26 0758ET

<p>Trader Kevin Muir believes silver has peaked, citing recent price action as evidence. He is selling call spreads on silver while favoring energy and international stocks. Muir notes that silver futures have tripled in the past year but appear tired, suggesting a potential $20 retracement. He expresses concerns about overvalued tech stocks and highlights the growing appeal of international markets, as investors may shift away from U.S. assets. Muir's overall strategy reflects a contrarian approach, advocating for energy investments and cautioning against crowded trades in the tech sector.</p>

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This contrarian trader says silver has topped out - and this week's action proves it