All posts by T3 Live
Shorting a Vulnerable Market
One of the most profitable beliefs about the stock market that I’ve adopted is that there exists a distinction between the real world company and the common shares of that company. I like to think of these two, distinct entities as being tethered, sometimes loosely, and sometimes strongly together. At times when the tether between the company and its traded shares is too loose, the price of the shares can travel very far away from the actual value of the company. I think we are approaching a point in time when the tether between the shares and the company is stretched to the max on the upside. A snapback of price down to true value is quickly coming. One of the more prominent metrics that most traders will be familiar with is the Schiller PE which has only been higher than the current level of 40x for several months in the year 2000 before the .com crash. It would be improper speculation to simply take this as a reason by itself to be bearish on the market. Proper speculation requires one to dig deeper and to look for a reason why the market would be vulnerable now. I think that reason is that passive investing is about to see a big slowdown in inflows. As tech companies work AI into their workflows, they are seeing just how many employees they need to keep the same level of output. Big corporations have been, for months now, burning through compute tokens as they let their employees run unconstrained with AI to see how much they can produce. The employees that can produce the most output, document it, and present it to management get to keep their jobs. This has been going on since this Spring. As CFOs get back from the lazy days of summer, they will be planning their budgets for next year. The inflation that has caused all of us to figure out how to do the same with less is now biting corporations as well. The belt tightening always hits them last because they have so much money that they can resist the inflation for longer than individuals. It’s these employees that are getting let go that will cause a slowdown in inflows to passive ETFs in retirement accounts; no more job, no more contributions every paycheck. Mike Green has been publicly vocal for 6 years now that passive investing has an outsized influence on the price of the index as it plows money indiscriminately into the largest market cap companies. This is exactly why SpaceX needed to get a huge valuation on a tiny sliver of shares that are allowed to be traded and why the rules are being changed to allow these shares to be included in a large index like the S&P 500 far quicker than has customarily been allowed. Wall Street needs these shares to get inclusion so the price will be supported. We’ve gotten to the point in this cycle where professionals on Wall Street are gaming the system right out in the open for all to see. Signals like this indicate we are very close to the end of the up cycle in asset prices. Another cycle that seems to be coming to an end is the credit cycle. Michael Howell has been making the podcast rounds lately telling us that the 65 month credit cycle is due to peak imminently. I’ve attempted to read his book, Capital Wars, but it’s far too complex in it’s entirety for me to fully grasp. All I need to know is that when excess reserves in the banking system fall below a certain dollar amount at the end of the credit cycle, we get a liquidity crisis, and asset prices fall. We know we are nearing the end of the credit cycle because the first warnings that private credit was in trouble came when Tricolor defaulted. Private credit funds have been gating their products for months now. The combination of a slowing passive inflow and an ending credit cycle leave the market vulnerable. We saw the first hint of that this week with the FOMC decision to hold and the response in the market was a hard sell to the lows of the week. We’ve got expanding new 52 week lows as the market has been stuck in a range for 2.5 months. My bet is that this range resolves to the downside. I think the market is vulnerable, and I see a low risk opportunity to short in a good, low risk location, with the added benefit of a potential autumn crash whose signs I’ve been watching for several weeks now. Here’s my trade plan for shorting the SPY. I’ve left plenty of room for a logical stop for the usual coordinated market intervention by the Fed and BOJ that could spike the SPY up to $750. That gives about 2.5% of risk at current prices around $740, but the reward is two times that risk if the SPY can get down anywhere near the 200dma on a good sell move down. That’s my plan on the large portion of a short position, but I do want to see if this $760 is the real top, so I’d like to keep a small short on unless and until $757 is breached on the upside. That’s not a great risk to reward if my profit target is $700 so I’ll keep that portion of the position to maximum 1/3rd (in other words, only $33 of every $100 bet would have the higher $757 stop). There are more indications that this range could resolve to the downside like heavy volume on the last good sell move and weak volume on the subsequent rally to here. There are also increasingly more frequent volume increases on red days lately. All these elements combine to give me enough evidence to hypothesize that shares are moving to weak hands. The odd part about being short the market is that my
Continue Reading -->24 AI Stocks Explained in Plain English
Updated July 29, 2026 using data from Koyfin. This is an educational overview, not a big list of stocks to buy right now. Always do your own research or talk to a financial advisor before buying anything. People talk about AI stocks all the time, and the media’s obsessed. So it’s easy to want to start buying these wild stocks, even if you don’t know what they actually do. That’s why we’re breaking down 24 key AI stocks in plain English. Take your time reading this. There’s a lot of ground to cover since the AI supply chain is absurdly complex. Building and running applications like ChatGPT, Claude, Gemini, and Grok takes a massive supply chain: chips, cloud computing, software, networking, cooling, and of course, electricity. That’s why everything from GPU makers to memory producers to nuclear power companies gets lumped into the “AI stocks” category. Below are 24 companies across that entire chain, grouped by what they actually do, explained without the jargon (or at least minimizing it). We’ve also included some helpful stats for each one like the current stock price, market cap, recent performance, distance from its 52-week high, the average Wall Street price target, and short interest. These numbers were last updated on July 29, 2026, so keep that in mind. 🧠 Part 1: The Chipmakers (the “brains” of AI) These companies make the physical processors that train and run AI models. Without them, there’s no AI boom. 1. Nvidia (NVDA) Nvidia is pretty much THE flagship AI name. This Mag 7 name makes the GPUs (graphics processing units) that have become the industry standard for training and running AI models like ChatGPT. Originally built to power graphics in high-powered gaming PCs, these chips turned out to be awesome at AI math. Nvidia is the single most important hardware company in the AI world right now, and most of the biggest AI buildouts run on its chips. 📊 Stock Price: $194.13 | Market Cap: $4.70T | 1-Mo performance: -0.4% | YTD Performance: +4.2% | Below 52-Wk High: -17.9% | Analyst Target: $302.83 (+56% implied return) | Short Interest: 1.3% 2. Advanced Micro Devices (AMD) AMD is Nvidia’s main rival in AI chips, just as it is in PC GPUs. AMD makes its own line of AI accelerators (called Instinct) and has landed major deals, including a huge multi-year agreement to supply GPUs to Meta (META). AMD isn’t likely to dethrone Nvidia anytime soon, but it gives big tech companies a second supplier so they’re not fully dependent on one vendor. 📊 Stock Price: $444.05 | Market Cap: $724.1B | 1-Mo performance: -17.7% | YTD Performance: +107.3% | Below 52-Wk High: -24.1% | Analyst Target: $575.49 (+30% implied return) | Short Interest: 2.6% 3. Broadcom (AVGO) Broadcom doesn’t sell off-the-shelf chips. It’s best known for making Google’s TPU processors, and also co-designs custom AI chips for other customers like Meta, and OpenAI. This lets those companies get chips tailor-made for their own AI workloads instead of using general-purpose GPUs. Broadcom’s AI chip and networking business has grown explosively, and management has talked about reaching $100 billion in annual AI-related revenue. 📊 Stock Price: $380.02 | Market Cap: $1.81T | 1-Mo performance: +2.0% | YTD Performance: +10.2% | Below 52-Wk High: -23.2% | Analyst Target: $527.00 (+39% implied return) | Short Interest: 1.5% 4. Taiwan Semiconductor Manufacturing Company (TSM) TSMC doesn’t design chips. It manufactures them for everyone else, including Nvidia, AMD, Apple, and Broadcom. If you own an AI chip, there’s a good chance TSMC physically made it. That makes TSMC one of the most important, and most geographically concentrated, companies in the entire AI supply chain, since nearly all of its advanced manufacturing happens in Taiwan. However, TSMC is looking to make inroads in the US. 📊 Stock Price: $385.75 | Market Cap: $1.79T | 1-Mo performance: -15.2% | YTD Performance: +27.5% | Below 52-Wk High: -19.5% | Analyst Target: N/A | Short Interest: N/A 5. ASML Holding (ASML) ASML makes the extraordinarily complex (and pricey!) machines that TSMC and other chipmakers need to actually print circuits onto silicon (called EUV lithography). Nobody else on Earth makes machines capable of this at scale, which gives ASML a near-monopoly on the equipment behind the most advanced chips. News reports indicate China is entering the same market, but is way behind ASML in terms of technology. 📊 Stock Price: $1,583.21 | Market Cap: $607.5B | 1-Mo performance: -15.8% | YTD Performance: +48.6% | Below 52-Wk High: -20.8% | Analyst Target: N/A | Short Interest: N/A 6. Micron Technology (MU) Micron makes memory chips (DRAM and, increasingly, high-bandwidth memory or “HBM”) that sit right next to AI processors and feed them data fast enough to keep up. Demand for its newest memory has been so strong that Micron has reportedly sold out its 2026 HBM supply through long-term contracts. Memory used to be thought of as a boring, cyclical business, like potatoes or soybeans. Now it’s a high-growth piece of the AI puzzle. And the debate is raging over whether AI has turned memory into a secular growth sector. 📊 Stock Price: $772.02 | Market Cap: $871.9B | 1-Mo performance: -32.6% | YTD Performance: +170.6% | Below 52-Wk High: -38.5% | Analyst Target: $1,507.38 (+95% implied return) | Short Interest: 2.8% 7. Marvell Technology (MRVL) Like Broadcom, Marvell designs custom AI chips for big cloud companies (its biggest customer is reportedly Amazon) and makes chips that help data move between AI processors. It’s grown fast and joined the S&P 500 in 2026, but it also trades at a very high valuation relative to its earnings, meaning investors are pricing in a lot of future growth. 📊 Stock Price: $171.02 | Market Cap: $149.8B | 1-Mo performance: -38.4% | YTD Performance: +101.5% | Below 52-Wk High: -48.2% | Analyst Target: $256.91 (+50% implied return) | Short Interest: 3.9% 💾 Part 2: The Storage Makers (where all this AI data actually lives) Training and running AI takes a ridiculous amount
Continue Reading -->The First Step to a Crash
I’m naturally inclined to be bearish. I have been since my formative years in the market during the 2008 GFC. There are only two, maybe three times in a career where it pays to be bearish. This may be one of them. Last week I detailed the steps to a possible stock market crash this October. We just got the first step in that sequence: an initial break in the Dow Jones Industrial Average from the summer rally trend. The reason for this break is that something appears to be going wrong in the Iran situation. The US 10y yield is approaching 20 year highs, crude oil is abundant yet going higher in price, and gold, the best barometer for global base money, is sinking. As more global money gets burned up securing crude oil, there is less available to roll over the massive amount of debt that’s been built up since 2020. If central banks don’t start printing, base money doesn’t grow, and asset prices fall as there is no money to bid higher for financial assets. An exchange with Senator Kennedy and Secretary Hegseth this week should give the market a reason to sell more as it prices in a deteriorating situation in Iran. Senator Kennedy, usually with an unperturbed and jovial demeanor, seems flustered to a degree I’ve never seen him before. He thinks the situation is getting serious, and that “we are down to it”. I’ll bet he just received a briefing telling him the supply chain breakdown we’ve been hearing about since March is coming soon unless we commit ground troops to go into Pickaxe Mountain, destroy centrifuges, and end the conflict. With the House passing a resolution to limit Trump’s ability to escalate further, I think the market has more downside in the near future to price in a possible worst case scenario of a supply chain breakdown if the US doesn’t send in ground troops. This is a situation with no good outcome, and it’s starting to resemble Britain’s Suez crisis. I’ve been in about 70% cash since March, and now I wish my cash position was even bigger. I’ve got about 15% in gold miners and 7.5% in energy, shipping, and fertilizer stocks. Right now, I wish I’d bought more of the “conflict” stocks such as $XOM, $NTR, and $DAC earlier this year, and I wish I’d sold more of the gold miners in March. My portfolio seems to be in the same situation as the US in Iran: no good outcome in sight. I’m too long and too short at the same time. I can’t sell what I’ve got that is going down, and I can’t buy more of what I’ve got that is going up. The only way out of this situation for me is to either get shorter or get longer. There’s no way I’m getting longer with a market setup this bad fundamentally, so I’m sticking to my plan I detailed last week of waiting for a confirmation of a bear market with a failure of the $DJIA to get back above this initial break level of $51,850 if bulls attempt a rally back in the next couple weeks, then, and only then, shorting the $SPY and/ or $QQQ. It’s not just the US in Iran that is worrying the market. The Yen keeps getting weaker with a clean break above $160. The Bank of Japan won’t tolerate too weak of a Yen for much longer. An emergency rate hike by the BOJ would weaken the dollar, and that would slow the capital inflows into the USA that have been flowing into financial markets. The stock market needs foreign capital inflows to sustain these lofty valuations. Stock valuations are too high to find any meaningful support from value investors, and passive investors won’t help the situation if concern about lower prices causes them to stop retirement inflows. There are dozens of reasons to be bearish, but the market simply has not cared about any of them as long as excess liquidity was finding it’s way into stocks. The SpaceX IPO was very large and took up a lot of balance sheet capacity (i.e. liquidity) that is now needed to support stock prices. It’s been my view that the professionals on Wall Street had the resolve to forge together a market for two more big IPOs: Anthropic and OpenAI, and that would signal an intermediate top in the market. Scrapping those IPO’s would be an even more bearish indicator that the pros on the Street don’t want to even try because they see a bear market ahead. Bear markets are extremely difficult to navigate because they require you to constantly think negatively, to think about what can go wrong. This goes against our human nature to always improve, to think about what can go right. I’m far more introverted than the average trader (an extreme INTP on Jung’s psychological type, and a Type Five on the enneagram), and as a result, I’ve spent more time analyzing my own mental activity than the average trader. I’ve come to understand how being so bearish since the QE era began in 2012 cost me so much. It was really just a pessimistic world view that made me see only the reasons the markets should go down. Around March of 2020, I began to understand the benefits of shifting my mindset to a more productive, positive, and optimistic one. I began to see clearly that it wasn’t pessimists that got rich trading in the markets. The bearish arguments seemed so smart, so correct, but they just didn’t matter. Other guys were getting rich by being bullish, and I was stuck in a negative mental state with more desire for wealth than talent in attaining it. For me, finding success in the markets was a choice. It was a choice to do the work to be bullish on something. That happened to be gold, and that choice changed my trajectory in a big
Continue Reading -->How This Stock Market Will Top
“There is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market to-day has happened before and will happen again.” -Edwin Lefèvre, Reminiscences of a Stock Operator. The term “speculator” has been used derogatorily ever since the 1929 stock market crash. Ben Graham spent an entire chapter in Security Analysis attempting to delineate the differences between investing and speculating. I’ve read that chapter dozens of times over the years in hopes that repetition will bring clarity as to what exactly is the distinction between the two. All these years later I still can’t believe in a real distinction between speculation and investing, and I don’t think he believed it himself. From what I understand, Ben Graham ran a proto-hedge fund, lost all his investors’ money “investing” according to his method, got a job as a professor teaching others how to do what he couldn’t do for himself, and then spent decades winning back his investors’ lost money. That’s a lot of effort and a lot of years for a scratch trade. If that’s what happened to the genitor of common stock “investing” as we know it today, then for my money, speculation seems like a better approach… Nowadays it’s almost verboten to refer to your market participation as “speculation.” This wasn’t always the case. It certainly wasn’t the case in the late 1920’s. I like to surf old New York Times archives from the financial section to get a feel for the zeitgeist from earlier periods in the market. What’s most stunning to a contemporary reader is the brutal honesty with which reporters delivered the financial news. Everyone back then accepted that stock markets were for speculation. There was no need to explain price movement with a fundamental narrative. It was all insiders creating pools and bidding up stocks, or hammering them down. Today we would call that “insider trading.” While it’s tempting to think so much has changed in the stock market between then and now, I don’t think our markets are very different from markets in the late 1920’s. That’s because human nature never changes. The quote from Lefèvre stands true: whatever happens in the stock market today has happened before and will happen again. Deep in the annals of stock market history lie the clues to discern what we are going through in the present. Market quotations, in their essence, are the manifestation of thoughts in the minds of men. To study their recorded thoughts from the past is the closest we can come to gaining their experience, and experience is the most powerful tool we have in attempting to win in the markets. We can stamp either label we’d like on the activity, whether it’s investing or speculation, but the approach is the same: figure out what has worked in the past, and apply it to the present. This is the way we win in the markets. As for me, I think it’s all speculation, so we better aim to do it well. Proper investing is merely one element of speculation. You’ve got to have some understanding of basic fundamental conditions to speculate well. It’s my view that we are in the contraction phase of the business cycle, and that this autumn we will see a window of opportunity for the market to sell. All the conditions are in place: a stock market that requires a lot to go right to justify a 20 PE, a new technology that created a mania and parabolic charts like memory chip stocks, an opaque securitization scheme with leverage in private credit, the largest stocks shifting their capitalization tables from buybacks to debt issuance for AI capex, and now the biggest IPOs in history adding tons of shares on the market. If you were looking for a recipe to make a top in the stock market, you couldn’t ask for better ingredients. To understand how to speculate in this market properly, I study the past. The charts of previous market tops show us the subtle clues that revealed the shifting probabilities favoring price declines rather than further increases after a long bull run. Below are two famous crashes we can scour for portents that inside the minds of men, fear was beginning to replace greed, stocks were being distributed from strong hands to weak hands, and the natural proclivity for stock prices was to retreat. The 1929 and 1987 tops display a certain uniformity in price structure that we can capture and build into a “top template” for memorization and pattern recognition as we move into the window for a crash this autumn of 2026. While all tops have their own unique characteristics, there are two broad categories of tops I’ve identified from historical studies: autumn tops and spring tops. 1929 and 1987 are autumn tops, and 2000 and 2008 are spring tops. Since we are past the spring window, and the 2026 market most resembles the autumn tops, I’m focusing on those. The autumn tops both share these basic elements in common: a summer time rally, an extension of price far above the 200 day moving average, an initial break, a failure to surpass the initial break price level, and an autumn crash. Here are annotations of the basic elements on the historical charts of the Dow Jones Industrial Average:. 1929: 1987: Now here’s an annotation on the current 2026 $DJIA and what I’d expect to happen if this market follows the autumn top template. 2026: After this summer rally, I’m looking for an initial break sometime in late August or early September, coinciding with back-to-school time when no one besides professional traders will be paying attention to the markets. Everyone will be busy getting back to work and CFO’s will be creating budgets for the next year. This is the earliest an initial break would occur. The initial break, if it comes, would be our first warning that the market is at risk of following
Continue Reading -->Big IPOs Are Big Business on Wall Street
I’ll never forget the lessons I learned about Wall Street during the Facebook IPO in May of 2012. I was the newest guy on the desk at a prop trading firm, and it was the summer of the PIIGS Euro debacle and Draghi’s “Whatever it takes” speech. It was a chaotic backdrop for the most anticipated IPO in decades. The FB offering was huge in terms of shares, and one trader on the desk had an allotment of shares in his personal account. The offering price was $38, and in the premarket, it couldn’t hold above $43. The guy with FB shares was an amazing trader with superb instincts. He sold his shares at the open because he didn’t like the way the stock was acting. The stock had a brief spurt higher, then sank the rest of the morning. By mid afternoon, it was approaching the IPO price. We all saw how weak it was. We watched in amazement that there wasn’t any demand to keep the price above the initial offer figure of $38. As the price slowly approached the offering price, more and more volume came on the offer. Massive quantities of shares were being dumped in the most overhyped IPO since the .com era. It seemed to take forever for the price to get down to $38. Penny by penny it sank listlessly. We all knew it was going to break below the figure, and then, out of seemingly nowhere, infinite sized bidding came in at $38. Every single share that was offered was met with an inert floor of demand at $38. Price never went one penny below the initial offer that first day of trading. That was the underwriting syndicate bidding in infinite size for the stock. This is the lesson I learned that day: Wall Street will not allow itself to look bad to the public. By sheer force of will, the money will be found to support shares that need to be supported to keep a proper image in the investing public’s eyes. This is the way in which Wall Street professionals operate. A retail trader like myself can only watch in admiration at the way they handle their business. I’ve never forgotten that day, and I’m reminded of it now as we move beyond the SpaceX IPO and into the IPOs of OpenAI and Anthropic. I still hold the view that we are in the contraction phase of the economic cycle, but I don’t think the market has a window to move down significantly until after August, and likely not until after the November midterms. Those dates are far into the future, and not our concern for the present. For the moment, Wall Street has at least two more big IPOs to work through, and I am supremely confident that the professionals on the street will make the IPOs a success no matter what. So while I am growing increasingly bearish as we move into the second half of the year, I am still aware of the realities of the business of markets, and it’s bad for business when stock prices go down. I’m still in mostly cash, but you can’t make money if you don’t have a position so I’m looking for some positions that I can work into. I’ve analyzed all my trades for the 1st half of the year, and it’s amazing that March was my only down month considering how disappointing some of my entries and exits have been so far this year. The only reason I’m still in good shape this year is because I stick to a discipline. I intend to keep sticking to what has worked for me so far. My discipline is to only buy two types of setups: technical breakouts in good price structures when the $SPY is above its 8 and 21 day moving averages, and large positions in stocks that I like fundamentally. The breakout trades are tactical, and as such, I keep a constant risk size in those, without letting any position get bigger than about 7.5% of the total account. These trades produce positive cash flow on average and keep me involved in the game to feel how things are developing. These are generally less than a 3 month average holding period. My position trades are different. Those are where the vast majority of my gains come from, can make up 90% of my account, and are generally a 9-18 month average holding period. Since we are not yet in a period where the $SPY is trending nicely above a rising 8 and 21 day moving average, I’m focusing less on breakout trades and more on working slowly into some stocks I think could weather the coming storm later this year. I only feel comfortable holding large positions in stocks that I can analyze as having some compelling value. There’s several stocks I like in this regard. I’ve already shared the pipeline companies I like because their asset base is irreplaceable and should hold value through a downturn, then soar if and when the Fed is forced into yield curve control and inflation breaks out in the years ahead. In keeping with the hard asset theme like pipelines, I’m also looking for companies that own assets and trade around book value. If the assets on their books are priced properly, they should have limited downside in the deflationary event that is my current base case. Here are some stocks I’m stalking to find a small, low risk entry now with a plan to build a much larger position over time if these initial buys don’t get stopped out: $RYN trades at 1.2x book value, and it yields about 5%. But it is tied to housing which I’m not bullish on until rates come down so I’m in no rush to take offers on this one. I’ll place small bids below the market once rates on the 10 year treasury find a good top. $NTR trades at 1.4x
Continue Reading -->American Assets Worth Owning
250 years ago, 56 men pledged their lives, their fortunes, and their honor to each other that they would support a common cause. Of all the men that signed the Declaration of Independence, not one of them died with nearly as much wealth as they had when they signed. They pledged their fortunes in support of freedom and meant it. They were all wealthy men when they signed but sold down their vast fortunes to support the war against the greatest military power the world had ever seen, and each of them died poor with their fortunes scattered but their honor intact. From the period in between the Declaration of Independence in 1776 and the ratification of the Constitution in 1787, the citizens of the newly formed country needed convincing to form a government after they had just lost a great deal of blood and treasure to abolish the old one. Alexander Hamilton was instrumental in accomplishing this task when he expressed the rationale for the Constitution, line by line, in the publication of the Federalist Papers. Most of the text of the Federalist Papers is devoted to explaining how a central government would allow for a prosperous nation. Hamilton’s chief rationale was that money needed to be raised to build a navy. It was only a navy that would protect commerce. The States were incredibly productive and produced far more than the citizens of the US could purchase. They needed to sell their goods overseas, and a navy was a necessity to protect the merchant ships from their former colonizers and the largest naval power in the world. From the beginning, this country was formed with the idea that commerce leads to prosperity. Commerce has been and always will be an undertaking uniquely suited to the American experience. A notable change in the direction of that commerce is under way and under the radar. In March, the US Gulf Coast region, PADD 3, exported more petroleum products to the rest of the world than at any point in history. The flow of commerce has been a one way trip for 50 years: our wealth flows out, and Middle East oil flows in. Thanks to the vast energy fortress the USA now possesses, as a result of generational capital contributed by our ancestors over the past 170 years of oil exploration in this country that incrementally built an energy dynamo, the flow of commerce is reversing. The rest of the world’s wealth is coming in, and refined energy products are going out. In addition to possessing 46 billion barrels of proven reserves, the US also possesses the world’s most robust and redundant energy infrastructure: 140 refineries capable of processing any crude grade on earth, millions of miles of pipelines, coastal export terminals, and hundreds of thousands of wildcatters and independent oil producers. In its totality, our energy infrastructure is a national treasure. It is our heritage, and it is an asset bequeathed to us by past generations. The American spirit is one of risk taking. It was the risk taking spirit that built the energy infrastructure we now possess. The spirit of risk is still evident, most readily observable in the investment preferences, between Americans and our European cousins. While other western cultures prefer to place their savings in bonds, Americans have historically chosen a riskier, but ultimately more profitable path. We buy stocks. We always have, and we always will. There’s has been and will be more stock market crashes, but the risk taking spirit will always work its way back to the forefront of the American people’s consciousness. While the energy infrastructure this country possesses is priceless, individual assets have a price and are for sale every day on the American stock exchanges. These are assets that I want to own. Most stocks I want to rent, but not these. One asset I’ve owned for over a decade is $EPD. It’s the Cadillac of MLPs. It briefly went below my cost basis in the 2020 crash, and I only doubled my position. It’s one of my largest regrets that I didn’t 3x or 4x my size for the few days out of 10 years I was red on the position. But I think we’re going to get another chance this year to load up on these energy assets that we can keep forever. That chance is going to come because a wave of deflation is already on us, and I don’t think market participants are positioned for falling commodity prices. Over the course of this summer, as global tensions ease, millions of barrels of oil will find their way back into storage. This is likely the reason the major integrated oil companies have let storage run low: they know how much oil is about to come to market after the Iran conflict winds down. If they had topped up storage in the crisis, all that oil coming to market from behind the Strait of Hormuz would crash the spot price, and that is good for no one in the oil industry. As this oil fills storage, and the oil doomers loose their bull case, I suspect the energy names will get sold by all the traders that bought for the “war premium.” Further exacerbating the energy longs later this year should be reduced demand as the full effects of this credit bubble ending weighs on the economy. It’s still my view that we are in the contraction phase of the business cycle, and that means we will get one chance to buy up the energy infrastructure assets that we can keep as permanent assets in our attempt to exit the working class and become part of the investor class in this country. It’s only this country that affords opportunity to the average guy looking to make a better life for himself and his family. If this stock market offers that opportunity to me this year in an energy sell off, I plan on taking it. I’ve learned
Continue Reading -->For Every Stock There is a Season
In the deep south, we’ve fully entered into summer time. That means we can depend on hot, humid weather until about the middle of October. While I can’t pinpoint the exact date the miserable humidity will subside, I do trust my timing prediction of the approximate change of the season. That’s because the seasons are dependably cyclical. They announce their coming and going with tell tale signs. The patterns of the seasons are comforting in their predictability. I like to frame my thinking in the observation of repeatable patterns as a means to navigating life because a predictable future is easier to plan for than a completely haphazard one. It’s a sometimes serendipitous quirk and a sometimes rueful lament that life doesn’t always conform to my mental models of pattern recognition. Markets are a microcosm of life in this regard. A mental model of how markets should work is an essential, if not always useful, toolkit in the business of speculation. The notion that the buying and selling of different groups of stocks could be timed based on cyclical patterns was compelling to me when I started trying to figure out how the market works over 18 years ago. The pattern I use as a mental model to try and determine what “season” the market is in is this graphic depiction of the business cycle: This graph is more of a guideline rather than an instruction manual. The nature of markets is such that perfect conformity to a standard is not high on a list of observable traits. I’ve noticed over the years, that while perfect conformity to this pattern is not realistic, there are observable cycles that do approximately represent the pattern this cycle predicts. The QE era from 2012 to 2022 was a horrible period for trying to use this graph as a guide. But ever since the first rate hike cycle got under way in April 2022, this graph has proven to be a useful guide to me once again. The biggest trade of my life was gold miners from 2023 to autumn 2025, and while my P&L was compelling me to lock in gains on the way up, this cycle graph is what steeled my resolve that letting go of the stocks that made my gains was the only sensible course of action. T he Fed began easing, and I knew from the last time this cycle worked in 2007 that the metals and mining stocks, including the gold mining stocks, should be sold. That decision to lock in profit was a monumental one for me. Now, once again, I feel comfortable using this cycle graph as a guide to determine how to deploy my capital next. My view is that we are in the contraction phase of the business cycle, and my biggest position is by far cash. Several indicators don’t line up exactly with this cycle graph, so I’m not clinging to my view, in fact, I’ve got one foot out of the door on this view already. I’m already building mental models of what would prove my view to be incorrect (one development that would begin invalidate my view is if crude oil holds this 200 day moving average, and makes a run for the highs later this year). But for the moment, I’m planning on using this cycle graph as a guide for what the buy next. The contraction phase of the business cycle should make earnings less predictable, which should make any reliable growth in earnings worth more to institutional investors whose waves of buying leave footprints on the tape. Traditionally, they should be willing to shift capital into drug and grocery store stocks due to the predictable earnings in a weak economy. The consumer packaged goods stocks are all in horrific downtrends, so I’ll need to see some reversal there before I think about building a big position. I’ve never seen $GIS yield this much (5.5% div yield) or trade this cheap (11 PE), but I’ve never seen it have sustained volume declines either. $GIS reports July 1 so I’ll see what they say about volumes and pricing there. This could be the bottom if they are able to stop the declines and get back to growth, but I have no insight there so I’m just watching for now. The consumer packaged goods space is in too much trouble to confidently take a large position. The drug stocks however, are beginning to show the tell tale signs of a change in season. The $IBB is shaping up nicely. $ABBV jumped the gun and bought $APGE this week. $APGE had a picture perfect set up that let you know institutions were buying up all the supply at lower prices, but the SPX with an 8 day moving average underneath the 21 kept me out of breakout trades. $APGE didn’t even give a proper breakout signal before it got taken off the board, but this serves as validation that drug stocks are in play, underpriced, forming constructive price structures, and in the correct part of the business cycle. $AUPH is another one with a text book price structure setup for a breakout. It already broke out above it’s flat top at $16.50 on a gap up. It’s a low risk buy under $17, but I’ve never had good results chasing. There will always be other opportunities. With the SPX and NDX flopping around their 8 and 21 day moving average stack, I think there’s a possibility patience will be rewarded and offer a brief moment to get in something before a trend move higher starts and doesn’t let you in without chasing. I’m still looking towards the August time frame as a period when the market has to deal with a tapped out consumer, services prices that are just too high, and the ramifications of the private credit and life insurance debacle, so a summer rally into Autumn, then a big market reaction is a scenario I’m planning for. Commodities are
Continue Reading -->Observe the Structure, Wait for the Signal
The business of speculation is entirely unique. What’s required to succeed in this business often runs counter to what’s required to succeed in other lines of business. Virtually all other businesses involve some element of salesmanship. Sales is denoted by its busyness. In sales, being busy, or even just the appearance of being busy, confers to others that you are working. Not so with speculation. The work of speculation is denoted by its lack of busyness. This apparent lack of activity is easy to mistake for idleness; even after years of trying to explain what I do for a living to my wife, she still can’t believe that work is anything other than continuous motion and constant action. I can’t blame her for thinking my lack of appearing busy is idleness, but what I’m actually doing is anything but idle. I spend on average 25 to 30 hours a week doing real work, and about 5 to 10 doing admin and maintenance. Of the 30, at least 15 hours is spent in observation. To her, my work in observation looks like doing nothing, but it’s the most critical activity for my work. I’m observing the market and waiting for something to appear that looks familiar to me. I’m searching for the one setup I know works for me. There’s really only one technical setup that I can attribute to all my winning trades: a long base and a breakout within a strong general market. Here’s my best winning trades from 2025. They all share the setup I like with a base in white, a breakout in green, elevated RSI in yellow, and most importantly, a stop in red: $AGI: $ATUSF: $GIFI: $DAC: $MT: Each of these trades had two things going for it: 1) a technical setup that I recognize combined with the SPX above it’s 8 and 21 day moving averages, and 2) a fundamental theme or compelling valuation. The technical setup writes its own story: there is a negotiation between buyers and sellers inside the white base that forms a price structure with a flat top. All throughout this price structure formation, I’m observing. I’m waiting to see a signal. The breakout in green is the exact moment in time that the buyers have bought up all the available supply of stock. In order for the auction to occur, the price must work higher. The best stocks will show strength for some period of time before the breakout. The very best trades have a logical stop that is not more than 7% below the breakout level. The closer the logical stop is to the breakout, the less risk there is and the larger the position can be. I use a constant risk position sizing so any trade will never risk more than 1% of my account, and each stock should be under 10% of the account in case of a gap down beneath the stop. I’ll relax this requirement if I have a compelling fundamental reason for feeling OK with a large single stock position. The fundamental part of owning a stock is a lot more difficult to pin down than the technical. Each stock from my 2025 trades had a fundamental appeal to institutional investors that made it compelling to own. $AGI’s cash flows were surging with the price of gold, and it was trading at the same cash flow multiple as the average stock when it should have been trading at a premium due to the cash flow ramp. $ATUSF was very cheap at 7x cash flow when it broke out at $20. This is far too cheap for a company with as high a caliber management as Altius. $GIFI, Gulf Island Fab, was right in the sweet spot – oil and gas ancillary services was the right theme, they had no debt, and growing backlog and earnings for several quarters. It was all right there in their SEC filings. I had no idea they would get a buy out so quickly after the breakout signal. $DAC broke above $100 right at the beginning of 2026. It was trading at less than book value at the time, and earnings were stable. I figured it shouldn’t trade at a discount to book. I had no idea the shipping disruption that was about to come with the Strait of Hormuz, but institutional buyers did. They bought up all the supply under $100. $MT was in the metals and mining theme that was working so well in 3Q and 4Q 2025. I didn’t know it at the time the stock broke $35, but the EU was ramping up steel tariffs in a big way. ArcelorMittal was trading at 70% of book value before the EU tariff announcement while US companies like $NUE and $STLD were already rallying and trading much higher than book value. $MT was an easy target for institutional sponsorship. The reason I was able to participate in these moves is because I was observing. I know what I want to see, and I keep on the look out for it. I won’t always get every move, and it’s painful when I see a technical setup I recognize but can’t get a fundamental understanding of the valuation component. Because a lot of the story-stocks in this market are pretty un-analyzable from a fundamental perspective, I have to sit on the sidelines for a lot of the big moves that these stocks achieve. Stocks like $TSLA, $ASTS, or $RIOT can have great setups, but if I can’t get an understanding of why they may be compelling from a valuation perspective, I’ll have to pass. Some stocks which are more suited to my analytical abilities that I’m observing right now are: $BIIB, $MRK, and $NVS. The technical setup is easy to see: a base with a flat top forming and strong RSI. I’ll be observing those stocks as the price structure develops and waiting for a breakout that occurs with the SPX above it’s 8 and 21 day
Continue Reading -->Why 2026 rhymes with 2008 when it comes to deflation
Why a new T3 Live contributor is saying the ‘crowd’ noise’ is different than what the market is saying I’m not saying 2026’s setup is similar to 2008’s. I’m saying it’s exactly the same. The crowd is shouting again. It’s shouting about inflation — the same way it shouted in 2007 and 2008. And just like back then, the market is whispering something else entirely. After almost two decades in this trading and investing game, I’ve come to accept that winning in the markets is a choice. You show up regularly, you practice with intention, and you execute your plan on game day — no different from winning at anything else. But the first thing you have to choose is who you listen to: the crowd, or the market. They’re rarely saying the same thing. My 2008 story of using vegetable oil for fuel… because the ‘crowd’ said to When I first started trying to operate in the stock market back in 2007, I knew none of this. I treated it as a hobby, not a profession. Hobbies cost you money; professions earn you money. My hobbyist approach cost me embarrassing amounts of both time and money. Back then, I was fresh out of college, working my first “real job” as a telephone salesman for a big tech company. The cubicle is a miserable environment — they couldn’t have invented a more sorrowful place to spend your waking hours. I saw trading stocks on the internet as a way out, and it became a mental escape more than an income stream. And those were crazy times. Crude oil was pushing through $120… Cars were a way of life for me and my friends back then — building them, racing them, buying parts for race cars and 4x4s — so we felt the looming gas shortage in our bones. Building a car was already expensive, and driving one was getting worse by the week as China bought up every commodity on the planet to pull its population out of poverty and into a middle class. We started making biodiesel out of vegetable oil and lye, because we knew — we just knew — we were only months from running out of crude and gasoline. We just knew the trucks would stop delivering and the grocery stores would empty out. We knew all of it because we were listening to the shouting. The media. The politicians. The people around us. I was learning to be a trader, and instead of listening to the deafening noise of the crowd, I should have been listening to the whisper of the market. Gold can predict the future of inflation… and it’s doing it again Here’s what I didn’t know then but know now: gold front-runs the money printing. It starts moving 18 months to two years before the central banks do. By 2008, gold, wheat, and crude had already priced in the inflation before it ever entered public awareness — and as they topped out, they began whispering what came next. Not more inflation. Deflation. The most violent deflation to wash over the money system since 1929. Gold’s four-year run from autumn 2004 to autumn 2008 looks awfully similar to its run from autumn 2022 to now. It was a deflationary bust that dragged gold down into October 2008 as the financial crisis hit: Back then, it was the fertilizers running geometrically as China bought up all the potash and nitrogen in the world. Today, it’s the hyperscalers buying up all the DRAM. Here’s $MOS then versus $MU now: This is where it gets uncomfortable. Almost no one who was warning about deflation during the 2008 top could be heard over the shouting. Home prices — and the property-tax receipts riding on them — were ratcheting higher, and we were told they always would. By the end of 2009, property taxes were slashed across the country. Homeowner’s insurance cost a fraction of what it had a year earlier. Getting work done on your house in 2006 and 2007 came with an astronomical price tag, if you could even find someone to do it. By the end of 2009, the market was flooded with contractors looking for any project at all. It’s the exact same story, repeating verbatim, today. The signs were everywhere in 2008, but they didn’t boast… Frantic road-construction projects as towns rushed to spend every last tax dollar that had come in the year before. Look around your own town — see anything similar? The social excesses, too: the Hummer H2, a beefed-up Tahoe built for suburban moms who wanted to feel like they were on patrol because the drive to the grocery store had gotten too mundane. Nothing marked the top better than that thing. Are you seeing this in your town? Now look at your streets. I’ll bet you can’t drive across town without passing two Hummer EVs. The auto industry is writing off its wasted EV capex as we speak — Honda’s just the latest. None of those signs announced themselves. The astute speculator had to watch for them and listen to the quiet voice within — the one that whispered: sell. I’m watching, and I’m listening. Being 90% long gold miners from 2023 until autumn of 2025 got me to where I am today, and I’m always hunting the next high-probability position to size into. Right now, that position is cash. My current portfolio holdings I’m in 75% cash, with about 15% in gold miners left over from my last big trade, plus small trading positions in $ATUSF, $DAC, and $FTK after peeling some off over the past few weeks. I’ve also got a small long-term hold in $VITL and a bigger one in $EPD. As long as $SPY stays below its 8- and 21-day moving averages, I’m not taking on any new breakout trades. I’ll keep what I’ve got, trail my stops, stay in the upside, and run my game plan into August 2026 — when I
Continue Reading -->T3 Wrap Up – I Shorted Micron. Here’s Why.
See why Sami shorted Micron here Sami Abusaad believes the market topped out. And he just shorted the greatest stocks on Earth. Get the list now. Sami goes over: Why he bet against the red-hot semiconductors like Micron (MU) and more What to watch for on Monday’s close The problem with IWM right now His #1 long idea, a healthcare play His potential downside targets for SPY and QQQ Learn the 3-step process to “automate” your futures trading Many stock traders worry about buying the top. Futures markets run nearly 24 hours a day, allowing traders to react to breaking headlines, trade the overnight session, and position for whatever comes next. Dan O’Brien, from our sister company Prosper Trading Academy, added a nice little twist to following the futures market: He developed an algorithmic platform that’s designed to “automate” futures trading in 3 steps. Tuesday at 7 PM ET, Dan is going live to walk through this exact process step by step, which helped his futures trade signals show 10X results in 2024 and 2025. Sign up for the live training here.
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