Category Archives for Articles
How Meta Can Hit $1,000
We’re cruising into the July 4 holiday so let’s take a look at the 5 things you need to know right now. How Meta Can Hit $1,000+ On Thursday, Bloomberg reported that Meta (META) is planning a cloud infrastructure business called “Meta Compute” to sell excess compute capacity for AI and other applications. If this is real, it would put Meta in competition with the likes of Amazon (AMZN), Microsoft (MSFT), and Alphabet (GOOGL). You could argue this a million different ways. The bears will say Meta should not have excess compute capacity, and it’s entering battle with aggressive competitors. Or maybe this gives Meta the potential for a higher valuation because it’s hitching a more direct ride to the growth of AI. But I ask myself, couldn’t Meta make way more money by just selling ads to AI companies? This seems like the easy money instead of rolling the dice with hundreds of billions in AI infrastructure investments. Yes, Meta should use AI for things like improving ad targeting and speeding up code development. Everybody knows that. But it seems far smarter to be the cash register counting up all the ad dollars from OpenAI, Anthropic, etc. Call me crazy. But if Meta backs off from its wildly aggressive AI spending plans, I think it’s going straight to $1,000. Because earnings estimates will go through the roof. The problem is that this could take years. I mean, how long did it take before they realized the Metaverse sucked? Techflation Is Here In 1965, Intel (INTC) co-founder Gordon Moore observed that the number of transistors in a chip would double about every two years, with the price dropping by half. That was declared “Moore’s Law.” It’s something of an outdated concept for technical reasons. For example, transistors can only get so small. But what if AI, to some degree, has given us Moore’s Law, only upside down? Prices for SSDs, DRAM, CPUs, and even old-school spinning hard drives are going up. This SanDisk (SNDK) SSD drive cost T3 Live $150 in January 2023: Today, it’s going for $280+ on Amazon: News reports indicate that Intel is raising prices for desktop CPUs. These are not super-powered AI chips. But it looks like we have an upward pull on everything related to computers, smartphones, and tablets. If people are paying higher prices for SSD drives, why not everything else too? Recently, Microsoft (MSFT) announced higher prices for its Xbox video-game consoles. It expects storage and memory prices to double by the fall of 2027. And Apple (AAPL) jacked up prices on Macbooks and iPads. Welcome to techflation. Did Warsh and the Jobs Report Shift FOMC Expectations? The Nonfarm Payrolls report was slightly light today. And yesterday Fed Chairman Kevin Warsh said inflaation risk are declining. So have FOMC rate hike expectations shifted lower? Nope. The CME’s FedWatch tool shows that markets are pricing in a 79% chance of higher rates by year-end. This compares to 83.1% yesterday and 80.8% a week ago. So nothing’s changed on that front. And the expectation of higher rates is boosting this name: Robinhood Rockets! Sami Abusaad has been super bullish on Robinhood (HOOD). And it’s been on a tear: One reason is the expectation of higher interest rates. Higher rates means bigger profits on margin loans. And margin loans have been at record levels. Plus, based on Interactive Brokers’ (IBKR) June 2026 numbers, we can assume Robinhood is seeing heavy trading volumes. And if the crypto market can turn the corner, that would give Robinhood even more rocket fuel. Crypto revenue has been a sore spot for Robinhood, so if that reverses, it could be off to the races at an even faster pace. FYI: IBKR is one of my biggest positions. Wait. Are Investors and Traders Bearish? The AAII Sentiment Survey shows that investors flipped back to bearish this week. Just 31.4% of investors are bullish on stocks for the next 6 months, a substantial drop from last week’s 44.9%. This is the sixth bearish reading in the last seven weeks. It seems like folks are still worried about the economy, the direction of the FOMC, and the sustainability of the AI/semi boom. Meanwhile, CNN’s Fear & Greed Index is at just 31, indicating moderate fear. Plus, the CBOE’s equity put-call ratio is at 0.69, which is in the neighborhood of neutral. No sentiment indicator can help you nail the market every time. But rampant euphoria often coincides with market tops. And we are nowhere near that.
Continue Reading -->Micron Put Apple to the Test
What a week! Micron (MU) dropped a blockbuster earnings, report, Apple (AAPL) raised prices, and oil came crashing down. Let’s talk about what’s going on in this fun-filled market: This Really Is the 90’s Era All Over Again It’s been hard out there for the AI hyperscalers like Meta (META), Alphabet (GOOGL), and Microsoft (MSFT), who are spending ungodly amounts of cash on hardware like memory, storage, and networking equipment. That means they are transferring their cash flow to companies like SanDisk (SNDK), Intel (INTC), Western Digital (WDC), and this week’s earnings superstar Micron (MU). So it’s no shocker that the 2026 S&P 500 leaderboard looks like this: Virtually all of these companies cashed in by selling picks and shovels in the 1990’s Internet boom. Now it’s rinse and repeat with AI. Instead of Pets.com and Ask Jeeves and American Online, the end application is Claude or ChatGPT! Just look at Micron’s monster earnings report on Wednesday. They beat revenue expectations by 16%. SanDisk beat by 26% in its last quarter. These picks and shovels (DRAM, flash memory, and even freaking old-school hard drives) are getting so expensive that Apple (AAPL) just raised prices on MacBooks and iPads. And that means… Apple Is Being Put to the Test Apple has an affluent user base that is willing to pay premium prices for a superior user experience. And this MacBook/iPad price hike feels like a test for something even bigger: iPhone price increases. Last quarter, Mac and iPad sales accounted for just 14% of total sales. So when Apple drops its next earnings report (about one month from now), we’ll see how much customers are willing to pay up for the brand. I suspect Apple will do fine because its devices are more or less consumer staples. Some people will choose cheaper models. But who’s going to give up their screens in 2026? Or even worse – switch to Windows/Android? I’m in the market for a new phone myself, and I’d rather pay an extra $100 to $300 to Apple than deal with an inferior user experience. I’m an Apple shareholder, so I won’t pretend I’m unbiased. SpaceX Plays Great Defense I sold my SpaceX (SPCX). And I might have screwed up. Because this stock has been doing a great job of holding that $150 area: We all know the issues with this company. It’s overvalued. A ton of shares will hit the market when lockups expire. We might not see a data center in space for many years. But the buyers keep stepping up This could be a situation where the bear case is way too obvious to be right. At least for now. Because those lockup expirations will pack a big punch. Are We Getting the Fed Wrong? The market continues to brace for higher rates. The CME’s FedWatch Tool shows that the market is pricing in a 77% chance of higher rates by year-end. This hasn’t changed much over the past month. But it is a pretty big sea change from earlier in the year, when we were debating how many cuts we’d see. Though interestingly, this chart from Apollo has been making the rounds: The market is almost always wrong about what the Fed will do, per Apollo: pic.twitter.com/yluOOKYynD — unusual_whales (@unusual_whales) June 26, 2026 Apollo argues the market is usually wrong in sniffing out Fed policy. Which makes sense because the Fed itself isn’t very good at predicting anything. Remember when inflation was “transitory” for about 98 straight years? So maybe, just maybe the smart move is to bet on lower rates? Sentiment Suddenly Flips Bullish. Sort Of. The AAII Sentiment Survey shows that 44.9% of investors are bullish on stocks. This is a big jump from 36.9% last week. And it’s the first above-average bullish reading since May 13. The market peaked on June 2 at SPX 7620, so it took a few weeks for the mood to catch up. And during that time, the market’s slipped a bit. On balance, it would be better to have less bullish sentiment, because it implies there are still doubters on the sidelines. However, this is still far from euphoric sentiment, which we haven’t had in quite some time. Meanwhile, CNN’s Fear and Greed Index is at just 25, in the extreme fear category. Keep in mind Fear and Greed is calculated by market indicators, while AAII is determined by an actual survey, reflecting people’s actual feelings. Add it up and investors/traders are ‘sorta’ bullish.
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 -->SpaceX: The Hard Questions Are Here
Peace is coming (hopefully) to the Middle East, sending oil lower while equities stabilized. But if you expected a sleepy summer, you’re disappointed. Because this market remains action-packed. So let’s talk about what’s happening: SpaceX Comes Down to Earth Last Friday, SpaceX (SPCX) came public in the biggest IPO of all time. And it hit Earth with a bang. The deal priced at $135. The stock opened at $150 on the dot and hit a high of $225.64 on Tuesday, from where it started sliding: Even after this 20% drop, its $2.36 trillion market cap is larger than: Broadcom (AVGO) Tesla (TSLA) Meta (META) Micron (MU) Walmart (WMT) JP Morgan (JPM) Analysts expect SpaceX to grow revenues from $35.9 billion this year to $130.9 billion in 2029. Elon Musk himself said he expects SpaceX to generate about $1 trillion in revenue in 2030. But now the tough questions are coming: Was the entire rally engineered through limiting the supply of stock and giving more retail traders access to the IPO? Can Elon Musk sell SpaceX the way he’s sold Tesla? Even if SpaceX can hit growth targets, is the valuation out of control? Will the stock collapse when insiders get the green light to sell? Will the company have to raise even more capital? There are now reports of a potential $20 billion bond offering on the way. I own a whopping 10 shares of SpaceX myself. And I’m thinking about selling, and buying some out-of-the-money puts. Because if SpaceX crashes, it’s bound to be ugly. JR Romero had some harsh words for SpaceX (the stock, not the company) here, and we went deeper into the potential dangers facing this iconic name: The Epic Semiconductor Run Won’t Stop, and Has Another Catalyst The VanEck Semiconductor ETF (SMH) might be incapable of going down. It’s up 83% this year and hit another record high on Friday thanks to big moves in names like Intel (INTC), Taiwan Semi (TSM), and AMD (AMD). And it would be up even more if SanDisk (SNDK) was in the ETF. SanDisk is the #1 stock in the S&P 500 this year with its 819% gain. Plus, there’s another catalyst on the horizon: Micron’s (MU) earnings report on Wednesday after the close. Based on the number of AI-related capital raises we’re seeing from the likes of Alphabet (GOOGL), Nvidia (NVDA), SpaceX, and others, demand for memory remains insatiable. So Micron should extend what’s been a monumental winning streak for semiconductor earnings. Warsh Confirms the Drift Towards Higher Rates New FOMC Chairman Kevin Warsh made a big splash at his debut meeting on Wednesday. Warsh shortened the post-meeting statement, ditched the dot plot, announced five new task forces, and declared war on inflation. Warsh’s hawkish show came as a surprise to many because he was viewed as a loyalist to President Trump, who has been vocal in wanting lower rates. And 9 of 18 Fed officials now expect at least one rate hike this year. The market was already leaning in the direction of higher rates, and the Fed reinforced that. Now markets are pricing in an 85% chance of higher rates by year-end, according to the CME’s FedWatch Tool. So the breakdown of expectations is now as follows: 15% chance of rates staying unchanged 37.6% chance of 25 bps in hikes 33.3% chance of 50 bps in hikes 12.5% chance of 75 bps in hikes 1.7% chance of 100 bps in hikes This isn’t a major change from last week. It was more a reinforcement of what the market is looking for. Still, I’m eager to see if the President starts tangling with the independent-minded Warsh. Stocks Go Up, Traders Go “Meh” The latest AAII Sentiment Survey shows that 36.6% of investors are bullish. This is up from last week. But it’s still the 5th straight week of below-average bullishness. That’s even with equity markets hitting record highs, and a US-Iran deal coming together. Meanwhile, CNN’s Fear & Greed Index is at 37, smack dab in the Fear category. But overall, the numbers are healthy because it shows that not everyone is bought into this rally. The last thing we need is euphoric sentiment, which typically happens around tops.
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 -->The SpaceX IPO Was Boring?
We’ll skip the preambles this week. You know what you want to hear about: 1. SpaceX IPO = Boring? The SpaceX (SPCX) IPO is a hit. The deal priced at $135, and the stock opened at $150 before hitting $176+. That was a sizable move, but it felt rather almost too orderly. Just boring. I expected more back-and-forth violence because of the crazy day-one action in Cerebras (CBRS) in May, along with the presence of Elon Musk cultists, and the huge valuation assigned to SpaceX. It felt combustible. But as of 1:25 pm ET Friday, this feels like an anticlimax in terms of volatility. It’s downright boring. I picked up a whopping 10 shares of SpaceX at the offering, so I’m not complaining. Every tick higher is good for me. Now it will be interesting to see if Elon’s true believers stick with the stock and hold it up. You can get our team’s full reaction to the IPO here: 2. SpaceX Sets a Hilarious New Mark for Leveraged ETFs This morning, Defiance ETFs relaunched their Defiance Daily 2X Space ETF (SPCL), saying this: “Effective June 12, 2026, all or a predominant portion of SPCL’s Target Portfolio consists of exposure to SpaceX (Nasdaq: SPCX), making SPCL the world’s first and only ETF to have 2X exposure to SpaceX on IPO day. The fund’s SpaceX exposure was established at the $135 IPO price.” So we got a leveraged SpaceX ETF the same day as the IPO. And it was trading before SpaceX opened at 11:46 am ET. Based on the Defiance website, it looks like the SPCL ETF went to cash before buying 52,888 shares of SpaceX at the $135 IPO price. That’s why SPCL has a trading history. And it had a notable price and volume explosion today: It traded just 49K shares Thursday, but was at 941K on Friday as of 1:42 pm ET. However, “normal” SpaceX leveraged ETFs will hit the market soon after the SEC delayed listings to avoid mucking up the IPO. 3. SanDisk Refuses to Stop On May 29, JR Romero predicted SanDisk (SNDK) hitting $2,000. And it crossed that mark today. Close enough for government work? The stock is now up 717% year-to-date, making it the #1 stock in the S&P 500 by a long shot. The #2 name Micron (MU) is up “only” 249%: And as you can see, the leaderboard is dominated by semiconductors and tech hardware names. Because it feels like there is near-unlimited demand for AI hardware, based on recent news like: Oracle (ORCL) raising $40 billion to help fund its AI buildout Alphabet (GOOGL) selling $80 billion in equity to expland AI infrastructure Super Micro (SMCI) raising $7 billion to buy components to fill new $39 billion in AI server orders And a lot of this money is going towards flash memory, DRAM, hard drives, processors, and all the other stuff that powers AI. 4. Higher Rates? The ECB raised rates on Wednesday and traders are thinking the US will follow suit following the hot CPI and PPI reports. The market is now pricing in a mere 39.4% chance of rates remaining unchanged for the rest of 2026. This is down from 61.8% a month ago. And now the following rate hike odds are being priced in: +25 bps: 41.0% +50 bps: 15.1% +75 bps: 2.1% +100 bps: 0.1% So in total: Traders are pricing in a 58.3% chance of higher rates by year-end. Remember when we debated how many cuts we’d get? Of course, next week we get the first FOMC announcement and press conference from new Fed Chair Kevin Warsh. It will be interesting to see what tone he sets to kick off his term. And if he’ll signal he will go along with President Trump’s wish for lower rates. 5. Sentiment Is Bearish? The latest AAII Sentiment Survey shows that 30.4% of investors are bullish. This is the lowest reading since March 18, when the S&P 500 closed at 6224. It’s also the fourth straight week of below-average bullishness. AAII says the #1 concern is “the economy and/or inflation.” That makes sense given this week’s hot CPI report, plus ongoing concerns about AI taking jobs. Meanwhile, the CNN Fear & Greed Index is at just 33, squarely in the “Fear” category. So the decline from the early June highs has taken a clear toll on the mood.
Continue Reading -->SpaceX-Mania Is Here. So What’s the Problem?
Stocks hit record highs this week, but tumbled after a semiconductor giant inspired a sell-off to close the week. Meanwhile, the biggest IPO of all time is about to land right on our heads: SpaceX-Mania Is Coming The SpaceX IPO is next Friday, June 12. Elon Musk’s baby will trade under the ticker SPCX. Word on the street is the deal is oversubscribed, maybe thanks to brokers like Fidelity lowering account size requirements to get on the deal. I have my order in to buy 10,000 shares. Whoops, that was a typos. It’s actually 10. As in ten. Enough to give me a thrill, but not enough to ruin my life. But after hearing JR Romero and Sami Abusaad talk about it, I’m thinking about cancelling my order: SpaceX aims to sell 555.55 million shares at $135 to raise $75 billion. That’s a target valuation of $1.75 trillion, which would give SpaceX the 8th largest market cap of any publicly-traded US company. Bigger than luminaries like Meta (META), Micron (MU), and Eli Lilly (LLY). To put that in perspective, the entire US 2025 IPO market (including SPACs and other such vehicles) was $70 billion, according to the SEC. And with AI giants Anthropic and OpenAI also coming public this year, we’re on track for a blockbuster year for IPOs. If all three companies come public, 2026 will likely sport the three biggest IPOs of all time. Saudi Aramco holds the record at $29.4 billion in its 2019 offering, which should easily be dwarfed by The Big Three. But there’s a catch. The market tends to top out in years with surges in public offerings: It happened in 2021, 2014, 2007, and 2000. Why? Likely because we get surges in offerings when capital markets conditions can’t get any better. So call me a little cautious. Speaking of Caution… First Broadcom, Now Oracle? The AI/Storage/Semi stock boom was raging out of control, until Broadcom’s (AVGO) underwhelming AI chip forecast ended the party Wednesday. AI-levered companies have been knocking the ball out of the park, so Broadcom’s disappointment felt out of nowhere. Broadcom is indeed growing like a weed. Just not fast enough for the hungry masses. And there’s no evidence it means AI demand is slowing, let alone dying. But the stakes go up on Wednesday, June 10 when software giant Oracle (ORCL) reports earnings. Oracle is a major AI player, and the market may not react well to another AI-related disappointment, no matter how small it is in the grand scheme of things. Rate Hike Odds Are Going Up Following Friday’s strong job report, traders are pricing in increasingly higher rates. Right now, the market is pricing in a 28.5% chance of rates staying the same through year-end: That’s down from 54.4% last week. Meanwhile, these are the implied odds of each level of rate hikes: Odds of one 25 bps hike are at 42.9%, up from 36.4% last week. And odds of 50 bps in hikes are at 22.5%, up from just 8.1%. I bet new Fed Chair Kevin Warsh is going to have some very interesting conversations with President Trump… What Happened to Bitcoin? I’ve heard people call Bitcoin a “store of value” and “a hedge against inflation.” But it’s one of the worst asset classes of 2026, dropping 30% in a banner year for risk assets. The bulls’ last hope is a double bottom at the $60,000 area: The big question is why? Some blame the US dollar and the prospect of higher rates. I think the problem is much simpler. People saw how fast semiconductor and AI stocks were rising, and took their capital elsewhere. Look at this Bitcoin vs. SMH chart: They were very loosely correlated until last November, when they took divergent paths. One to the promised land. The other to the wasteland. Sentiment Remains Neutral The latest AAII sentiment survey shows that 36.3% of investors are bullish on stocks. This is the second straight neutral reading in a market that’s made record highs. Meanwhile, the CNN Fear & Greed Index is 50, right in the neutral zone. This is healthy to see. Because it shows some caution out there, even with stocks blasting into orbit. Or maybe not everyone caught the hot semiconductor/AI trade, which was brutally strong up until Broadcom.
Continue Reading -->Dell Is Partying Like It’s 1999
The stock market hit record highs again this week as AI-mania won’t stop. And the funny thing is, the tech highflyers of the late 1990s are dominating 2026, led by names like Dell (Dell). Yes, Dell. Dell Is Partying Like It’s 1999 It’s 1999 all over again. The New York Knicks are in the NBA finals. Kids across America are wearing Doc Martens. And Del is once again a stock market darling. On Thursday after the close, Dell dropped a huge earnings beat with shocking forward guidance thanks to momentum in its AI server business. And now the stock is up 234% year-to-date, making it the 3rd best name in the S&P 500. Furthermore, look at this list of the best-performing S&P stocks: Many were late 90s dot.com favorites, including Ciena (CIEN), Texas Instruments (TXN), and NetApp (NTAP) in there. What goes around comes around. Turns out that AI is driving demand for memory, processors, and networking tools. Just like the Internet explosion did. And on a random note, I looked up what happened to JDS Uniphase, another 90s superstar. In 2015, it split into networking names Viavi Solutions (VIAV) and Lumentum Holdings (LITE). Both are AI monsters, up well over 100% this year: The Software Short Squeeze Software has made a massive rebound from the April lows, when the “AI will eat software” theme caught fire. The iShares Expanded Tech-Software Sector ETF (IGV) is now up 29% from its 52-week low on April 10. And interestingly, the average individual name in IGV is up a whopping 65% from its 52-week low. Some examples: D-Wave Quantum (QBTS): +133% Datadog (DDOG): +133% Palo Alto Networks (PANW): +84% Oracle (ORCL): +51% ServiceNow (NOW): +34% And interestingly, it looks like the software rally was at least partly a short squeeze. Of the 106 stocks in IGV: 30 have short interest over 10% 75 have short interest over 5% And because of heavily shorted individual names like SoundHound (SOUN) and MARA Holdings (MARA), the average stock has short interest of 8.9%. For comparison, the average QQQ name has short interest of just 3.4%. Remember Rate Cuts? Seems like just yesterday we were thinking about how many times the Fed would cut rates in 2026. But the CME’s FedWatch tool shows traders are now pricing in a 0% chance of rate cuts until July 2027. So presumably, the market does not believe new Fed Chair Kevin Warsh will automatically cut rates as President Trump wants. Today’s PCE Price Index Report showed that inflation accelerated for the 3rd straight month to 3.8%. Excluding food and energy, it rose 3.3%. Because everything is more expensive. Oil, imports, insurance, healthcare, etc. No wonder consumer confidence is in the dumps. The Bulls Are Not That Bulled Up The $SPX just hit a new record high at 7565, but are investors euphoric? Nope. The latest AAII Sentiment Survey shows that just 35.6% of investors are bullish. This is the 2nd straight week of below-average bullishness. Meanwhile, CNN’s Fear & Greed Index is at 61/100, showing modest greed. However, the options market is showing elevated bullishness. The CBOE equity put-call ratio was just 0.43 Wednesday, which shows low demand for puts. But add it up, and it’s hard to say sentiment is anywhere near euphoric.
Continue Reading -->