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Mandelbrot retweeted
Some names I like outside of the usual suspects this site talks about: SITM, SMTC, CLS, and FLEX
Obviously they’ll be red tomorrow but let’s watch how the week develops
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Slow down…
Let the nasdaq breakout before we start talking about rotations… sheesh
(I am building long Dec IWM calls)
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Good note.
On a similar note, but perhaps more topical…
Before the leverage (Leopold) induced melt-up out of the first Iran TACO in Q1, semis were showing incredible strength despite QQQ drawing down over 13%. They didn’t even lose weekly trend…
From there, we had one of the greatest equity meltups we’ve seen in quite a long time (probably since late 90s?). Obviously we overshot thanks to Leopold and all of us on fintwit tailing the gamma squeeze; but now we are consolidating back at weekly trend and the sector’s forward PE sitting around the 10th percentile over the last 5 years.
Ofc the E is at risk here with this “slowdown” news, plus the market has always known the E was naturally going to normalize as the AI buildout progressed. It’s no secret that relying on forward PEs on a cyclical industry is a dangerous game.
30000 ft view: trend is reset, forward valuations are depressed (for a good reason), if you think the market is too pessimistic on AI then this week likely presents a buying opportunity, the sector on aggregate is still up huge ytd so I wouldn’t necessarily just own the index— more work is required but necessary for individual winners, but as long as trend holds the next 1-5 weeks are for finding those winners for the right risk case that the AI trade isn’t over. (Certainly doesn’t mean all in January calls like Leopold).
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Nice try— AI fud’ing for entry already worked last week…
You missed your entry, too bad
(New ATH weekly close for QQQ btw)
I resigned from Google today.
I enjoyed my work and loved the people, but my GDM team was working on a new generation of chips to make AI much faster and cheaper, and I think AI is already progressing too fast, so I had to quit.
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Coulda just listened to my advice the day before the AI/semis meltdown of September 14th…
On a similar note, but perhaps more topical…
Before the leverage (Leopold) induced melt-up out of the first Iran TACO in Q1, semis were showing incredible strength despite QQQ drawing down over 13%. They didn’t even lose weekly trend…
From there, we had one of the greatest equity meltups we’ve seen in quite a long time (probably since late 90s?). Obviously we overshot thanks to Leopold and all of us on fintwit tailing the gamma squeeze; but now we are consolidating back at weekly trend and the sector’s forward PE sitting around the 10th percentile over the last 5 years.
Ofc the E is at risk here with this “slowdown” news, plus the market has always known the E was naturally going to normalize as the AI buildout progressed. It’s no secret that relying on forward PEs on a cyclical industry is a dangerous game.
30000 ft view: trend is reset, forward valuations are depressed (for a good reason), if you think the market is too pessimistic on AI then this week likely presents a buying opportunity, the sector on aggregate is still up huge ytd so I wouldn’t necessarily just own the index— more work is required but necessary for individual winners, but as long as trend holds the next 1-5 weeks are for finding those winners for the right risk case that the AI trade isn’t over. (Certainly doesn’t mean all in January calls like Leopold).
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Mandelbrot retweeted
$QQQ
Finally entering box
Doesn’t make sense to try it but would be an entertaining outcome
Wouldn’t it?
$QQQ
Not like I’m anywhere near max long but the more whining about how every single scenario tomorrow financial assets die, the more some semblance of this is a real possibility…
During the prior two HTF “rollovers” anyone who was paying attention knew the end was near, and yet both instances the Qs went on to test ATHs (+5% in a very short period).
Just something to keep in mind, nothing is outside of the realm of possibilities, and it’s times like these when the outcome seems preordained you should be considering the exact opposite scenario playing out.
Not here to tell you why or how, just talking price action. Topping is a process (if that’s what we’re in fact doing).
I’d just say if we trade down tomorrow into the guaranteed rate hike and we knee-jerk down, pay special attention for any strength from there— it may be our best long opportunity since…. the last FOMC…
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Mandelbrot retweeted
Lots of bear euphoria over this tweet…
Have you thought about the last time this got around these levels?
April 2024…
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Already putting up a much better fight than it did on the two parallel set-ups…
Carefully observing.
$QQQ
Decided to pick up some calls again during the NY session…
Not playing short term expiries like I am with SPX
Selected Jan 2027 $800 calls (will size harder if we can break ATHs)
Idk— if you hid the price (lack of drawdown) on weighted indices from me, and told me yields were blowing out, breadth was reaching lows in line with liberation day, Bessent was progressively ramping up treasury buybacks, four hikes were priced in by mid 2027, and OAI/ANT was firing on all cylinders with Meta making a leap on AI as well… that would be a shut up and bid moment…. No?
The only thing that is missing is the lack of equity volatility spike and “sufficient” drawdowns on a weighted index level…
But what if tech/AI related earnings (and fundamentals) are still strong, inflation is 3-4% (sweet spot for nominal earnings, but not too hot either), there is marginal (if any) job loss expected over the next several years (per the Fed) = continued max flows into weighted indices via 401Ks, and everyone is going to make +30% more on their cash over the next few quarters and beyond (3.625% to 4.7% as per current pricing).
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