The 2 Ugliest Charts in the World
What a week! Alphabet (GOOGL) failed on earnings and there’s no peace in the Middle East. So let’s go over: The 2 ugliest charts in the world Why it’s hard to be an AI hyperscaler right now Why Nvidia may be a value trap Where sentiment sits Let’s go. Ugliest Chart in the World #1 SpaceX (SPCX) was hot for 4 days. Now it’s been cut in half. We identified $150 as an obvious line in the sand. And SpaceX just cut through it like a knife through butter: And let’s give credit to Sami Abusaad! He got short at $154.89 and has been riding it down the whole way. So why is this stock getting dumped? Because the more the stock drops, the more attention is paid to the danger on the horizon (insider lockup expirations). That’s created a race to the exits. Meanwhile, Wall Street banks (many of whom earned paid big fat IPO underwriting fees from SpaceX) love the stock. According to Koyfin, the average analyst target price is $236.71: So they think SpaceX will double. Do you? Now let’s talk about its twin… Ugliest Chart in the World #2 This is Oracle (ORCL) over the past year. Oracle has a major problem. It’s a hyperscaler with potential credit problems. While a company like Microsoft has heaps of recurring revenue and free cash flow to reinvest in capital expenditures, Oracle does not. Just so you understand the difference in scale here, Microsoft generated almost $73 billion in free cash flow over the past 12 months. Oracle (ORCL) had NEGATIVE free cash flow of almost $24 billion. So it has to borrow tons of debt to power its AI dreams. Maybe too much. It’s Hard Out Here for a Hyperscaler The AI market remains split between “haves” and “have nots.” The AI hyperscalers are most certainly have-nots in 2026, given these performance numbers: Alphabet (GOOGL): +2.8% Amazon (AMZN): +2.3% Meta (META): -7.9% Microsoft (MSFT): -19% Oracle (ORCL): -36% Meanwhile, the VanEck Semiconductor ETF (SMH) is up a whopping 61%. This makes sense because the hyperscaler buildout is a wholesale transfer of cash flow to the likes of Nvidia (NVDA), AMD (AMD), ASML (ASML), Micron (MU), SanDisk (SNDK), etc. Think of it this way. Google sucks up money selling ads. Then that money goes straight to hardware and chips from the likes of Nvidia, AMD, Micron, Dell, etc. Which flows down to networking gear, semiconductor equipment, etc. At some point the trend reverses, but for now – hardware looks like easy money. Especially when we have Alphabet raising its capex forecast. And Meta, Microsoft, and Amazon might do the same when they report earnings this week. Is Nvidia a Value Trap? Many traders and investors are zeroing in on Nvidia’s (NVDA) valuation. The stock is now trading at 21x forward earnings, which looks cheap for the flagship AI chip name: But I wonder if Nvidia is a value trap. As in, it looks cheap but goes nowhere. I see Nvidia’s biggest challenge as a lack of sex appeal relative to other places within the AI landscape. Right now, the market is excited about the memory and storage names, because that’s where the biggest supply-demand imbalance is. On Thursday’s earnings call, Intel (INTC) CEO Lip-Bu Tan said “…memory has become the big supply constraint challenge.” Yes, Nvidia is most likely still supply-constrained. Just not at the level of a Micron (MU) or SanDisk (SNDK). But we’ll know for sure this coming week. If we see Meta, Microsoft, and Amazon signal higher capex spending and Nvidia does nothing, then maybe the thrill really is gone. We’ll see. In the meantime, I recommend watching this interview with Cerebras (CBRS) CEO Andrew Feldman, who shares some interesting points about the AI chip universe. He discusses why Nvidia’s CUDA platform may be losing its competitive moat, though you should obviously take that with a massive grain of salt: Investors Are Bearish… for Now The AAII Sentiment Survey shows that just 29.6% of investors are bullish. This is well below the 37.5% long-term average. And it’s a massive decline from last week’s 44.9% reading (above average bullishness). So are investors bearish? Kind of. These sentiment surveys have been topsy-turvy all year, so we never get any sustained bullishness or bearishness. That reduces the predictive power of these numbers, which wasn’t all that great to begin with (outside of real extremes). Meanwhile, the CNN Fear & Greed Index is at 41, which is slightly fearful. Add it up and it looks like investors are far from euphoric. But they’re not down in the dumps either.
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 -->2 Ugly ETFs That Could Bounce Hard
ATTN: Sami Abusaad and James Rich Young’s next Pristine Mentorship is on the calendar for October through December 2026. The broader market looks tricky. But Sami Abusaad is about to show you why 2 of the ugliest ETFs on the market (IBIT and IGV) are ready to bounce: Sami also goes over: How to know if QQQ will pull back How SMH can signal a bounce A pharma name with a solid chart An online dating name with an excellent monthly chart 4 names that can decline from here And more!
Continue Reading -->AI Meltdown = Buy Buy Buy?
AI stocks melted down early Friday morning in the wake of another drop in the Korean KOSPI index. Is this a massive buying opportunity? We discuss here: Learn: If the AI trade is toast How ETFs like DRAM, SOXX, and SMH are impacting the market Whether Micron (MU) just found support Why SpaceX (SPCX) is still an ugly mess, and why you need to look at Cerebras (CBRS) for clues on where this can go The reason ETFs make sense when the market goes wild If Robinhood (HOOD) still has big potential And more!
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 -->David Prince Loves HOOD Longterm
David Prince just declared Robinhood (HOOD) a favorite for a long-term hold. He explains what he likes about the story and the stock: David also covers: How to trade HOOD short-term What he’s learned from the beginning of this earnings season Where Micron (MU) and SanDisk (SNDK) are headed Why now isn’t the time for stories like CCXI How he nailed KORU overnight this week The strength of MAG7 His strategy for entering trades And more! Get David’s free weekly newsletter for more insights.
Continue Reading -->The Fall 2026 Pristine Mentorship Is Open!
Sami Abusaad and James Rich Young’s next Pristine Mentorship is on the calendar for October through December 2026. 3 of 30 spots for this one-of-a-kind event have already been taken. This is the ultimate “Earning and Learning” Mentorship for 2 types of traders: Newcomers that want to go all-in and learn a complete system for success Intermediate traders that want a fresh start Sami and James start by teaching you their technical analysis system from A to Z. Then they move on to more advanced topics. And you join specialized group coaching sessions so you can work on your personal trading style. We’ve had attendees from 23 countries across 5 continents. We’re talking everywhere from the US to Belgium to Hong Kong to Sweden to Kazakhstan. 3 Reasons Real Traders Love the Pristine Mentorship Apart Our Mentorship programs have always gotten fantastic reviews. But our 2024-2026 cohorts surpassed the most optimistic expectations, because we added: 1) More Expansive Training with Sami Abusaad and James Rich Young Pro trader James Rich Young leads the Pristine Active Trader Virtual Trading Floor® alongside Sami. And here’s a fun fact; James attended Sami’s 2019 Mentorship. Soon after, James stepped up help Sami lead the VTF@ community, and now he’s one of your teachers. He’s the ultimate example of a student becoming a master. 2) Live Specialized Coaching Sessions with Sami and James Our past Mentorship Programs did not include specialized coaching sessions after the initial week-long event. That’s changed. Now you get 5 exclusive LIVE group coaching sessions to set you up for long-term success. You’ll get to ask these two top pro traders anything you want. So you can solve your greatest trading challenges, and build on your personal strengths. Sami and James bring you right inside the reality of pro trading. You’ll hear about the good, the bad, the ugly — and everything in between. If you have questions, they have answers. 3) From 5 Days… to One Year of Trading & Learning with Sami and James The classic Mentorship Program lasted for 5 days. And yes, traders LOVED IT. But in our quest to create the greatest learning experience in our history, the Mentorship program now lasts 6 weeks. And as part of your enormous bonus package, you get a year of access to the Pristine Active Trader VTF® so you work with Sami and James for an entire year. That gives you additional coaching for a whole year. That is 12 months of growth for you. So What Stays the Same? The Earning and Learning. The heart of the Mentorship experience is your ability to earn and learn. Yes, we want you to learn everything you need to know to earn a consistent, large income in the markets. But your goal should be to be profitable as soon as possible too. On day 1, if you can. We can’t promise you specific results, but that’s what we shoot for. That’s why live trading is a core part of the Pristine Mentorship. This isn’t just another weekend seminar where the instructor looks like a genius because he tells you what just happened. Sami and James show you their ideas in real-time, live without a safety net. So you can see their strategies working in real-world conditions using real money. Go here to learn more about this amazing trading mentorship.
Continue Reading -->SanDisk Is Going to $2,700
Apply for JR’s Gold Mentorship Program Here JR Romero is 100% bullish on AI. And he makes multiple bold predictions in this video, including a call for SanDisk (SNDK) to hit $2,700 this summer: JR also goes over: Why Micron (MU) is also on the verge of a big rally Why he just loaded up on the beaten-down Oracle (ORCL) The reason SpaceX (SPCX) is going to $60 The bull case for SpaceX over the long-term The big problem with the crypto space P.S. Learn about JR’s Gold Signature Mentorship in this video:
Continue Reading -->Tesla Beats SpaceX
Tesla (TSLA) chart is not perfect. But it can hit $495+ as a long-term play. And on the flip side, SpaceX (SPCX) looks bad and Sami is short. Sami explains why he is playing these Elon Musk stocks both ways: He also goes over: The challenge with Iran right now Why the trend is still bullish An online dating name that has big potential on the monthly chart A beaten-down payments name that can power up Where Roblox (RBLX) can go next The bear case for Michael Saylor’s Strategy (MSTR) And more:
Continue Reading -->The 5 Horsemen of the AI-pocalypse
What a week! We may have peace in the Middle East, SapceX is fighting for its life, and we have a new AI powerhouse trading in the US: Meet the 5th Horseman, SK Hynix I called these stocks the 4 Horsemen of the AI-pocalypse: SanDisk (SNDK) Micron (MU) Western Digital (WDC) Seagate (STX) AI has created unprecedented demand for storage and memory to the point that they comprise 4 of the 5 best S&P 500 stocks this year: And now we may have a new horseman in the form of South Korean memory giant SK Hynix (SKHY), which had a blockbuster US market debut Friday. The $26.5 billion deal priced at $149 per share, and the stock was trading around $169 as of 2:33 pm ET. Pretty solid first day. And CEO Kwak Noh-jung is telling the right story. He told Reuters “We forecast that next year will be the worst year in the industry’s history from the supply perspective.” And he added that demand will exceed supply beyond 2030. Nothing drives momentum like a massive supply-demand imbalance. So I’m making SK Hynix a probationary “5th Horseman of the AI-pocalypse.” Get David Prince’s take on SK Hynix here: Meanwhile, another high-profile IPO is fighting its own battle: SpaceX Fights for $150 We all know the bear case for SpaceX (SPCX). IPO lockup expirations will flood the market with shares. The valuation is outrageous. The Nasdaq 100 addition didn’t help the stock. At the same time, it is stubbornly holding the $150 area: That looks like a major psychological line in the sand. And maybe this situation is as simple as a hard break above or below this level will dictate the next big move. For more on SpaceX, check out this video: And since we’re on the topic of IPOs and AI… Bank Earnings Should Be HUGE This Year This coming week, we get earnings from the big banks like JP Morgan (JPM), Goldman Sachs (GS), Bank of America (BAC), and Morgan Stanley (MS). And now that I think about it, maybe the banks are a stealth AI play. Especially the capital markets focused names like Goldman and Morgan Stanley, which are up nicely in 2026: Aside from the massive SpaceX IPO and the prospective OpenAI and Anthropic deals, there’s been a ton of capital markets activity related to AI, like: Alphabet (GOOGL) raising $85 billion in equity Oracle (ORCL) raising $40 billion to help fund its AI buildout Super Micro (SMCI) raising $7 billion to buy components to fill new $39 billion in AI server orders According to Crunchbase, global venture funding hit $510 billion in the first half of 2026. That compares to $440 billion for all of last year. Crunchbase also said that this is the strongest exit market since 2021. All this capital markets activity should mean fat fees for Wall Street banks. Earnings Season Is About to Go BOOM Q1 earnings season was huge, thanks to massive beats in tech, particularly in the semiconductor industry. As noted above, this coming week, Q2 results kick off with the likes of JP Morgan (JPM), Netflix (NFLX), and ASML (ASML). I’d argue ASML is the biggest report of the week since it sells into the AI/Semi giants like Samsung, AMD (AMD), SK Hynix (SKHY), Micron (MU), Intel (INTC), and Taiwan Semi (TSM). Note: Taiwan Semi also reports next week. There’s a whole lotta optimism out there. FactSet data shows that 111 S&P 500 companies issued guidance. 57% issued positive guidance, well above the long-term average of 41%. This is the highest percentage of companies issuing positive guidance since Q3 2021. And tech guidance is at a record high. Analysts are also pumped. They are now estimating 23.3% growth, up from 18.8% on March 31. And looking forward, Q3 growth is forecast at 26.8%, and Q4 is 24.1%. This is bad. Because the bar is very high. Plus, if results come in as expected or better, we are going to be facing some tough year-over-year comparisons next year. But even as companies and analysts are positive, investors and traders show no signs of joy: Sentiment Remains Neutral The AAII Sentiment Survey shows that 36.3% of investors are bullish. This keeps sentiment in neutral territory. And while we’ve had a few positive or negative readings here and there, there hasn’t been a true extreme reading (in either direction) since early 2025. Meanwhile, the CNN Fear & Greed Index is at 47, smack in the middle at neutral. On balance, this is all bullish because it shows little euphoria on the part of market participants.
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