EVENT: 3 Strategies Working Right Now
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SpaceX the Phone Company?
ATTN: Sami Abusaad and James Rich Young’s Pristine Mentorship starts soon. Check it out here.What a week! AI stumbled on reports of disappointing revenues at OpenAI. Middle East tensions kept oil prices high. US Treasury iields hit multi-decade highs. And Elon Musk’s SpaceX might be your new phone company! Let’s jump into it. Skip Ahead! October Is Getting BetterElon Musk Wants a Big Piece of the Phone/Internet/Cable PieJensen Huang Might Be Right About MarvellSentiment Is NeutralNext Week Will Be LoudRate Hike Expectations Subject to ChangeREMINDER: Join the Mentorship October Is Getting BetterSeptember was a very tricky month, with just 113 of S&P 500/SPY stocks up for the month. The average name was down 4.6%, and tech was the only major sector that was in the green. Things are broadening out in October. The SPY is up 2.1% for the month, and every sector is in the green, aside from Communications.And Communications would be positive if not for T-Mobile (TMUS) and Verizon (VZ), which got hit after Elon Musk’s SpaceX (SPCX) agreed to buy up wireless phone spectrum. Speaking of that news…Elon Musk Wants a Big Piece of the Phone/Internet/Cable PieSpaceX is looking to acquire low-band wireless spectrum from Grain Management. Upon FCC approval, SpaceX Mobile aims to become “a major mobile carrier in the US.” That’s because this new spectrum works indoors, unlike SpaceX’s Starlink, which generally requires a clear view of the sky. SpaceX also got FCC approval to launch 15,000 new Starlink satellites that supposedly offer 100 times the bandwidth of the current generation Americans spend hundreds of billions per year on phone, internet, and television service. Elon wants a piece of that pie. So before long, we might be paying Elon for combined phone and data service! That could mean tens of billions a year in revenue for SpaceX. By the way, here’s JR Romero’s take on SpaceX stock:Jensen Huang Might Be Right About MarvellIn June, Nvidia (NVDA) CEO Jensen Huang said Marvell Technology could be the next trillion-dollar company because of wild demand for networking infrastructure. It looks like Jensen might be right. I later bought Marvell stock, because I assume Jensen knows what’s getting bought in the world of AI infrastructure. And since Nvidia owns a $2 billion stake in Marvell, I gotta figure the companies will do lots of business together. Anyway…At Marvell’s Investor Day on Tuesday, the company issued FY2028 revenue guidance of $20 billion, and FY2031 guidance of $70 to $90 billion. These numbers were well above Wall Street estimates. This is just the latest in a stream of “all systems go” indicators for the AI industry. Because in recent weeks, we’ve seen AI-dependent companies like Micron (MU), Everpure (P), and Penguin Solutions (PENG) deliver huge results and guidance. This week, the market raised its eyebrows on a report that OpenAI’s revenues were lower-than-expected. But observers were comparing OpenAI’s reported numbers with Anthropic’s, which uses a different method of calculating revenue.Sentiment Is NeutralThe latest AAII Sentiment Survey shows that 40.3% of investors are bullish.That’s technically above the long-term average of 37.5%. However, it comes after three straight weeks of bearish readings. So that’s not exactly a sign of an ecstatic crowd. Plus, CNN’s Fear & Greed Index is at just 46/100, indicating neutral sentiment.So there’s not a ton of enthusiasm for a market near all-time highs. I’d guess people are still smarting from a rough September.Next Week Will Be LoudThis week was quiet. Next will be loud. We’ll get the critical CPI and PPI reports, and FOMC Chair Kevin Warsh will appear on an IMF Panel on Thursday. And earning season starts cranking Tuesday with JP Morgan (JPM), UnitedHealth (UNH), Goldman Sachs (GS), Wells Fargo (WFC), and Citi (C). We also have two major tech reports with semiconductor giants ASML (ASML) and Taiwan Semi (TSM). Investors want them to indicate that AI-driven semiconductor demand remains sky-high.Rate Hike Expectations Subject to ChangeThe market is pricing in a 19.4% chance of a 25 bp rate hike at the October 28 meeting, according to the CME’s Fedwatch Tool.And the market expects an 86.4% chance of at least one hike by year-end. However, based on the busy economic calendar next week, these numbers could change, big time.REMINDER: Join the Mentorship Sami Abusaad and James Rich Young’s Pristine Mentorship starts soon. Learn about it here. Want to get to know them? Watch this webinar:
Continue Reading -->Brace for Impact
I’ve been trying to catch the bottom in TLT and the top in rates since March. Thrice I’ve thought I’ve seen a bottom, bought, and have gotten stopped out for a loss with the third attempt occurring this week at $77 on the TLT. Rates should have spiked out in the last Fed meeting and be sinking back towards 3.75% by now, and the market should be breathing a sigh of relief. Instead, rates on the 10yr remain “bid”, and the 2-10 yield curve is re-steepening. This is a pretty wicked bear steepener at a moment when we should be seeing a bull steepener where the short end falls as the business cycle enters into the contraction phase. The facts that Warsh raised at the last meeting and that there is talk of another hike this month are alarming. I’m not saying the Fed is doing anything wrong, as I think they really just follow the bond market where it wants to take rates rather than set rates themselves (which is the way it should be in a free market system), but the fact that they keep seeing a need to hike means that the natural path for rates is higher even at these elevated levels. The dollar agrees with rates as its uptrend remains firm. Every penny above $101 on the DXY is pulling demand from financial assets like stocks and broadcasting the slowing velocity of dollars in the real economy. While the real economy is not in as terrible of shape as people feel, the financial economy is in a far more dire situation than prices would suggest. Stocks are far too expensive for any real capital allocators to step up and bid even if we get a 20% correction. I think the odds of an October crash are increasing with every tick higher in the 10yr yield. In real life, it’s irresponsible to yell “fire” in a crowded theater, but when my irreplaceable capital is on the line, my policy is to panic first and ask questions later. I can always chase stocks higher if I need to. There will be wave after wave of sectors and stocks in those sectors that setup and breakout if this spurt higher in the S&P and the NDX has legs and the market gets away from me while I’m in 75% cash. I’m wondering now if even that much cash is too little… Policy makers have staved off a normal correction at every turn since 2012. Capital allocators have never forgotten, and prices seem to have a memory as well; the SPX tagged its 2014 highs in the March 2020 spike down as a form of declaration that the move from those levels has significance. Like water in a container after a perturbance, stock prices will want to level out at a natural equilibrium, but we have no idea where that is after a decade of central planning. I’ve been waiting for a rally back to $53,000 in the DJI for a chance to short, but now I’m wondering if I’ll get that chance at all. The way I thought this story of a market top would play out is a nice looking, although unhealthy breakout in the SPX and NDX and a bounce in the DJI and RUT near their 200 day moving averages; all being the result of a normal bounce in the US Treasury bond long end as rates peaked then sank lower. There still may be a chance it plays out that way, but the TLT would have to bounce hard in the up coming week. We’d want to see the bonds rally as SPX falls as that would indicate a normal end of a cycle and maybe a 20-30% drop in stocks (which wouldn’t alleviate the expensiveness of stocks, but prices of all things may never get back to pre 2020 levels). I was expecting that level of correction to happen pretty quickly in October which would give it a “crash” feeling. But if rates keep going higher, and assuming I’m correct in my view that stocks reset lower this month, it means we have something else on our hands entirely. There are exactly zero market participants that have a working memory of trading through a market when both stocks and bond are declining. That’s the scenario we could have in front of us if the TLT doesn’t start reversing hard this week. The last time stocks and bonds declined in unison was in the 1970’s, and to viscerally remember the experience of trading through that, a trader would have had to have been in his 30’s then, which would make him in his late 80’s now. We don’t have any 86 year old traders now that Buffett is retired. The only source of knowledge we have on that period in market history has to come from books. Buffett’s annual letters are the only source I’ve read on the topic, and it doesn’t sound like an environment in which traders conditioned to a decade of central bank intervention could thrive. We are all products of the environment in which we grow, and while it is possible for a skilled trader to adapt to a new market environment, the unfortunate reality is that a bull market makes many traders more successful but undisciplined. I’ve known traders that came of age in the bull market in the late 90’s and got rich. They were professional traders that made it through the .com burst and kept winning into the 2008 burst, but they struggled to adapt to the QE era starting in 2012. Some of those guys were amazing traders, pushed through their obstacles and are still winning consistently in the market today. One saw even more success in 2021 than he ever had in decades of successful trading and retired from full time trading with a massive account in the 8 figures. These guys are proof that we can adapt and thrive in any market environment.
Continue Reading -->Bank Earnings = Buy?
Q3 Earnings Season kicks off next week with the big banks reporting. David Prince doesn’t typically trade these reports… but there could be some Alpha this time around: David goes over: Why the banks are a buying opportunity His focus for the rest of earnings season The impact of macro factors like oil and yields on the market How he’s been navigating the recent market chop The names he would invest in now And more! Join next week’s free webinar to learn the 3 strategies working for David in this market!
Continue Reading -->Nvidia vs. Lumentum: Which One Wins?
Nvidia (NVDA) looks good. Lumentum (LITE) may look even better. JR Romero explains as he goes over his top AI stocks: The artificial intelligence stock market boom isn’t slowing down. It’s just evolving. As hyperscalers expand infrastructure and custom silicon demands explode, we still have opportunities to find big-time upside. I JR Romero goes over: 1. Nvidia (NVDA): The Path to $257 Nvidia remains the undisputed King pin of the AI revolution, and JR Romero outlines a potential move to $257. Demand for Blackwell architectures outstrips supply and next-gen data center deployments just keep on coming. Plus, the stock is ridiculously cheap. 2. Lumentum (LITE): Optical Breakthroughs As AI clusters scale to hundreds of thousands of GPUs, traditional copper interconnects reach their physical limits. That is where optical networking leaders like Lumentum (LITE). Bandwidth requirements just keep going up, which is crazy bullish for LITE. BTW, did you know that LITE was spun out of 90’s stock market legend JDS Uniphase? 3. Broadcom (AVGO) & Astera Labs (ALAB) Marvell (MRVL) just had a bullish analysts day with increased guidance. This indicates good thins to come for AVGO and ALAB. AVGO is dominant in custom ASIC design and high-speed switching silicon. And ALAB is riding the wave of PCIe and CXL connectivity solutions, which are key to eliminating data bottlenecks in AI server setups.
Continue Reading -->Why Oil Controls Stocks
Forget CPI. Forget PPI. This market is about oil: The market is obsessed over the CPI and PPI reports because inflation has been so stubborn. But JR argues that the price of crude oil is vastly more important. The Problem With CPI The CPI is widely used as a benchmark for inflation, but it comes with a few massive flaws for active traders and investors who need up-to-date info: It’s a lagging statistic: By the time government CPI numbers are released, they are already telling us what happened weeks ago, not what is happening right now. It is subject to revisions: Government data is notorious for being adjusted after the fact. The initial print you react to isn’t always the final reality. Oil: The Ultimate Real-Time Indicator In contrast, oil doesn’t suffer from the same lag or bureaucratic adjustments. As JR points out, oil is a real-time indicator you can access any time It fluctuates every second based on pure global supply, demand, and geopolitical realities. There are no surprise government revisions to oil prices. The price on your screen is what the market dictates at any given moment. The “Everything” Commodity Oil is the lifeblood of the global economy. Its influence extends far beyond what you pay at the gas pump. Oil factors into the manufacturing, packaging, and transportation of practically everything we consume: Electronics: The complex global supply chains and synthetic materials required for modern tech products rely heavily on petroleum products. Plastics: How much plastic is in your house right now? All of it depends on oil. Agriculture: The fertilizers used to grow our food—as well as the massive machinery used to harvest and transport it—are highly dependent on oil. Because oil is a foundational component for so many different industries, a spike or drop in oil prices instantly impacts production costs, corporate profit margins, and your wallet. Driving Market Sentiment This is why so heavily dictates market sentiment. When oil prices surge, you see an instant ripple effect of anxiety because costs rise for businesses and consumers. And on the flip side, when oil prices drop, we can take a deep breath. While the broader public might continue to react to outdated CPI prints, smart traders know that tracking oil gives you the real-time pulse of the economy.
Continue Reading -->SpaceX Is Going Here
The story of SpaceX (SPCX) stock is a story of supply and demand. Those forces tell JR Romero SpaceX is going to $190: SpaceX has been a fascinating example of how a narrative change (especially when it comes to the data center) helped drive a massive move in the stock price. And that’s made it hard for traditional analysts to evaluate the stock. But JR will show you how the chart confirmed that it was time to buy the stock. At one point, JR was massively short SpaceX, but he had to respect the price action.
Continue Reading -->This ETF Is Going to RIP
ATTN: Sami Abusaad and James Rich Young’s next Pristine Mentorship is on the calendar for October through December 2026. Spots are running out! Is AI dead? No. Sami is very bullish on Roundhill Memory ETF (DRAM), and he sees it going from $61 to $80 for 31%+ gain. Learn why: Learn about: Why the market remains bullish, especially the semiconductors Where Micron (MU) can go next The problem with the Russell 2000 (IWM) Sami’s bullish take on Fair Isaac (FICO), the worst stock in the S&P 500 this year And more! Want to learn how he makes these gamebreaking trades? Consider his Pristine Mentorship, which he co-leads with James Rich Young.
Continue Reading -->Desperation for Dollars and Liquidity
The Nasdaq 100 has gone nowhere for 4 months. Trillions in market cap is simply treading water. The price weighted Dow Jones Industrial Average has been declining for 2 months. Its two largest components are GS and CAT at $900 and $800 respectively. Both topped out over two months ago. The next largest component, MSFT, is a $500 stock, and it put in a 52 week high almost a year ago with a double top completed in Oct, 2025. While the SPX and NDX are near highs, the number of stocks making new 52 week highs is sinking lower with every rally in the averages. The number of new 52 week lows is expanding with every impulse higher in the averages. This is an unhealthy market. Insiders in many of the stocks I follow have been selling their shares all year while they use shareholder equity to do share buy backs of the very same shares they themselves are selling out of their personal holdings. The insiders know what their stocks are worth, and they are voting with their own money. Valuations of stocks in every single sector are far in excess of the average earnings power an owner of those shares can expect to receive over 15 or more years. This is an expensive market. It’s the banking sector that is most troubling from a valuation perspective. As the rate on the 10yr US Treasury Bond rises, the assets that sit on the regional banks’ balance sheets deteriorate in value. In the depths of the SVB crisis in 3Q 2023, regional banks were holding unrealized losses of $675B on their books vs $2T of equity capital. Rates are now higher than they were then. We changed accounting rules for “held to maturity” assets then so we could pretend our banking sector was solvent, and we must continue to pretend now even though their assets are presumably worth even less than during the SVB crisis. We’ll have to wait another month to get the total unrealized losses sitting on regional banks’ balance sheets after this most recent rise in rates. The potential exists that one third of our banking system’s equity is impaired in long duration assets they can’t sell from their books. This is exactly what happened in the S&L crisis in the 1980’s. The savings & loans went bust, and the banking system created the collateralized debt obligation security market to package up all the low interest rate loans no one wanted to buy in a high rate environment. We later realized this was in part the origin of the 2008 GFC, as the CDO market went into overdrive by the early 2000’s. This time however, the impaired assets aren’t held by a niche corner of the banking system. The impaired assets make up a major portion of all regional banks’ balance sheets. The stock market seems to be in a state of suspended animation. The SPX and NDX seem like they want to breakout higher. The DJIA, DJT, DJU, and RUT aren’t in a mood to follow. The market needs a catalyst to move in either direction. I think there’s only one bullish catalyst that could propel the market higher: an end to the Iran situation and a resumption of trade relations with China. There are rumors leaking out now that indicate we could see that, but even if that news does come out soon, the market should look right past that to post midterms when the conflict is almost sure to resume. Any rally on Iran or China news should bring the DJIA back up to the $53K level I’ve been watching to short. In fact, I’m counting on a rally in the next couple weeks to test out my theory on an October crash. A failure for the DJIA to trade above $53,700 before Halloween makes a crash a high probability event by my analysis. While there’s plenty to dislike in this market, there’s three interrelated forces I see driving the current environment. The stock market is being ruled by a triumvirate of higher rates, a higher dollar, and lower liquidity. Rates are going higher across the developed world. Only China is not seeing rate increases. The most common explanation for the higher rates is that global growth is picking up, but I can’t see any indication of that accelerating growth in the stocks that should be benefiting from growth. The growth explanation to rising rates floats like a lead balloon. The real reason rates are going higher is simple: asset holders are selling their bonds to raise the much needed dollars to keep up with rising borrowing costs. As the DXY rises above $101, we are witnessing the scarcity of dollars in real time. Every penny above $101 is another tranche of demand pull away from financial assets. A plethora of dollars means lots of potential demand for financial assets that can go into stocks and support prices. A scarcity of dollars implies the opposite. Without the willingness to freely supply dollars, liquidity in the financial system is drained, and asset prices are vulnerable. No asset is more vulnerable than an absurdly expensive stock market that has to compete with short term US debt for income. Long term holders of stocks are sitting on massive gains. They’re eyeing the real rates they can get by switching into bonds now. Real rates are over 2% now and increasing. Due to these higher real rates, bonds are acting as competition for increasingly scarce dollars that need a home. Gold is sinking as real rates rise. Gold is showing us the future path for stocks unless policy makers respond with liquidity creation soon. I’ve always followed the gold signal, and right now, gold is telling me there is a deflationary event on the horizon. It’s been my view for some time that the deflationary event is the end of the current business cycle. The business cycle is obviously entering into the contraction phase, but Warsh
Continue Reading -->AI Earnings Boom: Never-Ending Story?
ATTN: Sami Abusaad and James Rich Young are hosting an Open House next week. Sign up now for 5 full days of day and swing trades, plus in-depth training. 100% free. September was a slopfest and rate hikes may be farther away than we thought. Meanwhile, the AI earnings boom just got more ridiculous. So let’s dig in to the biggest and baddest stories in the market. Skip Ahead! September Was RoughMicron & the Ridiculous AI Earnings Boom Sentiment Is Still Not BullishNo Rate Hikes?Next Week Is About RestREMINDER: Join the Open house September Was RoughSPY was down 0.3% in September, while the QQQs were up 3.3%. Not so bad. But things were way uglier below the surface. Just look at all the red in this table showing September ETF performance:Just 113 of S&P 500/SPY stocks were up for the month, and the average name was down 4.6%. And by the end of the month, the average stock was 21.1% off its 52-week high. Essentially, you had to be overweight the right tech names (mostly semiconductors) to have had a decent month.Micron & the Ridiculous AI Earnings Boom Memory maker Micron (MU) dropped another amazing earnings report after the close, and AI is the driver. This chart showing Micron’s quarterly earnings per share over the past 10 years illustrates just how transformative AI has been:Micron earned $33.42 per share last quarter, more than 10X the $2.59 it earned in its last quarterly earnings peak in 2022. By the way, JR Romero expects Micron to hit $1,434. See why here:And the AI earnings boom seems to get more ridiculous by the week. FactSet reports that analysts now expect S&P 500 earnings growth of 29.1% in Q3, which would be the third straight quarter of 25%+ growth. And AI monsters like Nvidia (NVDA), Dell (DELL), and Super Micro (SMCI) are leading the charge. Estimates are going up so fast that analysts expect 63.5% earnings growth in the Information Technology sector. That is wild. It’s not like this is the first year of a bull market where we’re working off easy year-over-year comparisons. We are almost 4 years into the AI cycle and it shows zero sign of slowing! Starting to feel like a never-ending story.Sentiment Is Still Not BullishThe latest AAII Sentiment Survey shows that just 34.6% of investors are bullish.This is the third straight week of below-average bullishness. Meanwhile, bearishness remains high at 46.5%. Plus, CNN’s Fear & Greed Index is at just 32/100, indicating moderate fear.So there remains little enthusiasm for the market as a whole.No Rate Hikes?Friday’s weaker-than-expected Nonfarm Payrolls report came in the wake of the Fed’s Williams saying there is no urgency for rate hikes. So now the market is pricing in a mere 20.5% chance of a rate hike at the October 28 meeting:That’s down from 64.2% last week. However, traders are still pricing in an 81.9% chance of at least one rate hike by year-end.Next Week Is About RestThis week had some key events like the Micron (MU) earnings report and the Nonfarm Payrolls report. Next week, we get to take a break. There are no market-moving earnings reports or major economic data. But remember, we could get news on Iran so keep an eye out.REMINDER: Join the Open house Sami Abusaad and James Rich Young’s Open House begins Monday. Jump in now! Want to get to know them? Watch this webinar:
Continue Reading -->2 Huge Catalysts on My Radar
Yes, it’s time to talk politics. Because it can make you money. JR Romero believes the mid-term elections could be a bullish catalyst. If the Democrats take the House and/or Senate, government gridlock could drive a rally. He explains: Democrats Win = $SPY Skyrockets? JR Romero argues that the Democrats succeeding in the mid-term elections would be bullish for the stock market. If Democrats win control of the House or both chambers of Congress, it could mean less aggressive executive actions by President… pic.twitter.com/Jp8UAdv775 — T3 Live (@t3live) October 2, 2026 But that’s not all. If we get a positive resolution on Iran, JR believes Caterpillar (CAT) has potential to put in a big rally: $CAT Bull Case If we get a US-Iran peace deal that sends crude oil lower, Caterpillar is the way to play it. JR Romero believes the stock could get to $922 to $960. See the technical breakdown in this video: pic.twitter.com/qvI6hsU6k2 — T3 Live (@t3live) October 2, 2026
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