All posts by Michael Comeau
Elon Musk Is Rocket Man!
What a week! Stocks hit record highs on hopes for peace in the Middle East, while Elon Musk has earned the title “Rocket Man.” So let’s dig into what you need to know right now: 1. QQQ Hits Lucky 13 What a Friday for tech! QQQ rose for the 13th straight day, with 2026 leaders like Seagate (STX), Western Digital (WDC) and Marvell (MRVL) making new all-time highs. Of course, the question now is “are we overextended?” The RSI on QQQ is now 74+, which has marked near-term tops in the past, like last October: This doesn’t mean we’re destined to crash. But things are overheated just as earnings season is heating up. And speaking of earnings, we have to talk about Tesla (TSLA), which reports Wednesday. 2. Tesla Is the Wildest Wild Card Right Now Tesla(TSLA) has had a brutal move off the lows heading into earnings on Wednesday, April 22. And it’s the wildest of wild cards in the market. Forget the fundamentals because the world is obsessed with SpaceX. And there is a non-zero chance Tesla benefits from the SpaceX IPO. Maybe Tesla gets folded into SpaceX. If Elon Musk even hints at hitching Tesla to SpaceX, Tesla is going to the moon. And based on surveys of the T3 Live audience, retail interest in SpaceX is sky-high. So everything Elon-related is getting bid up. JR Romero explains the situation here: And speaking of space, have you seen this? 3. Elon Musk Is Rocket Man! Space-related stocks have been flying this month, led by BlackSky Technology (BKSY) up 47.8% and Intuitive Machines (LUNR) up 46%. Interestingly, all these names aside from Rocket Lab (RKLB) are heavily shorted: This has created additional “rocket fuel” on top of anticipation for the SpaceX IPO. So I am declaring Elon Musk “Rocket Man.” Sorry Kim Jong Un. And since we’re looking at high-flying stuff.. 4. The Russell 2000 Is Dominating IWM is now up 12% year-to-date, crushing SPY and QQQ: And short squeezes look to be a big driver of the recent small-cap surge. We screened for the best-performing Russell 2000 stocks in April. As you can see, plenty have short interest over 10%: Like Aehr Test Systems (AEHR), which is up 118.6% this month on 13.0% short interest. And AMC (AMC), which popped over 93% with 15% short interest. 5. Record Highs, “Meh” Sentiment The S&P 500 hit a new record high at 7147 this afternoon. But is the crowd overjoyed? Nope. Sentiment remains “meh.” The AAII Sentiment Survey shows that just 31.7% of investors are bullish on stocks for the next 6 months. This is the 9th straight week of below-average bullishness. Meanwhile, the CNN Fear & Greed index climbed out of the cellar and is now 61. This means mild Greed. So overall, traders remains cautious considering equities’ shocking momentum. This is good news because tops are often (not not always) marked by overly bullish sentiment. We’re not even close to that. So the technicals look extended, sentiment is stuck in the middle. Quite the puzzle we have here.
Continue Reading -->Oil vs. Stocks: Who’s Lying?
We survived another week in this topsy-turvy market. These are the 5 things you need to know. The Oil vs. Stocks Conundrum President Trump’s Iran-focused primetime address on Wednesday wasn’t exactly a roaring success thanks to mixed signals. He said the operation is “nearing completion.” But he also said the US would hit Iran “extremely hard” over the next 2-3 weeks. We could be arguing semantics here. Maybe 2-3 weeks qualifies as getting close to the end. But it appears that equities are looking past the turmoil. SPY is now down just 6.3% from all-time highs even though oil just did this: And even though rate cuts might be off the table this year. This is where it gets tricky. Stocks are pricing in resolution on Iran. Oil is doing the opposite. Which side is right? Which one is lying? This is the toughest question in the market right now. My guess is that stocks are right about oil. What’s yours? We’ve Got Gas, and It’s Very Expensive Traders are now pricing in a 25% chance of lower rates this year, up from just 1% last week. Still, we get NFP on Friday April 3, followed by CPI, GDP, and the Core PCE Price Index next week. So God only knows where this number will be by next Friday. But the big topic on consumers’ minds is the price of gasoline, which has skyrocketed: Aside from the economic fallout, high gas prices could impact the midterm elections later this year. And there’s no telling when we get relief, because Iran is digging in its heels, likely because they know that high energy prices hurt President Trump. There’s Been a Massive Invasion of Privacy JR Romero has been warning that Private Credit is a disaster waiting to happen. And yesterday, Blue Owl (OWL) said it was facing a huge wave of redemption requests for its funds. Private Credit funds are under pressure because investors are worried about credit quality and rising rates. Many funds have high exposure to speculative software companies that may be under threat from AI. Interestingly, Private Equity stocks have also been under pressure for the same reasons. And of course, some Private Equity companies like Blackstone (BX) and KKR (KKR) run Private Credit Funds. Look at this list of Private Credit Companies/Funds, and Private Equity Companies: They are down an average of 38.8% from their 52-week highs. Meanwhile, the Financial Select Sector SPDR ETF (XLF) is down just -12.2% Traders Are Not Fearful The AAII Sentiment Survey shows that 33.6% of investors are bullish. This is up slightly from last week, but the 7th straight week of below-average bullishness, though it’s not an extreme reading. And 51.4% of investors are bearish, which is well above the long-term average of 31.0%. These numbers are not shocking considering the tricky environment. Meanwhile, over in the options market, things remain neutral. The CBOE equity put-call ratio has hovered between 0.56 and 0.66 this week, which doesn’t tell us much either way. So we can say the crowd is cautious. But not overly fearful, even with a lack of resolution in the Middle East. Could an OpenAI IPO Bomb? Coming into 2026, traders were excited about three possible IPOs this year: SpaceX Anthropic (maker of Claude) OpenAI (maker of ChatGPT) OpenAI might be off the table. Bloomberg reported that demand for OpenAI shares on secondary markets (where shares in private companies are bought and sold) has collapsed. If you follow the AI ecosystem, you know that Anthropic is dominating the war for hearts and minds. I can’t open Twitter or LinkedIn without reading 13,000 new tales of how Claude Cowork is changing lives. And right or wrong, now everyone’s treating ChatGPT like yesterday’s news. And the Wall Street Journal reported that OpenAI is retooling the company to focus on coding and business users, which is Claude’s strength. OpenAI is now generating $2 billion in revenue per month, and just raised $122 billion in new capital. But could a prospective OpenAI IPO bomb because Anthropic is the belle of the ball? I’m guessing yes. And then OpenAI could be the buy of a lifetime.
Continue Reading -->I’m Afraid of SpaceX
What a week. War is raging. The headlines won’t stop. Crude oil is raging higher. And inflation is on everyone’s mind. So let’s go through the 5 things you need to know. 1. I’m Afraid of SpaceX Word on the street is that Elon Musk’s SpaceX is about to raise up to $75 billion in an IPO that would value the company at up to $1.75 trillion. And I’m afraid. SEC data shows that market tops coincide with strong IPO years like 2000, 2007, 2014, and 2021. So if we get big IPOs this year from SpaceX, OpenAI, Anthropic, and Databricks, that could be a sign of a cyclical top. Many investors are frustrated that high-growth companies are staying private longer and longer. Maybe that’s a good thing. And with rates possibly on the upswing and speculative stocks getting slammed, maybe the IPO window for these hot companies will stay closed anyway. 2. Hard Times Are Here March has been a miserable month for stocks unless you’ve been long energy. (more on this below) As you’d expect, sentiment has taken a hit. The AAII Sentiment Survey shows that 32.1% of investors are bullish. This is the 6th straight week of below-average bullishness, though it’s not an extreme reading. And 49.8% of investors are bearish, which is well above the long-term average of 31.0%. These numbers are not shocking considering the tricky environment. Meanwhile, over in the options market, things are pretty neutral. The CBOE equity put-call ratio has been hovering between 0.56 and 0.63 this week, which doesn’t tell us much either way. If we get a spike to 0.9 or higher on Friday, maybe that’s a sign we’re oversold. So we can say the crowd is somewhat bearish. Nothing that can give us a buy signal. One big reason markets are in a funk is the sudden fear of rate hikes due to high inflation. That’s why… 3. The Hawks Are Flying We looked at FOMC rate policy expectations using the CME’s FedWatch Tool. The market is now pricing in: 2.9% chance of one 25 bps rate cut 69.5% chance of no change 24.5% chance of a 25 bps rate hike this year 3.0% chance of 50 bps in hikes 0.2% chance of 75 bps in hikes That’s a 27.7% implied probability of rates going up this year. And a 2.9% chance of a single rate cut. If we wind back the lock just one month, traders were pricing in a 0% chance of higher rates, and a 96.1% chance of cuts. You can thank oil for this. Speaking of oil… 4. Energy Is the Star Every equity sector has been red in March, with one exception: energy. Not a shock with oil up so much. SPY is down nearly 7%, while the Energy Select Sector SPDR ETF (XLE) is +13% and the VanEck Oil Services ETF (OIH) is up +5%. And if you look at the top SPX/SPY stocks for the month, they are virtually all in energy: And you know what’s not on the list? 5. Mag 7 Really Is the Lag 7 The Mag 7 used to place to be, but no more. All 7 are underperforming SPY/SPX this year, with Microsoft (MSFT) bringing up the rear, down nearly 26%: Many of these names are starting to look like value stocks. Nvidia (NVDA) is trading at 20 times forward earnings, even though it’s expected to grow earnings by 74% this year. If this was 1984, Peter Lynch would be drooling. But the market’s undergone a sea change. Three years ago, everyone was focused on the promise of AI. Now, the market’s more worried about the sustainability of capex spending growth amid a lack of clear real-world benefits. According to a study from the National Bureau of Economic Research, 90% of companies said AI has had no impact on employment or productivity. Of course, we’re still in the early innings. And anecdotally, I’ve seen plenty of people in small companies make amazing use of AI. I wouldn’t want to live without it myself.
Continue Reading -->Epic Bear Invasion Is Here
What a week. Inflation’s still a thing, Micron dropped another earnings bomb, and Chuck Norris is hanging with Bruce Lee in heaven. Watch this clip with respect because they don’t make ’em like this anymore: Now let’s go through the 5 things you need to know. The Bears Are Here The latest AAII Sentiment Survey shows that just 30.4% of investors are bullish. This is the 7th straight weekly decline, and the lowest bullish reading since September 11, 2025. And 52.0% of investors are bearish. This is the highest bearish reading since May 1, 2025. Meanwhile, the CNN Fear & Greed Index is at 17, signifying extreme fear. Finally, the CBOE equity put-call ratio hit 0.90 Wednesday. This is a fairly high reading and close to the 1ish level typically seen at near-term bottoms. But has enough negativity seeped into the market to form a short-term bottom? That is the #1 question we need to ask ourselves. Because if we get good news on Iran over the weekend, a lot of bears may throw money at the market. March… What a Stinker March has been a real mess. Our ETF monitor shows that everything is red for March, aside from Ethereum (ETHE), Bitcoin (IBIT), and Energy (XLE): And many of the strongest sectors from early 2026 (like silver, gold, and uranium) got spanked. The SPY is down a not-so-disastrous -5.6%, but the average individual name in the index is down -7.2%. Plus, there have been very few individual winners in March, as you might expect from the lousy ETF numbers. Just 65 SPY names are positive. And to catch them, you had to be long energy, or had the guts to buy oversold software names like Datadog (DDOG), Intuit (INTU), and Palo Alto Networks (PANW). Otherwise, you got hit hard. The Fed Is a Total Mystery Following this week’s FOMC meeting, hot PPI report, rising rates, and ongoing tensions in the Middle East, the market has flip flopped on rate expectations. 1 week ago, the market was pricing in a 60.9% chance of lower rates this year. Now it’s pricing in: 5.4% chance of one 25 bps cut 57.9% of rates staying the same 30% chance of one 25 bps hike 6.0% chance of 50 bps in hikes 0.6% chance of 75 bps in hikes So we went from pricing in a 60.9% chance of lower rates to 5.4%. Housing stocks sniffed this out because they’ve been in a nasty downtrend for the past 6 weeks: JR Romero Nailed Super Micro (SMCI) In August 2024, JR Romero said he considered Super Micro (SMCI) to be the “Bernie Madoff of tech.” Today, the U.S. Attorney for the Southern District of New York charged three men affiliated with Super Micro with conspiring to smuggle Nvidia (NVDA) AI chips to China in violation of U.S. law. One of those men was Super Micro co-founder Yih-Shyan “Wally” Liaw. Doesn’t get much worse than that. So JR was right. This company can not be trusted. But if we look at the news another way… is this not the biggest endorsement of Nvidia AI chips ever? Based on an SEC filing, Liaw owns over 15 million SMCI shares, which were valued at over $450 million as of yesterday’s close. Smuggling these chips is so lucrative that a guy this rich was willing to risk his company’s future. ALLEGEDLY. But you know who’s not crying today? Dell (DELL) longs: Because the market assumes some of Super Micro’s $40+ billion in annual sales will get shifted to Dell. And you figure Nvidia just might hold back on chip allocations to Super Micro. The 4 Horsemen of the AI-pocalypse Are Still Dominating On January 30, I identified these memory/storage leaders as the 4 Horsemen: SanDisk (SNDK) Seagate (STX) Western Digital (WDC) Micron (MU) And they’re still crushing it this year. And you know a group is how when the worst name (Micron) is up a crazy 47.3%! David Prince of T3’s Inner Circle shared his thoughts on this white-hot set of names: What does the $MU report mean for $SNDK $WDC and other peers?@epictrades1 says the “business is on fire” but that doesn’t mean the stocks will go up forever… Learn more from DP: https://t.co/VExJsdNZtf pic.twitter.com/sgHoxLykn4 — T3 Live (@t3live) March 19, 2026 The story here is simple. AI data centers can’t get enough memory and storage. These companies could probably double capacity and sell it out in minutes. If you want to see how this is playing out on the ground, I bought a SanDisk 2TB SSD drive for about $200 3 years ago. Today, they’re going for $349: This is insane.
Continue Reading -->The End of the Market As We Know It?
We’re about to enter week 3 of war with Iran. Crude oil hit shocking highs this week, while stocks hang in, right on the edge of failure. So it’s time for the 5 things you need to know. Play this week’s theme song as you read: 1. We Are on the Verge of Disaster. But There’s a Catch. The market has been a tight, frustrating mess with zero follow-through for months. And SPY, down just 2.7% year-to-date, looks like it might be on the verge of a breakdown. Is the 200-day moving average at $656 the next stop before a bigger collapse? It looks like it, but there’s a catch. And of course, that catch is between now and Monday morning, we will get 48 hours of headlines. Good luck figuring out what they’ll be. Axios reported this morning that President Trump told the G7 that Iran “is about to surrender.” The problem is the President has a long history of hyperbole (often a big asset), and Iran shows no signs of backing down. In fact, the Wall Street Journal reported that the Pentagon is sending more US Marines and warships to the Middle East. The market wants resolution, ASAP. 2. Oil Traders Are Bracing for More Big Moves We took a look at options prices on crude oil futures. And those prices are high. Implied volatility on options expiring next Friday is at 120%. The $97 straddle for next Friday is trading around $13.58 right now. That’s an implied move of about 14% in a single week. That would seem wild at any other time. But anything can happen in the Strait of Hormuz, plus the rest of the global oil infrastructure. 3. The Mood Is Going Sour The latest AAII Sentiment Survey shows that just 31.9% of investors are bullish. This is the 6th straight weekly decline, and the lowest level since November 12. It’s not an extreme reading, but it’s below the long-term 37.5% average. And bearish sentiment jumped to 46.4%, the highest level since November 12. The CBOE Equity Put/Call Ratio reached 0.80 Wednesday, the highest since February 17. This shows a moderate amount of fear. It’s good to see more caution coming into the market, because by definition, it means there is a lack of froth. However, these are not extreme measures so we can’t use them as an excuse to load the boat with equities. 4. Private Credit Is Coming Into Focus Many market observers believe the private credit market is the next big market boogeyman. Private credit grew fast after the financial crisis when traditional banks bulled back on lending to smaller companies. But now defaults are rising thanks to lax underwriting standards, and there’s worry of a crisis brewing. This has hurt stocks like Blue Owl (OWL), Ares Management (ARES), and even Deutsche Bank (DB), which just disclosed $30 billion in exposure to private credit loans. And we noticed something funny this week. Google searches for “what is private credit?” have exploded: This story is going mainstream. 5. SanDisk Is Amazing I got stopped out of my SanDisk (SNDK) long last Friday. So of course it rallied back $100 in under a week. In the middle of a war. The stock is now up 176% this year, making it the #1 name in the S&P 500 index. Texas Pacific Land (TPL), the #2 stock, is up “only” 85%. And SanDisk has two fresh catalysts next week: Micron’s (MU) earnings report, and Nvidia’s (NVDA) big GTC conference. Both should point to strong demand for everything related to AI infrastructure, which of course includes flash memory storage. By the way, JR Romero is sticking to his $1,000 target price:
Continue Reading -->Did Crude Oil Just Peak?
Traders are edge amid the US and Israel launching a major attack on Iran. So let’s look at the 5 things you need to know right now. 1. Crude Oil Went Parabolic. Did It Peak? The military conflict in Iran sent crude oil up over 30% this week. And the RSI on crude oil futures hovered around 87 Friday morning. In recent years, crude oil has tended to fade after hitting RSI levels in the 85+ range. So should we short crude oil? It’s a tough question. Because we could walk into any kind of news come Monday morning. So shorting oil feels like a binary bet on things like: The status of the Strait of Hormuz Whether Iran is open to a deal What President Trump says on Truth Social at 3 in the morning Interestingly, the red hot oil service sector sold down hard this week, which feels like a massive “sell the news.” Oil service stocks had been ripping because higher oil prices mean more oil projects become economically feasible. (plus the favorable regulatory backdrop) But now it looks like an awful lot of news was priced in. And believe it or not, OIH was as high as $440 early Monday morning. Now it’s around $375, 14% off that high. 2. Lousy Jobs Report = FOMC Rate Cuts? On Friday morning, we got the February Nonfarm Payrolls report, and it was a mess, even taking into account temporary factors impacting the numbers. But is the FOMC needle moving? Yes. A little bit. Markets are now pricing in a 50.4% chance of a rate cut by June, up from 33% yesterday. So the market sees: 42.3% chance of 25 bps in cuts 7.8% chance of 50 bps in cuts 0.3% chance of 75 bps in cuts Of course, the rising price of oil is inflationary. And next week, we have multiple key US economic data reports including CPI, Existing Home Sales, ADP Employment Change, GDP, and Core Price Index. So we should get more insights into the state of the US economy. 3. Palantir Perked Up Most tech stocks had a rough week. Palantir (PLTR) was an exception thanks to its close ties with the US and Israeli military: Palantir’s AI systems are reportedly used for applications like target identification. The military-industrial complex is rapidly becoming the military-industrial-data complex and Palantir (along with companies like Anthropic) is at the heart of it. The Times reports that 20 soldiers using Palantir AI are accomplishing a workload that required a team of 2,000 during the US invasion of Iraq. Traders often ask the most obvious question about Palantir: why is this stock trading at 50 times sales? The answer is simple. The US military can’t (or won’t?) live without Palantir’s technology. And the US military wants to keep that tech to itself. 4. Traders Are in a Funk Investors and traders are still in a funk. The AAII Sentiment Survey shows that 33.1% of investors are bullish. This is the third straight week of below-average bullishness. And it’s well off the 49.5% high set on January 14. Meanwhile, the CBOE equity-put call ratio is 0.6o, which is in the range of neutral. So traders are far from euphoric. This is a positive because it implies few traders are all-in bullish. In fact, it seems like everyone’s waiting for resolution on Iran before placing their chips down. And odds are, if equity markets keep weakening, bullish sentiment should drop below 30% next week. 5. An Ugly Stock Is Looking Beautiful The single worst stock in the S&P 500 this year is tech research & advisory company Gartner (IT). According to conventional wisdom, Gartner’s business looks ripe to be eaten by AI. On February 3, the stock dropped 20% after the company reported weak guidance. But on March 5, Sami Abusaad added the stock to his Number Ones swing trading newsletter at $167.63. And it’s starting to fill that big ugly earnings gap: Wall Street’s indifferent on the stock, with 4 buys, 9 holds, and 2 sell ratings. But the stock looks like it’s under accumulation. Will be interesting to see where it is in a month.
Continue Reading -->Nvidia vs. Sandisk vs. Utilities?
What a week! Nvidia (NVDA) flopped after earnings, OpenAI picked up $110 billion in fresh funding, and PPI came in hot. So let’s look at the 5 things you need to know right now. 1. Nvidia = Buy on Valuation? Nvidia (NVDA) delivered another solid across-the-board beat and strong guidance on Wednesday. And for the third straight quarter, it sold off the next day. I’m long, so of course I’m aggravated. So what’s the problem? Everyone’s wondering how long the AI capex spending boom can last. Because companies like Oracle (ORCL) and Meta (META) are burning downright absurd levels of cash flow. However, there may be hope for the bulls. Nvidia’s valuation has compressed to 22 times forward earnings. That’s right around where the stock bottomed in November 2023 and April 2025. Meanwhile, Nvidia is expected to grow earnings by 73% this year. If this was 1985, Peter Lynch would be loading up for the Magellan fund. But while tech leaders like Nvidia and Microsoft (MSFT) sag, you know what’s not struggling. 2. The Electric Mystery Machine Are In Secret Bull Market Mode SPY is down in 2026, but the State Street Utilities Select Sector SPDR ETF (XLU) just keeps grinding up: I highlighted this secret bull market on February 13. Why are utilities booming? Rates are falling. And traders could be rotating into utilities in fear of an economic mess. Plus, AI is driving increased electricity demand. And Anthropic said it will fit the bill for infrastructure upgrades and consumers’ higher electric bills. Why didn’t you see this on financial TV? They’re talking about Nvidia. 3. SanDisk May Be Setting Up Beautifully I’m long SanDisk (SNDK). I even declared myself the Captain of Team SanDisk. Not that I’m buying it here. It’s the #1 stock in the S&P 500 this year, and right now it’s hugging the 20 day moving average: Could it be basing for a breakout? We talked about it on this week’s live stream: 4. Cybersecurity Is Less Awful Than Regular Old Software We all know software has been a mess, with the iShares Expanded Tech-Software Sector ETF (IGV) down 23% year-to-date. But cybersecurity is holding in less bad. The Amplify Cybersecurity ETF (HACK) is “only” down 10% YTD. And security leader CrowdStrike (CRWD) reports on Tuesday. This is a pivotal report. The stock recently came under pressure when Anthropic launched Claude Code Security. If CrowdStrike says AI is not a problem for them (or an opportunity), it could add some upside fuel. Interestingly, CrowdStrike describes itself as “The Agentic Security Platform. Unified and built to secure the AI revolution.” 5. The Mood Is Still Sour It’s hard to argue that investors and traders are too optimistic. The AAII Sentiment Survey shows that just 33.2% of investors are bullish. This is below the 37.5% long-term average. And it’s well below the 49.5% reading notched on January 14. Also: the CBOE equity put-call ratio averaged 0.61 this week, which is in the neighborhood of neutral. This is all good news. Because extremes in bullish sentiment can signal complacency and mark tops. And we are nowhere close to extreme bullish sentiment. Which makes sense given how tricky this market is. Back on February 12, we asked our Twitter following if 2026 has been harder than 2025. 80% said yes. That says a lot about how frustrating this market’s endless grind is.
Continue Reading -->You Are Not Alone in the Twilight Zone
What a week! The Supreme Court smacked down President Trump’s tariffs, Q4 GDP flopped, and Amazon (AMZN) surpassed Walmart (WMT) as the world’s #1 company by sales. Our song of the week is Golden Earring’s “Twilight Zone.” Blast it while you read this report: 1. If You’re Frustrated, You’re Not Alone Last week, we asked our community if the market felt easier or harder than usual in 2026. 67.7% said harder. So if you’re frustrated by this market, you’re not lone. Because while the major averages are stubbornly range-bound, individual stock performance is all over the place. The S&P 500 is up about 1% year-to-date, and off the highs by about 1%. But drilling below the surface tells a much more interesting story: The average stock has moved 14.4% year-to-date 342 stocks are up, with an average gain of +15.4% 161 stocks are down, with an average loss of -12.4% This implies traders and investors are having trouble with timing. Because 69% of stocks are up and the winners are up more than the losers are down. We can even see this from a sector perspective. If you look at our sector ETF tracker, you see that most ETFs are up: There has been a lot of gains in the market this year. It’s just been touch to catch them because it feels like there’s no follow-through. And if you’re stressed and in need of a fresh start in your trading, check out the Pristine Mentorship with Sami Abusaad and James Rich Young. 2. This Week Is HUGE for Tech Yes, we all know that Nvidia (NVDA) earnings hit on Wednesday. But we’re also getting reports from Salesforce (CRM), Synopsys (SNPS), Snowflake (SNOW), Intuit (INTU), Autodesk (ADSK), and Dell (DELL)? That means we get insights on software (important given the IGV debacle), AI, and my favorite topics – memory and storage. I own Nvidia stock, but I’m just as interested in Dell. Because Dell spend lots of dough on hard drives and SSDs. So what they say will impact the 3 amigos of storats: SanDisk (SNDK), Western Digital (WDC), and Seagate (STX). They are the #1, #5, and #9 best stocks in the S&P 500 this year, posting absurd gains: BTW, I own SanDisk and plan on holding it into the Dell report because I agree with JR Romero’s take: 3. The Mood Has Soured There’s still little evidence that investors and traders are overly optimistic, which tracks with how challenging this environment has been. The AAII Sentiment Survey shows that just 34.5% of investors are bullish. This is below the 37.5% long-term average. And it’s well below the 49.5% reading notched on January 14. Also: the CBOE equity put-call ratio is 0.64, which reads pretty much neutral. This is all good news. Because extremes in bullish sentiment can signal complacency and mark tops. Just remember that timing the market with sentiment data is tricky, if not impossible. 4. OIH Might Hit a Sell the News Energy has been a dominant force in 2026, thanks to geopolitical worries. And this week, President Trump gave Iran a 10-day ultimate to make nuclear deal, or “bad things happen.” The VanEck Oil Services ETF (OIH) is up 36% year-to-date after the “Gap of the Year” on January 5 after the US Army Delta Force plucked Nicolás Maduro out of Venezuela. OIH has crushed every other sector ETF, including the Energy Select Sector SPDR ETF (XLE), which is up “only” 22.5%. And it could be getting overbought. So if Trump and Iran make nice, there could be a sell-the-news reaction. I own OIH and XLE and have zero plans to sell. I’m in for life. 5. Software Still Stinks Software looks like it was bottoming. The iShares Expanded Tech-Software Sector ETF (IGV) showed about 8,000 signs it was oversold, with record volume after a huge decline. And it bounced. For three days. I thought I was smart by picking up the Global X Cybersecurity ETF (BUG). Because that’s the “safer” side of the software arena. Nope. I’m losing money thanks to Palo Alto Networks (PANW) and Akamai (AKAM), the #1 and #2 components in BUG, both whiffing on earnings this week. Why haven’t I sold yet? I wish I knew.
Continue Reading -->The Electric Sector That’s Skyrocketing Without You
What a week! We had a big jobs report, a light CPI number, and momentum stocks falling into quicksand. This song seems to fit: So let’s get into this week’s big stories! 1. Utilities Got Hot Consumer Staples was the surprise sexy sector last week. Utilities took the crown this week. Look at that big fat green bar on the weekly chart for the Utilities Select Sector SPDR ETF (XLU): Plus, on Thursday, we noticed a bizarre stat in the options market. As of about 2:30 pm, 231,546 XLU calls had traded. And just 6,129 puts traded. So we had a put-call ratio of 0.026. 38 calls for every 1 put. Crazy. So it looks like some folks were sniffing out a light CPI report. Because a light CPI (which we did get) could mean lower rates which is good for utilities. But there was another big utilities story that didn’t get much attention this week. We all know that AI is driving higher demand for electricity. But did you know that AI giant Anthropic just said it will pay the costs of upgrading electric grids to accommodate AI data centers? That looks like a surprise source of capex funding for utilities. Sounds bullish to me. And on Friday, those call buyers are smiling with XLU on the upswing. FYI – I’m long and strong XLU and VST so my money is where my mouth is. Now let’s talk about the other big sector story this week: 2. The Semis Won’t Stop The VanEck Semiconductor ETF (SMH) had impressed this week thanks to surges in leaders like: Applied Materials (AMAT) Lam Research (LRCX) KLA (KLAC) NXP Semiconductors (NXPI) Cadence Design Systems (CDNS) We saw big earnings from AMAT and Japanese memory maker Kioxia, plus Taiwan Semi (TSM) reported impressive January sales. So even with Kingpin Nvidia (NVDA) stuck in the mud (I do own it), the AI story still has SMH up 13% YTD: I know you’re asking “but isn’t SanDisk (SNDK) really the 800-pound semiconductor gorilla right now?” Well it’s still the #1 stock in the S&P 50p this year. But it’s actually not in the SMH ETF. That said, you might want to hear what JR Romero said about the stock this week: FYI: Get JR’s training here. 3. Software Is Back Under Pressure Traders are still worried about AI nuking software in the wake of Anthropic releasing Claude Cowork. The iShares Expanded Tech-Software Sector ETF (IGV) just hit its highest monthly volume ever. Less than halfway through the month! IGV had a solid bounce attempt into Tuesday but it crapped out fast as leaders like Microsoft (MSFT) and Palantir (PLTR) slumped. We’re even seeing names like ServiceNow (NOW) and Salesforce (CRM) trade at record low valuations. Salesforce is now trading at just 15X forward earnings: This is a tricky situation because it looks like traders are looking for any excuse to sell software stocks. Even though replacing real software (even crappy stuff) with home-grown AI alternatives is far from easy. Every person I know works with software they hate. But even if they could vibe code a replacement, they wouldn’t. Because no one wants to be responsible for the inevitable glitches. 4. There Is Not Much Fear Out There Countless momentum stocks have been rocked, and things feel shaky. But there’s not much fear out there. The AAII Sentiment Survey shows that 38.5% of investors are bullish on stocks for the next 6 months: This is in-line with the long-term 37.5% average. Meanwhile, options-related sentiment indicators like the CBOE Equity Put-Call Ratio and ISE Sentiment Index remain subdued. I like these indicators because trading options with actual dollars says more about sentiment than a survey. And neither shows an explosion in put option demand, which would be a real sign of fear. 5. It’s Been a Bad Year for Small Cap Short Squeezes Since small caps are outperforming this year, we wanted to see if short squeezes were a favor. So we used KoyFin to screen for US stocks between $500 million and $5 billion in market cap, with short interest of 15% or higher. We came up with 138 stocks, of which: 62 are up this year 76 are down The average return is -1.7% So on the whole, it hasn’t been a great year for small cap short squeezes. That said, here are the top 5: Nektar Therapeutics (NKTR): +89.5% Cable One Inc. (CABO): +37.5% Monro Inc. (MNRO): +25.0% Advance Auto Parts Inc. (AAP): +22.2% Twist Bioscience Corporation (TWST): +21.6% P.S. Don’t forget the market is closed Monday for Presidents’ Day! Here’s next week’s calendar:
Continue Reading -->AI vs. Software: Who Wins?
What a week. We got Dow 50,000, Alphabet (GOOGL) and Amazon (AMZN) cranking up their capex, a crypto collapse, and metals trading like meme stocks. So let’s talk about the 5 biggest things you need to know right now: 1. Software Got Nuked By AI Software stocks were the talk of the town this week. In a bad, bad way. Anthropic launched its Claude CoWork app and the world seemed to scream “AI is going to eat software.” The way software was eating the world back in 2011, according to Marc Andreessen. And people started creating doomsday scenarios for AI replacing software applications wholesale. Traders developed a newfound obsession with the iShares Expanded Tech-Software Sector ETF (IGV), which had its highest-volume week ever. Below the surface, it looks even worse. The average individual stock in the IGV ETF is -44% below its 52-week high, according to KoyFin data. Here are some examples: Microsoft Corporation (MSFT): -29% Salesforce Inc. (CRM): -44% WDAY Workday Inc. (WDAY): -44% ServiceNow Inc. (NOW): -53% Unity Software Inc. (U): -54% Oracle Corporation (ORCL): -60% Atlassian Corporation (TEAM): -71% And at the bottom of the barrel is Tom Lee’s Bitmine Immersion Technologies Inc. (BMNR) at 88% from its highs. (more on this below) Here’s another fun fact: just three of the 100+ stocks in IGV have made a 52-week high in 2026. They are Zoom (ZM), A10 Networks (ATEN), and Electronic Arts (EA). And EA in only that category because it’s being taken over. Is the bottom in for software? My personal guess is maybe. IGV hit an RSI of 14.84 on Thursday. Hard to go lower than that: I bought the Global X Cybersecurity ETF (BUG) Thursday because it’s also oversold, and security may be more AI-proof long-term. Ironically, software companies may benefit most from AI. Because AI coding tools like Claude may help developers do more work faster. So in this war… both AI and software may win! 2. Why Hardware Is Winning Now We plotted a simple chart comparing IGV to the VanEck Semiconductor ETF (SMH) and the SPDR® Tech Sector ETF (XLK): This lets us compare the software to the semiconductor sector (a good proxy for hardware) and tech overall. So over the past year, SMH is up 60.8% while IGV fell 22.5%. That’s a differential of 83.3%! You’re asking why, right? To me the answer is simple: shortages are sexy. And short-term gyrations aside, the hottest semiconductor names like Micron (MU), Broadcom (AVGO), Lam Research (LRCX), and Nvidia (NVDA) have been supply constrained. The “we can’t make enough stuff to meet demand” message is catnip for traders. That’s why SanDisk (SNDK) is the #1 stock in the S&P 500 this year. (note: SNDK is not in the SMH ETF) This excitement has pushed tremendous investment dollars to the semiconductor side. Software’s just not been as compelling from a story perspective. 3. Apple Took Over Mag 7, No AI Required I’ve argued that Apple Is Playing the Smartest AI Game of All. Unlike Alphabet (GOOGL), Amazon (AMZN), Meta (META), and Oracle (ORCL), Apple is not blasting hundreds of billions of dollars into new capex spending on AI hardware. Apple’s also not playing financial engineering games with the likes of OpenAI and CoreWeave (CRWV). Apple is simply partnering with Google to enhance Siri with AI. Simple, safe, efficient. Especially since iPhone demand is rampant as it is. And as of Friday morning, Apple was the #1 stock in the Mag 7 this year, by a hair: 4. Consumer Staples Went Parabolic Of all the major index ETFs, the one showing the most power as of late is the Consumer Staples SPDR ETF (XLP). XLP is up 13% YTD vs. a 1% gain for SPY. Its RSI is at 82, which is a record high for XLP (or close to it – my data set isn’t perfect). That’s also the highest RSI of any major ETF. Because stocks like Wal-Mart (WMT), Costco (COST), and earnings winner Pepsi (PEP) have been marching on up. Now, there’s an argument to be made that traders are looking for boring stocks after the wild action in AI, the metals, and cryptocurrencies. But if we look back at the past 10 years, XLP has underperformed SPY by an enormous margin: So there’s an element of catch-up here. Strength in the staples is one reason the Dow Jones Industrial Average just hit 50,000 today. 5. Knives Out for Tom Lee Now, I’m not sure if the crypto market just bottomed. But the hate for Market Strategist and Bitmine Immersion Technologies (BMNR) Chair Tom Lee has been deafening. It feels worse than when everyone threw Ark Invest’s Cathie Wood under the bus in 2022. Tom’s taken a lot of flack for his crazy bullish forecasts on Bitcoin and Ethereum. But I now wonder if Bitmine bottomed at the point of maximum hate: Are you buying? I’m still afraid…
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