July 2025 DDD

[ducati916]

Health care stocks are experiencing one of their worst streaks of underperformance in history. With policy uncertainty under RFK, industry-wide cost pressures, and an insurance sector crisis... these stocks haven't been able to get on trend with the broader market. In fact, they've barely participated this entire cycle. In early May, the 4-week relative rate of change hit -13%, its lowest reading of all time. Health care stocks had never done so poorly over a trailing one-month basis. Extreme momentum readings like this tend to show up at turning points in the trend. So the question is simple… Was the collapse in healthcare a sign of exhaustion or initiation?

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In other words, is this blowout downside momentum signaling the end of an old downtrend… or the beginning of a new one? And I think it's pretty obvious we’re looking at exhaustion here. It simply can’t be the initiation of a new downtrend. XLV/SPY has been moving in a straight line lower for the last two and a half years. It’s already in a downtrend! So I’ve been picking my spots and buying large-cap healthcare stocks in the long-term account... preparing for a sustained rotation. Let’s start with Merck $MRK.

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I think this massive dot-com bubble base finally resolves higher in the future, and I’m using the tactical reversal pattern that’s playing out right now to get a prime entry. The dividend here is great so I plan to sit back and collect my 4% while I wait for this pharma leader to break out. Pfizer is also working on a tactical base and pays a sky-high 6.7% yield. Here’s a zoomed-in look at Pfizer $PFE:

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If we can clear and hold 26, Pfizer is headed back into the 30s. One of my favorites in health care right now is Medtronic $MDT.

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This is the best-looking fresh primary trend reversal in the sector. If we’re above 92, I’m long MDT with an initial target of 110 and secondary objective of 135. Next let’s look at some leaders. I think this monster base in GILD is about to resolve and I’m jumping it using the VWAP from the pivot highs.

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We'll get confirmation this breakout is in the books above 123. From there, the first stop is 164. Next is BSX which has completely ignored the broad weakness in health care this cycle. This has been one of the best ones to own up until now and I think that only continues if the overall sector finds its footing.

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I like BSX above 110 with a target of 175. The stock reported an earnings beat and gapped to fresh all-time highs Wednesday. Another green candle or two will break this leader back out. Last but not least, I came across a handful of potential failed tops in the sector. First up, here’s Thermo Fisher $TMO.

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The hook is already in for TMO. As long as we're above 430, this top is failing. I'm long with a target back toward the old highs around 620. And I feel the same way about Danaher $DHR.

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It looks poised to trap the bears and scoop higher in similar fashion to TMO. I plan to buy it on strength above 207 in the coming days and weeks. While we’re at it, industry leader and largest XLV component Eli Lilly is unlikely to complete its massive top too. Especially if the broader space is just getting going. So that bodes well for XLV itself as LLY will continue to be a primary driver of performance. The bottom line is I’m expecting there to be more and more bullish opportunities in this battered sector in the future. I think the bottom is in. For now, I like the idea of adding some quality exposure with these large cap anchor positions.

The issue with XLV components is that Trump has via Medicare reforms, killed their profitability.






This week the WSJ reported that the US burned through nearly 25% of all the THAAD air defense missiles it had ever purchased in just 12 days of medium-intensity combat against a non-peer adversary (Iran.) The second derivative implications of this story are enormous: It is proof that the US has outsourced too much of its defense industrial base, a strategic mistake that will likely be attempted to be rectified aggressively in coming years. What does this mean for macro?

The offshoring of the US defense industrial base was disinflationary, good for the real value of LT USTs, and good for Washington DC, Wall Street, and China relative to US working class wages and US industrial output.

Reverse all of those for what the macro impacts of reshoring will likely be(inflationary, bad for real value of LT USTs, and bad for Washington DC, Wall Street, and China relative to US working class wages and US industrial output.)

• The Dow Jones Industrial Average closed just 10 points shy of an all-time high, or -0.02% on a weekly closing basis. However, it still gained +1.3% this week.
  
  
• The other two large-cap indices ($SPY and $QQQ) have consistently set record highs over the past month, but the Dow hasn’t notched a new high since November.
  
  
• $DIA remains tightly coiled beneath resistance at 45,000, representing the peaks from January and November. As Ross notes, a breakout would unlock the door to Dow 50k by year-end.
  

The Takeaway: The Dow closed just a few points shy of a record high despite solid gains this week. Pressure is building at 45k, and a decisive breakout would target 50k by year-end.







Every time there is a bull market in crypto, there is a new wrinkle, and this time that wrinkle is that you can buy exposure to altcoins in your brokerage account, through publicly traded companies that have gone all in on some cryptocurrencies.
The big picture: You might know that Tesla has some bitcoin and Strategy (formerly MicroStrategy) has all the bitcoin, but did you know that publicly traded companies are swiftly pivoting to buying and holding lots of other cryptocurrencies?



Catch up quick: There are crypto treasury firms, such as Sharplink Gaming for ether and DeFi Development Corp. for solana, and companies betting on extremely new cryptocurrencies, like the fitness firm Interactive Strength, which is buying the artificial intelligence coin from Fetch.ai.

• Many of these companies are issuing large amounts of new shares to sell to the public in order to buy more of their target cryptocurrency.
• The market has been rewarding them in a very meme stock-like way.

Between the lines: The big selling point of these coins is access. Folks who want to keep their investments in a familiar stock portfolio can just buy companies that are actually stand-ins for a favorite token.
Case in point: Once upon a time, litecoin was seen as the silver to bitcoin's gold, but in recent years it hasn't had a strong reason to continue existing.

• MEI Pharma, a company devoted to developing cancer therapies, will buy $100 million worth of litecoin, funded through a private placement.
• The company, which lost money for the nine months ending in March, has typically traded in the $3 range for the last year. The deal fueled a 100% jump in price, with the stock now trading at $6.86.

Reality check: James Butterfill, the head of research at CoinShares, a digital asset-focused investment firm, tells Axios this crypto treasury theme could be the real altcoin season in this cycle.

• Butterfill calls the situation a "liquidity shift." There's plenty of money sloshing around, looking to go to work, some of it in a very meme stock mood, he notes.

What they're saying: Butterfill sees merit in the bitcoin treasury strategy, though he adds the theme might be running out of steam.

• "At least in some ways bitcoin is regarded as an emerging store of value," he says. Other cryptocurrencies are more like tech stocks, if they are even that, he cautions.

The bottom line: "Who's buying these companies?" Butterfill says. "It's the same people buying altcoins."






jog on
duc

 

[ducati916]

Credit where credit is due... I stole that headline from my pal Fil Zucchi, who writes Fil’s Randoms on the Markets on Substack. And whose most recent pieceis headlined, “The Rippee-dee-doo-dah Market.” The timing couldn’t be more perfect, plus as he explains...

Risks are everywhere of course, with the daily watch for incoherent tape-bombs from the orange ape, a less than ideal fiscal backdrop, geopolitics, etc. but nothing matters until it does. Did I forget about “valuations” having left the realm of “valuating”? Nope, but there too nothing matters until it does.

Or as my Ozarks friend, Bob Howard, who writes the Positive Patterns newsletter, puts it...

Reminds me of the summer of 1987 when I worked at Lehman. It was up, up, up, every day. Relentless... Then October came with a thud of reality.

But that’s for some point in the future. “Right now,” Bob says, “they are running around the party with lampshades and Krispy Kremes on their heads.”

Solar storm heating up... If you missed it, on Wednesday I wrote about why the squeeze in solar stocks was the silliest of all squeezes. I included this one-month chart on SolarEdge $SEDG, which showed a 97% gain.

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Yes, that gain was cut in half. For what it’s worth, even at its current price the stock is down 83% from where I first red-flagged it in August of 2023. At its depths it was down more than 90%. I’ll explain to Red Flag Alert readers, in an upcoming update, why it’s likely going... lower.

It’s moving time... You may have noticed my mentions here lately that I’m transitioning away from Substack to a new platform. Substack has been fantastic. It’s easy to use and brilliant in the elegance of its execution – which only gets better – and which is why it is now the king of all content. The missing link for me, and my drive for alternatives, has been marketing. I do zero, and would rather let somebody else do that heavy lifting. For current premium and free subscribers, the change will be seamless, with one exception: My archives will shift from Substack to the new website for Herb Greenberg’s Red Flags, which will be the umbrella for my premium Red Flag Alerts and my free, long-running Herb on the Street. I’ll be adding weekly video office hours for premium subs, plus a few other bells and whistles as we go forward... including a video backstory on any new Red Flag Alerts. Speaking of video... We’re spearheading the official transition this Wednesday at 2 p.m. ET with a live event, where I’ll be going through the anatomy of a scam – focusing on my recent coverage of WhatsApp stock scams, but also a focus on what I do... discussing some specific names that are currently on my Red Flags list.

Welcome back for another Top Down Trade of the Week. This is a classic leadership scan. We start with the best sectors, then drill into the subgroups. We pick one, and then take a look at the top stocks in it. This week’s standout is Materials, which cracked into the Top 3 of our rankings.

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It’s also worth highlighting Industrials, which held strong with their #1 rank this week. We want to keep shopping for long opportunities in this leading sector. And when it comes to laggards, how about Healthcare? We’re seeing pockets of strength emerge and are dipping our toes in. I posted a quick idea note yesterday with some of my favorite big-cap names—worth checking out if you’re looking to build some anchor exposure to the space. Here’s a look at our overall industry rankings, where Construction Materialsjust ramped into the top five.

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This group is quietly becoming one of the most important areas within Industrials and Materials. Below are the Top 10 Construction Materials names in the group, ranked by relative strength.

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This week’s favorite pick is Martin Marietta Materials $MLM.

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The stock has been stair-stepping higher, consolidating constructively at each level. With momentum building, MLM looks ready to kick off a fresh leg to the upside. As long as we’re above 530, I’m long with a target of 820.

The calm before the storm is over - this week will decide the market’s next big move. We just wrapped a wild stretch of earnings that gave us everything from best reactions in a decade to ugly double-digit selloffs. But that was just the warm-up. Now the spotlight shifts to the true market movers. Microsoft $MSFT, Apple $AAPL, Amazon $AMZN, and Meta $META are all set to report this week, and the stakes couldn’t be higher. Together, these four stocks are worth more than $11 trillion and comprise a substantial portion of the S&P 500 and Nasdaq 100. The charts are coiled, key resistance levels are being tested, and expectations are sky-high. As we’ve seen over the past two weeks, a simple beat isn’t enough - the market demands guidance, growth, and a clear roadmap for the AI-driven future. In this Weekly Beat, we’ll break down the critical setups for all four mega caps, show you how they’ve reacted over the past 12 earnings events, and highlight the levels that matter most. Because when the Magnificent 7 move, everything else follows. Let’s dive in.

What happened last week

Monday: Charles Schwab $SCHW reported a double beat and rallied nearly 3% to a new all-time high. The stock has been rewarded for 7 of its last 10 earnings reports. Netflix $NFLX beat its top and bottom-line expectations and raised its forward guidance, but fell over 5%. This snapped a 3-quarter beat streak. Tuesday: Verizon $VZ smashed the market's expectations and raised its forward guidance. The stock was rewarded with its 3rd-consecutive positive earnings reaction. Domino's Pizza $DPZ missed expectations across the board and fell nearly 1%. Shareholders have consistently been punished for the company's earnings reports for the last year. Wednesday: Northrop Grumman $NOC exceeded the market's expectations and rallied nearly 10% for its best earnings reaction this century. Net earnings increased nearly 30% year-over-year. Lockheed Martin $LMT missed the market's expectations and got blasted lower by nearly 11% for the worst earnings reaction in 15 quarters. Despite a disappointing quarter, management reaffirmed its forward guidance. Thursday: TE Connectivity $TEL reported a double beat and was rewarded with its best earnings reaction ever. Sales and EPS grew by 14% and 19% year-over-year, respectively. Texas Instruments $TXN beat the market's expectations, but cratered by over 13% in reaction to the event. The biggest concern was guidance... management is extremely cautious amid the ongoing Tariff War. Friday: Alphabet $GOOG smashed the market's expectations and rallied nearly 1% in reaction to it. Revenue and net income grew by 14% and 19% year-over-year, respectively. Tesla $TSLA reported a double beat, but the market didn't care... the stock sold off by over 8%.

What's happening next week

The week ahead belongs to Big Tech. We’re heading into one of the most pivotal weeks of earnings season. The Magnificent 7 dominate the U.S. stock market like never before, now accounting for roughly 25% of the entire market capitalization. And next week, four of the biggest - Microsoft, Apple, Amazon, and Meta - are set to report. Combined, they represent a market capitalization of more than $11 trillion. How these stocks react could determine the near-term path for the major U.S. indexes. Let’s dig into the charts and data to see what the setup looks like for each one.

Here's the setup in MSFT ahead of earnings

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Microsoft heads into earnings perched at fresh all-time highs after delivering its best earnings reaction since 2015 last quarter. Back in April, the stock beat on both revenue and EPS, sparking a multi-month rally that pushed it decisively above a shelf of former highs. Now it’s riding momentum into Wednesday’s after-market report. This time around, the Street expects $73.8 billion in revenue and $3.38 in earnings per share. The big question is whether Microsoft can deliver another upside surprise and sustain this historic breakout, or if expectations are too high after such a strong run.

Here are MSFT's earnings trends

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Examining the past 12 earnings reports, spanning the last three years, reveals a clear trend of consistent revenue and EPS growth, with Microsoft consistently beating expectations in 11 of those 12 quarters. However, the stock’s price reaction has been far more mixed... Even when the numbers looked great, the stock didn’t always rally. Three of the last five reports showed negative one-day reactions despite beats, highlighting the significant influence of forward guidance and market sentiment on the response. The best post-earnings rallies occurred during periods of high double-digit EPS growth and strong cloud momentum, while cautious guidance often led to selling pressure, regardless of headline beats. Going into this report, the setup is straightforward: there's little margin for error. A solid print could fuel further upside momentum, but even a slight miss or soft guidance might spark profit-taking.

Here's the setup in AAPL ahead of earnings

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Apple reports Thursday after the bell, and the stock is knocking on the door of a significant level of resistance defined by the VWAP anchored to its all-time highs. After a prolonged downtrend, AAPL has been basing for months, and now it’s right back at a critical inflection point. Consensus expectations call for $89.17 billion in revenue and $1.43 EPS this quarter. The market is laser-focused on iPhone demand trends, services growth, and any AI-related product updates that could drive the next cycle. A decisive move above $214 in AAPL would trigger a breakout from this multi-month base. But if earnings disappoint, sellers are likely to step in and force a longer consolidation.

Here are AAPL's earnings trends

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Apple has a long history of beating revenue and EPS expectations, but, like Microsoft, the price reactions have been anything but consistent. Over the past 12 quarters, AAPL has delivered double-digit EPS growth only sporadically, and revenue growth has been decelerating in recent quarters. What’s striking is the muted average reaction - even when they beat, the one-day price move often stays within a ±5% range, underscoring just how mature and widely held the stock is. For this quarter, investors are looking for evidence that the services business can offset slowing hardware sales, and any hint of an AI-driven ecosystem refresh would likely be rewarded. But if the numbers meet expectations without a forward-looking catalyst, the stock could stay trapped below that VWAP resistance.

Here's the setup in AMZN ahead of earnings

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Amazon also reports Thursday after the close. The stock has clawed its way back toward the highs from earlier this year. The chart shows a textbook accumulation pattern forming, making this a pivotal setup. Earnings could be the catalyst that decides whether it breaks out or needs more time in the box. Wall Street is expecting $162.11 billion in revenue and $1.33 in EPS, with a focus on AWS cloud growth and retail margins.

Here are AMZN's earnings trends

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Amazon’s past 12 quarters tell a clear story of AWS driving the bulk of profitability while retail margins remain volatile. Revenue beats have been consistent, but EPS surprises have been less predictable due to fluctuating cost structures. What’s notable is that positive earnings reactions often coincide with margin expansion in AWS and North American retail. At the same time, guidance-driven concerns about CapEx or logistics have caused sharp pullbacks even after headline beats. The stock is coiled and ready for a big move. A strong report with accelerating AWS growth could finally push AMZN to new all-time highs. However, any cautious commentary on cloud spending trends could trigger another rejection at the resistance level.

Here's the setup in META ahead of earnings

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Meta reports on Wednesday after the close. After a monster rally off last year’s lows, the stock is consolidating just below a key level of interest. This level has acted as a ceiling since May, and now the market is waiting for a fresh catalyst to break it. Analysts expect $44.78 billion in revenue and $5.87 in EPS this quarter, with ad revenue trends, AI investments, and Reality Labs spending under scrutiny.

Here are META's earnings trends

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Meta’s earnings history over the last 12 quarters has been a rollercoaster of massive beats and occasional sharp misses. Revenue growth has rebounded strongly following the post-2022 advertising slump, and EPS growth has been explosive due to cost cuts. However, the stock’s earnings reactions have been highly volatile - Meta has experienced both single-day rallies of over 20% and double-digit drawdowns. Guidance has been the key swing factor, especially around spending on AI and the metaverse. With the stock sitting just below resistance, the setup is binary. A strong ad growth print, combined with disciplined spending, could ignite a breakout. But if Reality Labs' cash burn or AI CapEx guidance spooks investors, we could see another sharp reversal. Thank you for reading.

Every weekend, I dive into our insider activity tracker looking for the most interesting and bullish buys — and this week brought some serious heat. Here’s the most notable activity:

Let’s start with Newegg Commerce $NEGG, where Vladimir Galkin dropped another $12.3 million into the online tech retailer. That brings his total spend over the past week to more than $24 million. Galkin is one of the company’s largest shareholders and has been aggressively increasing his stake while the stock squeezes higher over the past two months. Next up is Rocket Companies $RKT, where Nuveen Asset Management upped their stake from 5.57% to 7.90%. This comes just as housing-related stocks are catching a bid across the board. With RKT sporting a sky-high short interest, institutional buying could help fuel a squeeze. Three different CEOs also stepped up to buy their own stock this week — something we never ignore. The heads of Simply Good Foods $SMPL, Progress Software $PRGS, and Dave & Buster’s $PLAY all filed fresh Form 4s, scooping up shares on the open market. CEO buys carry serious weight — no one knows more about the business than they do. And rounding out the list is Strattec Security $STRT. GAMCO Investors increased their stake from 16.64% to 18.66%. GAMCO is the investment firm run by famed value investor Mario Gabelli. They specialize in fundamental, event-driven plays — and this one clearly has their attention.

So looking at the post re. earnings and the Mag 7 stocks and specifically Meta:





Full:https://www.reuters.com/business/zu...ndreds-billions-superintelligence-2025-07-14/


Which was posted last week as something noteworthy.

But here is the rather significant disconnect:





Full:https://www.bloomberg.com/news/arti...s-capacity-for-new-data-centers-watchdog-says




Full:https://www.reuters.com/sustainabil...grid-is-struggling-meet-demand-ai-2025-07-09/


So this problem is not isolated to AI data centres alone. We are talking about any and all industrial plant. Whatever is being manufactured, requires energy and that energy is usually delivered at the point of use as electricity.

So all the CEO's who sent their manufacturing base (plants and specialised workforce) offshore to China et al, are now going to reshore the plant costing hundreds of billions when there is no electrical infra-structure to power them?

Well




That looks like a hard no.


Of course that's just the start of the problems. The US simply no longer has a skilled workforce in manufacturing. It all died off in massive drug addiction and suicide when the mid-west was gutted of industrial plant which was then sent to China. What's left is near retirement age and working at Walmart as a greeter.


So is AI a bubble?

For my money yes. Much like the internet bubble where there was massive overbuild (supply) before the demand, the valuations were outrageous.

This time we have massive demand before we have supply, which results in the same massive overvaluations.

The supply is coming no time soon and China may well eat America's lunch before it actually happens.

So I am long Chinese AI via KWEB and short US AI via MAGS. Since I'm running out of uploads for charts, you will just have to look at the constituents yourself.

jog on
duc

 

[ducati916]

I was talking with a trader friend this weekend who reads all our research. The first thing he said to me was, “what’s with all the catch-up trades?” I thought it was a great question so I’m writing this note to answer it. The main idea is that there’s a time and a place for everything… and right now is primetime for catch-up moves. The strategy has a higher probability of success in an environment where breadth is expanding and losers are catching up to winners… and not the other way around. I’m basically describing the mid-to-late stages of a bull cycle. It’s where we are now. Correlations for stocks are moving higher and more and more things are working every day. Catch-up trades are simply betting that something that isn’t working starts working in the future. For example, when our housing index is ramping back toward its highs and homebuilders are on the mat — we buy homies and bet they look more like their industry peers in the future.

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It should look something like this. Or when all the Mag Seven stocks are working except Tesla and Apple, we get long those laggards and make the bet they get up to pace with the leaders. That’s catch-up trading in a nutshell. And because they eventually buy even the worst stocks in the best times, this strategy is perfect for the current environment. All things equal, these setups have a higher win rate in a market like today’s. But they are also perfect for Breakout Multiplier. It’s why so many of our big winners have come from these setups... and it’s why we keep seeking them out and buying them. Let me explain. Options are priced for the standard volatility of each individual stock. If the stock makes a directional move, but it comes with average volatility, it’s unlikely to be a great trade. The market does a phenomenal job at pricing these instruments for what is most likely to occur. Therefore, the magic with options tends to happen when you are in something that acts in a way it wasn’t supposed to. It’s when there is an unusual move… one outside a certain standard deviation… one that the greeks and options premia weren’t pricing in— that’s when you get the outlier winners. Just think about it. What does a catch-up trade usually look like? It’s when a stock makes an outsized move to get back in gear with its group. It’s when they sprint a bit to catch up with the pack, right? By definition, catch-up trades tend to come with above-average momentum and volatility. So when you buy options, which are priced for normal action, and the stock makes an abnormal move… You can earn abnormal profits from it. That’s what we’ve been doing in our Breakout Multiplier book all year. As long as the strategy keeps working, we’re going to keep working it. I guess my advice to you is to throw some catch-up on that dog every now and then. It’s grill season out here. Like any good New Yorker, I usually dress mine with mustard, sauerkraut, and onions… But, like I said, there’s a time and a place for everything… and now is the time for some ketchup— or catch-up. You get it.

Like what very well may have been my first appearance during the first year of my pal Jim Cramer’s “Mad Money” show on CNBC. Back then, with me living in San Diego, Jim had invited me on for a weekly segment called “East vs. West,” where I would generally take the other side to whatever he was talking about. In this case – silly me! – I was the bull. And die-hard newspaper guy that I was at the time, I was arguing the case for the few remaining public newspaper chains... in large part because at that time they were still producing gobs of free cash flow. But what Jim saw – as someone who was deeply ingrained in the rapidly evolving world of online media through his creation of TheStreet.com – was that newspapers were dying.

Coulda, Woulda, Shoulda...​

I coulda, woulda, shoulda seen it. After all, I was one of the first mainstream journalists to hop to what was then called “online journalism,” starting with six years at TheStreet, then a fledgling startup. Yet when it came to newspapers, I was no doubt in denial – blinded by legacy, loyalty and the cash flow, which at that point was merely starting to melt, not disappear. And let’s not forget, at the time three newspapers were still landing on my driveway... even though by the time they arrived, I had probably gone through all online except the San Diego paper, which I sometimes never took out of the bag. I was thinking about all of this when researching the two companies I’m adding to the Red Flag Alerts list... Both are likely to be hit by AI the same way newspapers were hurt by Craigslist, the rise of social media and whatever else ate into advertising revenue. And with both of these companies, the unwind is not evident quite yet if you just do a cursory look at the numbers.

Then Again...​

Disintermediation is not always easy to see in the early stages, which is why it’s so easy to dismiss in the moment. We’ve seen it over and over... Newspapers thought they could beat it with their own online operations.... Cable thought the answer would be its pay-per-view. Broadcasters, well... as kings of the content hill they simply didn’t see their own rapid decline coming until it arrived. The same is true with these companies, which both say they’ve endured change before and will now, in fact, thrive with AI. And it very well may be, by helping them cut costs. But thanks to the rapid adoption of the early rounds of generative AI, it’s helping their customers cut costs too... by taking some of that outsourced business in-house. That, in turn, is starting to siphon off business. Which gets to these two companies...

• The Nikkei just made its first new high in 35 years.
• My friend Todd Sohn is the Michael Jordan of ETF analysis.
• Here's how to play Japan like a champion.

Japan is probably my favorite country to visit in the entire world.

I've been fortunate enough to be able to do that a half dozen times over the years. Whenever I'm there, I'm reminded how much I love it.

The food, the culture, the history. It's awesome.

Did I mention the food?

There's a park in Tokyo, basically the grounds surrounding the Imperial Palace.

In 1989, this land was worth more than all of the real estate in the entire state of California combined.

And that's when the Japanese stock market crashed.

Japan Today​

I've been to this plot of land. It's nice.

But more than all of California?

It's no wonder it took Japan more than 35 years just to get back to these levels.

But here we are.

Look at Japan's Nikkei closing up the quarter at its highest prices ever – finally exceeding those 1989 highs:



For perspective, when Japan's bubble peaked, Michael Jordan didn't have any NBA championships yet.

Tiger Woods was 13 years old and playing in his first major national junior tournament.

Funny enough, he was paired with then-unknown pro golfer John Daly, who beat Tiger by one stroke.

That was a long time ago.

But we're back.

Japan is at new all-time highs once again.

It's the Stocks, Not the Currency​

A lot is said about the Japanese stock market and whether the weaker yen is what's driving prices up.

And, over time, we can make that argument, sure.

But I prefer to look at the data.

First off, take a look at the WisdomTree Japan Hedged Equity ETF (DXJ), hedged in yen.

In other words, this ETF gives investors the ability to own Japanese stocks priced in their local currency.

It just closed the week at new all-time highs:



This is impressive. And investors here in the United States are making a ton of money on DXJ.

I'm friends with the folks over at WisdomTree. They know how much I love this vehicle they've built. I tell them all the time.

But now let's take a different look.

Here's the iShares Japan ETF (EWJ), which prices Japanese stocks in U.S. dollars. So this one is not hedged, like the WisdomTree ETF.

This one doesn't get the benefit of a weaker yen:



It's not the currency.

It's the stocks.

So What's the Solution?​

A good question to ask here – one that certainly comes up all the time – is which one do we want to own?

Do we want to own Japanese stocks priced in the local currency or the US dollar?

My follow-up question usually revolves around whether you want to be a currency trader or if you just want exposure to Japanese stocks.

Because if the answer is the latter, my friend Todd Sohn has a great solution.

Todd is the Senior ETF & Technical Strategist at Strategas Securities, and he does a better job of analyzing ETFs and their fund flows than anyone else I know.

I don't say that because he's a friend. Todd really is the man.

And his suggestion is a fantastic one.

If you're interested in owning Japanese stocks but don't want to play the currency game, you can own both DXJ, which prices Japan in yen, and EWJ, which prices Japan in the U.S. dollar.

If you own both, the currencies offset each other, and you just own Japanese stocks.

If that's what you're trying to do in the first place, and not play Forex Trader, there you go!

And, with Japan making new all-time highs, this is an area we want to keep looking to for exposure.

But wait, there's more...

Japan Part Deux​

I told you how much I love visiting Japan. I've been to baseball games out there, and even got escorted off the floor of the Tokyo Stock Exchange.

There are stories about Japan that I haven't shared yet.

We'll leave it here for now.

But stay tuned, because I need to tell you what sumo wrestling taught me about investing...

Stay sharp,

ICYMI: in Sunday's Weekly Beat, we outlined everything you need to know ahead of Big Tech earnings week. Together, the four mega-cap tech stocks reporting this week are worth more than $11 trillion and comprise a substantial portion of the S&P 500 and Nasdaq 100. If you're an American investor, we can almost guarantee these stocks will have an impact on your portfolio. Check it all out here before it's too late.

Earnings season isn’t slowing down - and neither are the market reactions. We’re seeing significant moves on both ends of the spectrum, with some stocks surging to new highs while others are being obliterated. It’s a reminder of how vital this data is, especially for stocks at key levels of interest. In today’s Daily Beat, we’re breaking down the most notable earnings reactions from Friday and spotlighting the charts that matter most. Let’s get into it!

Here are the latest S&P 500 earnings reactions

​

*Click the image to enlarge it VeriSign $VRSN had a +4.12 reaction score after reporting a double beat. This was the stock's 3rd consecutive positive earnings reaction. They reported revenues of $5.32, versus the expected $4.85, and earnings per share of $1.43, versus the expected $1.16. Charter Communications $CHTR had a -7.61 reaction score after reporting mixed results. This was the worst earnings reaction in the stock's history. They reported revenues of $13.77B, which met the market's expectations, and earnings per share of $9.18, versus the expected $9.58. Now let's dive into the data and talk about the most important reports

VRSN had its 3rd consecutive positive earnings reaction

​

VeriSign rallied 6.7% after this earnings report, and here's why:

The company grew revenues and operating income by 5.9% and 5.4% year-over-year, respectively. The renewal rate improved to 75.5% from 72.7% year-over-year, with broad-based growth across all regions, particularly in the Asia-Pacific region. In addition to the excellent report, the board increased its share repurchase authorization by $913M, bringing the total to $1.5B (roughly 5% of the current market capitalization).

This was another solid quarter from the "utility of the internet". We like how the market consistently rewards this company for its earnings reports. It adds to our conviction in the technicals. The stock has now decisively broken out of a .com bubble base, entering a brand-new primary uptrend. We think this new trend could last for years. So long as VRSN holds above 258, the path of least resistance is likely to remain higher for the foreseeable future.

CHTR had its worst earnings reaction ever

​

Charter Communications fell 18.5% after this earnings report, and here's why:

The company missed its earnings expectations by a country mile. They lost over 100,000 broadband subscribers. This company is on the wrong side of a mega trend away from traditional cable television (ahem, YouTube TV).

This earnings reaction is as bad as it gets... the market hated this report! In addition, the technicals are suggesting more downside is on the horizon. After a multi-decade secular uptrend, the stock has carved out a textbook distribution pattern. We think there's a good chance the bears put the finishing touches on this top before the end of 2025. If and when CHTR closes below 236, the path of least resistance will decisively shift from sideways to lower for the foreseeable future. Thank you for reading.

Red Flag Alerts With Herb Greenberg And Steve Strazza

See how Herb uncovered the OST stock scam.

www.stockmarkettv.com

• A journalist, an analyst, and a blind squirrel walk into a bar...
• This doesn't happen every day, though it's less than miraculous.
• Indeed, "Bitcoin will go up if more people buy."

If you've been following along, it's not every day I agree with journalists.

Me agreeing with bank analysts is also something you won't see often.

However, this week they did something that really made me stop and say, "Yes, that is 100% accurate."

Here's a Financial Times headline from Friday morning:

Bitcoin will go up if more people buy Bitcoin and won't if they don't: Citi
"A bitcoin is worth what the next person will pay for it," the FT journalist, Bryce Elder, writes. "The same can be said of a lot of assets."

Yes. Yes. And yes again. All correct and accurate reporting.

I never thought I'd see the day. But here we are.

I agree with Bryce. And I agree with the Citi analyst he's quoting.

As far as the rest of the article goes, I don't know. I don't read those things.

But the headline and first sentence? Spot on!

And that's how we want to think about markets, whether it's Bitcoin (BTC), shares of Apple (AAPL), or the direction of Gold.

If there are more buyers than sellers, prices go up.

The opposite is also true too: If there are more sellers than buyers, prices go down.

Now, of course, for every buyer there must be a seller.

But there aren't an equivalent number of buyers and sellers at every price.

And that's where the market's process of price discovery comes into play.

We all know of many people – professionals and otherwise – who didn't own enough stocks...

Or sold their stocks too early...

Or, worse, have been shorting the market during one of the greatest rallies of all time.

In most of these cases, I'd argue they were scared away by arbitrary things such as valuations and/or geopolitics.

Those things can be scary, especially for people who are bad at math.

But if you've studied markets, you'll see that if there are more people buying, prices go up.

So that's all we focus on – the buyers and the sellers and how many of them are left to buy, or to sell.

Usually, we'll point out how everybody's wrong. But, in this case, they're right – the journalist and the analyst.

Prices will go up if more people buy. And they won't if they don't.

Facts only.

Well done, FT journalist. Well done, Citi analyst.

Let's see if we can make all this truth-telling a habit.

I'll take the under...

See a Setup No One's Talking About?​

We want to hear about it — Send it our way, and we might break it down in a future issue.
Please note: We can't respond to personal investing questions, but we may feature your topic in a future issue.

This Week in Everybody's Wrong​

On Monday, we broke down a huge misconception about "good companies," "fundamentals," and price.

Markets move based on mispositioning, folks.

Here's why we continue to look for opportunities in speculative high-growth tech stocks.

On Tuesday, we talked about the sloppiness of the modern mainstream media.

These folks will lie to you – deliberately, and a lot, but often without even knowing it.

But, around here, we have standards.

On Wednesday, we discussed a real headline from a real newspaper.

The Wall Street Journal posed this wonder: "Why Are Stocks Up? Nobody Knows"...

Here's why we're betting all those folks who aren't participating and who are betting against this rally will be wrong.

On Thursday, I posted a defense of Jim Cramer – say what you will, his first book is a classic.

And, in fact, Cramer is onto something lately.

I'm talking about "short squeezes" and our repeatable system to profit from them.

On Friday, I wrote the one about Rasheed Wallace.

Rasheed is a basketball legend, a low-key genius who understands what he's looking at and knows how to express it.

"Ball Don't Lie" is the truth...

On Saturday, Senior Analyst Jason Perz provided a rewarding read at the end of another good week.

Jason goes deep on self-awareness and human behavior.

At the end of the day, "trading in good faith" is a true path to freedom.

Have a great Sunday.

We'll see you Monday morning...

Stay sharp,

• The market has a feast of earnings and economic data to digest this week, including earnings from four of the Magnificent 7. $MSFT and $META report on Wednesday, followed by $AAPL and $AMZN on Thursday.
  
  
• While the S&P 500 logged its 15th record high of the year today, the Mag7 index hasn’t logged a single one. That could change this week, as the group sits just whiskers below its December peak ahead of earnings.
  
  
• With these seven names comprising roughly one-third of the S&P 500, the two indices look nearly identical. If the Mag7 finally breaks out, it will reinforce the trend in the S&P 500. However, rejection here could pressure the broader market.
  

The Takeaway: The Mag7 hasn't logged a record high this year, but the index is flirting with its December peak ahead of a busy earnings week. A breakout would confirm the trend in the S&P 500, while rejection could pressure the index.







jog on
duc

 

[ducati916]

Health Care has become the forgotten sector. It’s been the worst performer year-to-date — totally left behind while everything else trends higher. Nobody wants to touch it as the risks have been well advertised. And it shows. The sector just wrapped up one of the worst streaks of underperformance in its history. But here’s the thing about market extremes like this. When everyone’s piled onto one side of the trade… there’s no one left to drive it any further. That’s precisely when the tide turns. So what if Health Care starts catching a bid? What if it plays a little catch-up here? Strazza’s been pounding the table about this strategy lately. And to us, Health Care fits the bill perfectly for the next rotation. Now, if we’re going to talk about Health Care, we have to talk about Biotech. It’s the most aggressive corner of the space — high beta, ultra-sensitive to interest rates, and pure risk-on. And right now, it’s knocking on the door of a huge breakout. Just pull up the chart of the cap-weighted Biotech ETF $IBB.

​

It’s pressing right up against 135 — and that level matters. It marks the prior cycle highs from 2015. It’s also where the anchored VWAP from the all-time highs lands. And if you throw on a volume-at-price indicator, you’ll see a massive buildup of price memory right around that area. This major polarity zone has acted like a magnet for nearly a decade. Any decisive move above 135 could light the fuse and mark the beginning of a new leg higher. Don't sleep on biotechs. We’re not.

One of the key tenets of the US-EU trade deal, namely that European countries would buy $750 billion of American energy over the next three years, would be close to impossible to achieve.

- Europe’s total energy imports from the US already totalled slightly south of $80 billion last year, after LNG deliveries ticked in at 36 million tonnes and crude oil supplies soared to a record 74.5 million tonnes.

- Tripling current energy flows would be a Herculean task, with European refining demand handicapped by the closure of four plants in 2025 and regional gas consumption to increase by 1.5% from last year, equivalent to roughly 3 million metric tonnes of incremental LNG.

- The pledge could be further watered down by the EU counting its investments into the US energy sector as part of the $750 billion, as well as Brussels counting new nuclear projects into it even if none of the small nuclear reactors would see daylight this decade.

Market Movers

- Global mining giant Rio Tinto (NYSE:RIO) is reportedly considering the sale of its titanium unit due to weak prices and low returns, finding it hard to compete with mushrooming Chinese mines.

- US LNG developer Venture Global (NYSE:VG) announced that it had reached a final investment decision on the $15 billion Calcasieu Pass 2 project, aiming for peak capacity of 28 mtpa with first deliveries starting in 2027.

- US power company Duke Energy (NYSEUK) stated it would sell its Tennessee natural gas distribution business to regional utility firm Spire (NYSE:SR) for $2.5 billion in cash, seeking to unlock capital to invest in grid upgrades.

- Thailand’s national oil company PTT bought out the 50% ownership share of US oil major Chevron (NYSE:CVX) from the offshore A-18 block in the Malaysia-Thailand Joint Development Area for $450 million, taken over following its Hess acquisition.

Tuesday, July 29, 2025

Donald Trump continues to be the main newsmaker across the globe, shortening the deadline for Russia to make progress on its Ukraine ceasefire talks, threatening secondary sanctions on buyers of Russian energy. This was enough to lift ICE Brent futures above $70 per barrel, further buoyed by market optimism that US-China trade talks could bear fruition after Trump squeezed out a deal from the European Union.

OPEC+ Calls For Better Compliance. Ahead of the full OPEC+ meeting this Sunday, ministers from the Joint Ministerial Monitoring Committee reiterated the oil group’s need for better compliance with oil production quotas, asking non-compliant nations for compensation plans by August 18.

Qatar Threatens EU over Human Rights Regulations. Qatar has threatened to cut LNG deliveries to Europe if Brussels doesn’t amend its corporate sustainability due diligence directive, which requires regional buyers to find and disclose human rights and climate policy violations in their supply chains.

Norway Still Suffers From Compressor Blues. Problems with the Hammerfest LNG terminal’s compressor system have prompted Norway’s state oil company Equinor (NYSE:EQNR) to extended its three-month maintenance outage at Europe’s largest LNG export facility to August 3.

The American AI Boom Is Straining the US Grid. The rapid rise of power demand from data centre developers has prompted US grid operator PJM, covering most of America’s Mideast, to issue nine top-level emergency alerts over the past five weeks, compared to just one last summer.

It's Good to Be a Vitol Employee. Global trading house Vitol Group paid out $10.6 billion through its employee buyback scheme last year, the highest ever payments after its share buybacks soared to a then-record $6.4 billion in 2023, even though the firm’s net profit fell from its 2022-2023 peak.

Trump Lays into UK Oil Policy. US President Donald Trump criticized the United Kingdom’s oil and gas policy, describing the North Sea as a ‘treasure chest for the country’ and called on the Starmer government to lower its 78% windfall profit tax to incentivize oil drillers to produce more.

Aided by the State, Mexico’s Oil Industry Churns Out Profits. Mexico’s national oil company Pemex reported a net profit of $3.17 billion in Q2 2025, despite its revenues falling 4.4% compared to Q1 on lower oil prices, with the NOC reporting a $5 billion financial stimulus from the Mexican government.

Brussels Seeks to Derail UAE’s Expansion. The European Commission has opened an in-depth investigation of ADNOC’s $17 billion bid for German chemicals giant Covestro, agreed in October 2024, alleging that UAE subsidies and capital increases could distort Europe’s internal market.

Russia Slaps Ban on All Gasoline Exports. The Russian government imposed a full ban on the exports of gasoline until the end of August, citing runaway domestic prices that have come within a whisker of surpassing the all-time high of ₽76,875 per metric tonne ($970/mt) from September 2023.

Baker Hughes Expands Into LNG Equipment. US drilling giant Baker Hughes (NASDAQ:BKR) agreed to buy Chart Industries in a $13.6 billion all-cash deal, marking this year’s largest oil services M&A deal to date, boosting its exposure to valve and measurement technology in LNG and gas projects.

Sanctioned Refiner Takes Microsoft to Court. Russian-backed Indian refiner Nayara Energy, having appointed a new CEO in Sergey Denisov this week, started legal proceedings against Microsoft (NASDAQ:MSFT) following the unilateral suspension of its Outlook email accounts and Teams.

Global Coal Mining Capacity Tapers Off. New coal mining capacity fell to a 10-year low last year, with miners worldwide adding just 105 million tonnes of capacity, however researchers warn that the slowdown in China and India is mostly down to delays in regulatory approvals.

Chile Talks Will Define Copper’s Next Move. Prices of copper have been easing lately, with the LME three-month contract dipping to $9,760 per metric tonne after Chile asked the Trump administration to include copper in their upcoming trade talks, potentially exempting it from the punitive 50% tariff.







Indecision may or may not be my problem.” Jimmy Buffett





Stocks continue to trend higher, yet I’m noticing a few myths starting to show up that are meant to scare investors. In today’s blog, we are going myth busting!

Myth 1: No, Market Breadth Isn’t Bad​

I’ll be honest, I don’t get where this one comes from, but it seems like every few weeks I hear about it and I’ve been hearing it more and more lately. There is a myth out there that the market is top heavy and only a few stocks are pulling things up. We’ve been hearing this one for years now and it simply isn’t true. Given the amazing returns we’ve seen the past few years, it’s hard to believe this continued worry doesn’t have a lot of holes, and it does.

For starters, all 11 S&P 500 sectors are up year to date. Spoiler alert, each year you’ll have some groups do well and some lag—that is normal. But to see all 11 sectors up YTD tells you this is a healthy market, not to mention various countries making new highs. Heck, Japan is making new highs after 35 years as this global bull market continues. That isn’t weak breadth.



Then just last week we saw the S&P 500 equal weight index hit new highs, further showing breadth is anything but weak, as you wouldn’t see this if only a few stocks were going higher. On to the next myth.

Stay on Top of Market Trends​

The Carson Investment Research newsletter offers up-to-date market news, analysis and insights. Subscribe today!



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Myth 2: Margin Debt Of $1 Trillion Is Bad​

According to recent data from FINRA, the amount of margin debt is at a new record and above $1 trillion for the first time ever. Many claim this shows massive excesses and suggests a major bubble is about to pop, but once again, this isn’t true.



You see, this is another example of denominator blindness. The numerator might be high, but we have to consider the full picture. To get a more apples to apples comparison, let’s look at margin debt as a % of the overall market cap. Stephen Suttmeier of Suttmeier Technical Strategies put together this great chart that compares margin debt and the overall market cap of the US stock market.



Looking at it from this point of view shows a much different picture. Yes, margin debt might be ‘high,’ but compared with the market cap of the stock market we aren’t anywhere near past major peaks. The current 16% level is well off the 30% before the Great Financial Crisis or over 20% at the peak of the tech bubble. This is yet another myth that you shouldn’t get too worked up over. Now for the final myth.

Myth 3: Foreigners Will Sell All of Our Debt​

We’ve long heard that China owns a bunch of our debt and they could sell it to hurt us. But let’s look at some numbers. Back during the worst of the trade war we were again told that foreigners would sell our debt, as they didn’t want to own US based assets, but once again, the data shows this isn’t true and it is another myth.

Recent data from the Treasury showed that not only have foreign holders of our debt increased recently, they added US equity holdings as well. This is another sign that demand is higher for US assets and it was only a myth when they tried to scare you into thinking this wasn’t true.



Thanks for reading and I hope you can have some fun in the last couple weeks of summer!







jog on
duc

 

[ducati916]

• "Average" is not reality.
• In fact focusing on "average" is dangerous.
• We can do much better than "average."

It's common knowledge at this point that the average annual return for the S&P 500 is somewhere between 8% and 10%, depending on what year you start counting.

You even see these numbers among many sell-side analysts when they come out with their year-end projections.

As Salvadoran author and filmmaker Erwin Raphael McManus said, "Average is always a safe choice, and it is the most dangerous choice you can make."

But the truth is, the S&P 500 almost never returns between 8% and 10%.

This is the "average" return.

But we simply do not live in an average world.

When 'Average' Happens​

My friend Ryan Detrick is the Chief Market Strategist at Carson Group, a large investment advisory with more than $40 billion in assets under management.

He published a chart this week providing a great reminder to all investors that this 8%-to-10% average return is actually extremely rare.

We've only seen returns fall within this range four times since 1950.

That's it: four times.



Stock market returns are historically a lot more, or even a lot less than 8% to 10%.

As of this morning, the S&P 500 is up 8.64% in 2025, falling within the historical average of returns over the years.

But as we know, the likelihood of the return ending up here is slim.

Our bet is we're likely to finish 2025 with much higher returns, like the S&P 500 did last year with a gain of 23%, and the year before that, when it was up 24%.

Everybody's Wrong ​

In this case, everybody actually is wrong.

They confuse "average" with reality.

We do not live in an average world.

If I'm standing up and I have one foot on hot coals, and one foot in a bucket of ice water, my body temperature is about "average."

You can't argue with that. It's the volatility in that temperature that is not being accounted for with that statement.

When you look at the S&P 500, you'll find that some years it's up 43% or 54%. Some years it fell 37% and 43%.

These volatile returns are much more common than the 8% to 10% average return.

It's because we don't live in an average world.

We never have.

And my bet is we never will.

So we're acting accordingly and betting on returns this year that don't fit within the average.

Stay sharp,









Michael Saylor rebuts comparisons to closed-end funds such as GBTC (see Part II, here) by pointing to MicroStrategy’s significantly greater flexibility as an operating company:

Sometimes I see..a Twitter analyst saying, oh, this is just like when GBTC and Grayscalewent below one times mNAV before. And what they miss is that Grayscale [GBTC] was a closed-end [fund]. And we're an operating company.
A [fund like GBTC]…has no operational flexibility to manage its capital structure…it doesn't have the option to refinance or take on leverage or to sell securities, buy securities, recapitalize, or buy their own stock back.
Operating companies [like MicroStrategy] have much more flexibility. We can buy stock, sell stock, recapitalize. We can take on debt to fix or to close a gap.

This distinction, however, overlooks a certain historical irony: the investment trusts of the 1920s pioneered the very capital structure innovations that make today's Bitcoin treasury companies so compelling to investors—and created the same reflexive dynamics in the 1920s that we observe today.

As Galbraith documented, the investment trust had evolved into something far more sophisticated than a simple pooled investment vehicle such as GBTC—it had become a flexible corporate structure of exactly the type about which Saylor boasts today:

The investment trust became, in fact, an investment corporation. It sold its securities to the public—sometimes just common stock, more often common and preferred stock, debenture and…bonds—and the proceeds were then invested as the management saw fit. Any possible tendency of the common stockholder to interfere with the management was prevented by selling him non-voting stock or having him assign his voting rights to a management-controlled voting trust.

Lyn Alden makes similar observations about contemporary Bitcoin treasury companies:

Publicly-traded operating corporations have access to better types of leverage than hedge funds and most other types of capital. Specifically, they have the ability to issue corporate bonds…often with multi-year durations. If they hold bitcoin and the price dips, they don’t have to sell prematurely. This gives them a better ability to weather periods of volatility than entities that rely on margin loans. There are still bearish scenarios that could force corporations to liquidate, but those scenarios would involve a much longer bear market occurring, thus making them less likely.

Long-Term Debt And Reflexivity​

​

Lyn's analysis above—while accurate for any individual company in isolation—overlooks the systemic risk that emerges when these "safer" leverage structures proliferate. Just as long-term 30 year mortgages didn’t prevent the 2008 crisis, any long-duration debt doesn't inherently eliminate systemic risk; it may even amplify it.

During the boom years of the late 1920s, financial alchemy magnified returns through the same self-fulfilling prophecy that benefits Bitcoin treasuries today: rising asset prices and mNAV premiums enabled more leverage and “torque”, which in turn pushed asset prices higher still. But this reflexive loop made the system inherently unstable. As we saw, these complicated capital structures were far more than passive funding instruments—they played an integral role in fueling both the bubble's spectacular inflation and its subsequent collapse.

Like cheap hurricane insurance after a series of quiet storm seasons that spurs a building boom, the apparent safety of termed-out debt in a bull market may encourage more leverage, creating larger positions and asset inflation that ultimately amplifydownside volatility rather than dampen it. The newfound availability of "affordable" protection against forced liquidation triggers a spectacular expansion of risk-taking along the waterfront—until the inevitable hurricane arrives and the insurance marketplace itself collapses. When hundreds or thousands of companies adopt the same capital structure and business model of speculating on a “one way bet”, what appears individually prudent can easily become collectively destabilizing. In financial “progress”, the dose makes the poison.





While "hyperbitcoinization" and "Bitcoin banks" may offer future opportunities to change this dynamic, Bitcoin currently generates no cash flows, pays no dividends, and yields no interest. This creates a structural vulnerability that the 1920s trusts, for all their flaws, did not face. Bitcoin treasuries, lacking even the income streams of 1920s trusts, tend to be more vulnerable to these pyramid dynamics—not less. Their viability—even within the context of a long term bull market during which Bitcoin appreciates tenfold—is entirely path-dependent, hinging on continued appreciation, access to credit, and investor enthusiasm. Break the chain—possibly by oversaturation of leveraged bitcoin treasuries themselves—and the structure unravels, as we will discuss in the forthcoming Part IV of the series.








Full:https://bewaterltd.com/p/bitcoin-treasurycos-lessons-from


A really interesting article.

Ben Graham also goes into a really detailed and extended analysis of the 1920's Trusts in 'Security Analysis 1934 Edition'.

After reading this article, I just had to take a short position in BTC via IBIT ETF. I'm preparing for some pain, so it is a partial position.




I have to admit that although there exists a rational argument, part of this trade is pure emotion. BTC is (IMO) an absolute fraud and Ponzi scheme and Mr Saylor just irritates the bejesus out of me with his condescending attitude.

In other developments, I'm testing a new weekly system on the QQQ's.

So probability of success = 44%
R/R = 10:1

So basically a 50/50 shot, but a massive payout if it hits. So risk $5 for $50. Obviously you can leverage that up. I'll give it a month or so and see what happens.


jog on
duc

 

[ducati916]

Full:https://www.ft.com/content/7052c560-4f31-4f45-bed0-cbc84453b3ce


E-Books:https://lefsetz.com/wordpress/2025/07/26/e-book-revolution/


Memes:https://arstechnica.com/culture/2025/07/the-case-for-memes-as-a-new-form-of-comics/




Memes drive stocks, definitely.

• Copper just had its worst day ever, plunging -18.4%, to a two-month low of $4.62 per pound.
  
  
• Just three weeks ago, the metal had its best day ever, surging +13% to record highs earlier this month following Trump’s initial plan for a 50% tariff on Copper imports. However, he dialed it back today and sparked the reversal by exempting refined metals from the tariff.
  
  
• With one trading day left in July, Chris notes that today's reversal could leave the largest bearish reversal wick in over 20 years. Similar reversals took months, or even years, to recover from.
  

The Takeaway: Copper had its worst session ever today, just three weeks after its best session ever. The monthly candle will likely close with a massive upper wick, resembling other meaningful tops in the past two decades.

ICYMI: Microsoft $MSFT & Meta Platforms $META are soaring on the heels of their blockbuster earnings reports. Will Apple $AAPL & Amazon $AMZN follow suit? In Sunday's Weekly Beat, we outlined everything you need to know ahead of Big Tech earnings week. Together, the four mega-cap tech stocks reporting this week are worth more than $11 trillion and comprise a substantial portion of the S&P 500 and Nasdaq 100. If you're an American investor, we can almost guarantee these stocks will have an impact on your portfolio.

We just got a fresh wave of earnings reactions from over 30 S&P 500 components - and the tape doesn’t lie. While some companies are riding the AI wave and breaking out to multi-year highs, others are selling off despite delivering double beats. The market is drawing a clear line between winners and losers this quarter - and it’s not always about the numbers. Beneath the headlines, there are some surprising standouts and some brutal punishments. We're seeing under-the-radar names explode higher on renewed growth stories, while global giants like Visa are getting the cold shoulder from Wall Street despite strong fundamentals. Let’s unpack the top and bottom reactions and highlight what they mean for investors as we advance.

​

*Click the image to enlarge it Generac $GNRC had a +7.34 reaction score after reporting a double beat. This was the best earnings reaction since 2012. They reported revenues of $1.06B, versus the expected $1.03B, and earnings per share of $1.65, versus the expected $1.32. Teradyne $TER had a +5.62 reaction score after reporting a double beat. This was the 3rd-best earnings reaction ever. They reported revenues of $650M, which met the market's expectations, and earnings per share of $0.57, versus the expected $0.54.

​

*Click the image to enlarge it IDEXX $IEX had a -7.38 reaction score after reporting a double beat. This was the stock's worst earnings reaction ever. They reported revenues of $111.62B, versus the expected $111.50B, and earnings per share of $4.08, versus the expected $4.48. Mondelez $MDLZ had a -5.75 reaction score after reporting a double beat. This was the stock's worst earnings reaction since the Great Financial Crisis. They reported revenues of $8.98B, versus the expected $8.86B, and earnings per share of $0.73, versus the expected $0.68. Now let's dive into the data and talk about the most important reports

GNRC had its best earnings reaction since 2012

​

Generac rallied 19.6% after this earnings report, and here's what happened:

They grew revenue and adjusted EBITDA by 6% and 17.7% year-over-year, respectively. This growth far outpaced the market's expectations. Formally launched large megawatt generators for data centers, with initial shipments to begin soon and most backlog realized in 2026. In addition to the excellent report, the management team raised its EBITDA margin guidance.

This is another under-the-radar winner of the AI Revolution. They're benefiting from new data centers across the U.S., much like Corning $GLW. We love how the market rewarded the stock with its best earnings reaction in decades. This adds to our conviction in the bullish fundamental story. The streak of 5 consecutive positive earnings reactions is another point for the bulls. The price surged above a key pivot high from earlier this year, and we're expecting more upside follow-through. So long as GNRC holds above 165, the path of least resistance is decisively higher for the foreseeable future.

V was punished for beating expectations

​

Visa fell 0.1% after this earnings report, and here's what happened:

They grew revenue and net income by 14% and 8% year-over-year, respectively. They're also seeing +32% top-line growth in the Other Revenue segment, which is being driven by advisory and value-added services. Payments volume grew 8% year-over-year in constant dollars; U.S. volume up 7%, international up 10%, cross-border (ex intra-Europe) up 11%. They're also expanding stablecoin capabilities, adding support for new coins and blockchains, and deepening partnerships in emerging markets.

Despite being one of the most powerful companies in the Financial sector and growing by double digits, this report wasn't enough for the market to buy it. However, we think this name will likely buck this quarter's earnings reaction and reach new all-time highs soon. While we expect more chop in the short-term, there's still a textbook bearish-to-bullish reversal pattern unfolding over more extended time frames. Our line in the sand for who's in control (e.g., bulls or bears) of the trend is the VWAP anchored to the year-to-date peak. We think the path of least resistance for V is sideways for the foreseeable future.

• What's a few hundred billion among friends?
• This is not bear market price action.
• We're calling our offensive plays.

Last night, in a matter of minutes, we saw $500 billion added to the market.

Microsoft (MSFT) reported earnings after the close yesterday. Immediately after the release, the stock was up more than 8% in after-hours trading.

That's $300 billion added to what's already the second-largest company in the world.

If that wasn't enough, Meta Platforms (META), the artist formerly known as Facebook, rallied more than 12% after hours, the equivalent of $200 billion in market cap.

In just a few minutes, two companies alone added more than $500 billion in value to the market.

Literally minutes...

Microsoft Hits $4 Trillion​

Microsoft is already one of the biggest winners of this entire bull market, and it's also one of the leaders during this historic rally off the Spring lows.

Good news comes in the direction of the underlying trend. That's how I learned it.

Here's another example. I don't know what Microsoft said, or what was so special about its earnings. That's not anything we care about around here.

All I know is it was enough to rally the stock up another $300 billion to a new all-time high:



It was also enough to make Microsoft the second company in history to reach a $4 trillion market-cap.

What's another few hundred billion among friends?

For perspective, this $300 billion dollars Microsoft added to its value in just a few minutes is more than the market cap of 475 of the companies in the S&P 500.

Meta Approaches $2 Trillion​

Meanwhile, a few minutes after MSFT ripped in the after-hours market last night, Meta Platforms reported its numbers, and the stock exploded higher - up 12% in just a few minutes.

That's another $200 billion in market-cap and another new all-time high:



It puts META close to that $2 trillion market-cap threshold, something only a handful of companies have ever been able to top.

The world's biggest companies hitting new all-time highs and creating hundreds of billions of dollars in profits for their shareholders in a matter of minutes is not something you see in bear markets.

These are the types of moves you see in risk-on environments.

The offense is on the field. We want to be calling our offensive plays.

And that's what we're doing.

Asset managers are underexposed to this market. We know - we have the data.

They've been wrong. They're still wrong.

And, until they correct that, the path of least resistance for stocks remains higher.

I've gone back and done the work. During bull markets, investors who own stocks make a lot more money than investors who do not own stocks.

Go back and see for yourself. You'll notice the same thing.

Stay sharp,

The central debate over monetary policy right now is whether America's economic waters are fundamentally calm or hazards just beneath the surface demand urgent rate-cutting action. The big picture: Chair Jerome Powell and the majority of his colleagues are in the former camp, as was evident in yesterday's news conference. Powell rejected the idea that there are simmering problems — including underlying labor market weakness — caused by too-high interest rates that haven't fully revealed themselves. And three years into the Fed's war on post-pandemic inflation, its leaders do not believe they have fully won — even before accounting for the likelihood of more tariff-driven inflation showing up in the numbers in the months ahead. The upshot: Don't count on lower interest rates unless clearer evidence emerges that elevated rates are doing meaningful damage to the economy. State of play: A dozen or so times in Powell's news conference yesterday, he deflected the notion that the economy is weaker than it appears due to elevated interest rates. "The economy is not performing as though restrictive policies were holding it back," Powell said at one point. He added later that "if you look at the labor market, what you see is, by many, many statistics, the labor market is ... still in balance." He seemed prepared for the possibility that headline job growth will falter in the months ahead as immigration policy causes less labor supply — arguing that against that backdrop, it's more important to watch the unemployment rate, which has been steady this year. Driving the news: New data out this morning supports Powell's view of underlying stability and ongoing inflation risk. Personal income and outlays each rose a solid 0.3% in June, per the Commerce Department. But the Personal Consumption Expenditures Price Index favored by the Fed ticked up to 2.6% over the last 12 months, from 2.4% in May. The number of Americans filing unemployment insurance claims remained low last week, at 218,000, the Labor Department said. The other side: Two Fed governors dissented yesterday, the first time that has happened since 1993. In a speech two weeks ago, one of them, Christopher Waller, laid out his case for cutting rates — and emphasized subtle warning signs that monetary policy is too tight. Waller said that "while the labor market looks fine on the surface, once we account for expected data revision, private-sector payroll growth is near stall speed, and other data suggest the downside risks to the labor market have increased." He said that based on current conditions, the Fed's policy stance should be neutral — neither stimulating nor slowing activity — which implies rates around 3%, not the current level just below 4.5%. Of note: Trump administration officials are also arguing for interest rate cuts, arguing that the economy is booming and that this means rate cuts are justified. That's the opposite of how traditional monetary economics would recommend a central bank respond to a boom.

Even if you've been following markets for decades, you've likely never seen anything as crazy as the comeback that online used-car company Carvana (CVNA) has experienced in the last couple of years. Big stocks like Netflix (NFLX) and Meta (META) saw massive drawdowns of 75%+ during the bear market of 2021 and 2022, but Carvana (CVNA) was on another level with a decline of 99% from a peak of $370/share to its closing low of $3.72 made on 12/27/22. As shown below, a stock that falls 70% needs to gain 233% to get back to even. That's a tall task, but it at least seems do-able. A stock that falls 99%, however, needs to gain 9,900% to get back to even. That seems downright impossible!

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Below is a price chart of Carvana (CVNA) over the last five years. As of today, with the stock currently up 17% on earnings to $393/share, CVNA has not only fully recovered its 99% drawdown, but it has also eclipsed its prior highs. In less than three years, the stock has gained 10,460%! Maybe you have, but we've never seen any recovery quite this remarkable.

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New York and Chicago On Top The latest monthly data on home prices was published earlier this week from S&P CoreLogic's Case Shiller indices. Case Shiller indices are published on a two-month lag, but they break down price levels across twenty major cities around the country. Below is a look at the latest data. Seventeen of twenty cities were up month-over-month, with many cities up more than 1%: Chicago, Boston, Detroit, Minneapolis, Charlotte, and Cleveland. The three cities that were down m/m were Los Angeles, San Francisco, and Miami. On a year-over-year basis, the national reading came in at +2.25%, but there's quite a bit of disparity across cities. Tampa, Dallas, San Francisco, and Denver are actually down year-over-year, while New York and Chicago are up 6%+. New York is actually up the most of any city tracked over the last year with home price gains of 7.4%. Exactly half of the twenty cities tracked hit new all-time highs in May. San Francisco is the city where prices are down the most from their highs at -7.7%. Back in 2022 and early 2023, we saw a dip in home prices after seeing a huge post-COVID surge in 2020 and 2021. Since that dip, though, prices nationally have rallied roughly 13%. The two cities that have seen the biggest rallies since their 2023 lows are Chicago and New York, which are both up more than 20%. In terms of prices, given their y/y readings and their gains since early 2023, New York and Chicago have been the hottest markets in the last couple of years. Conversely, the West Coast and Southeast have seen the most weakness.

​

Of course another stock that has done something similar is MSTR. LOL.


$1.4B Fartcoin is what you get when the risk free asset underpinning the entire banking & currency system is a bond issued by an insolvent govt w/debt of 7x revenues, off-bal sheet liabs of 20-30x revenues, peacetime deficits of 7% of GDP, that has not run a surplus in 24 yrs

You can sell equity stakes in US's crown jewel corporations, farmland around US military bases, DC political favors, & placement spots in top US universities to foreign adversaries with a strong USD.

You just can't sell manufactured stuff.

If you think that a) the Fed is independent, and b) that Fed independence is critical to the US...

...then why not advocate for the US going back on a gold standard? Nothing would make the Fed more independent than a gold standard.

"Whoa, whoa, whoa...not THAT independent!!

jog on
duc