“God himself could not sink this ship.”
-Cal from Titanic
Titanic had Cal and The Mother of All Bubbles has Jensen.
Please Jensen, tell me another story about AI. Tell me NVDA can have a TRILLION in #BubbleCap again. And “promise me you’ll survive. That you won’t give up, no matter what happens. No matter how hopeless.” -Jack
If we didn’t have Storytellers on Wall Street, what kind of fun would we really have? From Elon to Michael Saylor to Jensen Huang, The Mother of All Bubbles in Storytelling should have a shelf life longer than Titanic itself.
Back to the Global Macro Grind…
Since we know bubbles are hard to understand but easy to believe, what does The Titanic Is Tilting mean?
- SPY was “up” +0.3% yesterday with 9 out of 11 of its major Sector Styles DOWN on the day
- Tech (XLK, 2 stocks, APPL + MSFT = 40% of it) was up another +1.6%, Energy (XLE) led losers again -1.4%
- Crowding into MAGMA + NVDA was already a > $450 BILLION 7-day move pre yesterday!
Oh, and since that wasn’t enough, they needed to see the “relative value” trade (i.e. a #BubbleCap that lagged on 5-day price momentum?) in NFLX ramp $15B in CAP (+10% on the day) to $143B in #BubbleCap on “Canadian tracker data.”
LOL
In all seriousness, this is not funny. This is the part of the movie when we all hope all of the beautiful and innocent people are going to be safe up there on the last part of the ship that’s visible, and many of them will probably die.
I don’t mean die as in the wrong side of the grass dead. I mean that if/when we blow up The People’s “portfolios” for the 2nd time in these #BubbleCaps, they may not come back to pay you to invest their hard earned money for another decade.
You know that happened post the Dot Bomb Bubble imploding, right? #NotGood.
Those of you who not only survived the 2000-2002 period in the US stock market, but made money like I did (it’s ok to say that, it’s a track record and credentials thing), will recall the cadence to start 2001:
- “NASDAQ best JAN ever” at +10% plus in January 2001
- Then the quick correction
- Then the echo ramp into March …
Then companies had to report Q1 and Q2 of 2001 reality.
In other words, crowding into the prior #BubbleCaps that blew you up in either 2000 or 2022 isn’t a new thing (it’s ok to say that too, it’s a Cycle Thing). For many in both eras, all they know is buying those things.
One can make the same argument for most of “Crypto” imploding again in FEB/MAR but Bitcoin ramping. Just like selling the > 1000 stocks in the Russell right now (which just closed at a YTD low), if you can’t be long anything, just buy 1 thing?
But I won’t go there this morning as one of their Storytelling Prophets, Do Kwon, is being charged with #CryptoFraud.
Instead, let’s go right back to the wood and do what I’ll call Molten N-Squared MAGMA:
- Microsoft (MSFT) has $2.1 TRILLION in #BubbleCap and @Hedgeye TREND resistance at $191
- Amazon (AMZN) just got back to $1.0 TRILLION in #BubbleCap and TREND resistance at $131
- Google (GOOGL) ramped back to $1.4 TRILLION in #BubbleCap and TREND resistance at $114
- Meta (META) is a pipsqueak with only $530 BILLION in cap and is Bullish TREND (support = $165)
- Apple (AAPL) is a nichy new idea with $2.5 TRILLION in #BubbleCap and Bullish TREND support = $152
- NVDA has the revived StorytellingCap of $671 BILLION after breaking out above TREND of $239
- Netflix (NFLX) is the half-pint cap at only $143 BILLION with @Hedgeye TREND resistance of $352
In summary, N-Squared (NVDA + NFLX) + MAGMA = $8.3 TRILLION in #BubbleCap leaning on the one side of the Titanic that still has the lights on. Jensen, can you tell me another bedtime story before they turn them off during the blackout period?
Ami Joseph broke down Jensen’s Storytelling on The Call @Hedgeye yesterday, so if you’re an Institutional Client just ask us for that summary audio clip. He’ll have his newly minted NVDA bear case in written form next week I think.
What struck me most about my conversation with Ami on NVDA was that I didn’t really understand a damn thing. While you all know I was too dumb to understand the “exponential age” crypto thing, I really struggle with this AI thing.
I know what it is (it’s built into my stochastic algos that powers both my #VASP Signal and our #Quad outputs)…
But I don’t know what it is in terms of what we’re going to see from NVDA, MSFT, GOOGL, etc. in the coming 2 quarters. You know that the next 2 quarters will be the 2 worst quarters of both US GDP and Corporate Profits of The Cycle, right?
For 15 months that’s been my “catalyst” for The Mother of All Bubbles to crash:
A) Profit Recession #Reiterated
B) Credit Event #Reiterated
So it’s all good and fine for Jenson or Elon or whoever to tell you a story about their stock until they have to report their actual numbers. Don’t ever forget that these guys are in “great businesses” of selling you stock!
And it’s all good and fine for every American to “own Apple”, until it’s @Hedgeye TREND Signal support of $152 breaks. Is Cook going to have a “great quarter”? He better…
Or the Macro Aware will be reminding you of the catalyst that always gets all these guys and their sinking ships: gravity.
Immediate-term Risk Range™ Signal with @Hedgeye TREND signal in brackets
UST 30yr Yield 3.57-3.81% (bearish)
UST 10yr Yield 3.31-3.71% (bearish)
UST 2yr Yield 3.64-4.54% (neutral)
High Yield (HYG) 72.49-74.25 (bearish)
SPX 3 (bearish)
NASDAQ 11,003-11,990 (bearish)
RUT 1 (bearish)
Tech (XLK) 135-147 (bearish)
Gold Miners (GDX) 27.42-31.98 (bullish)
Shanghai Comp 3211-3299 (bullish)
Nikkei 26,609-27,818 (bearish)
DAX 14,603-15,390 (bearish)
VIX 20.92-28.43 (bullish)
USD 101.75-104.75 (bullish)
EUR/USD 1.053-1.085 (bearish)
Oil (WTI) 64.91-73.44 (bearish)
Gold 1 (bullish)
Silver 20.99-23.54 (bullish)
MSFT 251-282 (bearish)
AAPL 148-161 (bullish)
AMZN 89-102 (bearish)
META 183-213 (bullish)
GOOGL 89-107 (bearish)
NFLX 285-322 (bearish)
TSLA 168-199 (bearish)
NVDA 230-281 (bullish)
Bitcoin 20,015-31,316 (bearish)
Best of luck out there today,
KM
Keith R. McCullough
Chief Executive Officer
