TURNAROUND THURSDAY | STOCK MARKET TALK

your mega cap tech again, right? Your, your, your mag seven or so off where, right? So it doesn't have to be everything. I think that's the only question I'm saying. It doesn't have to go right back to that. But yeah, there's no idea. Those are the last two bounds today. I'm arguing it's a hundred percent. I'm arguing that the odds say it doesn't go right back into that. I'm making the argument that every bounce we've had since June has just been a counter trend rally in a larger downtrend. I said this yesterday, and I posted the day before, these AI names that blew up starting in, you know, back in June, some of them are going to take years, like three, four, five years to get back to the recent highs. Some of them are going to turn into zombie stocks that will just meander around for years and do nothing. And some of them are going to go out of business, okay? So the idea that this, this sector as a whole is going to just have a run back to the highs is, it's fanciful. And I said as much when they first started to roll over back and I said if people think that we're having a V shaped recovery on these names, they're wrong. Now there may be some standouts. Like I know people think Nebius is like the blue chip of this sector. Maybe like there may be some that will get back to their highs quicker. But I think a lot of people are going to be very surprised at how much damage this sector has taken and how unrecoverable it is going to be for a lot of names. So I agree with you. I would like to. Let's get monotid. I want to hear Monotid's thoughts on this one. I imagine something topics as well. It is, but I can wait to let options like finished, you know, his thought. Arnda, haven't you learned by now just jump in? Let's go ahead. So I was going to say, I'm not a little fan of very high beta stocks anyway. So set that aside for a second. Let's just talk about AI trend general. Now we've had ASMR that says the health disability all the way to 2030. If they want to take that out, they're not even ready to do that. But they have a disability to 2030. We saw TSM, TSM Edge Note. The two nanometer node has already ramped up so fast. The 1.4 is going to be, you know, starting testing late 2027 in production in 2028. 8% of the revenue is already from two nanometer. 68% of the revenue is coming from high performance compute. And that's a total reversal. It's a 3 to 1, you know, it's 24% from, from, from, handsets, in a mobile phone business. So that's it in three years. We flipped the, the, you know, the whole, you know, multiple from, you know, three times, you know, their largest business about 70% or so used to be handset. Now it's, you know, a quarter of their business. And we're going to get a lot of confirmation from the hyper scalars. Now there is a lot of data. I'm not saying that the AI trade is going to be back. I'm not even, you know, putting money on the trust right now. But I'm just saying that we are going to see a lot more data that could justify if nothing else, a floor on many of those trades. I again, right, I talk about larger companies. I don't talk about smaller companies. That's not, you know, that's not what I watch. But among the larger AI players, you could really see, you know, a floor put on them once we get confirmation of the data. The other problem is, of course, what is the price action if you get good data and it still sells off? That could be a very bad thing too. But I'm just saying that we're going to get a shit on the data in the next two weeks. That might actually find some support for the AI trade. A monitor. Wouldn't you say that that is a fundamental and technical thing, right? If you get a fundamental. Okay, so that, I think that's the part that's missing for a lot of people. Again, let's go back to the A.O.I. Right? So when you saw that bounce, when it bounced in August, that thing ran 100%. It had a hundred percent bounce from a low of 76 to a high of 160. Okay? And a lot of people thought, here we go, we're going right back. Well, as of today, it gave that whole bounce back. So what I'm trying to say is, if you think that the fundamentals are great, that's awesome, right? As long as the technical support that, I'm all for it. But if you just close your eyes and just say, oh, yeah, I think everything's going right back to where it was, I think you're going to be disappointed in a lot of names. That's all I'm saying. Can I jump back in? Nope. I'd like to let everyone else talk three times. And then it is acceptable. All right. No, no, you can go. You didn't ring the opening bell again today. Did you have an? Nope. Nope. Nope. Nope. Nope. I did not or closing. Good. I'm not going to the NASDAQ. Did not touch the bell. Yes, they ought to be. That PPI number was horrific. And the market completely shrugged it off, never reacted to it. That was the first tell today that we're going to try to bounce for me. I mean, 0.6% versus 1.2%. I mean, that was a horrifically bad number. And the market was like, not, it's okay. Yesterday we had a 0.1% year-over-year hire. CPI inflation, the market freaked out. So, you know, it just puts things in perspective. Bons are have had a nice rally. They can hold. I think this market is set to try to rally. Now, whether this is the lower or not, I'm not sure it could have been. It could be. And I think you have to look at today's candle and say, this could be the low for the rest of the year. You could also say, maybe we come back down and we go there. Maybe this is just as you point out Brian a dead cat bounce for today, right? But the indexes were never extended over that far down. We didn't go anywhere. Names, however, have. But you know, micron, like, you know, got apps have been absolutely this memory names been just absolutely viciously beat up. So I honestly think that the market is going into a very bullish time of year. We've talked about this. Jeff Hirsch was on. He's talked about it. You know, the last two weeks, specifically October, tend to be very strong. And then you have a usually a very good, um, November after the midterms. And, you know, we're coming up on that time of year. The Fed goes into their blackout starting tomorrow afternoon, right? For the next Fed meeting. And we go into. The harder earnings season starting next week. And you know, the banks were okay. I don't think they were great. I don't think they were bad. They were just they were mixed. Mods of a lit. You. Chiming on that. But you know, next week, just quickly. G E GM 3M. Uh, nope. Northroproamin Netflix United Airlines. Nano nuclear energy. Then on Wednesday night. Tesla meta IBM. LRC X. Texas Instruments. You got Spotify. PNG. D.E. Western Digital. America Express. Slumber J. So this whole market is about to get into this earnings mode. And if these are good, it's going to just start lifting us up. And Mike, let's not gloss over the action in TLT, right? Everyone's been trying to tie. Interest rates to the market, right? What happened yesterday? TLT. We detached. We detached. Yeah. We told lead. The TLT gapped up two percent. We're going to be able to. We're going to be able to. We're going to be able to. And so we recommend. The TLD gapped up two percent this morning. What was the last time you saw TLD up 2 percent this morning and the market gapped down. Brian, It gapped up on a horrific inflation report that should have the Fed screaming. We need to raise rates. It was so my my point is is that it. Look, Everybody wants to divine. Why the market is doing what it's doing, right? Whether it's the war, whether it's rates, whether it's bad fed policy, where, But when none of us know, right? None of us know. Sometimes it lines up. Sometimes it correlates for a while. Sometimes it breaks, whatever. But when you abandon the technicals on your investing or your trading, you're abandoning risk management. Because none of us know what is going on in the news. We don't know if we don't know if a news event is already priced in because smart money had their ear to the ground. Or if it's an absolute. Like PPI. Which seems like what like PPI this morning, which seems like it was. But, but you can do that with a dozen different events every single day. Right? And what happens is you get these moves that happen in a relation to event. And we all see. See it's because of that. But then when it doesn't correlate to the move, no one ever says, well, maybe it doesn't work. So look, again, I'm not smart enough to put all the economic geopolitical pieces together. You know, I was a sea average student in high school. But I can look at a chart. I can look at a trend line. I can look at a moving average. I can look at a sport resistance level. And more importantly, I can determine what my own comfort level is. What my own risk level is and say, OK, where to spot where I'm wrong. So can I. Can I. Can I. One great thing. I'll let you go. Yeah. And then you can do your thing there. I was live on the stream with Jordan and guys today. We're talking. I said 10 o'clock. I said, you know, for a market that's down this morning. Market breaches right through across the board. And that was another big tell for me. Like sometimes you just have to have things you look at there. Right. We had breath was green on a down move on the market. That was just telling you. I'll let you guys go. I just thought that was important. So options like, you know, there are some rumors that I blew up. 26 billion. Fund that blew up. So so again, I have no confirmation of that. I'm just waiting. What was it on a tip? It's a fun call. Where are we are? It's an AI fund. About 26.8 billion something like that. So they are supposed to have blown up. There's a lot of people that posted that. So so I tend to believe there is at least something to that room. Or even if it's not well, well, Marge barely called it out. And he also called out before leopold blew up. So I. People are assuming that he's right. But he's the one who called it out. That would be the most bullish thing for this market. If that's true, if we find out tomorrow morning, if someone on on Squawk box tomorrow morning, puts that officially out there and market is going to rock it. Yeah, they have similar a you M to leopold to anyway, sorry. Yeah, what about the second leopold blow up? That's coming right? That has to come. Well, I mean, he loaded like $500 million of AI calls like two weeks ago. So yeah, I mean, he could have grown up for a second time too. He's you know, he's sitting there nice and comfy. He thought sitting on a doughnut or anything like that and vomiting in a bag. Is it? So just one thing a lad, you know, on the PPI. I don't think that's over. Remember last quarter in video said that they're going to pass on a 15% price increase starting in January. So some of this is happening behind the back. So some of this is happening behind the scenes, right? A 15% the new clothes don't have their own ASIC. They're all dependent on Nvidia for most, but certainly Corvivus. So an additional 15% off the top is going to change their capExplan. It's going to change their capital structure. It's going to change their business plan altogether because the margins are off. You're paying off the top. You're paying 15% more. And what you're going to charge is going to start to come down slowly. And you have a weak hand financially. Your customers are going to squeeze you. So I don't think it's quite done. I think as always, PPI back is delayed. So I would still be careful and watch that. What is that Mr. Chris Patel? How are you doing, sir? Good man. I just I was going to spend some money on this backyard and this patio. But I figured my cron spreads would be a better idea for that money. So I got a eventually my. I was looking at it. I was looking at it this morning. I was like, oh, eight, 6870, whatever it was. Do I snap up a little? I didn't do that. I didn't buy it. You know what I did by this morning? No, I didn't buy it then. I actually bought it towards the middle of the day. I mean, the thing that I was looking for and are we back? The new were good. I mean, I saw the news coming out of Google that they were signing like an even longer term. Like a deal for LTAs for memory. I mean, that sounds pretty. Pretty good to me in terms of visibility. And if so, the market is looking at this. That pretty much means that Google is likely to come out. I mean, look, it's all rumors. But you know how rumors work. So this might get some clarity during earning season where, you know, the forecast might be, hey, listen, we're actually still going to spend a lot of money and memories going to be one of those bottlenecks and our job is to lock in supply and, you know, regardless whether for TPUs win or GPUs win or XP use win, you're going to need memory. So I figured right now it's still trading at a very low multiple, which means all the share buybacks these guys are planning on doing for the next couple of years are going to be very shareholder. A creative, I mean, look, if you're a dumb company and you're trading out like a 58 PE and, you know, you're buying back shares and good luck to you, but you're trading out of AP, people market thinks that you're a cyclical business and but the data that's coming out shows that you're not nearly as cyclical as everyone thinks. So yeah, I think it's not the worst thing to, you know, to be in the memory trade for a mean reversion, but I do think that people have to be a little bit grounded. Some people are like, oh, this is going to go to 2000 and I'm like, what's your time frame on it? And they're like, oh, within the next like 30 days and I'm like, what's the catalyst that's going to bring it to 2000 and they're just like, I just will. And I'm like, okay, great, cool, I'm all for it, you know, so I think, you know, as long as you're measured, I think a 20 30% rise from here to get a mean reversion by the end of this year is not too difficult, you know, I think technically it's a little bit oversold. It's definitely not curling up right now. I know stock talk, what's his name? Sam was mentioned how just follow the averages moving averages and you know, and that's usually a good indicator of where you are. This thing's below it's 50.