Weekly Market Report 7/19/26
The AI complex, two smaller cap energy stocks sitting in low risk areas, the leading theme in the market, my portfolio, and more.
The AI trade is being called into question more than it has at any point in quite some time.
Kimi, leverage in South Korea, questions surrounding the sustainability of memory pricing, debates over hyperscaler capex, and concerns that AI spending may eventually slow down.
The list goes on.
We’re seeing major washouts and corrections in many of the markets AI leaders and I’m noticing tons of posts where people are discussing their major drawdowns, some even hitting 50%.
That’s with the S&P 500 being down around 2.5% from all time highs.
That leads me to something I’ve been discussing and emphasized a number of times:
You can’t just buy any stock at any price.
No matter how much you believe in the story, narrative, fundamentals, etc. where and when you buy matters.
So many of these stocks that have pulled back and gone through major corrections are still significantly higher than they were just months ago.
You can have the best story, fundamental trajectory, or narrative in the market but once too much gets priced in, volatility ramps higher and corrections happen.
If you bought months ago, you’re likely still up a significant amount.
If you chased the hype and focused only on where the stock might go instead of where the price already was, you’re likely getting crushed.
That’s the difference between buying a great company and buying a great company at a good price. You don’t need to catch the exact bottom but you do need to understand where a stock is trading relative to its history.
That doesn’t mean these have topped forever, but it does mean that many people who chased are now underwater and need 50-100% gains just to breakeven.
Price always matters. Entry always matters.
Are these AI stocks finally presenting an opportunity to get in, or was the latest push higher the last hurrah?
More on that later..
If you’re not already in the subscriber chat, I strongly suggest paying attention to it.
This is where I post all of my new trades as I enter them. I walk through the trade idea entirely including my thesis, risk level, cost basis, and more.
The subscriber chat is also where I post a daily thread with my thoughts on the day ahead, relevant headlines and macro events, my main focus names, notable upgrades and downgrades, and anything else I’m watching.
It’s basically become a live market group chat. We have a ton of smart people sharing ideas, setups, headlines, and observations throughout the day, and there’s a lot of genuine alpha in there.
I honestly believe it might be one of the most (if not the most active) subscriber chats on Substack.
Come join us!
In the remainder of this article, I’m going to discuss:
The AI trade
My AI focus list and the names I’d like to potentially buy in the weeks ahead
Two of my favorite smaller cap stocks entering lower risk add areas
The market’s newest leading theme along with two names almost nobody is talking about
The Magnificent 7
Kimi and what it means for the AI trade
The overall market
Other notable charts
My trading portfolio
And more.
The market is in a precarious position and there are more unanswered questions than there have been in quite some time.
We’re going to learn a lot over the next few weeks, the traders who are prepared now will have a major advantage when the next move begins.
And I think that move may be closer than most people realize.