Weekly Market Report 8/2/26
A rare trade opportunity, the "chosen" AI stocks, my favorite group outside of AI, my portfolio, favorite charts, and more.
Did we just witness the modern day AI equivalent of the LTCM (Long Term Capital Management) blowup that took place in 1998?
In 1998, one of the most followed hedge funds in the world nearly collapsed after an extremely leveraged portfolio moved sharply against it.
Sound familiar?
Leopold Aschenbrenner’s Situational Awareness blowing up is obviously different in size but the similarities are there.
A highly concentrated, hyper followed, and increasingly crowded portfolio moved violently in the wrong direction and the positions were ultimately transferred and sold to a much larger fund.
The question now is whether this marked the end of the AI trade or if this forced liquidation finally cleared out the excess…
Reality is that lots of excess leverage and froth was taken out over the last week or so.
If that was the bottom in the AI trade and we resume the uptrend there’s going to be tons of money to be made.
If you feel like you missed something, remember:
The most amount of money is made in the middle 80% of the move, not the first or last 10%.
People obsessed with buying the bottom and “calling it” often don’t have capital left to buy by the time the bottom is actually in.
That’s why we’ve remained defensive over the past few weeks and reduced our trading activity to almost nothing.
But it might finally be time for that to change…
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:
An update on the “next MU”
A rare trading opportunity that doesn’t come around often
The AI stocks beginning to separate themselves from the rest
The group I believe could deliver monster earnings growth over the next few quarters
The signal I’m watching for to confirm the bottom is in (which could arrive as early as next week)
The overall market
My favorite charts and setups
An update on my portfolio
Iran
And more.
This past week has potential to be a turning point for the market, and we might finally be close to a major trend.
The time to lock in is now.