ALERT: SELL EVERYTHING OR HOLD BEFORE BIG EARNINGS?!?
In a Nutshell
Markets are derisking with a slight NASDAQ pullback (-0.14%) after a 20% rally in under a month, ahead of massive big tech earnings from Microsoft, Amazon, Meta, Alphabet (Wed), and Apple (Thu)—half of S&P 500 value at stake at all-time highs; sell or trim overbought positions like AMD (down 4%, after 84% gains) and Microsoft (down 5% on OpenAI news) to hold cash for potential correction. Micron stands out positively with 600% yearly gains, low 24.4x PE, and $700 target. Focus on fundamentals over hype: avoid overpaying for weakening names like Intel; join live streams for earnings and Fed updates.
These notes were generated by AI and may contain inaccuracies.
Active morning for a few stocks, almost everything except NASDAQ gapping down. Stocks gapping up on good news or gapping down.
Positive news about the market, yet markets selling off. Sunday after overnight hours, markets gapped up—rare, as past five to six weeks markets gapped down then recovered to green by Monday close. Straight vermouth closed Friday announcement, opened green Monday—different this time.
US offered possibility of talks, Iran considering—form of de-escalation. Could be factored in already. Larger time frames show aggressive push higher; celebrated end of Iran war multiple times, causing initial gap up, ceasefire, multiple ends of war, capped to new all-time highs overnight due to de-escalation. Markets digested news. Focus now on big tech earnings delivery.
NASDAQ up 20% in less than a month—one of biggest rallies since 2009. Markets retracing a little (down 0.14%). Discussed in live trading session why selling off despite no negative news—tune in via second link below at market open.
Big tech (Microsoft, Amazon, Meta, Alphabet) report after Wednesday close; Apple Thursday—half of S&P 500 valuation in 24 hours. Trading at all-time highs, factored in great news. If they don't deliver, market at elevated levels.
These companies print money: Microsoft, Amazon, Meta, Alphabet, Apple—Magnificent Seven. Tesla teeter-totter, low net income. Markets derisking, taking profits after best rally in short time. NASDAQ barely down 0.14% after 20% in 27-28 days, not aggressively making new highs.
Not everything gapping down. Micron Technologies (semiconductor manufacturer) doing well—from $60 to $531 in one year (600%+ gains), low PE ratio. New price target $700/share. Good news on price targets, purchases reigniting excitement.
Overbought technically from $300 to $531 quickly. Fundamentally low PE 24.4x earnings, low in semiconductor space vs. AMD.
Called AMD investment video when underperforming vs. Nvidia—bought sub-$200 ($190-200) for investment and daughter's long-term account. Exploded 80% to $357 (84% in 30 days). Levelheaded amid greed—began trimming profits as overbought, markets derisking.
Kathy Wood (ARK) sold $75 million AMD before earnings. Can't blame her before big tech earnings. Semiconductors strong sector (AMD, Intel). Intel loses billions yearly, up 300% in year due to sector favor, but overvalued.
At overbought levels with attractive short-term returns, consider trimming profits for cash on sidelines in case of correction. If already cashed up, hold overvalued like Intel.
AMD down 4% due to de-risking, big investors like Kathy Wood taking profits.
Microsoft falls 5% after OpenAI license non-exclusive, no longer pays revenue to OpenAI—less favorable for investors. Holds elevated levels, recovered 18% from lows ($552 prior). Worst performing Mag 7 stock—lost one-third value in pullback, poor recovery.
Tesla doesn't count (Mag 6). Microsoft falling behind AI race vs. Apple, Nvidia at/near all-time highs. Hype fading on Microsoft. Went $300 to $500 quickly on hype.
Great company, no concern sustaining, but if markets correct, Microsoft takes big hit. Be careful with exposure to weakening companies. Don't overpay long-term if red flags—e.g., don't buy Intel at all-time highs (loses $3 billion/year, negative PE)—hype pumped it.
Not about timing market, but time in market—don't overpay when hype, overbought, valuation disconnect from fundamentals. Use common sense despite irrational markets.
Differentiate trade vs. investment: trade short-term rally with direction/momentum/hype—calculated, no leverage, manage risk. If overbought larger time frames, huge downside, treat as higher risk trade.
Live streaming Microsoft, Amazon, Meta, Alphabet earnings, Wednesday 2 p.m. rate decision—free on YouTube, thumbs up and subscribe.
Full micro/macro outlook this week. End year green.
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