Everything Is Red! What To Do When The Market Crashes
In a Nutshell
Markets are in a bearish trend with lower highs and lower lows, as the speaker profits from shorting Micron and warns of deeper downside if Bitcoin breaks below $75,000. MicroStrategy is highlighted as a poor performer that has significantly underperformed Bitcoin due to share dilution. Nvidia's upcoming earnings are the key focus, with the speaker holding long-term but not adding to positions amid rising geopolitical tensions and US Treasury bond buybacks signaling potential desperation.
These notes were generated by AI and may contain inaccuracies.
US Treasury bets triggered a market reaction with Micron currently down 0.9% in after-market hours and 5.8% on the day. The initial sell-off from market open to current lows was approximately 3.6%, with most of the decline occurring as a gap down overnight rather than during regular trading hours. Markets found support and began recovering before heading back down, maintaining a bearish trend with lower highs and lower lows.
The semiconductor space is experiencing significant pressure following Samsung's most recent update. The speaker maintains an active short position on Micron and is currently up over $2,000 on the day. The trade taken earlier in the day for LPP team members generated $1,300 in profits and was fully closed.
Bitcoin gapped up significantly last week with the speaker waiting for a break of support. The major trade opportunity would occur if Bitcoin breaks below $75,000, potentially filling a gap down to previous lows between $75,000 and $65,000, representing over 15% downside. The speaker does not currently trade Bitcoin but remains open to shorting MicroStrategy once Bitcoin begins to sell off.
The speaker describes MicroStrategy as a company that dilutes investors by borrowing against their investments and conducting share offerings. From highs of $543 to lows of $80, MicroStrategy has been one of the worst-performing stocks of 2025 and 2026, underperforming Bitcoin even during periods when Bitcoin reached new all-time highs. The speaker notes they are patient and biased against MicroStrategy, waiting for confirmation rather than shorting based solely on the belief the company is worthless.
The Nasdaq ended 1% in the red with a downward trajectory and lower highs and lower lows. US Treasury Secretary Blinken stated that the world must decide between the US or Iran, threatening anyone who chooses Iran. The speaker expresses exhaustion with ongoing deal negotiations and references Trump's ability to manipulate markets through oil trading, noting Trump's disclosures show he made the most money in the past 2 years from various investments.
The Trump administration stated earlier that the Strait of Hormuz is open, but reports from August 24th, 2026 indicate oil tankers were attacked in the strait. The US plans to impose an additional 7.5% tariff on Chinese goods following the announcement of up to 50% tariffs on Canada starting January 1st, 2027.
Nvidia is set to report earnings on Wednesday after market close, representing the most highly anticipated earnings report of the quarter. The stock has recorded seven consecutive red days. Nvidia trades at 31 times earnings, which the speaker notes is historically reasonable, with analyst fair value suggesting approximately 24.6% upside according to Investing Pro.
Market sentiment appears uncertain, with the speaker noting the US Treasury's bond buyback program increasing from an initial $2 billion offering to $4 billion, with potential to reach nearly $1 trillion in cash reserves. This escalation is interpreted as a sign of desperation. The speaker maintains a long-term investment in Nvidia but has no intention of adding to the position at current levels, distinguishing between being invested and actively adding to positions when favorable opportunities arise.
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