The Market Is About To Shift—Are You Ready?
In a Nutshell
Markets are oversold after a pullback, making shorting riskier than buying value stocks with light positions. Beginners should use tiny position sizes—starting with just one share—to survive volatility and avoid getting shaken out before recovery. Speculative AI stocks like Coreweave and MSTR carry extreme risk due to poor fundamentals, heavy insider selling, and structural issues, while direct Bitcoin exposure beats leveraged proxies like MSTR.
These notes were generated by AI and may contain inaccuracies.
Markets have been overbought and the NASDAQ recently pulled back to its previous support range of 700. Anyone surprised by this pullback needs to spend more time in the market. Markets are reaching oversold levels and are more bullish than bearish. Traditionally, it makes more sense to go long than to go short at these levels.
Shorting comes at greater risk because theoretically there is no cap on how high a stock can go, meaning no cap on potential losses. Beginners will most likely get margin called and forced to liquidate before cutting losses if they don't manage risk appropriately. For those with experience who can actively short and mitigate risk, direction remains in their favor.
The probability for a rate hike remains relatively low even after this week's higher inflation reading for both PPI and CPI. When markets sell off, the approach is to buy companies with value rather than short them, though shorting is done with relatively light positions.
Knowing how oversold markets are and how irrational they are to always recover eventually, the potential for profit to short versus the potential for risk of a recovery no longer makes sense. Markets are reaching oversold levels, making it potentially a good time to identify stocks to buy if markets begin to recover.
Position yourself like things could get worse before they get better. One day does not define a market reversal. Many got overconfident and overpositioned themselves with too large positions, leading to panic during pullbacks. The intention should be to buy and hold knowing recovery won't be linear with no pullbacks.
Micron and other bigger players moving significantly are incredibly volatile stocks. Don't use leverage or margin—only use money you actually have. Position exposure to be wrong first before being right. Bought the dip on Micron while also shorting it, but not carrying any shorts overnight. Micron appears attractive at current levels with 15 to 17% recovery potential if it recovers to a thousand.
The biggest mistake beginners make is buying so much that when markets get worse before they get better, they get shaken out. If markets drop another five or ten percent (a 100% possibility), they can't tolerate the volatility and cut losses. With more time, markets eventually recover normally. Be intentional and less aggressive with exposure through smaller position sizes.
NBIS trades at a 1,100 P/E ratio, considered pretty crazy. Coreweave supposedly has 31% upside but trades at a negative 19 P/E ratio and loses nearly $2 billion a year. While fundamentals do matter eventually, technicals are the name of the game for 2026.
Coreweave is reaching a previous support range with 50-60% recovery potential to conservative highs of 92. After its big rally in 2025, it's been making lower highs and kind of the same lows. The story driving Coreweave lower is that Coree crashed 11% today alone as fears over heavy debt grow. It's not well financed with insiders selling $32 million worth of stock since August with zero buys. The CEO alone has sold over $199 million.
Incredibly speculative stocks include Coreweave, NBIS, and Irene. Additional news shaking up the semiconductor and memory chip space involves Chinese memory chip maker CXMT, which said they might oversupply the market. US companies cannot buy Chinese chips currently, though this policy can change.
CXMT revenue last year was 4.8 billion, with revenue this quarter at 39.7 billion (though this might actually be for the year, not per quarter). The company went from a loss last year to a net income of nearly $20 billion. AI growth and memory demand are very real outside the US as well.
China is one of the best at manufacturing with capabilities no one else in the world has. However, US companies are not allowed to buy Chinese alternatives due to regulations, though this may change.
Stories emerging about concerns about AI include Anthropic news about possibly not IPOing at two trillion but maybe 1.5 trillion, with adjustments being made. CXMT is now a big Chinese competitor. The South Korean market KOSPI absolutely plunged this past week.
Current fear factors mean that if deciding to buy the dip on speculative stocks, position yourself to tolerate volatility. Buy one share even if you can afford twenty because with one share you won't get shaken out. With one share, if it recovers there's still gain there. Going in too aggressive early and not tolerating volatility leads to cutting losses and losing money.
With one share, you might not make much money but at least you could possibly make money versus going in too aggressive, cutting losses, losing money, and never wanting to invest again. Establishing good principles even with very small dollar amounts early on enables seeing value in investing and trading, continuing to do it and grow over time.
MSTR is being removed from the MSCI index. BTC is falling and touching $80,000. Shorted MSTR for $3,100 on the day. MSTR has news about getting removed from the index, causing funds that follow the index to sell with expected outflows of 2.8 to 3 billion in a matter of days and weeks.
MSTR is not a real company—it doesn't generate actual profit. It borrows against shareholders, dilutes investors, and uses that money to buy Bitcoin. It's a failed software business that identifies as a Bitcoin treasury. It's better to buy Bitcoin directly or a one-for-one BTC ETF that's not leveraged versus buying MSTR.
Things are uncertain right now, making it the best time to be intentional and calculated. Position yourself not just for success on recovery but to tolerate the downturn as well.
Keep Ricky Gutierrez in your library
Save the videos and channels worth coming back to, and find them again in one place.
