Two markets are running side by side right now, and confusing them will cost you money.
On the investor side, I am not touching AI stocks at these levels because the risk-reward is absolutely terrible.
The trader account had a completely different week. I went 4 for 4 on 0DTE and 4 for 4 on earnings flips, with the least made on any single trade landing at 100%.
AI now represents over 40% of the S&P 500. The semiconductors are doing all the heavy lifting while everything else fades.
Look at the year to date spread. The S&P 500 is up 5% and the QQQ is up 10%, while the SMH is up 36.57% after running from 360 to 512 in a near vertical line.
Nvidia is the tell. The chip giant just slipped from a $5 trillion market cap to $4.8 trillion.
Watch the 200 level into early next week. Lose it and we test 190, which pulls the entire market down through statistical arbitrage.
Here is what I covered in tonight’s video:
- AMD ripped 61% off recent lows after being down 12% a few weeks back. Micron flipped from basically flat to up 72%. Broadcom rallied 21% after dropping 16%. These are gamma squeeze mechanics, not investment fundamentals.
- OpenAI is supposed to spend $1.5 trillion they do not have. The entire semiconductor industry depends on that capex actually showing up. OpenAI is on trial right now, literally and figuratively.
- My 0DTE trades this week landed on Nvidia, XSP, Microsoft, and Tesla. The earnings flip side knocked out Microsoft, Google, Meta, and Apple in the same window. The Apple flip alone went from 55 cents to $1.48 in a single overnight session.
- The SPX expected move dropped from $130 last week to $110 for next week. We have gone two consecutive weeks without touching either edge. That coiled setup typically resolves with violence.
Oil sitting at $102 a barrel is the consumer killer nobody is pricing in. Eventually that pain hits spending.
The Fed has become a sideshow. The CME FedWatch Tool now shows a higher probability of raising rates by March 2027 than cutting them.
