[video_player type=”embed” style=”1″ dimensions=”640×360″ width=”640″ height=”360″ align=”center” margin_top=”0″ margin_bottom=”20″ ipad_color=”black”][/video_player] Note: My friend and colleague Gianni Di Poce will be on TheoTrade Live tomorrow morning to talk about how to use AI for a shot at doubling the markets. AI looms large right now… We were treated to an unexpectedly strong second-quarter GDP print today – 2.8% on an annualized basis. That’s almost double last quarter’s performance. So you might think we’re firmly in “growth” mode out here in the wider economy, but today’s sector-by-sector price action looked more like a recovery or early growth phase. But you’ve got to take what you’re given. Industrials, energy, and financials all outperformed but gold and (surprise) tech stocks took a beating. In fact, a lot of tech and AI stocks fell back to lows – and some, like MSFT and GOOG are still falling as investors start to question the AI narrative.

[video_player type=”embed” style=”1″ dimensions=”640×360″ width=”640″ height=”360″ align=”center” margin_top=”0″ margin_bottom=”20″ ipad_color=”black”][/video_player] Wow! Yesterday was an absolute snoozefest and today… we just closed out the worst day for stocks since 2022. You awake yet? Good. It had been creeping in around the edges lately, but volatility hit the markets like the Kool-Aid today. We saw the VIX skyrocket more than 22% today to top 18 – it had been hovering in the 12 region just 10 days or so ago. We were driving hard toward the lower edge of the expected move near the close, which is crazy when you consider we came close to the upper edge yesterday. There’s some real damage being done out here in the markets, and we’re going to look at exactly where that’s happening – and what to do about it. This isn’t the time to go out and take on risk. More importantly, we’ll look

[video_player type=”embed” style=”1″ dimensions=”640×360″ width=”640″ height=”360″ align=”center” margin_top=”0″ margin_bottom=”20″ ipad_color=”black”][/video_player] The recent massive selloff in tech should prove what I’ve been saying for weeks now: The one-time leadership sector is slowing down. Nature abhors a vacuum and the stock market’s not all that different. The hunt for a new leading sector is on, and like some other groups I could mention, there are suddenly new contenders… though no outright winner. Real estate, at least as tracked by the $33 billion VNQ ETF, is showing emerging strength; that fund is up about 6% for the month. Energy is starting to show as well; XLE is down about 0.82% over the past month but is paring its losses recently. But a 6% gain and 0.82% loss aren’t exactly a flashing neon “RISK ON!” signal. I have been and remain enthusiastic about what I’m seeing in the biotech sector and, by way of

[video_player type=”embed” style=”1″ dimensions=”640×360″ width=”640″ height=”360″ align=”center” margin_top=”0″ margin_bottom=”20″ ipad_color=”black”][/video_player] The U.S. political landscape underwent a second earthquake in as many weeks as President Biden announced (by Tweet, no less) that he was ending his embattled candidacy for the Democratic nomination for the presidency. His campaign for the nomination, which was all but totally sewn-up, ended in a bit of a whimper as he shrugged off the rigors of the modern American electoral process. Biden endorsed Vice President Harris (who could be running the government while he’s sick with covid for all anyone knows) to replace him at the top of the 2024 Democratic ticket. You’d assume the degree of uncertainty surrounding one of the most important offices in the world would ignite turmoil in the market… “What are we going to do? Who’s going to lead?”… but it hasn’t. This “Atlas” – the President – shrugged, and the markets

[video_player type=”embed” style=”1″ dimensions=”640×360″ width=”640″ height=”360″ align=”center” margin_top=”0″ margin_bottom=”20″ ipad_color=”black”][/video_player] Stocks might have caught a break today if it weren’t for a disastrous CrowdStrike snafu that took down systems almost across the world. For the moment, though, the selling is still fairly concentrated in CRWD and a few other names out there. The bears are still making choppy, cyclical moves. The advance/decline line, which looked really good during the tech selloff earlier this week, and which I was worried might start to display correlation, still hasn’t done that. Volatility futures are up, but they’re not really rockin’ yet. Exits have been small and trade has been pretty orderly. But will it stay that way? Here’s what I see happening out there…

https://www.youtube.com/watch?v=tiyXkayO14s Look at a 24-hour chart of the S&P 500 ETF, SPY, and you’ll see clear gaps in the price action overnight. I’ll show you what I mean in a second, but bear with me.  Those happen precisely because of overnight activity; it’s not magic. If the market was open 24 hours a day… the gap wouldn’t be there.   This isn’t just some interesting sociological phenomenon – it’s an opportunity. In other words, you can make money here. Let me show you how…

[video_player type=”embed” style=”1″ dimensions=”640×360″ width=”640″ height=”360″ align=”center” margin_top=”0″ margin_bottom=”20″ ipad_color=”black”][/video_player] That eerie, everywhere-at-once sucking noise you hear when you go outside? That’s the sound of hundreds of billions of dollars in market cap leaving tech stocks. The selling we’ve seen today has been incredibly concentrated in the tech sector… and therein lies the risk. On a point-for-point basis, a drop of 541 on the NASDAQ is big, but still shy of that 3% mark. On top of that, we’re looking at a 71-point move to the downside on the S&P 500. Keep it in perspective, though: That’s barely a 1.25% drop. But, speaking of “eerie,” the S&P 100 advance/decline line is positive at 65/36. Sounds damn good on the surface, but the thing is, if selling persists, you could see the advance/decline line snap like a twig and then selling starts to spread out in the wider market. I’ll show

[video_player type=”embed” style=”1″ dimensions=”640×360″ width=”640″ height=”360″ align=”center” margin_top=”0″ margin_bottom=”20″ ipad_color=”black”][/video_player] It’s a bull market, alright… and our playbook has helped us to take full advantage. XBI, an ETF that tracks biotech, is up 8% in five sessions. The gold ETF, GLD, is up 3.5% in the same timeframe, while Bitcoin is up more than 13% in five days. The Dow Jones Industrials have come up 4.2% over the latest five-day, while the Russell 2000 index of U.S. small-caps is up nearly 11% – it’s having its best week in 24 years. These are all in play, enjoying a moment in the sun, and we’ve done a great job tapping into this. I’ll show you a chart in a moment that confirms the continuation of the bull trend, but I’m also seeing the first signs of a flight-to-safety unfolding. As someone who’s been bullish for several months now, I’m coming to

[video_player type=”embed” style=”1″ dimensions=”640×360″ width=”640″ height=”360″ align=”center” margin_top=”0″ margin_bottom=”20″ ipad_color=”black”][/video_player] This weekend’s assassination attempt on the former president, and distinctly downbeat vibes throughout the economy, make it worthwhile to consider… a gigantic bummer. Possibly. If you were contemplating a dystopian United States – a dystopian world, really – what would you invest in? Maybe one of the few online bastions of free speech? RUM and DJT were both bid today. What about a medium of exchange or store of value? Gasoline and muscle cars à la Mad Max? How about gold or Bitcoin? The yellow metal was up modestly today, but Bitcoin packed on nearly 5% during the trading day. The pathway to a dystopian future always needs a villain at the end of it. How about the rally in banks following Jerome Powell’s talk about rate cuts? First by inflation… then by deflation… Then again, maybe “Mad” Max Rockatansky

[video_player type=”embed” style=”1″ dimensions=”640×360″ width=”640″ height=”360″ align=”center” margin_top=”0″ margin_bottom=”20″ ipad_color=”black”][/video_player] You know, I don’t care if you’re fundamentally bullish about this market or bearish, you have to just take a step back in shock and awe and try and get a grip on the magnificent sell-side activity we got yesterday. And on a day when we saw relatively soft inflation data – pure catnip for Fedheads looking to cut rates. We got a full on, pants-#$%^ing tech beatdown. And it doesn’t matter because traders erased most of those losses today. “So what,” I can hear you say, “people will buy the dip… and the dip has been bought!” That’s true, in certain corners of the market, but the charts I’m going to share with you in a second underscore the true nature of the rotation going on right now. I’m going to show you some insane options volumes, too. You