[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] If you’ve gotten the sense lately that something is building, you’re not wrong. We’ve seen hyper-concentration in the biggest stocks, to the point where plenty of us are focused on just one. People are chasing crowded stocks and trades, bidding up stocks to nosebleed levels. And yet, tech is still strong. We can tell from a bullish crypto market and lows in the bond market, that, despite how far we’ve come, there’s still plenty of appetite for risk out there. Let’s look at some of my charts, and see what’s probably coming around the corner. It could be explosive…

[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] “When YOLO, you’re all about FOMO.” The Magnificent 7 tech mega-caps and AI are the quintessential “fear of mission out” plays – it often seems there are more bettors there than bona fide traders. But another “leg” has been kicked out from under these stocks” Google. Tune out the noise and we find…the stock is now dead flat for the year. Not a good sign. So, the FOMO crowd is moving on to smaller, soon to be crowded pastures. Other AI stocks of varying quality, and cryptocurrency. We’re going to look at just what the heck’s going on here and run down the tickers in play right now…

[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] I can think of 499 stocks that might as well hang it up… Welcome to the S&P 1, where you can buy any stock you want… so long as it’s Nvidia. Buyers only, though – no sellers allowed. I’m only half-joking. Diversification on the S&P 500 is now severely compromised; it’s more concentrated than it’s ever been. The combined weight of the Top 10 stocks is now north of 32%, having blown way, way past its Dotcom Bubble-era peak of 25%. And it goes almost without saying that diversification as an investment strategy is dead, too. But, like they say in Texas, “ya gotta dance with the girl that brung ya” and the only way out is through. Its Nvidia’s world and we have to trade in it. The S&P 1, excuse me, S&P 500 largely shrugged off the Fed’s

[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] Now, there’s no doubt artificial intelligence (AI) will eventually change the world. That’s already starting, but the full impact is probably a ways down the road. Right now, investors’ perception and imagination of AI is what’s really driving the bus. Hopes and fears are what we have to contend with right now. That’s powerful stuff. In fact, those hopes and fears are so powerful that Nvidia is now around $100 billion larger by market cap than the entire Energy Select Sector SPDR. That’s why worries about its earnings drove massive tech selling this week. And it’s why Palo Alto, which had decent earnings, got crushed. We’re going to look at why this happened and what it means for AI stocks from here out.

[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 got a little shot in the arm in the last hour of trading on the expectation that Jensen Huang and the Nvidia board would have good news for them. And that’s what they got – big beats, particularly in the revenue column, which saw a 265% year-on-year increase. It’s tough to exaggerate how important these earnings are. Barron’s called them a “referendum on the future of AI.” – as good a way as any to put it. AI (or at least the anticipation of the profit potential in AI), has been a huge bull catalyst over the past year. It might as well be a referendum on the stock market. NVDA has a market cap north of $1.6 trillion and makes up a huge chunk of the S&P 500 by weight. It’s one of the most important (and some

[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] If you’ve been able to make my daily trading room sessions, the selling of the past few days hasn’t been a surprise at all. The warning signs have been building and we’ve caught every single one. In fact, I’ve been doing everything short of pounding the table that we should expect downward pressure in the markets. As we’ve talked about, that selling pressure is now coming from investors bailing on tech and the chipmakers. But it’s not all red ink. I’ve been looking at the precious metals space and some of the defensive consumer staples – those had a particularly good day today. That’s where I think we’re likely to find winners right now…

[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] Google, Amazon, Apple, and Microsoft – together they’re worth more than $10 trillion-with-a-”T.” They account for a bit less than a quarter of the S&P 500 by weight. Incidentally, it’s been more than 50 years since the S&P 500’s top stocks were this concentrated. Well, they’re in real trouble now. All four of those mega-caps were down for the day. I’ve been about this all week, watching – and warning – as the cracks formed. It’s really just capital rotation keeping the S&P 500 above water right now. We’re going to look at what that means in this week’s wrap-up. We’ll grapple with the return of inflation and the meaning of inverted SKEW (tail risk) readings for Nvidia and Super Micro. And we’ll look at how our expected move predictions did. Let’s rock and roll…

[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 almighty American consumer is… spread a little thin right now. A little worse for the wear. That’s not just a hunch. Today’s retail sales numbers were negative – very negative. But to understand what’s really happening we have to get in and look behind that headline 0.8% drop. A lot of that decline took place in auto sales; that’s more confirmation that consumers are tired out. That’s the smoking gun, in fact, and we’ll look right down the barrel. Of course we’ll investigate the number of delinquent auto loans, as well. Let’s dive in…

[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 mainstream narrative today was, “Oh, look – a bounceback rally after a big down day.” But look just a little deeper, pull on the threads, and you find the situation is a lot more alarming than I think a lot of people realize right now. Apple, for one, did not advance today. Not only that, it breached its expected move in a big way, sinking around 0.59% by the end of the day. Not a good look for the bulls. Nvidia (one of the most dangerous stocks on the market, in my opinion – I’m on the record here) overtook Google to attain the third-largest market cap in Silicon Valley. If it were a world economy, it would fall somewhere between Mexico and Russia. And if that’s not alarming enough, the good old SKEW index is hitting record highs.

[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] Over the past few weeks, we’ve talked about some of the various unsettling intermarket signals, like the strengthening dollar, that have come across the screens. Today, in the wake of a higher-than-expected inflation reading, the danger that had been lurking “out there” is now in our laps. The greenback is getting even stronger, and stocks, led by chipmakers, are dropping fast. Not too long ago, the odds of a March Fed rate cut were high. Today, there’s a 60% chance there will be no cut in May. With the CPI numbers we’ve just seen, no one’s seriously taking bets until June. But that’s not to say there are no opportunities out there. We’ll be looking at where the money’s headed in today’s video.