Hey trader,
For two years, every dip got bought. Companies bought back their own stock, insiders loaded up, and the floor held.
That floor is gone.
I’m going to show you exactly how it broke, who proved it, and what it means for the next leg down.
Disney’s board bought shares all the way down and blew out their own investors. Nike’s board did the same thing.
CoreWeave insiders did it too. EVERY one of them accelerated the losses on the people they were supposed to protect.
The insiders learned the lesson the hard way. You don’t buy back stock at highs.
You wait until it crashes and burns, then you support it. That means the buyback put that held this market together for two years is not coming back at these levels.
I told my audience this morning that this is a new thought process on Wall Street. The S&P 500 companies that used to buy anything at any time. Those days are done.
So when this vertical market rolls over, there’s no shock absorber underneath it. It falls faster than it went up.
Everything Is Priced In at the Top
ASML reported $8.43 this morning. The number crushed the estimate. They raised guidance.
The stock dropped.
I told my audience it doesn’t matter what a company reports. It matters where it’s positioned when it reports.
ASML was at an all-time high. At that level, the good news was already baked in before a single number hit the tape.
If you worked for me and held that stock into earnings without a hedge, I’d fire you. I don’t care what your excuse is.
Bank of America printed the same lesson today. They beat earnings by 11 cents. The stock rallied into a 15 multiple.
I’ve covered banks for 39 years. Fully priced on a bank is 15 to 16. That’s it. You’re done.
Sell the stock and buy it back at 45. You’ll get another shot. But buying into an overbought condition with virtually no upside left is how accounts get destroyed.
The Sugar High
Nike was up a buck today because Tim Cook bought 25,000 shares. The CEO of Nike bought 23,700.
Sounds like a vote of confidence. It’s not.
Nike still trades at a 29 multiple. I told my audience this morning you could go out and buy dozens of stocks at 12.
Cook is on the board of directors. The CEO wants his stock to stabilize. I’m not saying either one of them is wrong or right.
I’m saying it’s a one-day sugar high. The economy is not helping them. People are tapped out on their credit cards.
Consumer discretionary in this backdrop at a 29 multiple is not a buy. It’s a stock you avoid like the plague.
How You Break Free
Here’s what most traders will do this week. They’ll watch ASML, Bank of America, and Nike. They’ll chase the names on their screen.
EVERY one of those names is either fully priced or losing its safety net.
I told my audience this morning that three flows are driving this rally at the same time. Hedge funds, institutions, and retail are all chasing. That’s gasoline on a bonfire.
It feels unstoppable. But I’ve seen V-bottoms like this before. When they top out, they turn into diamonds on the way down. People can’t get out.
The $45 billion in CTA buy orders I warned about last week is what sparked this vertical run. When those orders fill, the bid disappears.
And the buyback put that used to catch the fall is gone. Disney’s board proved it. Nike’s board proved it. CoreWeave proved it. Companies are not going to support stock at highs anymore.
That means when the rotation starts, it won’t drift politely into the next trade. It slams into neglected names before the headline, before the chatroom, before anyone on television has a narrative for it.
The BURN SIGNAL is built to catch that earliest moment. I scan over 200 stocks for the behavioral shift that happens in quiet, overlooked names before the fast money arrives.
You don’t need to scan 200 stocks yourself. You don’t need to guess which neglected name is about to move. The BURN SIGNAL does the work. You get the ticker, the signal, a stock trade, and an options play. Twice a week.
On Thursday, April 16th at 2pm ET, Don Kaufman and I are pulling the curtain back on what that earliest clue looks like and how to act on it before the crowd arrives.
This is a free event. One session. The safety net is broken. When the rotation comes, you’ll want to already know what to watch for.
Save Your Seat — Free Live Event →
Professor Jeffrey Bierman
Creator of the Genesis COG System
