Gabz
Stock & Crypto Trader, SuperTrend Indicator Owner
The Magnificent Seven face a crack forming in the bond market, not the stock price, as the AI buildout gets funded with borrowed money. Per @Barchart, the cost to insure hyperscaler debt has jumped to a multi-year high. For some, capex now exceeds the cash their businesses generate, and credit markets tend to smell trouble before stocks do. x.comÂ
The Magnificent Seven ETF has drawn its largest institutional buying volumes ever over the past six months, while low-conviction traders misprice it on short-term uncertainty. It has now hit a new all-time high, and the setup favors steadily dollar-cost averaging in. x.comÂ
MAGS's seven major holdings are betting heavily on AI, guided by leaders with the best view of its future. There is no doubt the ETF will have its best year in 2027 or 2028, despite today's skepticism. x.comÂ
The iShares Top 20 U.S. Stocks ETF is a way to avoid the volatility drag that comes with the Roundhill Magnificent Seven ETF. x.comÂ
The Magnificent Seven's bull run is only starting, because investor sentiment is unusually bearish even as the group closes at all-time highs. AAII bearish sentiment is at its 2026 high, a level last seen in April, the same squeeze setup that preceded the prior run. For Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia and Tesla, this is the time to increase market exposure, not cut it. x.com x.comÂ
US large-cap equities look near a bottom because hedge-fund positioning suggests forced selling is in its final innings, not economic deleveraging. By many measures this is one of the largest hedge-fund equity deleveraging events in 30 years; AI positions built over 18 months are being unwound in 75 days. Yet profits are growing about 20% year over year, AI compute demand exceeds supply, and the S&P 500 has barely moved. Contagion has reached credit, multistrats and European bonds. x.comÂ
There is a reasonable chance, about 35%, of a 10-15% drawdown in the Nasdaq and Magnificent 7 before year-end, alongside a return of value investing. Jim Chanos' chart reinforces the setup for what triggers a drawdown in tech-dense passive indexes, which buy indiscriminately by market cap when dollars come in and sell the same way when they leave. x.com x.comÂ
The Magnificent Seven look better than grid and electrical equipment stocks, which carry some of the most egregiously high valuations. That group spans power equipment such as GE Vernova and ABB, switchgear from Powell and Eaton, cooling and panels from Vertiv and nVent, plus modular nuclear, fuel cells and batteries. A failed breakout on Eaton's weekly chart would be a big blow to the AI trade. x.com x.comÂ
The Magnificent Seven are now responsibly priced after being expensive, and in two years today's prices will look like an obvious buy. US tech now trades at a PEG ratio below almost every other index. x.com x.comÂ
The Magnificent Seven and memory makers rising together is the market's green light for the AI trade, because one firm's capex is another firm's revenue: the Magnificent Seven write the checks and the memory makers cash them. For a month, being right on one meant being wrong on the other, and that trend is ending. x.comÂ
Friday's extremely high volume in the S&P 500 suggests US large-cap stocks may be close to a bottom. The last bottom came last April during the tariff scare, at a reading of 3 on the charted indicator. This is a tentative technical read. x.comÂ