3X Long Labubu
Long-Term Investor, Hobby Trader
US stocks are unlikely to enter another selloff unless the equal-weight S&P 500 and small caps break their key support zones. The recent drop came from bond volatility after unusually strong PMI data, and the S&P 500 has tested 7,695, at the top of its weekly opening gap and above a broken downtrend line. Indexes should stay range-bound and choppy until September CPI, PPI and next month's FOMC. Tech remains preferred as the area least sensitive to rates. x.com
US large-cap equities are vulnerable because earnings have not caught up with total market capitalization. The market is farther from its 200-week moving average than at any point in 18 years, and cracks are starting to show; staying bullish ignores these risks. Rate hikes remain possible, oil is still high, and yields may climb again, so now is the time for caution. x.com x.com
Uncertain AI-capex profits and higher oil costs from Iran still threaten US stocks. The SPCX-Nvidia deal brought much-needed overnight inflows to chips and is shifting sentiment, but tech's waterfall decline will not heal with a sharp V-bottom. Be prepared for a big fade. x.com
ETRADE's post-midterm return history and the prospect of political gridlock point to higher US stocks. The S&P 500, Nasdaq 100 and Alphabet should rise regardless of the election outcome. ETRADE says gridlock limits sweeping tax, regulatory and spending changes; under a Republican president, it reports average next-calendar-year S&P 500 gains of about 16% with Democratic control of Congress and 23% with split control. Strong 2026 gains may limit further upside, particularly in tech. x.com
US stocks remain vulnerable because leveraged long positions could amplify an unwind of the mania. The SPY-versus-long-Treasury trade has given back only a few weeks of its gains. x.com
Europe does not look great and the Middle East appears even more unstable than 52 days ago, adding to near-term risk for the S&P 500. Poor price action suggests its 52-trading-day streak without a 1% drop will end sooner rather than later. It is probably a decent time to sit on hands instead of being a hero or panic selling. x.com
The Iran war, rising oil prices and inflationary pressure do not yet look severe enough to trigger a major economic crisis. Despite some deterioration in the macro picture and short-term volatility, the broader picture remains relatively healthy and the long-term outlook for US large-cap and Nasdaq 100 stocks is very positive. x.com
US large caps will likely chop sideways until at least the midterms, with no sustainable bull run until skyrocketing oil prices are resolved. x.com
War escalation and the midterms will keep investors from increasing gross or net semiconductor exposure. SOXX will take out its July lows before any sustained rally; against a suggested 5% dip and 50% rebound, the path is '5% down then 100% down.' x.com x.com
Far less inflated valuations and significant AI earnings make US equities unlike the dot-com market top. AI/SI spending may still be overexuberant. Rates and yields have returned to historical averages; more oil through the Strait of Hormuz and from OPEC and Russia should lower oil and inflation. The market may not have bottomed yet, but falling yields, steady rates and the midterms passing should let it climb the wall of worry. x.com x.com x.com
US stocks look increasingly vulnerable: high interest rates are making long positions harder, while more bearish setups are appearing as the market worsens. x.com