Michael Wiggins De Oliveira
Deep Value Returns, Equity Investing without Options or Leverage
The Nasdaq 100 cannot go up with oil at $90, and until oil and inflation are under control the market will stay tough. Since roughly last October the market has been choppy, much like 2021, when the indexes looked fine while things blew up under the surface, and no clear theme is taking charge. A complete washout, such as a 15% Nasdaq drop from here, would be preferable to this death by a thousand cuts. x.com
The Nasdaq is close to rallying again because sellers look exhausted despite all the bad news. It is down less than 2% despite rising rates and yields, high oil and war, unlike last April, when it often fell 5% a day and twice fell 10% in a day. Markets correct every 12 to 15 months, the broader market is already down 10% in this one, and much negativity is priced in. A Trump post saying negotiations are resolved could send it higher; it just takes a bit more patience. x.com x.com
The Nasdaq 100 faces short-term downside because a failed push to a new high leaves crowded bullish sentiment vulnerable to a break below. Despite record institutional accumulation and a long-term bullish position, five months of chop, a failed ATH and an attempted loss of the bullish trend favor hedging rather than adding leverage. x.com x.com
Hotter-than-expected inflation is pressuring the Nasdaq as yields rise. September CPI reached 3.7%, above the 3.6% forecast; hot oil, rising rates and the active Iran war accompanied the Nasdaq's 2% drop. The Nasdaq also failed to hold 745. x.com x.com 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
Disappointing Amazon earnings make a Nasdaq 100 decline to the bottom of its range near 700 look likely tomorrow. It may be forming a range like the one that preceded the decline into the March low, but a sideways phase lasting as long as that one looks unlikely. x.com x.com
Forward risks matter more than good earnings for the Nasdaq now. The index looks to be topping and has a good shot at 28,000 before a rally after the midterms; tomorrow's PCE and GDP releases are unlikely to help, and this week's lows could break. x.com x.com
The AI supercycle is backed by real profit growth, not a bubble. Nasdaq-100 earnings-per-share growth just crossed 50%, faster than the post-GFC rebound and every expansion cycle of the last two decades, with revenue growth rising alongside it. Bubbles are built on multiple expansion and nonexistent earnings; this is an acceleration in real cash flow. x.com
The Nasdaq looks headed lower as the Iran war points to inflation, higher oil prices and rising yields that will force tough Fed decisions. Iran is expected to respond to Ukrainian attacks, China and Russia are acknowledging US struggles, and the Houthis and Iran are hitting regional oil infrastructure, destroying facilities that will take years to rebuild. A Fed hike is 35-40% likely, Mag 7 capex is at record highs, and the index is near support. AI and semis remain bullish longer term. x.com … Show more
Big tech faces the most pressure as oil, Treasury yields and the dollar rise together, with Brent near $100, the 10-year above 4.7% and the dollar index above 101. Higher oil lifts inflation expectations, higher yields compress valuations and a stronger dollar tightens global liquidity, while risk-asset deleveraging is not fully cleared. Oil is the key, and Trump may not back down over Hormuz until markets show extreme pessimism. Alphabet's capex and negative free cash flow also worry investors. … Show more
The Nasdaq 100 stands to gain as Trump's Iran deal trades geopolitical leverage for lower oil and easier money. Giving Iran billions and ceding Middle East leverage has pushed Brent crude down to $86 a barrel, which should crush core inflation before the elections and give the Fed a clear path to cut rates, boosting tech stocks. x.com
The Nasdaq-100 is showing distribution, with too little participation under a near-record price; this is not a crash call. A rounding top has formed since April, and QQQ has stalled under the same dome three times since May. The McClellan Oscillator is rolling over a third time; a similar rollover in July preceded the summer's sharpest drop. New 52-week highs are only 1–4% of S&P members and just 54% of stocks sit above their 50-day average. Support is 702. x.com x.com
