The "Dragon" Stock Market Crash is Starting

[00:01] Wow, what a wipeout in the stock market.

[00:04] We need to talk about what's going on

[00:06] and specifically the Bank of America red

[00:10] dragon warning. Really, the dragon

[00:12] warning. It's just often called a red

[00:15] dragon because well, it means stocks end

[00:17] up going red. We're going to talk about

[00:19] that. We're going to break down exactly

[00:21] what's going on with this liquidity

[00:23] issue coming from SpaceX, Google, and

[00:26] the timing around these. Very important.

[00:29] uh some miscellaneous other news in

[00:30] addition to what's going on with Micron

[00:32] Wednesday. We already have a full

[00:34] breakdown video on that. Uh then we'll

[00:35] be moving into the Bank of America

[00:37] Dragon warning and then of course we'll

[00:39] talk about the Federal Reserve and

[00:40] something that's really contributing to

[00:42] some of the pain that we're seeing

[00:43] today. So let's get some of the simpler

[00:46] news out of the way first. Uh of course

[00:48] you've probably already seen it at this

[00:49] point. SpaceX is refinancing about $20

[00:52] billion of their debt that was really

[00:55] due within the next year. And so it

[00:57] makes sense they're trying to get rid of

[00:59] that debt. But the problem is they're

[01:00] already going back to the market after

[01:02] raising 75 billion plus another10

[01:04] billion dollar green shoe. And now

[01:06] they're hitting up bankers for even more

[01:08] money. It is a suck of liquidity.

[01:11] There's only so much to go around. Uh

[01:13] and so unsurprisingly that momentum that

[01:17] SpaceX had been experiencing with just

[01:19] 4.2ish% two-ish percent of the stock

[01:21] available to trade. Uh that really

[01:24] helped propel the stock up well over

[01:26] $200 uh up to like $217 per share after

[01:30] IPO has now completely reversed as that

[01:34] initial lack of access for shares and

[01:38] momentum trading has turned into a

[01:41] downward trending disaster. The stock

[01:44] now down 16.4%

[01:47] just on the day. This is not a surprise.

[01:50] This is what we expected going through

[01:51] the company's fundamentals. Although, I

[01:54] will say it happened about a week

[01:55] earlier than I expected. I thought we'd

[01:57] have at least until that NASDAQ 100

[02:01] inclusion before we'd start seeing

[02:02] SpaceX fall. It started falling before

[02:05] that. And you know, usually the market

[02:07] is forward looking, so maybe that's not

[02:08] a terrible surprise. But as a result,

[02:10] the NASDAQ is also going down in part

[02:12] because of SpaceX. Because even though

[02:14] SpaceX isn't part of NASDAQ, the NASDAQ

[02:16] 100, we expect it will be within 15 days

[02:19] of trading. And so therefore, when

[02:21] SpaceX plummets, people start selling

[02:23] off the index as a whole, which then

[02:25] indiscriminately sells everything.

[02:28] That's not great at the same time as you

[02:30] have liquidity concerns. Look at, for

[02:32] example, what's happening over at

[02:33] Google. We had already previously heard

[02:35] about the $80 billion stock sale, but

[02:38] the timing of it of that $80 billion

[02:40] stock sale actually really matters. See,

[02:43] Berkshire Hathaway underwrote about a

[02:45] $10 billion private placement and they

[02:47] got a discount for doing that of about

[02:49] 7%. Which I personally thought was not

[02:51] enough. They should really be trying to

[02:52] go for like a reinvest style 20%

[02:55] discount like we do on real estate. So,

[02:57] I think this was a little surprising. I

[02:59] think Greg Ael kind of needed to show he

[03:00] was able to do a deal and get a

[03:02] discount, but it certainly wasn't what

[03:04] we're used to when it comes to Buffett

[03:06] style negotiated discounts. So a 7%

[03:09] discount has already basically been

[03:10] evaporated in the market. And the issue

[03:12] with that is what's going on with the

[03:14] other $70 billion that Google is trying

[03:16] to move into the market with their stock

[03:18] sale. $30 billion of which are expected

[03:21] to hit the market as soon as the end of

[03:24] June. So that means between June and

[03:27] July and August, we're expecting to see

[03:29] $30 billion of Google stock dump so

[03:32] Google can raise money for their

[03:33] artificial intelligence endeavors. But

[03:35] on top of that, their at the money $40

[03:37] billion portion begins in the third

[03:40] quarter as well, which is July, August,

[03:42] September. So you potentially have this

[03:44] overlapping $70 billion of selling

[03:46] pressure for Google. And so it's no

[03:49] surprise that right now the stock is

[03:51] down about 12% off all-time highs. Still

[03:54] obviously a great company, still doing

[03:56] really well. It's up 33% year to date.

[03:58] So you can't really, you know, uh, slate

[04:01] them here for for wanting to raise

[04:02] money. But the point is it's happening

[04:04] at the same time as SpaceX is raising

[04:06] money. At the same time, companies are

[04:08] starting to go, it's getting a little

[04:09] more expensive and harder to raise money

[04:11] at the same time as yields keep rising

[04:14] following Worsh. Now, we're going to

[04:16] talk a lot about that because obviously

[04:18] yields have been rising. If we actually

[04:20] look at the bond market, we can see the

[04:21] 10-year is up about six basis points

[04:23] today. The 2-year as well. So, the

[04:25] entire yield curve just moved in the

[04:27] bearish direction. We didn't really get

[04:29] any kind of flattening or steepening. we

[04:30] just went straight bearish where

[04:32] basically both the 10 and the two are

[04:34] going up aggressively in the same

[04:36] direction. Not ideal. And eventually it

[04:39] becomes a longerterm risk for the stock

[04:41] market because one of the things that

[04:42] keeps the stock market moving is the

[04:45] fact that there's been relatively cheap

[04:47] access to capital. But SpaceX, because

[04:50] its fundamentals are kind of crappy, is

[04:53] having to raise at higher interest rates

[04:55] than people expected. Especially now

[04:57] with the stock falling, you're probably

[04:58] going to see even more of a premium for

[05:01] SpaceX level bonds. And it just means

[05:03] the entire artificial intelligence

[05:04] capital stack has to pay more money in

[05:07] interest than they could spend on

[05:08] hardware or otherwise. That said, we

[05:11] still had decent movement today on

[05:13] stocks like uh Micron or SanDisk. Micron

[05:17] today was up 6.8% which is great. Marll

[05:20] was pretty much flat today. SanDisk was

[05:22] up 4%. A lot of this is anticipation

[05:25] around uh not only earnings for Micron

[05:27] on Wednesday, but they also had this

[05:29] really weird which I thought was just

[05:31] sort of a pump announcement. This

[05:33] morning, Micron announced basically

[05:35] nothing right before earnings, but it

[05:37] got a lot of news attention where Micron

[05:40] announced that they are partnering with

[05:42] Anthropic to optimize systems for

[05:44] workloads and secure the supply that

[05:47] Anthropic needs. And so then when I

[05:50] actually got to like, okay, cool. So

[05:51] what does this mean? like you guys can

[05:52] make a chip together, you guys going to

[05:54] like invest in a fab together? No, it

[05:57] literally says Micron and Anthropic are

[06:00] basically agreeing to quote will I

[06:03] should rephrase the grammar here, but

[06:04] I'll just quote it here. Micron and

[06:06] Anthropic quote will analyze how memory

[06:10] and storage subsystems perform across

[06:13] various workloads and interact across

[06:16] the full infrastructure stack. Like

[06:18] what? Wait, so you guys announced this

[06:21] crazy multi-year partnership to analyze

[06:25] how things are going and you know to me

[06:27] that helped pump those stocks today

[06:29] because pretty much everything else sold

[06:30] off. You know in this morning's alpha

[06:32] report uh a few things happened. Uh we

[06:34] correctly identified that software was

[06:36] still going to be bearish for the next 3

[06:37] to 6 months. This is not a very hard

[06:39] estimate to make but we did correctly

[06:41] say like be careful. Uh we also did

[06:43] correctly say that SpaceX we maintain

[06:45] our bearishness on it. And if you

[06:48] actually look at SpaceX this morning in

[06:50] the pre-market, and mind you, I'm in

[06:51] Hawaii, so the time zone is crazy, but

[06:53] in the pre-market, SpaceX was actually

[06:56] okay. It was down like a percent or two.

[06:58] And in our alpha report, we're like

[07:00] super bearish on SpaceX. The thing

[07:02] freaking tanks another 14%. So, the

[07:04] alpha hit it there. Where it did not hit

[07:06] though was, and I should have seen this

[07:08] coming. It's hard to be bearish SpaceX

[07:11] and bullish on the cues, and that was my

[07:13] fault. Last week, I was optimistic on us

[07:16] getting over 740, regaining an easy 735

[07:20] on the NASDAQ and breaking through 740.

[07:23] That's what happened last week. Today, I

[07:26] was bullish that we'd be able to push

[07:28] further and through those levels.

[07:31] Unfortunately, I didn't reconcile that

[07:32] if SpaceX tanks, even though it's not in

[07:34] the index, it's also potentially going

[07:36] to take the market with it a little bit.

[07:38] Now, the market only went down 25 basis

[07:40] points on the cues, so NASDAQ 100 isn't

[07:42] really down that much. Uh and news out

[07:44] of Iran was pretty much just

[07:45] embarrassing and didn't really move any

[07:47] needles this weekend. We've got oil

[07:49] flowing in the straight of Hormuz. We

[07:51] know that we've given up a lot to Iran.

[07:54] Iran has a lot of strength that they

[07:56] didn't have previously. Iran not only

[07:59] able to likely monetize the straight of

[08:00] horses, but frankly they they might not

[08:02] even need a bomb to exert their

[08:06] leverage. They have a new bomb called

[08:08] the straight of Hormuz. Iran is keeping

[08:09] their missiles. They're gaining leverage

[08:11] over Donald Trump. At the same time,

[08:13] Trump is undermining Israel in their

[08:15] fight in Lebanon. So, it really seems

[08:18] like, as The Economist puts it, that

[08:19] Iran is going to get their yellow cake

[08:22] and eat it too, which is of course a

[08:25] reference to highlyenriched uranium.

[08:28] Anyway, uh so, you know, none of that

[08:31] really ideal. some of these negotiations

[08:33] with Vance. You know, there were some

[08:35] moments over the weekend about what was

[08:36] going on, but so far most of this ended

[08:39] up relatively bullish. The problem that

[08:42] really hit markets, in my opinion, is

[08:44] this liquidity issue with SpaceX and

[08:46] Google, those Google shares starting to

[08:48] hit the market, but also the warning

[08:49] around what Bank of America calls the

[08:53] dragon. Now, the dragon is basically an

[08:56] instance where all of a sudden you see

[08:59] the CPI rate go above the unemployment

[09:03] rate and that's a concern where the

[09:06] unemployment rate is low, you know,

[09:08] 4.3ish%

[09:10] right now. Uh, and the expectation is

[09:13] that CPI inflation in the United States

[09:17] could exceed that 4.3%. Right now, in

[09:20] the last 12 months, ending May of 2026,

[09:22] it was at 4.2. 2%. Now, of course, we

[09:26] expect that's going to roll over. Well,

[09:29] at least I do. But because of the

[09:33] near-term damage that does to the

[09:35] economy uh by keeping rates higher for

[09:38] longer, you could actually be

[09:40] intentionally keeping rates higher to

[09:43] fight down CPI like Kevin Walsh said he

[09:46] was going to do, especially when CPI

[09:49] exceeds the unemployment rate. Now you

[09:51] have to stay high for even longer, more

[09:53] aggressive with those rates, which means

[09:55] you squeeze AI liquidity even more at a

[09:59] time when it might not be that capable

[10:01] of absorbing any more of that squeeze. I

[10:03] mean, Satya Nadella literally just

[10:05] started talking about the

[10:06] commoditization of artificial

[10:07] intelligence, which you know, it's not

[10:09] great when they start talking about

[10:10] this. We started talking about this. I

[10:12] mean, well, we started warning about

[10:14] this years ago, but more recently,

[10:16] Google's IO really told us the

[10:18] commoditization is starting where we're

[10:20] starting to see the growth rates in

[10:22] token usage on a second derivative fall.

[10:25] That's scary. Basically, we grew token

[10:28] usage 50x from 24 to 25 on a 1-month

[10:32] period. And then from 25 to 26, we grew

[10:34] at 6.7x.

[10:36] So, the growth rate is negative on token

[10:39] usage. At the same time, we've got more

[10:41] efficient models, more efficient chips.

[10:43] Uh, and so that value per token is

[10:45] starting to fade. It's probably also why

[10:48] we're starting to see stocks like Google

[10:50] fall because Google had really been

[10:52] crushing it with their Gemini model in

[10:54] November of last year. Anthropic really

[10:56] took the lead here in the spring, but

[10:58] now you're actually seeing a little bit,

[11:00] this is me saying this early, a little

[11:03] bit of a chat GPT resurgence. I hate to

[11:05] say it, but but they're they're you

[11:06] know, all of them are close, but I'm

[11:08] seeing a little bit of an edge ahead in

[11:10] chat right now. Uh and maybe that's why

[11:12] there's no surprise that you've actually

[11:14] got one of the co-leads of Gemini and a

[11:17] VP of engineering, uh Noam Charzier.

[11:21] Probably screwed that name up. Sorry.

[11:23] But anyway, he just left Google to join

[11:26] Open AI and he had been only been there

[11:28] for like two years or whatever, but

[11:31] whatever, you know. So, all of this kind

[11:32] of comes together. So what is the dragon

[11:34] warning? Well, the dragon is basically

[11:37] the Fed keeping rates too high for too

[11:40] long and then what you end up with is

[11:42] what is called a bare flattener. A bare

[11:45] flattener is basically when we

[11:47] cyclically go from a boom. Commodities

[11:50] are winning like gold earlier this year.

[11:53] Stocks are booming. Everything's

[11:54] booming. Kevin Worsh gets appointed. It

[11:57] signals the top for gold, the top for

[11:59] some commodities, but it also post the

[12:02] Iran war ceasefire at the beginning of

[12:04] April, quote unquote ceasefire, what do

[12:06] we get? We start getting a bare

[12:08] flattening. Remember on Okay, let me

[12:10] explain this because I know this one's a

[12:12] little complicated and convoluted.

[12:14] Basically, there's this line called the

[12:16] spread between the 2-year yield and the

[12:19] 10-year yield. And if you chart the

[12:21] difference between the two, you get a

[12:23] curve, which is a fancy mathematical way

[12:25] of calling a line something that goes up

[12:28] and down. Okay, Iran war starts, that

[12:31] sucker goes all the way up to 71, which

[12:34] is like well in shock territory. It's

[12:36] often the market starting to say, "Crap,

[12:38] we're possibly going to have to print

[12:40] money because we're going to get driven

[12:42] into a recession with the closed

[12:43] straight of our moves." when we get

[12:45] ceasefire and now we're starting to see

[12:47] a recovery post that or have seen that

[12:49] in the stock market. What do we actually

[12:50] have? We have a very low uh spread

[12:54] between the two. In fact, we are at the

[12:56] lowest levels in all of Donald Trump's

[13:00] second term and we are at the lowest

[13:03] levels that we have seen since uh right

[13:07] before his term about December of 2024.

[13:11] That is a sign that that curve is

[13:14] flattening. The number is going down.

[13:16] When the number goes down, it means it's

[13:18] flattening and it's bearish because

[13:20] while the spread is shrinking or

[13:23] flattening, yields are going up. And

[13:26] that Bank of America says usually means

[13:29] we are moving into an era of stagflation

[13:33] where cash is more desirable. Now, the

[13:37] only way we can really get bailed out of

[13:40] this is if inflation rolls over. So, we

[13:43] get oil prices fall more than they

[13:45] already have, right? Because even though

[13:47] oil prices are down, they're still

[13:49] obviously up from where we have been. If

[13:51] we look at uh oil prices right now,

[13:53] we're at 78 on Brent. At the beginning

[13:55] of the year, we were at like 60 bucks a

[13:56] barrel. So, we're well above where we

[13:59] were at the beginning of the year. I

[14:00] mean, we dropped to like 59 there. kind

[14:02] of dragging dragging along the anchor,

[14:04] if you will, along the floor of 60 bucks

[14:06] there on Brent. So, we're still quite a

[14:08] bit higher. I mean, that's about 30%

[14:10] higher still on Brett, even though oil

[14:13] has come down. So, we're still more

[14:14] expensive on oil. Yields are rising

[14:17] because people are like, "Oh, AI

[14:19] spending isn't stopping." Yet, because

[14:21] AI spenders are spending and borrowing

[14:25] like crazy at the same time as yields

[14:26] are going up, people are going, "Man,

[14:28] there's actually not going to be as much

[14:30] money left because you're going to spend

[14:31] more on higher interest rates." Look at

[14:33] what's happening with SpaceX. Now,

[14:36] again, you get bailed out of this by

[14:40] oil falling and ideally AI disinflation

[14:44] and a tariff rollover. So, we want a lot

[14:46] of disinflation. If we get disinflation,

[14:50] then we could go back to bullishness

[14:53] where yields come down. That would be

[14:57] really, really good. We want that. What

[15:00] we don't want is yields to come down and

[15:02] then we go back into a reinverted yield

[15:05] curve because the Fed was too late and

[15:08] then we end up triggering a recession.

[15:10] Now, that's moving way too far down the

[15:13] curve. And I'm sorry to talk, you know,

[15:16] so like I feel like I I'm speaking in

[15:18] tongue about this. So, I'm just going to

[15:20] try to simplify this. Uh, just to to

[15:22] send this point home, okay? Go to

[15:24] mekevin.com, join the courses of

[15:26] building your wealth. Use coupon code

[15:27] pope. You could see the co pope's nod. I

[15:30] almost said cop pope pope's nod on

[15:33] Instagram. You can follow me there or on

[15:34] Twitter. You can see some uh pictures on

[15:36] Instagram from Hawaii. Uh but anyway,

[15:39] let's let's focus for a moment on on

[15:40] rephrasing that and get into some of the

[15:42] other data here. Uh that coupon, by the

[15:44] way, we've got another like week and a

[15:46] bit before that comes to expire. So,

[15:47] there's no major rush, but if you want

[15:49] to join the alpha membership and see

[15:50] what we're talking about every day and

[15:51] what stocks we're looking at, you can

[15:53] always do that over at mekevin.com. Uh

[15:55] now, and and keep in mind, you know, I'm

[15:56] not always perfect. I mean, I think the

[15:58] SpaceX calls were great. The calls on

[16:00] AMD and Marll and all of that in the

[16:02] near term were great. uh the last like I

[16:05] feel like five QQQ price targets we've

[16:07] had. We've hit them all. Just got a

[16:09] little too excited over this last week

[16:11] here without recognizing that SpaceX was

[16:14] going to drag the QQQ calls down. Uh so

[16:17] we missed that by about nine bucks on

[16:18] the QQQ for our near-term target. Little

[16:21] bummed about that, but that's also why I

[16:23] like studying what's going on in the

[16:25] market so we could talk knowledge

[16:27] knowledgeably. Let's make sure this is

[16:29] still recording. Yeah, we're still

[16:30] recording. Okay, good. knowledgeably

[16:32] about what the heck is uh is going on

[16:34] out there. So, to simplify this and then

[16:36] we're going to get into a little bit

[16:37] more data and and look at this from

[16:39] another point of view. Basically, uh the

[16:42] money vacuum is going on, right? You've

[16:44] got a lot of companies spending a lot of

[16:46] money chasing tokens when we don't

[16:49] actually really need that many more

[16:51] tokens. We're kind of plateauing out

[16:52] with the usage of artificial

[16:54] intelligence in terms of what it's good

[16:56] for. Yes, it's fantastic for coding.

[16:59] Yes, it's fantastic for cyber security,

[17:01] but beyond that, we sort of cap out and

[17:04] even in coding, there's going to be a

[17:06] cap out. There are only so many

[17:08] databases every engineer can make and

[17:10] eventually those have to have a usage

[17:12] and they have to prove profitability.

[17:13] And when you got Satiana going, "Yeah,

[17:15] go ahead open AAI, go to anyone else."

[17:18] What you really have is companies like

[17:20] Microsoft saying, "hm, all this crap is

[17:23] commoditizing so fast that we just need

[17:26] to be the one who actually profits from

[17:27] AI rather than goes all in on all of

[17:30] this capex." Now, they're still spending

[17:32] money and blowing money on capex, but

[17:34] that's going to flip. And the beauty

[17:35] about when that flips is Microsoft's all

[17:38] of a sudden going to look really

[17:40] profitable again. Now, that's not the

[17:42] case now. Microsoft stock was down like

[17:44] another 3% today. That's okay because

[17:46] right now they're still spending. Yeah.

[17:48] Down 3.18%. But what'll happen in the

[17:50] future is companies like Meta and

[17:52] Microsoft will actually turn around be

[17:54] like look at how much money we make. And

[17:56] people are going to be like wait I

[17:57] thought you were blowing all your money

[17:59] on capex. And then people are going to

[18:01] go or sp Microsoft and Met are going to

[18:03] go not anymore. We actually just make

[18:06] money through advertising and providing

[18:08] uh services you know productized

[18:10] services. Great. That's that's a cool

[18:13] long-term investment thesis for

[18:16] advertising plays or software plays.

[18:19] That's going to take time to play out

[18:20] though. In the near term, what we're

[18:22] most worried about is this dragon

[18:24] warning because Kevin Worsh is taking

[18:27] this approach of yeah uh I need to

[18:30] distance myself from uh Donald Trump

[18:33] pressuring me to cut rates. So, what's

[18:35] the easiest way to do that? Oh, uh let

[18:37] me just look at the clock over here. Oh,

[18:39] I know. I'll buy time. Now, how is Kevin

[18:43] Worsh going to possibly buy time if he

[18:46] just says, "Oh, yeah, JK, I don't want

[18:48] to cut rates. Donald Trump will just

[18:51] harp on him." Not that that necessarily

[18:53] should matter. Oh, Kevin Worsh could

[18:55] just end up being another drone Powell

[18:57] where you just take it. Um or you pull

[19:00] what Kevin Worsh did and you do a uh

[19:03] we're going to consult five different

[19:05] tasks for task forces and you know I

[19:08] think it's going to take them until the

[19:09] end of the year to really give me

[19:11] guidance on what's going on out there.

[19:13] So we're just going to be patient. It

[19:15] takes some time. Well that time gives

[19:19] him the luxury of saying to Donald

[19:22] Trump, "Hey, as soon as the task forces

[19:23] get back, we'll work at lower rates."

[19:27] But between now and then, he could

[19:28] actually make sure oil prices come down.

[19:30] He can make sure AI disinflation starts

[19:33] coming. Maybe some of the crazy capex

[19:35] investment starts slowing down. In that

[19:37] case, he's going to have a free license

[19:39] to cut rates. The problem with the

[19:41] dragon warning is how long can the

[19:44] economy sustain rates basically high

[19:48] while CPI is at the same level as the

[19:50] unemployment rate or higher. Basically

[19:53] in the same spot right now and then you

[19:55] end up crushing the economy. Now, not

[19:57] everybody thinks this way. You have the

[19:59] hawks over at TS Lombard who are

[20:02] actually pro a potential rate hike. They

[20:04] think inflation is going to last years.

[20:06] I think they're totally wrong. Now, in

[20:08] fairness, I know there are some of you

[20:10] right now that are like, "No, Kevin, I

[20:12] think you're wrong." But Kevin,

[20:16] inflation is going to stay higher for

[20:18] longer. That's fine. I respect that. I

[20:22] highly disagree with that. I highly

[20:24] think we are going to see massive

[20:27] deflation and the biggest concern that I

[20:30] have is that we have a Kevin Bush who

[20:32] doesn't help pump us out of that because

[20:33] we will be in the dumps for years. I

[20:36] hope that doesn't happen. Uh now the

[20:39] argument that the inflation hooks have

[20:42] is basically, oh this is good. Kevin

[20:44] Walsh taking his time and not rushing to

[20:47] cut rates is great. We were worried he

[20:49] was going to be too doubbish, especially

[20:52] at a time where tech companies are

[20:54] taking on more leverage. Uh, and what we

[20:57] need to do is keep rates high to prevent

[20:59] them from levering up too quickly.

[21:02] That's why we need to raise rates to

[21:04] constrain AI spending. Now, that's fair.

[21:08] I get it. Like, if it keeps going like

[21:10] drunken sailor style spending, sure. But

[21:13] if at the same time you stay hawkish on

[21:15] rates and the companies themselves start

[21:17] spending less money then you get

[21:19] pressure down on pressure down and you

[21:22] really rapidly you turn the economy

[21:24] down. So there are arguments here on

[21:26] both sides. The dragon just says we're

[21:29] at an aggressive time. In addition to

[21:31] what the dragon article says is that

[21:33] they talk about that right now the uh

[21:36] Bank of America bull bear indicator is

[21:38] sitting at a 9.2. This is a very high

[21:40] level. This is an extreme bull

[21:43] positioning. Their sell trigger

[21:45] triggered uh last month and uh of their

[21:49] last 17 sell signals since 2002, the

[21:53] average loss for global stocks over the

[21:55] next 2 to 3 months was 2 to 3% with a

[21:57] hit ratio of 60% and a max draw down of

[22:01] 20%. So, you know, I personally don't

[22:04] think any of that is scary enough to run

[22:05] for the exits, but I do think it is

[22:09] enough information to say, okay, maybe

[22:11] we have to be careful betting on this

[22:15] short-term everybody's going to believe

[22:16] in the disinflation narrative and the

[22:18] stock market's going to keep going to

[22:20] the moon at the same time as a meme like

[22:22] SpaceX rolls over, those probably don't

[22:25] align. Probably going to need some more

[22:27] patience. And the big thing that's next

[22:29] is Micron earnings. Now, if Micron

[22:31] misses on anything, one little thing,

[22:34] the stock will be down 16% or more,

[22:37] it'll be down like 30%. Overnight,

[22:40] there's no like and and I don't play

[22:42] earnings, so I'm not making this bet

[22:44] year. I'm just saying if I were a

[22:46] betting man, there's no way in hell I

[22:48] would buy calls for Micron. Now, famous

[22:51] last words, it could skyrocket the next

[22:53] day. Fine. I actually think Micron is

[22:56] relatively cheap, but all like there's

[22:59] so much hope on this company that one

[23:01] little thing they say wrong and that

[23:03] stock tanks and it'll tank really fast.

[23:07] Now, keep in mind I have a full micron

[23:09] video that I made at the end of last

[23:10] week. I highly encourage you watch it.

[23:12] It was basically in the same setting

[23:13] here. Uh and it, you know, it made it

[23:15] very clear what the expectations are for

[23:18] the company. At the same time that

[23:20] Microsoft Meta and Walmart are starting

[23:22] to limit their artificial intelligence

[23:24] usage. We talked about that. We also

[23:26] talked about the core components of why

[23:28] Micron is making so much money right

[23:30] now. Why they're sitting at a 1.1 peg

[23:32] which is very cheap, but what it

[23:35] requires to stay that cheap. All of that

[23:38] is in the other video. So that is more

[23:40] than a micron video. That is like your

[23:42] AI market video and I highly encourage

[23:44] you watch it. Rest in peace to Alan

[23:47] Greenspan. This is like losing a uh uh

[23:50] Jerome Powell of the prior generation.

[23:52] So, a little sad the guy was in um I

[23:55] mean he was a hund so you know good for

[23:57] him on that side. But uh you know he was

[23:59] if I have it correct he was in his

[24:01] chairmanship from 1987 through 2006.

[24:05] So the guy saw some stuff over at the

[24:07] Fed. But uh anyway that's what I got. So

[24:11] thank you so much for watching. Consider

[24:12] subscribing to the YouTube channel.

[24:13] Follow me on Instagram at me Kevin.

[24:15] Follow me on uh actually Instagram is

[24:18] real Kevin and yeah. No, no, no. That's

[24:20] right. Instagram is me Kevin. X is

[24:22] realme Kevin. Yeah, gold's down again

[24:24] over here. Uh and um yeah, consider

[24:27] sharing the video. Ah, yeah. Gold really

[24:29] peaked out right there when we said it

[24:31] would after that Kevin War confirmation.

[24:33] That was a good call. Uh but uh I can't

[24:36] get them all. My goal is just to be

[24:37] right more than I'm wrong, as everybody,

[24:40] right? Thank you so much for watching.

[24:41] We'll see you in the next one. Goodbye.

[24:42] Good luck and enjoy your day.