9/8 Best Idea For The Week Ahead

The SPY remains about the 21 week and has not seen a close below it since this uptrend began in late 2023, so as bad as it feels recently, we have not seen any notable technical damage on longer timeframes, yet.

The real issue right now remains tech, the QQQ, below, just closed below the 21 week for the 4th time since this rally began in late 2023. It’s getting hard to keep up with tech, the companies are all posting stellar earnings, many are surprising by alot, Amazon beat estimates by 20% last Q, nobody is guiding anything cautious, and everyone telling us how AI is maybe the biggest story of our lifetime. Then you have the 3 hyperscalers spending $100B+ this year alone in AI Capex and all 3 of those Microsoft,Amazon, and Google are below the 200 day indicating nobody is interested in buying them whatsoever, so either the market is sniffing out the AI trade or this is the buying opportunity of a lifetime.

When we look longer back to the start of the entire uptrend we’ve been in since 2023 began on the QQQ, below, you can see we still have no violated the near 2 year uptrend we have been in. Might we test that trend line? Sure, but until it breaks this is all just normal movement within an uptrend. If that uptrend below breaks, and look we tested it perfectly in that August crash but didn’t break. If that does break, that is where it is time to exit tech and accept that we likely are in a recession because something is really broken.

This week’s best idea is a name that is one of Warren Buffett’s favorite, no it isn’t OXY, but still one of his largest positions and it is having a huge technical breakdown right now. It probably isn’t a buy at this moment, but I think we can sell put spreads a few months out and get this thing for an incredible value.