Hello Reader, Monday the CEO of BlackRock compared Nvidia's new financing structure to the invention of mortgage-backed securities. He meant it as a compliment. Nvidia had just signed six agreements to put over $500 billion of outside money behind AI infrastructure, and the pitch was that GPUs are collateral now. Four days later Nvidia cut the guarantee it was willing to put behind OpenAI's Ohio campus from $250 billion to under $120 billion. Let's get into it. Macro Nvidia Cut Its Own...
9 days ago • 9 min read
Hello Reader, The US economy lost 23,000 jobs in July and the S&P finished the week at an all-time high. That's against expectations for a gain of 80,000, and May and June got cut by another 103,000 on top of it. The index closed at 7,757.64, up 3.6% on the week. A labor market coming apart means Warsh can't hike in September, and apparently that was all anyone needed to hear. Sentiment is stretched though. BofA's Bull & Bear Indicator hit 9.7 this week, and anything over 8 is a sell signal....
15 days ago • 11 min read
Hello Reader, Three separate blowups last week, and every one of them came down to borrowed money. A 24-year-old was running the hottest AI fund on the street, up 439% through June. By the end of July he was down 67% for the month and handing his book to Ken Griffin. Korea’s market fell almost 40% off its June peak, then ripped 17.9% in a single day. And on Friday the US Treasury and Japan bought yen together for the first time since 2011. Same thing happening three times. The AI trade has...
23 days ago • 11 min read
Hello Reader, This week we started to see the real effects of the enormous amount big tech has spent on AI over the last few years. The spending is not new. Alphabet, Oracle, Tesla and the rest have been pouring money into it for a while. What is new is that investors have started to question whether it will pay off, and that doubt is now showing up in the bond market and in credit ratings, not only in share prices. A few things happened at once. Oracle was downgraded to one step above junk...
30 days ago • 11 min read
Hi Reader, Last week I said the whole week came down to Tuesday's CPI and Warsh. The number came in soft, Warsh stayed hawkish anyway, and then the war took over and made it pointless. The truce is dead, oil is back up, and the Fed is stuck. Let's get into it. Macro This Time We Blockaded the Coast The truce that held through early July is done. Monday Trump named the US the guardian of the Strait of Hormuz and put a 20% levy on everything moving through it. Tuesday the Navy went further and...
about 1 month ago • 7 min read
Hello Reader, You voted, and this letter is changing because of it. Last week I asked how many times you've actually traded off the Technical Charts section in the past 3 months. 59 (way less than I expected) of you answered. 75% said zero. 20% said 1 to 5 times. Only 5% said 5 to 10, and not a single person picked 10 or more. So 3 out of 4 readers who voted have never traded off that section, and that's before counting everyone who didn't vote at all. I told you last week these letters take...
about 1 month ago • 11 min read
Hello Reader, Real quick, I need one thing from you before we get to the market. Most of you know I run a business outside of TheTradingActuary, separate from the videos, the trading, all of it. Lately that business has been eating every hour I have. The section that takes me the longest to put together each week, by a mile, is Technical Charts. So I want an honest answer from you. Over the last 3 months, how many times have you traded using the Technical Charts section or made trades based...
about 2 months ago • 14 min read
Hello Reader, Told you I wasn't dropping my guard. Last week I said the deal was fragile and the Switzerland walkout was probably how the next two months would play out. The whole thing fell apart in less than ten days. A drone hit a Singapore-flagged cargo ship in Hormuz Thursday, the US hit back with airstrikes Friday, and Iran finished the weekend by launching ballistic missiles at our bases in Kuwait and Bahrain. Oil is back up, futures are heavy, and Trump is on Truth Social threatening...
about 2 months ago • 17 min read
Hey Reader, Just landed back in LA today, so the letters are back on their normal schedule after a month of travel throwing me off. Good to be home. We've got a few big things to cover this week. Warsh ran his first Fed meeting and flipped the whole script, the cut is dead and a hike is now on the table. The Iran peace deal got signed Tuesday, almost blew up in Switzerland today, then got pulled back together by tonight. And the most expensive market in a hundred years keeps leaning on a...
2 months ago • 14 min read