First of all, epic podcast and video last night:
Our YouTube Channel is https://www.youtube.com/@Philstockworld and I would appreciate it if everyone subscribes AND tell 1,000 of your best friends to subscribe too. Our main podcast channel is https://philstockworld.transistor.fm/ and there’s a whole bunch of links to various platforms there. In fact, the AGI Round Table’s podcast is now ranked as the #3 AI/AGI Podcast in the World!
If they can do that for themselves in just 6 months – imagine what the AGI Round Table can do for your business? Look above, in just 4 minutes they’ve made you a leading expert on the Strategic Petroleum Reserve – amaze your friends at parties AND, more importantly, this is how they can explain your business to clients, train your employees, etc…
In fact, just this morning, Warren hit on a lesson that may just end up being the theme of the Options Trading Book we are writing:
Meanwhile, the war rages on and Oil is $87/94.33 this morning so HORRIFYING that it’s climbing so fast and EXTREMELY CONCERNING that the spread between WTIC and Brent is WIDENING rapidly – indicating things are WORSE in the Middle East than US traders are accounting for.
As we noted last night, 300M barrels may be roughly the usable bottom for the Strategic Petroleum Reserve – NOT ZERO! There are physics that have to be taken into account when removing oil from the reserves and the salt caverns we store the oil in were meant so last 25 years in 1975 – 51 years ago!
Q2 Earnings have been going well so far but it only takes one or two key missteps to pop this bubble – so every earnings report is a test of the market’s resolve.
7,469 – to be precise – is the KEY DATA POINT for the day as the S&P 500 is testing it’s 50-day moving average and we are 40 points above it – after gaining 65 points yesterday. The 200-day moving average is hitting the top of our predicted range (for 2026) and strong earnings are backing that up and we may have to lift the top of our range 10% – to 7,700 – assuming earnings season finishes the way it’s beginning.
We began the year at 6,850, fell 500 (7.2%) points to 6,350 in March and now were up 659 points (9.6%) since January and 1,159 (18.2%) off our March bottom just 4 months later.
The March drop was the start of the War (Feb 28th) and Oil ran all the way to (gasp!) $100 by the end of the month and then Trump’s team realized that, if they pretended there was going to be a peace deal EVERY F’ING FRIDAY!!! – traders were stupid enough to ignore the evidence and trade the “Truths.” That tactic has worked so well, in fact, that Trump is now charging $100,000/month for advanced feeds on Truth Social – so subscribers can make millions trading ahead of his market-moving news.
In fact, in order to justify the cost of the feed, Trump is ENCOURAGED to PRODUCE market-moving “Truths” – like yesterday’s 50% tariffs on Canada or his 6:54 announcement on Generic Drugs, which are now going to have a 100% tariff next year and 200% the year after that. That sent the Indian generic sector down 5% this morning! BILLIONS of Dollars to be made off a single “Truth”!
“How are my VIP Truth Subscriptions doing this month?“ “A little slow, Mr. President, better say something crazy.” “Will do!“
The Nasdaq is facing its own moment of truth today – after popping 550 (1.9%) points yesterday, putting us in spitting distance (4.4%) of 30,000 – again. The Nasdaq has run up 6,155 (26.7%) from the March lows, so what’s 4.4% between friends, right?
29,155 is 31.3 TIMES FORWARD EARNINGS and yes – it’s been higher – but not by much and NOT FOR LONG! The worst thing is this 31.3 forward-number is based on expectations of 25% earnings gains – ALREADY BAKED IN! Imagine what would happen if something went wrong – like not enough helium for chip manufacturing due to the Strait of Hormuz being shut down?
How did we come back from 37 to 31 this month? Not because anyone actually MADE more money but because they RAISED GUIDANCE or, as Wimpy used to say “I will gladly pay you Tuesday for a hamburger today.“
He’s dead now, heart attack – who could have guessed?
That’s where this market is heading – one big, massive coronary event as all these fat valuations clog up the arteries of reality. It costs real money to feed the beast and these “valuations” are notional. We have a $75 TRILLION US Stock Market and that is up $13Tn (20%) in the past 18 months yet daily market turnover is “only” $1Tn (1.3%) and half of those are buys and half are sells so net MONTHLY inflows (money being added to the market) are only $200Bn – and that’s a RECORD!
So, in 18 months, $3.6Tn in actual capital has flowed into the market but the “value” of the market has climber by $13Tn – 260% MORE mark-to-market increase than ACTUAL CAPITAL to support it. THAT is why it’s a house of cards – the forward valuations are NOTIONAL and there simply IS NOT ENOUGH MONEY – by a factor of 3 – to support the actual sale of these securities if the owners decide they would like to cash out – for some reason…
What if the participants want to reduce their holdings by 10% ($7.5Tn)? It would take 2 YEARS of inflows to find enough money to cash out just 10% of the market.
So I guess we’ll all just have to cross our fingers and hope no one ever wants to cash out, right?
That would be BAD!
