The Historic Stock Market Selloff.

[00:00:00] Speaker 1: With you, with you, with you, oh man, your boy Kevin just lost lots of money, oh that's okay, I am with you, here we go, come on, push it, buy the dip, buy the dip, here we go, come on, push it, buy the dip, buy the dip, here we go, come on, push it, buy the dip, buy the dip, here we go, come on, push it, buy the dip, buy the dip, here we go, come on, push it, oh my god, what's happening? [00:00:23] Speaker 2: First of all, all of this whining by Wall Street, it's making me sick, 140% of GameStop was short, GameStop was short, short, you can't allow Wall Street to short, 75% of a stock, crushing companies into the dirt, thousands of stocks into the dirt, then when the individual makes money, everyone's entrepreneurs, I have a kid who bought a house, paid $50,000 and bought a house, after decades of the shorts, you have to accept the fact that individual investors are playing the same game that you're playing and now you're losing. [00:00:53] Speaker 1: Now you're losing. [00:01:23] Speaker ?: There's a lot of power in the organization online. Too many people can get together in a subreddit. I think it's really funny that the GameStop stock is going up and just affects the market in that way. There's 20,000 people live in a Discord who are spamming rocket emojis yelling, go to the moon. [00:01:52] Speaker 3: Oh my goodness, the market has taken a poopy and boy do I hope you have your pooping pants on because the market is not very happy today. Holy moly, holy moly, even Berkshire Hathaway went red. Damn! That's when you know it is just across the board systemic selling. Boys and girls, we are trying to set up a new floor for the queues. Given that there was no respect previously, take a look at this. This is on the five minute chart. We are dragging like an anchor along the seafloor. Look at that. 650, 650, 650, 650, just above 650 right now. There you go. Pretty remarkable. We have not seen this level in quite a while. Volatility is also remarkably high right now. It is, in my opinion, not the greatest time for buying options. Better time for selling options, honestly, on stuff like this. But take a look at this. The volatility index is up 56.7% intraday. We have only seen 56% days on the VIX 10 times in the last decade. I'm sorry, 10 times since 1990. So in 36 years, days like today have only happened 10 times when it comes to the volatility. Like, just let that sink in for a moment. In 36 years, volatility days like today have only happened 10 times in 36 years. That's insane. That's how much of a vol spike we got today. Now, that just measures, you know, level from a low, not sort of, you know, net high level because we're still at, what, 25 on the VIX? I mean, we're not at Japanese carry trade levels. We're not at levels where, you know, we've been during Liberation Day. Here was the war. War VIX spiked to about 34. We got a spike up here to about 47 during Liberation. The Japanese carry trade, we got a spike of volatility all the way up to about 65. COVID was a big old spike. So we do see reaching this nominal level more frequently, but seeing how rapidly it has occurred, as in having a 50% move intra-day is exceptionally rare. That's something you generally only see once in, well, I mean, in 36 years, you add it 10 times, so that'd be about once every three years. Once every three years, you got a spike like this, which is really, really remarkable. Despite all of this, Michael Burry is holding on to the vast majority of his contracts. Look at this. He's holding his puts on Palantir, Caterpillar, the NASDAQ, Oracle, probably because he's still upside down on them. He did sell 25% of his semiconductor ETF puts, so still shorting this market. Some other things to pay attention to are, this is the absolute dispersion chart right here. You can see that it's pretty dang rare to see the S&P 500 have its component stocks move as much as they are right now, where the headline doesn't move as much. Something like this, you're at the 100 percentile in 30 years. Ah, I'm going to get some more coffee cooking here. It's like I had a fresh cup, we'll look at it in just a moment. But yeah, we are bobbing right there on that 6%, negative 6% line, puts you right at about 650 on the queues. Pretty freakish. You got Meta that got all the way down to about 604, Robinhood's down to 78, holy moly. AMD down 15%. Oh my lordy, look at that. Just laughed at the 452 line. It's days like today where you get this indiscriminate selling, but a lot of people are under the impression there must be some form of liquidations cooking. And it may not just be one company that's getting liquidated. We did cover Wall Eye Capital this morning. But we did have, or we do currently have coverage from Special Situations, who's tracking this. Take a look at this. He's got, where was it? Where was it? Where is it? He's got a list of companies that have gone poopy doopy this morning. And let me see here. Here we go. Comprehensive list of hedge funds blowing up this week. Getting large redemptions or shutting down. Axebrook, Wall Eye, Engineer's Gate, Lone Pine. This is the one we looked at this morning right here. Lone Pine Millennium has internal pods getting liquidated. Veritean has internal pods getting liquidated. Samlin has some liquidation going on. Here's the actual letter from Wall Eye Capital. We're going to go through that. I'm going to pull it up here as a PDF so we can actually highlight it. Otherwise, what good is it? You know, this should really integrate some kind of, like, highlighter function into Axe. I feel like that would be pretty clutch. I don't think it's that hard to do. I mean, these days, you can pretty much OCR everything. But let's get in here. Having OCRed the page now. There we go. I believe in discipline, humanity, and self-awareness. Following our worst months since COVID, we've taken a hard look at every aspect of the firm. With that in mind, we are simplifying our business. This decision includes parting ways with long-short leadership and a substantial portion of our internal long-short investment teams. We are going to lean into the business where we have a proven and differentiated right to win, including our volatility, quant, and external businesses. Related, we have evaluated the optimal size of the fund. And we plan to return a portion of our capital. We will be in touch with you regarding that. Our internal long-short has been the weakest performer since 2023, substantially underperformed our external. Over the past few years, we invested considerable effort in helping improve the internal business, including new leadership. Those efforts did not produce the results we wanted. And the opportunity costs and resources consumed have been too high. It did, however, reinforce one important lesson. Our competitive advantage is not trying to replicate traditional asset managers. Uh, blah, blah, blah, blah. Blah, blah, blah, blah, blah. The decision builds on a broader evolution that began in 23. We consolidated two funds into one. Blah, blah, blah, blah, blah, blah. Our external, okay, this is just more commentary. Our balance sheet strategy, such as reinsurance, treasury basis, and equity capital markets have been smaller, but valuable additions continue to grow. This is a proactive decision. We continue to see strong investor demand for more exposure to volatility, quantitative, and external strategies. Sure. Hey, even though we're sucking wind, people are still coming to us. Right. Right. Yeah. So, where do we sit here? Q's still holding. Still holding onto that line. You've got, uh, Lumentum's getting destroyed, though. Uh, down another 17%. Wow. It's actually a pretty good company. Uh, you've got Marvell's at 136 now. Holy moly. That's right around where we bought it. Wow. Yeah. That's crazy. Uh, because we bought it somewhere right around this mess over here. So, it's basically gone. Full circle. Full retard. Ha, ha, ha, ha. That's hilarious. Uh, wow. Yeah, look at that. Yeah, I want to say it was like the 140-ish level. But let me draw, let me see where we sit there. If you draw a line right here. There we go. Let's put you around Marvell. And let's make that a gray line. Yeah, that's roughly, roughly where you sit right now. That's remarkable. Look at that. Right through the 200-day moving average. It all kind of started with that acquisition there, huh? Uh, CrowdStrike. Look at that. How many times are we going to bob around this range right here on CrowdStrike? That's pretty remarkable. And if I jump on over into Net, ooh, Net's actually come through that range. Now sitting down about, uh, also at about the 200-day moving average. Wow. Wow, that's remarkable. Then if you go to, let's see, NVIDIA. Right through the 200-day moving average as well. You're in no man's land on NVIDIA. That's remarkable. And then you've got Microsoft's holding up. Still near all-time highs. AMD's basically at its 200 DMA. Moderna's holding on at 240. That's pretty good. Dell's come, Dell's at the 200-day moving average. Nice. Kind of like it when stocks are at the 200-day moving average. Ugh. Dell came through its, uh, its lows over here. Pretty remarkable. Someone says QQQ617. Maybe. Let's see here. Yeah, we do have a 617 line over here. And QQ617 was a ceiling here. Bounce here. Ceiling over here. Yeah, so it's been a line that's been played. Holy moly. Look at that. All right. Let's go take a look at, uh, some of the Wall Street commentary on some of the damage. So we talked about the volatility index being basically, uh, you know, a one in three year situation. We talked about, we haven't talked about Gina yet. Gina, uh, in a YouTube video indicated that they do not plan to pause, uh, existing data centers. Rather, they plan to pause permitting on new data centers. Now that I think is useful. Let's listen into that for a moment to see if we can hear that part. [00:13:12] Speaker 4: Blessed. It's a great day. [00:13:14] Speaker 5: You know, we've been hearing about a lot and especially been hearing about here in Abilson. [00:13:19] Speaker 4: Well, the priority of my data center policy is actually to give Texans a seat at the table. Okay. This is a great, big diverse state. We are like a country in Texas and different communities have different needs and the people of those communities should have a say. And right now they don't. So, um, that will be my first priority and yes, there should be protections for water and electricity costs and property rights and air quality, all those things. Um, but we re really need to have some laws in place that protect Texans before any of this continues, this continues. And so my position is I would have a moratorium or ban in place until we pass those laws that protect Texans and give them a seat at the table. [00:14:06] Speaker 5: Yeah. Can you expand a little bit on that moratorium? Kind of how that would work with some construction already going on? [00:14:11] Speaker 4: Right. It would be a pause on approvals because we need to make sure that Texans are protected. What happened in Texas. So, you know, in your viewers, right? [00:14:22] Speaker 3: So that's important. So if we zoom out, let's go to, Oh, where did I put this? I want to see there's a piece on approvals. Let's see. I was looking at this earlier. Here we go. I don't like Google. Thanks for the $5, but I'm not a big fan of Google. Although I'm curious, I'm curious where it sits today. 282. Yeah. No, I'm just not a fan of Google. They really need to offset that advertising biz from search and makes me nervous. It's over half of their rev. Especially if you include those websites too, which is the network. You know, so it's search and network. Both of those matter. It's a lot. 50 gigawatt of construction sits at vertical construction or beyond. So this would mean we're beyond the approval phase, right? So 50 gigawatts vertical or beyond. 86% of 2027 buildout is already vertical. And then 34% of 2028. The 20% plus part is where you get the first steal in. So in other words, you're really talking about this. 2029 to 2030. So, you know, this isn't really, this doesn't affect anything in the near term. But people are pricing it as if it is. So, Q's holding. Look at them hold this line. This is a pretty impressive line, I have to say. So, you know, we did break through it earlier, but it was bought. So that got bought at 647. Every time it's broken through that, it's been, it's been bought pretty rapidly. Wow. The VIX is now up 61% intraday. Holy moly. Ah. Google the best positioned hyperscaler. I mean, I don't see how. I think you have very solid competition from Microsoft, Amazon, and Meta. I wouldn't necessarily say one of them is way better than the other. All right. Let's keep looking over here. So this is useful on the vertical stage of construction. Let's see what we got over here. It's your ramen. Okay. Let's see here. NASDAQ has had 11 corrections. In the past decade and five bear markets following a correction, which occurs when the index closes more than 10% below recent peaks. The tech index usually does quite well, averaging a 23% gain over the next 12 months. You know, that would actually align with what you've seen or what the estimates are post midterms, right? Five bucks for Rocket Lab, Lunar, and SpaceX. I've never looked at Lunar, SpaceX I'm bullish on. I turned bullish around September 11th on SpaceX. Rocket Lab, let me see what I've written on Rocket Lab. Rocket Lab, oh, it's been a long time since I've looked at Rocket Lab. So, solid cash raise. This was, yeah, this was 11 months ago. 50% revenue growth, 36% margin. So tighter PP, but not bad. Profitability at the end of the decade. Yeah, it's just, I wrote very market sensitive because it doesn't have earnings, right? SpaceX is profitable, call it 18 billion of ARR 2026, that's low, right? Those were estimates that we saw back then, right? So, SpaceX, we were looking at, you know, 83X sales. That's because they hadn't actually built out their data centers yet or gotten as many contracts as they have. And so, even they bring 20% to the bottom line. I said that's $16 billion net, 93 times earnings. Over here, you know, you're looking at how many times are you, 50 cents of EPS. You're at 100 times earnings. So, the idea was that at 100 times earnings, you know, SpaceX was basically 93 times earnings, but based on 2026 numbers. This was based on 2029 numbers. So, when we did our course member analysis on Rocket Lab, basically we said, too much risk of market volatility because of, you know, its positioning. And I think that's where, I think it was at like 70 bucks or something then. So, then it went more and, you know, now it's lower. So, it's been quite a volatile stock. Sandisk and Bloom Energy, big fan, actually. Yeah. Yeah, I don't know much about the others. But Sandisk is very interesting because you do also have that NAND, well, quite a bit of NAND exposure. And I'm bullish on NAND over just purely RAM. So, I like the mix that you can get at Sandisk. And I think they've gotten substantially cheap. Bloom Energy is a lower margin than these guys, but still does really well. Yeah, look at Sandisk. I mean, the momentum is completely coming out of this guy. And this is a retracement back to Leofold. We have more than full circled past Leofold right now, which is remarkable. Oh, look at that. Selling off more into the last minutes. This is probably because leveraged ETFs are forced to sell within the last five minutes. So, generally, you're going to amplify what happens during the day because a lot of people are putting in orders to rebalance. So, you're going to get a little bit more vol at the end of the day. Not unusual. Even Disney down 1% today. Wow. App Lovin', though. All day long, holding on to that 30% very respectfully. You know, coming back from the dead a little bit. But also a very cheap, inexpensive stock outside the AI sector. NVIDIA, you can see it getting sold into the close. Look at that volume on NVIDIA. Wow. Yeah, there's some serious trade volume cooking through right now. That's incredible. That's incredible. 6.48 right now. So, I see some of y'all are commenting that you're buying culls for September. Yeah. That makes sense. That makes a lot of sense. Look at that. Nebbi is down 15% just intraday. Tempest. Tempest is down about 6. Oh, Medspace stock. Look at CoreWeave. Holy moly. CoreWeave has had one hell of a ride, man. Wow. Down at 43 bucks. It's almost at the bottom of its history. Remarkable. So, big coupon code here, right? This is a really big sale that you've got on the stock market. That's funny. We don't even have a coupon. We haven't had a coupon in like a week or so. We probably need one. One that said just like buy the dip. We don't have one. So, Tesla tried bobbing around 347, but even ended up losing 347. We started buying Tesla again around, started around 360. Yeah. Oh, let's get the bell. [00:23:09] Speaker 6: I think a lot of people are saying, thank goodness, that this trading day is over after one of the worst we've seen in a while. I'll send it in overtime to Mike and Mel. [00:23:26] Speaker 7: The bell's ringing in to the trading day at the NYSE. A Kushnet doing the honors net, the Nasdaq Alpha governance. [00:23:31] Speaker 3: Man, what a crappy day to ring the bell, right? Like, imagine this is the day you got assigned to ring the bell. Everybody just hates you. Ugh. Nasty. [00:23:43] Speaker 7: 2025, the Dow off 1,800 points. S&P 500 down more than 4%. Nasdaq down about 5.5%. Russell down 4.5%. Tech, the biggest drag across sectors is nearly every area got hit. The semi ETF down 11%. It's worst day since March 2020. Now down 22% in just a week. The laggards included AMD, Micron, Lam, Marvell, which all fell 13% or more. Wreckage in the neocloud and memory names as well. CoreWeave off 10%. That's been cut in half in just the past month. Sandisk off 20%. [00:24:15] Speaker 6: The AI infrastructure and energy stocks also with big losses, including GE Vernova, Vertib, Eaton, and Caterpillar. Cat is now negative for the year. The Mag 7 losing more than $800 billion in market cap altogether. NVIDIA and Tesla, the big decliners. NVIDIA is now negative for the year to date. The stock is not contained to tech, though. No, everything. Giving back all of yesterday's 4-plus percent gains. Some of that was Amazon and Tesla. Not all of it. Retail and travel-related stocks also big losers. [00:24:44] Speaker 7: Similar story in the financials. Everything from crypto-based names like Circle to Visa and the big money center banks in the red. Blue Owl, a lender to the AI, build out down nearly 8%. And take a look at SpaceX off another 7%. Now down 26% in a month. 10 bucks below its IPO price. We start off with the first take on the close. And maybe the silver lining to this doesn't seem like a silver lining at first blush. [00:25:07] Speaker 3: Oh, Airbnb is about to report. Healthcare was down 2.5%. Airbnb is about to report. Opendoor is about to report. Oh, I wasn't excited. I was just going live because the market was falling off a cliff. I forgot that we also have earnings we could look at. All right. I'll cover them. So we have Cloudflare. Iren. Opendoor, which I should honestly just go bankrupt already. I hate that company. Then Airbnb. It's another company I hate. I generally despise Airbnbs. I've had some good experiences, even recently. But I would say often more bad experiences than good experiences. Just kind of sad. All right. Iren, Cloudflare, Opendoor, Airbnb, and Atlassian. We'll take a look at those. Those are all earnings that are going to be coming out within the next 10 minutes. So, yeah, we'll just get started with them. So we're not out yet on anything. Let's see here. Okay. Iren, Open, Cloudflare. Oh, here we go. Airbnb. Okay. They actually beat on Q4 Guide. They beat on Q3 EPS. 316 versus 291. I might not like them, but they beat. Total costs came in a little lower than expected. So, Airbnb coming in with a beaten raise, honestly. Give them credit. Maybe they've cleaned up their act. Let me see here. Airbnb and Bizzle. Okay. Yeah. Airbnb now up about 4%. Airbnb's adjusted EBITDA at 36% versus 35.5. So, slight beat here. Okay. Then, Axon's out. Axon out. 172 EPS versus 190. Ooh, that's not good. That's an 11.5% miss on adjusted EPS. What happened there? Because adjusted EBITDA beat at 235 versus 229 mil. Net sales came in a little lower than expected. Was that a timing issue? Because they do so much government work. That's a 3% miss. Fiscal year came in a little soft as well. Margin better at 25.6. But fiscal year rev at 3.61 to, eh, call it 3.62. 3.62 divided by 3.71. Yeah, about a 2.5% to 3% miss on this one. Atlassian comes in. Atlassian comes in with a beat on Q1 revenue. Cloud revenue beats. Q2 forecast. Smidge of a beat. Margin, though, 32% versus 28.6. Airbnb is doing really well in after hours, actually. Airbnb. Airbnb, the company is now declaring that they are officially in growth mode. Ah, okay. So Airbnb going for growth mode. I've got Atlassian beats. Atlassian is down 8% in after hours despite beating. It is tanking. Then I've got Opendoor comes in with a loss of $66 million versus the $61 million expected. And EBIT a loss of $31 million versus $27.2. Q3 revenue, $1.02 billion versus $1.04. So Opendoor with a miss as well. Opendoor. And Opendoor goes up on the miss. Ha, ha, ha, ha, ha. No news yet on IREN. A lot of filings coming in right now. [00:29:31] Speaker ?: Okay. [00:29:33] Speaker 3: Atlassian is down 12%. Simon Property Group. Occupancy Q3, 96.5 versus 96.2. That's a beat on occupancy. But I have a miss on estimates. Free, or funds, funds from operations at $3.09 versus $3.32 expected. Simon Property Group actually flat. Atlassian getting whacked. And now we're waiting for IREN. Our Neocloud. Neocloud reporter. Still waiting. Okay. IREN. Nope. Still not out. There we go. Okay. So let's see here. Atlassian's... Yeah, Cloudflare's not out yet either. Atlassian now down 15%. Yikes. They're going straight down to the next line, which is 159.15. Simon Property Group we saw missed. Then we have Airbnb is authorizing a $12 billion buyback program. Wow. Yeah, they really want to pump it up, don't they? Good for them. I mean, this has been Airbnb stock on a month view. Month. Holy moly. But it's really broken out of this downtrend. Broke out in 2026. They're in about May. And Cloudflare's still not out. Probably within the next two minutes. And same for IREN. So probably about two minutes away from getting a little bit more color on what's cooking there. But that Atlassian drop, their gross margin is expected to be 86.5% versus 86.7%. So like a hair of a miss there. Cloud revenue year over year up 27%. That's really good. Operating margin is expected to be 25.5%. That beats the company's forecast and beats analysts as well. So the operating margin really beat over at Atlassian. But the market just does not care. The market here is AI right now and just says, nope, F you. Yeah, I don't see. Is IREN not actually on the reporting list today? I thought I saw some people talking about that. And I thought I double checked it. But anyway, we'll have to. Yeah, no, it says IREN. 409. 409 is the expected release. That's right now. I still don't see anything that's come through. Oh well. Oh well. Alright, we'll keep an eye on that for a sec. And then we'll keep talking about what's going. What's cooking. Because there's a lot cooking today. Okay, so. Volatility now 65%. Volatility tends to lag a little bit by about 10 to 15 minutes. So not unusual to see it now up 65%. It's honestly quite shocking. Just looking at some of the after hours. Broadcom, Marvell stable. AVGo stable. Oracle relatively stable. Wow. Tempest down about 60 BIPs. Looking for this Chipotle. Where? [00:33:38] Speaker ?: Okay. [00:33:39] Speaker 3: Cloudflare's still not out. Alright. Whatever. I'll keep an eye on these. Okay. Let's zoom out. Let me see if there was anything new in the info. NVIDIA workaround for data center backlash. Retrofitting telephone buildings. That's interesting. Can cheaper AI outrun data center backlash? Yeah, well, we'll see. Basically deploying it in enterprises, right? Like, forget about doing a data center. Just build it in your own facility. The cost of AI is running or is falling. For example, opening a 6.1 sole model released in September can perform comparably to a bigger flagship model, Astra. When used with a high reasoning setting, yet the model costs as much as a fifth per task. Wow. Private equity firms that own and develop data centers told me last week they believe prices of AI models will keep falling due to AI efficiencies. Many facilities that are supposed to come online have gotten some or all the necessary approvals. So the effect of the backlash might not have, voter backlash might not have an impact yet. Donald Trump signing a document to make the White House Oval Office and Cabinet Room a national monument. Okay. Interesting. Is that so nobody can change the rooms after he sort of moved them around a little bit? That wouldn't surprise me. He's trying to sort of, like, cement his style, and then as soon as he's in there, he's like, JK, now we're going to make it all mine. All mine. Nobody will be able to change it because now it's a monument. Yeah, I still don't see IRON. So, IRON is indicating up 7%, but its earnings are not dropped as far as I can see. At least they just haven't loaded in yet. Atlassian's 17% to the upside. Yeah, look at that volatility index. Really stopping at about 67%. Yeah. IRON, price target cut from 55, from 100, yeah, no? And I also don't see Cloudflare, which is really interesting. So, we've already covered all the other ones. IRON. Huh. Yeah. Oh, well. I'll just go to their website. IRON, investor relations. So, let's see if I can just. IRON results conference call. It just says upcoming. Yeah, even on their website, there's nothing yet. So, I don't see anything on their website, and I don't see anything that's actually come out on IRON. But, the stock is moving up. Oh, well. I will, uh, yeah, we already reviewed Axon's earnings. Scroll back. Um, okay. So, we're gonna wait for Cloudflare and IRON. We'll kind of keep those on the radar. Let's now go take a look at understanding all the other crap that's cooking. Okay. So, first thing. Okay. We will watch for that. Alright. Oh, Cloudflare literally just came out. Cloudflare comes in with 38 cents versus 35. Uh, they see Q4 at 43 cents versus 38. That's a beat and raise. Big beat on Q4 revenue. They saw revenue in the 700s. And, they're gonna be at 845 to 846. Massive beat, dude. That's a really big move on Cloudflare. Now, watch. It's probably down. Like, that's a really good move on Cloudflare. Yeah, Cloudflare is now up 10%, which is really just taking back what it got or what it lost today. But, it's now 14%. And, it's almost certainly going to be because of AI spend. I mean, let's go see really quick. Cloudflare, investor relations. Uh, let's see. Financials. No. Quarterly results. Yeah. Yeah, here we go. Q3 report. So, revenue increased 39% year over year at Cloudflare. Remaining performance. Okay. Remaining performance obligations. Uh, or delivered RPO. 37%. Third quarter. Best results ever. We crossed 3 billion of annualized revenue. Up 39% year over year. Yeah. Really bullish on that. Accelerated growth. Good. We have built a development platform for the AI-powered internet. As digital threats escalate, organizations of every size continue to rely on Cloudflare. Yeah. I agree. Good for them. Okay, we'll look at their numbers in just a sec. So, Cloudflare smokes it. Still indicating a loss here. Interest income was positive. They still spend all of it. What drives me nuts about Cloudflare. So, your... Some of this was restructuring. But your sales and marketing also exploded. That's a lot. Sales and marketing up. 337.9. Divided by 236.3. 42.9%. So, that's a little bit of a shrinking PP. Yeah, because their revenue is up 39%, right? So, very interesting. Yeah, stocks up about 15%. Huh. All right. Let's analyze a few things. What is next? So, we'll have to get the estimates for tomorrow as well, because we do have... We're going to go through all of this in terms of upcoming catalysts. We do have some dates that we want to go through. And I don't mean me taking you on a date. I'm talking inflation and the jobs report. Fed, we don't have to deal with until next month, which is nice. But you'll still get fed speak. And it'll be nice to look at what's going on with expectations right now as well. All right. Let's clean that board up and get into some catalyst watching. 18% now on this puppy. Wow. All right. So, let's cook up. All right. First catalyst that we're going to have. Russell Brand down today. That's bad. It's too soon. Oh. I wish Mitch McConnell were alive to see your comment. Oh, that's bad, too. [00:42:42] Speaker 1: Okay. [00:42:43] Speaker 3: Jobs. And so, for jobs, we are looking at 65K tomorrow. I'll go live for it. Versus 29K prior. Okay. Average hourly earnings should be back to 0.3 versus 0.1 prior. Labor force participation rate. 61.8. Then we need to get CPI. So, CPI is on the 10th. Oh, that's in five days. Okay. CPI 0.3 and 0.2 on core. I'll just write down that this is tomorrow. The 10th. The next catalyst thereafter is PPI, which actually doesn't come out until the 13th. Which is a little less cared about. Minutes. None of this really matters. And then what day is Black Friday? Let me see here. I feel like we've already got Black Thursday. Black Friday. Black Friday is the 27th this year. So, that means five days would be Tuesday. PPI would be Friday. Yeah, that makes sense. Okay. So, PPI. PPI. And then Fed. Sorry, not Fed. Black Friday. [00:44:56] Speaker ?: Okay. [00:44:58] Speaker 3: Making more of that. And then we'll go on Black Friday. And that's going to be the 27th. Okay. Okay, very well. Okay. So, let's review some of what we've got going on here. [00:45:26] Speaker ?: Let's review some of the things we've got going on here. Okay. [00:45:35] Speaker 3: Let's put all this together. One sec here. All right. That's nasty. All right. Now what? The market officially closed down over 6% on the NASDAQ 100. And we have more catalysts ahead. The first thing that we need to know is we just had a historic collapse in the market. At least based on a measurement of volatility. If you take a look at volatility today. We ended the day at 69% on the volatility index. Also known as the VIX. A 69% increase to this level is massive. Now, this level itself isn't that big of a deal. If I go back on the level, it's relatively nominal. We're coming off a very low base. Almost a floor of around 15. But an increase of 69% intraday is a once in about every three-year phenomenon. Let me give you the stats on this. First of all, if you go back into history and sort times that the VIX increased more than 50% intraday. So, we were 69%. Increased more than 50%. This is what you would get. You would see that in 2011, which was recovery time, you were up 50% intraday. And when we got liberated, we were up 51%. In 1991 and in 1990, we were up 51% to 52%. In 2021, in November, we were up 54%. That was kind of right when the bubble was ending of 2021. The COVID bubble was ending right around here. And then in 2021, January, when it was just getting started, we were up 62%. 2007, when you had the recession starting, you were up 64%. And then in 2024, during the Japanese carry trade, we were up 65%. And then right before Christmas, we were up 74%. So, we actually fall right in between these two levels right here. We are the third highest intraday volatility movement in the last 36 years. So, going all the way back to two years before your boy, me, Kevin, was born. Before I existed. Going two years back to before I existed. You ended up having now the third highest volatility intraday ever. And a lot of people like looking at that. And then saying, all right, well, what happens after that kind of volatility index? Well, we do have catalysts. We're going to talk about those catalysts in just a moment. And we're going to evaluate how much does matter. But take a look at this. This is the Prof Investor. He put together a beautiful little chart for us. Looks like it could be a little clodder, clodderama over here. And we can see the various different VIX levels. And what he does is he looks at the S&P 500 one week later, two weeks later, and one month later. Out of all of these scenarios, only one time did we see a more negative 30-day result. And that was during the early COVID sell-off. Measuring from February 24th. Although you basically measured to the bottom. And so my guess is if he went SPY two months out, that would have been green as well. This is only, his study only goes back 2007 to 2026. My VIX numbers go all the way back to 1990. But it's interesting. Usually when you have these flush outs of volatility, it's because people are going bankrupt. Now, I'm not here to cheer for anybody going bankrupt. I think it's terrible when people lose their jobs. But it sounds like there is a list that is growing of companies that are either returning money, that are going bankrupt, shutting down, or firing people. This morning we heard about Walleye. That was just one of them. Now there's talk it's Axebrook, Engineer's Gate, Lone Pine, Millennium Internal Pod. So, you know, groups within Millennium. Groups within Meritian. I probably screwed that one up. And it's Samlin. Samlin as well. Now, we don't know. We're just referencing special situations here. I think they generally have some pretty good insight. So, you've got a whole host of people who got hosed and wiped out today. And that's what's contributed to the insanity of this volatility. Now, these are the catalysts that we face. First of all, jobs report. Very important. This will be tomorrow at 5.30 a.m. As long as I'm not asleep, I should be covering it. I think it'll be a big deal. We really just want to be greater than 29k. I don't really need it to be 65. We just want to be better than 29k. That's the prior read. 65k. Anything over 29k. Honestly, anything over 20,000, no problem. Anything over 20,000, fine. If we get too hot and we go over 100,000, we'll expect yields to start rising. Earnings for people working. So, average hourly earnings, we expect them to be 0.3% versus the 0.1 higher or prior. That suggests maybe people getting some pricing power back. We'll see about that. If the labor force participation rate does not stay stable as it's expected to stay stable, we could see the unemployment rate go up. And that could sort of add to some of these fears of recession. CPI at 0.3 is expected on the 10th of November. So, we're five days away. CPI core, 0.2%. That is also five days away. And that's expected to be 0.2%. So, nothing super unusual here. CPI comes out on the 13th. And then you're coming up on Black Friday already. It kind of feels like we've already had Black November with what's been going on over here. Maybe even a Black Thursday. You know, like the anti-taco Tuesday. You get a Black Thursday. It's pretty nasty. But those are some of the big catalysts. And as you can tell, none of those really matter that much. The biggest fear people have has to do, I'm going to put up the scariest image on screen. No, it's not a coupon code. No, it's not get life insurance in as little as five minutes. Because you could use the sponsor on screen to sign up for life insurance in as little as five minutes. It's what I use. And you could Apple Pay or Android Pay for it in the response to the channel. No, it has nothing to do with any of that. The scariest image is this. That is your new governor of Texas. And boy, oh boy, there are a lot of people in Texas that are quite pissed. They're blaming the Californians for coming over and changing things. Anyway, a lot of people are really worried that data center spending is all of a sudden going to evaporate. That that's it. All data centers are cooked and you may as well sell everything now because it's all cooked. But you could listen to her very own plans on data centers. And she'll give you a pretty decent hint of what her plans are. First of all, one of her plans is to send a $1,500 stimulus check to every household in Texas. That's plan number one. Plan number two. [00:53:13] Speaker 5: Yeah. Can you expand a little bit on that moratorium? Kind of how that would work with some construction already going on? [00:53:18] Speaker 4: It would be a pause on approvals because we need to make sure that Texans are protected. What happened in Texas, so you know and your viewers know, we have more data centers in any state because Greg Abbott invited them in with the richest tax breaks in the whole country. They pay zero in sales tax for 20 years on the electricity they consume and other things. And we know that they consume a lot of electricity, right? And we're losing a billion dollars at least every year because of these tax breaks. But because of those tax breaks, they all came to Texas. Many of them came to rural Texas where they're outside of zoning restrictions. And there's really no protections for the people of Texas in these communities. [00:54:04] Speaker 3: Right. And guess where you stand today? Most of them already have approved permits. And so she argues that we're just going to pause permits on new construction. And so that gives you time. So basically, her intention is, and if you watched the full interview, you could see it. I've linked it in the Meet Kevin app. Basically, her idea is put a ban on new approvals, which you basically already have anyway. You already have a clean air audit moratorium in Texas anyway on new permits. So it changes nothing. Then she wants to work with the legislature to make sure that the people have a voice. We don't really know what that means. But the point is, all of that talk and yapping isn't really going to do anything until at the earliest January, more realistically, March to June, because that's when you're really going to get those legislative sessions underway. So does that mean data centers are screwed between now and then? No. In fact, 86% of 2027 construction is already in steel framing. That's called being vertical. Once you're deemed to be over 20% into the way of construction, you're deemed to be considered vertical. Now, you could actually have approvals and not even be vertical yet. So this could be an understatement of how many data centers are already approved. But 86% of 2027 construction is already going vertical. So it's not like you're going to rug pull things that have already been permitted. And if you zoom out to, these are the different states, the vast majority of that in Texas, 11 gigawatts in Texas are already over 25% complete. Another four are actually over 75% complete. And if you look over here, you really don't fall to lower levels until 29 or 2030, which suggests logically the biggest problem with a sort of dem sweep for data centers doesn't really hit data centers until 2028, 29, 30. You know, 2028, we're sitting at about 34% vertical, right? So I think this is pretty important. Jeff's asking in the chat, hey, couldn't Abbott and companies lock in more agreements and approvals before January? Yeah, and they might do that, sort of like a parting gift, if you will. And so all that does is, whether it happens or not, it just reiterates that this isn't really a 2027 buildout issue. And even in 2027, I suspect a lot of these state and local governments are going to say, well, would we rather have the construction here or not? Would we rather figure out how to tax them and make them pay a little bit more? Mind you, I'm all for that. I'm all for like, look, you want to build a data center? They came to me and said, look, you want to build a data center over there in the middle of nowhere? All right, usually it's a two-year permitting process. But how about this? You build me a new school, fire department, police department, and a neighborhood park and repave all the roads in the city? I don't care if that costs you $2 or $3 billion. You do that for me, I'll get you a permit in 60 days. Bro, how hard is that? It's a little bit of negotiating. So that's my point of view. And I think the data centers would be more than happy to do that because you would get it done. Now, under construction already, you can see the reason I bring Texas up is because Texas has the largest amount or largest exposure of individual data center exposure. And so that's why people are freaking out about Texas. But generally on vol spike days like this, you do have to be careful. I did notice some people are like, oh, buy NASDAQ calls, buy Soxel calls. Bro, I mean, I get the ballsiness here, but you have to be really careful about vol crush because when you're buying options, you're not really buying the price. You're buying the volatility. So you kind of have to be aware of that. You know, you look at something like Soxel. I mean, I get it, but that's 3x leveraged. So maybe, I mean, after all, look at it. I've got a floor on Soxel. My fib retracement floor on Soxel is 39.5. So like half of me is looking at this going, I don't know, man. Bottom of the fib retracement. Dude, sign me up, baby. Like that makes me bullish Soxel. Honestly, it could go straight up from here. You get a deal with Iran, which at this point just seems like a mirage. I'm very disappointed that Trump didn't prioritize that, whatever. There's now talk that the NASDAQ 100 is two weeks away from a nuclear weapon. And so Trump is bombing the NASDAQ 100. But anyway, I mean, that is a very sexy setup. I will say that is a very sexy position for Soxel. I don't touch 3x leverage and I don't touch buying options when the volatility index went up 69%. On a day, which is actually kind of hilarious because those who know, know that I did something today ending in 69 twice. In one alert that I sent to course members, there were two 69s in it. And little did I know that would represent how much the volatility index was going to spike today. 69%. Pretty remarkable. Again, that doesn't happen. That has happened, you know, once every maybe three or four years. That's very rare. S&P 500 absolute return dispersion. So basically how much are underlying stocks moving relative to the index? Underlying stocks moved an average of 13.2% in the S&P 500 over the past 30 days. Well, the S&P 500 moved just 1.1%. That's a spread of 12.1%, which literally puts you at the top. The highest percentile over the last 30 years. Like what is happening today? These collapses, Leo Fold 2.0. Some people are saying Leo Fold got liquidated a second time. That is unusual. And those are usually buy the dip moments. Now, we do have TS Lombard today that says that, actually not today. They said this two days ago. They said the equity market is fairly priced based on a stock market to GDP and a stock market to the 10-year treasury yield. They said that the equity market will typically strengthen into the year end, but there is volatility around elections. That's what we're seeing now. Which means if they thought it was cheap two days ago, stock market just got even cheaper. Equity returns tend to be tied to the Fed and policy after midterms. Well, I think we can all see that the odds of getting another interest rate hike this year are starting to fall. I mean, it's not in the bag, but there's a lot of anticipation that the odds of getting another hike this December are starting to come down. In fact, you're seeing the odds of a hold skyrocket today. You're at a 33% chance now of a hold. This was like a 10% chance just about a week ago. Oh, you can see it right here. One day ago, we were at an 18% chance. Sorry, a 17% chance of a hold. And one month ago, we were at a 13% chance of a hold. So we've literally gone from a 13% chance of a hold to a 17% chance of a hold to a now 33% chance of holding. I wouldn't be surprised if we keep going in that direction. Especially with how painful the stock market is moving right now. Obviously, this is one of my favorites on Calci right now is making a bet over here that the number of rate hikes we see this year will be exactly one. I don't have a lot in this, but I have a small little prediction in this. And I just track it every day because I like to kind of see where sentiment is going. It's less about, you know, we're going to get rich off of Calci. Hey, I mean, you can make a really good bet and you can make a good amount of money. But, hey, speaking of Calci, go ahead and consider that they are a sponsor of the channel. You can get a free $25 when you sign up and make your first trade with Calci. Just go to meetkevin.com slash prediction. And you can use meetkevin when you sign up or scan that QR code. They are a sponsor of my startup, Reinvest. And then when we make money from sponsorships or from whatever, what do we do? Well, sponsorships or software, AI or whatever. What do we do with that? We'll get to reinvest it. We love that. Anyway. Okay. So, Cloudflare reported earnings. Cloudflare reported earnings and smashed. Although I will say their pricing power fell a little bit. Even though their earnings are up 39% because of this boom that you're seeing in artificial intelligence, their costs rose a little bit more than expected. They cost $3 billion in ARR, which is really phenomenal. $3 billion of ARR. Fantastic. Really, really incredible. So, good job. And shout out to Cloudflare. Airbnb in earnings is also doing quite well. But let's focus on a little bit more data for the market. Equity returns, TS Lombard argues, are going to be tied now to the Fed policy. So, if the Fed comes in and says, look, we're good. We're going to hold. Inflation's coming in. Yields are coming in. The stock market's coming down. They're not going to say the stock market's coming down. They're generally going to say something like, financial conditions have tightened. That's good. And that's how you could end up seeing yields not only peak out, but really come in. Okay. We called a peak on yields at 5.27. They've come down a lot since then. We've really killed it on the 10-year. Those rate sensitives are really moving nicely as well. If we jump on over to the two-year treasury, two-year treasury. CNBC has like a problem with showing the two-year treasury. Two-year treasury was down 11 basis points today. The more this falls, the more the market is sending a signal that we are not going to get another interest rate hike this year, which is good. We don't want to get stepped on by the Federal Reserve when we're already stepping on each other. A divided government, TS Lombard says, generally prevents activism, which basically means the market is more predictable. And it would be rare to see a sell-off last after midterms. The only time a sell-off lasted after midterms was in 2018. And that wasn't because of the market. It was because of the Fed tightening into a bond market sell-off. Now we ended up rebounding in 2018. This is how those average statistics always show that after 6 and 12 months, you're generally way higher after these sort of dips and fear and panic around elections. TS Lombard also finishes by saying that the 10-year is not cheap enough to argue that those bonds aren't cheap enough, so the yields aren't high enough to actually draw money away from the allure of the stock market right now. The stock market is still plenty attractive. Now on top of this, we've got a couple of other things as well. Michael Burry did cover some puts in his portfolio, but not all of them. He's still holding on to his puts on Palantir, his puts on Caterpillar, the Triple Qs, and Oracle. He did cover 25% of his semiconductor ETF puts, and he increased his position in MELI by 50%. He also says that his puts on the semiconductor ETF are still very large, even after his small sale. And extreme valuation compression is happening. We have not seen the valuation compression on tech-forward multiples like this anywhere in this chart. And this chart goes back to COVID. You saw 31%, 36%, 18%, 34% compressions in multiples. We're now at a 45% multiple compression per this chart. And so this is the most extreme valuation compression seen in a decade, which in my opinion, just means baby, baby, buy the dip. [01:05:52] Speaker 8: Oh man, your boy Kevin just lost lots of money. Oh, but that's okay. I am with you, with you. Oh man, your boy Kevin just lost lots of money. Oh, but that's okay. I am with you. [01:06:07] Speaker 1: Here we go, come on, push it. Buy the dip, buy the dip. Here we go, come on, push it. Buy the dip, buy the dip. Here we go, come on, push it. Buy the dip, buy the dip. Here we go, come on, push it. Oh my God, what's happening? [01:06:22] Speaker 2: First of all, all this whining by Wall Street, it's making me sick. 140% of GameStop was short. GameStop was short, short. You can't allow Wall Street to short 75% of a stock. Crush these companies into the dirt. Thousands of stocks into the dirt. Then when the individual makes money, everyone's entrepreneurs. I have a kid who bought a house. Pay $50,000 and bought a house. After decades of the shorts, you have to accept the fact that individual investors are playing the same game that you're playing and now you're losing. Here we go, come on, push it. [01:06:54] Speaker 1: Buy the dip, buy the dip. Here we go, come on, push it. Buy the dip, buy the dip. Here we go, come on, push it. Buy the dip, buy the dip. Here we go, come on, push it. Oh my God, what's happening? Here we go, come on, push it. Buy the dip.