AI tired, Macro moves, Setups, Crypto

Breakout by Philo, Issue #4.

What did we write about in the last issue? Click here.

On June 20th, after market close, I sent out a flash Breakout by Philo titled NVIDIA NO MORE — in this issue I explained why and how I shorted Nvidia, and explained the overall setup on the stock.

I even made it into a short video which you can watch here!

Today we will be reviewing the Yen, the Euro, Gold, Silver, Crypto, the Nasdaq and more interesting setups (see inside!) that I am following.

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Breakout, Issue #4

The Yen

Dollar/Yen moving up and up — we called the breakout (indicated by the red arrow) in the last issue when it was at 153 Yen to the Dollar. The blue arrow shows the retest of the long technical formation, after the intervention by the Japanese around April 30th.

The Yen is in a clear downtrend, with no light at the end of this tunnel. If nothing significant changes, I could see this hitting 180Y to the Dollar.. The Japanese have lost control of this horse and seem dumbfounded about it.

Note: A change of scenery and a reversal of the Yen could bring massive gains. But we aren’t there yet.

The Euro

Not much movement in the Euro. The common currency is moving sideways on the weekly, in a 4cent range after almost two years of bear market which saw the Euro fall from 1.23 to 0.95.

My gut tells me we will need a historical event to help push this market either up or down. And I wouldn’t be shocked to see that historical event, in fact, we are ready for it…

Read my First Exit piece here.

Crypto

Bitcoin chart on the weekly, with the red arrow on the day Issue #2 of Breakout was published.

I saw no fundamentals backing up this uptrend and explained my views in this short video here.

We warned on the dangers of going long Crypto after the parabolic move in Issue #2 — excerpt below 👇

Bitcoin & Ethereum down ~20% since then, and just with the way Crypto cycles, I still wouldn’t touch this.

Note: If you are eventually looking to go long Crypto at bottom prices, this is the kind of sentiment you need to see — I called the bottom of Crypto here.

Gold

Gold consolidating after its big breakout in early March (the blue arrow).

After a >$350 move, prices have been consolidating since April (the yellow rectangle). This is a very strong technical signal, showing that Gold is in a multi-year bull market that wants to move up.

Note: A move above $2,400 means more upside.

Silver

As mentioned in the last issue, Silver tracks Gold as a sort of derivative (same way meme coins track Bitcoin). On the weekly 👇 you can see it’s surfing the EMA10 and looking bullish.

Considering how long the formation that it broke up in early March, this is also a strong trend.

Setups & Observations

RCI Hospitality: RICK

Possibly the most hated stock on FinTwit, RCI Hospitality is crashing and crashing. The orange line is SBUX (moving together, no?) — for me this shows how consumer discretionary stocks are being sold, probably due to a weakening US economy.

I wrote about RICK on Philoinvestor recently, and you can get a feel of the setup here. From an investment point de vue, I hope this crashes more!

Management is buying back shares, and at these levels EPS leverage is strong! 😈

This isn’t a bullish setup by any means, but just keep in mind that the stocks that bounce the most — usually come from the group of stocks have crashed the most!

Coursera: COUR

When markets are gripped by bubbley themes (AI!), everything outside that theme tends to get punished. Well, in this case its even worse, markets seem to think Coursera will get disrupted from Gen AI. My thoughts on this here.

The red arrow indicates where Goldman Sachs analysts downgraded Coursera and cited “Gen AI worries” that spooked the whole market. The company then had one weak quarter and everything exploded, the stock is down 70% since the downgrade and bottomed around June 20th (when NVDA peaked).

The stock has now moved up 15% and forming a pattern. Chart on the right is on the hourly showing a sideways consolidation, warming up for a breakout. I bought some deep OTM calls on this one just as a punt, the undervaluation is just disgusting.

Intel: INTC

I had an alert from weeks ago on this setup, and bought the breakout on Friday because of it. You can see on the weekly how far this stock fell, and now it’s breaking out from a two month consolidation.

On the daily, the breakout occurred while prices broke above the MA50. Fundamental driver seems to have been news on Intel’s AI accelerators (that compete with Nvidia) coming out.

—> Intel unveils new 4nm flagship GPU made by TSMC

Negatives are that Intel isn’t a very fast-moving stock, with an ADR of just 2%.

Nasdaq 100

Even with the SMH peaking, Nasdaq 100 still moving up propelled by Apple, Microsoft, Google and Amazon. No shock there, right?

The Nasdaq doubled since late ‘22, with many stocks more than doubling since then — this is trillions in value creation. I wonder though if the underlying businesses have indeed created that value. I guess not…

AI Tired

We talked about the AI Blowout in Issue #2, SMCI is down 25% since then but NVDA is still holding put.

In fact, it’s second-order (MSFT, GOOGL, AMZN) and third-order (AAPL etc.) plays that have been still moving up.

For now we are following this parabolic move, and staying vigilant to when it reverses.

Note: It will. I am working on the model for the Techno-AI boom/bust process and will be sending it out to subscribers shortly.

Sincerely,

Philo 🦉

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