Top Pick Performance

Top pick PENG was the star of the day, ripping 13% on its massive ER blowout and guidance raise. Swings RSKD added 3.7% and SOC gained 2.8%, while the short IWM hedge pulled its weight as small caps slid 1.3%. Swing BULL was the blemish, tumbling 19% on the House China committee report, and our number one pick of the day NVDA gave back 0.7% in a soft tape. But between PENG, the swings and the hedge, readers had plenty of ways to beat the market.
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Macro Discussion

It was a pretty easy call yesterday to short IWM yesterday after the rejection at the 20 DMA and the next level is glaringly clear.

If $275.50 does not hold at the 200 DMA, there is a magnet at $269. This could be hit today.

The catalyst is TLT continuing to dive (rates increasing) on a raft of economic data and persistently higher oil prices. Jobless claims at 8:30am and a 30 year bond auction at 1pm may be the catalysts which decide if IWM approaches $269 today.

Throughout the increase in rates and decline in IWM, we have stayed bullish big cap AI, which has been the right call. But today, we are going to back off. At some point, even this sector can be impacted by higher rates, particularly as larger AI-related companies (AVGO SPCS ORCL) increasingly tap the debt market.

We are downgrading to Red Alert today with a focus on capital preservation and trading IWM around the $269 to $275.50 levels.

Today’s Signal: 🔴