@trader-joe·Sep 29Major catalyst today but it sold off. Will it pop it again> Navitas was awarded a U.S. Army contract to develop next-gen 10 kV SiC power semiconductor technology.
Stock was under $12, exploded toward $15 on the news, and is now it round trip back to where it was.
Now I want to see if $NVTS can hold the breakout and turn that descending resistance into support.
This could get interesting fast if AI stocks pump. It needs help.
@trader-joe·Sep 29@trader-joe·Sep 29Do yourself a favor. Open tradingview and check TSLA's weekly chart.
How's my prediction looking?
@trader-joe·Sep 28A brighter financial future starts here.
@trader-joe·Sep 23The AI trade has been one of the most powerful forces in the stock market for years.
Nvidia, Broadcom, AMD, Micron, the hyperscalers, data-center companies, power companies and dozens of smaller AI infrastructure names have benefited from what has essentially become a global arms race.
But suddenly, the conversation has changed.
Instead of investors asking:
“How fast can AI grow?”
People are starting to ask:
“What happens if AI is growing too fast?”
That distinction matters.
The latest wave of concern intensified after Jacob Coxon, a researcher who worked at both OpenAI and Anthropic, resigned from Anthropic and publicly warned about the direction of advanced AI development.
Coxon wasn't simply an outside critic of AI. He had spent roughly three years working directly on training increasingly powerful models.
He said his decision wasn't triggered by one secret breakthrough or a single terrifying incident. Instead, he became increasingly concerned about how quickly AI capabilities were advancing and whether the companies building these systems actually had them under control.
That distinction is important.
This isn't someone saying:
“I discovered one evil AI.”
The concern is broader.
AI systems are becoming more capable, more autonomous and increasingly able to perform tasks that previously required humans. The people building them don't necessarily know where the capability curve eventually ends.
Coxon's warning also didn't happen in isolation.
Anthropic CEO Dario Amodei subsequently called for slowing the pace of frontier AI development to provide more time to address potential risks. Other prominent AI leaders have also expressed support for stronger safeguards or a slower pace of development.
OpenAI, meanwhile, recently announced a framework for regularly disclosing unexpected or unauthorized behavior by its models. The company acknowledged that increasingly autonomous AI systems create alignment and monitoring challenges that have not been completely solved.
So we now have something investors cannot completely ignore:
Some of the people closest to frontier AI are publicly saying that development may be moving faster than our ability to control it.
Because Wall Street immediately takes this discussion one step further.
The market isn't primarily trying to determine whether AI will become dangerous.
The market is asking:
Will governments or AI companies slow down?
That's the financial question.
If AI development slows significantly, perhaps companies don't need quite as many GPUs.
Maybe data-center construction slows.
Maybe memory demand slows.
Maybe power demand estimates come down.
Maybe hyperscalers reduce capital expenditures.
And suddenly the enormous earnings expectations embedded throughout the AI ecosystem have to be revised.
That's why semiconductor stocks were hit particularly hard when the safety debate intensified. Nvidia, AMD and other AI-related names sold off as investors considered the possibility that calls for slowing AI development could eventually affect infrastructure spending.
But here's where we have to separate headline risk from fundamental risk.
They are not necessarily the same thing.
Despite all the scary headlines, there's something extremely important happening underneath the surface.
The companies actually spending the money haven't meaningfully stopped spending.
One recent industry tally estimated that seven major AI builders spent roughly $657 billion in capital expenditures over their previous four reported quarters, including approximately $214 billion in the most recent quarter. More importantly, every company in that tracker either maintained or increased its guidance during the latest earnings cycle. None reduced it.
That's what I'm watching.
Not Twitter.
Not scary headlines.
Not people arguing about whether AI destroys humanity in ten years.
Follow the money.
As long as Microsoft, Meta, Alphabet, Amazon and the rest of the ecosystem continue spending enormous amounts of money building AI infrastructure, the underlying AI investment cycle remains alive.
The bull market eventually gets into serious trouble if that changes.
There's another possibility the market may be overlooking.
More AI regulation could actually require more infrastructure, not less.
Imagine governments requiring AI companies to perform substantially more safety testing.
More simulations.
More monitoring.
More cybersecurity.
More redundancy.
More controlled training environments.
More auditing.
All of those things require compute.
AI safety isn't necessarily anti-AI.
It could become another layer of the AI economy.
We've already seen an interesting version of this happening in cybersecurity. As fears surrounding autonomous AI systems have increased, cybersecurity companies have benefited from expectations that corporations will need significantly stronger defenses against AI-powered threats.
The AI trade could therefore begin splitting into different categories.
The first phase was:
Build AI.
The next phase could increasingly become:
Build AI + secure AI + monitor AI + control AI.
That's potentially an enormous industry by itself.
This is where I become more cautious.
The whistleblower situation isn't necessarily the biggest risk to AI stocks.
Valuation and capital spending are.
AI spending has become so enormous that investors increasingly need proof that hundreds of billions of dollars of infrastructure investment will generate adequate returns.
And some cracks are starting to appear in the financial structure surrounding the AI buildout.
There are growing concerns about increasingly complicated financing arrangements supporting data centers and AI infrastructure. Big Tech companies have been using guarantees and other structures to support enormous AI projects, while credit markets are beginning to scrutinize how sustainable some of these investments will be.
Goldman Sachs has also warned that the extraordinary contribution AI capital spending has made to S&P 500 earnings growth may become harder to sustain going into 2027.
That's much more important to me than one scary interview.
The AI bull market has reached a stage where simply announcing another $20 billion data center isn't enough.
Eventually investors ask:
Where is the return?
And that's healthy.
Absolutely.
In fact, after the enormous runs we've seen in many AI-related stocks, a correction shouldn't surprise anybody.
A stock can have an incredible long-term future and still drop 20%, 30% or even 40%.
Those two statements aren't contradictory.
We've seen this repeatedly throughout technological revolutions.
Great companies get ahead of themselves.
Expectations become ridiculous.
Stocks correct.
Weak companies disappear.
Strong companies keep growing.
Then the next leg begins.
The biggest mistake investors can make is assuming:
AI changes the world = every AI stock goes up forever.
No.
There will be massive winners.
There will also be companies spending billions of dollars that never earn an acceptable return.
There will be AI infrastructure companies taking on too much debt.
There will be speculative AI companies trading at valuations they can never justify.
And there will probably be companies nobody is talking about today that become enormous winners five years from now.
That's what happens during technological revolutions.
I'm watching several things.
First: hyperscaler capex.
If Microsoft, Meta, Amazon, Alphabet and other major AI builders begin materially reducing AI capital expenditures, pay attention.
That would be fundamentally different from a few days of semiconductor stocks selling off.
Second: GPU demand.
As long as high-end compute remains scarce and heavily utilized, it's difficult to argue that AI infrastructure demand has collapsed. Recent reports indicate GPU rental demand remains strong, including demand for older Nvidia hardware.
Third: government regulation.
There's a massive difference between:
“We need AI safety standards.”
and
“You cannot train models above X capability.”
The first creates compliance costs.
The second could materially change the growth trajectory.
That's why investors should watch actual legislation and regulation rather than reacting to every headline.
Fourth: monetization.
This may ultimately be the biggest one.
Companies need to demonstrate that AI isn't merely an enormous capital expenditure competition.
AI needs to generate productivity.
Revenue.
Margins.
Cash flow.
If AI revenue continues accelerating, spending will continue.
If AI spending grows exponentially while monetization stalls, Wall Street eventually stops rewarding the companies writing the checks.
My base case is that this controversy creates volatility and possibly further corrections, but by itself it doesn't end the AI bull cycle.
Why?
Because the money hasn't stopped.
Demand hasn't disappeared.
The infrastructure is still being built.
Corporations are still integrating AI.
Governments are investing in AI.
Data centers are still being constructed.
Compute demand remains enormous.
And perhaps most importantly, nobody wants to lose the AI race.
The United States doesn't want to lose to China.
Google doesn't want to lose to OpenAI.
OpenAI doesn't want to lose to Anthropic.
Meta doesn't want to lose to Google.
Amazon doesn't want to lose cloud workloads.
Microsoft doesn't want to lose enterprise AI.
That competitive pressure is incredibly powerful.
Even executives who genuinely believe AI presents serious risks face the classic prisoner's dilemma:
“If we slow down and everyone else keeps going, we lose.”
That's one reason stopping this train is much harder than simply saying it should slow down.
The biggest near-term risk isn't that AI suddenly disappears.
It's that expectations got too far ahead of reality.
That's where corrections come from.
If Nvidia grows 50% but investors priced in 80%, the stock can fall.
If an AI data-center company doubles revenue but investors expected it to triple, the stock can fall.
If hyperscalers spend $500 billion instead of the $600 billion investors expected, semiconductor stocks can fall.
Great industry.
Great technology.
Bad expectations.
Those three things can exist simultaneously.
That's why I'm not treating every AI dip as automatically bullish anymore.
We're entering the stage where investors need to distinguish between companies that benefit from AI and companies whose stock prices merely benefited from the words “artificial intelligence.”
That distinction will become increasingly important.
AI whistleblowers and safety researchers deserve to be taken seriously.
We shouldn't dismiss people simply because their warnings are inconvenient for our portfolios.
But as investors, we also shouldn't automatically translate:
“AI could become dangerous”
into:
“Sell every AI stock.”
Those are completely different conclusions.
Ironically, the fact that researchers are becoming frightened by how rapidly AI is advancing could be interpreted two completely different ways.
The bearish interpretation:
AI becomes so dangerous that governments restrict development, slowing the entire infrastructure boom.
The bullish interpretation:
AI capabilities are advancing much faster than expected, making the technology even more economically valuable and intensifying the race to build the infrastructure required to deploy it.
Right now, the market is trying to figure out which one wins.
My approach is simple.
Watch the spending.
Watch the earnings.
Watch GPU demand.
Watch actual regulation.
And watch whether AI companies can turn this historic infrastructure investment into historic cash flow.
If those remain intact, the AI bull story remains intact even if the road gets extremely volatile.
If those begin breaking, then we have a much bigger problem than a whistleblower headline.
Could AI stocks correct?
Absolutely.
After the massive moves we've seen, another meaningful correction would not surprise me at all.
Does the current whistleblower/safety situation alone mean the AI bull market is over?
The evidence doesn't establish that.
For now, the underlying buildout continues, capital spending remains enormous, and competition between the world's largest technology companies remains intense.
But we're entering a different phase of the AI trade.
The easy phase was buying anything connected to AI.
The next phase will likely reward companies that can actually convert AI demand into sustainable revenue, margins and free cash flow.
The bull train may keep moving.
Just don't expect the ride to stay smooth.
@trader-joe·Sep 17The September FOMC is officially in the books, and this was a pretty clear message from the Federal Reserve:
Inflation is still too high, the economy is still holding up, and the Fed is willing to keep rates higher to get inflation under control.
The Fed voted unanimously, 12–0, to raise rates by 25 basis points, bringing the federal funds target range to 3.75%–4.00%. This is the first Fed rate hike since 2023. ([Federal Reserve][1])
Simple: inflation.
Fed Chair Kevin Warsh said inflation remains too high and that the summer data hasn't shown enough improvement in the underlying trend. The Fed still wants inflation back near its 2% target. ([Reuters][2])
The Fed's updated projections show:
2026 PCE inflation: 3.7%
2026 Core PCE: 3.4%
Both were revised slightly higher from the June projections. ([Federal Reserve][3])
So despite all the talk about eventually lowering rates, the Fed is currently moving in the opposite direction.
This is probably the biggest takeaway from today's meeting.
The median Fed projection for the federal funds rate at the end of 2026 jumped from 3.8% in June to 4.1% now. Twelve policymakers projected a year-end midpoint of 4.125%. ([Federal Reserve][3])
In plain English:
The Fed's projections are consistent with another 25-basis-point hike this year.
That's not a guarantee. The Fed will still react to incoming inflation, employment and economic data.
But today's message was definitely not dovish.
Here's the interesting part.
The Fed isn't raising rates because the economy is falling apart.
It's almost the opposite.
The Fed says economic activity continues to expand at a solid pace, domestic spending remains resilient, productivity growth is strong and capital investment is robust. ([Federal Reserve][1])
The unemployment projection for 2026 was actually lowered from 4.3% to 4.1%. ([Federal Reserve][3])
Warsh also pointed to massive capital spending, including investment from large technology companies and AI/data-center infrastructure, as one factor increasing demand for capital and helping push longer-term borrowing costs higher. ([Reuters][4])
That's important.
Strong economy + sticky inflation = the Fed has room to stay aggressive.
Higher rates generally create a tougher environment for equities.
Companies pay more to borrow. Consumers pay more to finance things. Bonds and Treasuries become more competitive with stocks. And higher yields can put pressure on expensive growth companies whose valuations depend heavily on future earnings.
That's why the market cared about more than today's 25-basis-point hike.
The bigger question is:
How long will rates stay this high, and how many more hikes are coming?
Stocks pulled back following the announcement as investors digested the possibility of additional tightening. ([Reuters][5])
That doesn't mean stocks automatically crash because the Fed raised rates.
The other side of this equation is that the economy remains surprisingly strong.
Forget trying to predict every word that comes out of the Fed.
Watch the data.
Inflation: If inflation starts falling convincingly, pressure on the Fed eases.
Jobs: A significant deterioration in employment could change the Fed's calculation.
Treasury yields: Rising yields can continue creating pressure on high-multiple growth stocks.
Economic growth: As long as the economy remains resilient, the Fed has more room to fight inflation.
Every CPI, PCE and employment report just became even more important.
This was a hawkish FOMC.
The Fed raised rates to 3.75%–4.00%, inflation remains well above its 2% goal, and policymakers' median projections moved toward another hike this year. ([Federal Reserve][1])
But don't confuse tighter monetary policy with a collapsing economy.
Right now we're dealing with a strange combination:
**Strong economy.
Sticky inflation.
Higher rates.
More volatility.**
For traders, that means opportunities, but also more reason to respect risk.
For long-term investors, one Fed meeting shouldn't suddenly change the thesis on a quality company.
Don't just trade the headline. Understand why the Fed is doing it.
[1]: https://www.federalreserve.gov/newsevents/pressreleases/monetary20260916a.htm?utm_source=chatgpt.com "Federal Reserve Board - Federal Reserve issues FOMC statement"
[2]: https://www.reuters.com/business/warsh-says-fed-focus-stay-inflation-underlying-trends-have-not-meaningfully-2026-09-16/?utm_source=chatgpt.com "Warsh says Fed focus to stay on inflation, underlying trends have not meaningfully improved"
[3]: https://www.federalreserve.gov/monetarypolicy/fomcprojtabl20260916.htm?utm_source=chatgpt.com "The Fed - September 16, 2026: FOMC Projections materials, accessible version"
[4]: https://www.reuters.com/markets/us/feds-warsh-lays-out-forces-driving-up-bond-yields-2026-09-16/?utm_source=chatgpt.com "Fed's Warsh lays out forces driving up bond yields"
[5]: https://www.reuters.com/business/view-markets-steady-after-fed-raises-rates-points-another-hike-this-year-2026-09-16/?utm_source=chatgpt.com "VIEW Stocks pull back after Fed raises rates, points to another hike this year"
@trader-joe·Sep 8Only few spots left for this month.
@trader-joe·Sep 3$FLNC has been on one hell of a ride.
Fluence Energy went from roughly $3 to above $30, becoming one of the hottest names in the energy storage trade. Now it has fallen all the way back toward $10.
So what changed?
The short answer is that the long-term story remains interesting, but execution failed to keep up with the hype.
Fluence sits directly in the middle of several major investment themes.
The company builds large-scale battery energy storage systems. These aren't little batteries. We are talking about massive systems designed to store electricity for utilities, renewable projects, power grids and increasingly data centers.
That became a very attractive story for investors.
AI made it even hotter.
The AI boom isn't just about Nvidia chips. Those chips need data centers, and those data centers need enormous amounts of electricity. Power generation, grid infrastructure and energy storage have increasingly become part of the AI infrastructure trade.
Fluence started landing significant data-center and hyperscaler-related business, while its overall backlog grew to record levels.
Suddenly the narrative became:
AI + power demand + grid modernization + battery storage.
That's a powerful combination.
The market ran with it.
The problem wasn't necessarily a lack of demand.
The problem was execution and profitability.
Fluence ran into manufacturing and project delays. Hundreds of millions of dollars of expected project deliveries were pushed into the following fiscal year.
Margins also took a serious hit.
Then management cut its full-year revenue outlook and dramatically reduced its adjusted EBITDA expectations.
That's when the market's attitude changed.
At $30+, investors were pricing FLNC like a company about to execute beautifully on a massive growth opportunity.
Instead, they got delays, weak margins and reduced guidance.
The stock got punished accordingly.
This is an important investing lesson:
A great industry doesn't automatically equal a great stock.
A company still has to execute.
Here's what makes FLNC interesting around these levels.
The demand story didn't simply disappear because the stock crashed.
Fluence still has a multibillion-dollar backlog. Energy storage continues to expand globally. Electrical grids need modernization. Renewable energy needs storage. And AI data centers are creating another enormous source of electricity demand.
So I don't think the question is whether energy storage has a future.
It clearly does.
The question is whether Fluence can turn that opportunity into profitable growth.
That's a very different question.
This is probably the part of the story I find most interesting.
AI infrastructure is rapidly becoming a power infrastructure story.
Everyone talks about GPUs.
But those GPUs need electricity.
Lots of it.
That means the AI buildout eventually touches utilities, natural gas, nuclear power, electrical equipment, cooling systems, transmission infrastructure and battery storage.
If Fluence continues winning meaningful hyperscaler and data-center projects, the market could eventually begin viewing FLNC as more than simply a renewable-energy storage company.
That could be a major catalyst.
But I don't want the buzzwords.
I want contracts and revenue.
Fluence needs to execute.
That's it.
Fix the manufacturing problems.
Deliver the delayed projects.
Convert backlog into revenue.
Improve gross margins.
Move toward sustainable profitability.
If management accomplishes those things, sentiment toward FLNC could change very quickly because the growth opportunity is already there.
If they can't, then a giant backlog doesn't mean nearly as much.
Technically, this is why I'm paying attention now.
FLNC is around $10.50 and testing the lower portion of the long-term descending structure on my chart.
I'm watching roughly:
$9 → $12 → $15
If this lower structure holds, $12 becomes my first meaningful area to watch.
Above that, $15 becomes much more important.
A strong reclaim of $15 would start making the chart considerably more interesting.
But if the current structure fails, I wouldn't be shocked to see the $9 area tested.
And remember:
A stock being down 70% doesn't mean it can't fall another 30%.
That's why I'm not blindly calling this a bottom.
FLNC went to the moon because investors saw enormous potential in energy storage, AI power demand, data centers and grid modernization.
It came back to Earth because the company struggled to execute on that opportunity.
Now the hype has largely disappeared.
And strangely enough, that's when I become more interested.
At $30+, everyone loved the story.
Around $10, expectations are considerably lower.
For me, FLNC is now a high-risk turnaround/growth watch, not a blind buy.
If management fixes execution while data-center and energy-storage demand continue growing, there could eventually be a very interesting recovery story here.
If execution remains poor, the downtrend can absolutely continue.
The opportunity is real. Now Fluence has to prove it can actually capitalize on it.
@trader-joe·Sep 2GoPro suddenly became one of the hottest small-cap names on the market.
The catalyst initially catching traders' attention was a familiar name from outside Wall Street: Mark Fischbach, better known as YouTube creator Markiplier.
Markiplier disclosed ownership of 13.5 million GoPro Class A shares, representing approximately 8.5% of the class. That made him GoPro's largest shareholder. The SEC filing says he has sole voting and disposition power over those shares and that they were not acquired for the purpose of influencing control of the company.
For anyone familiar with Markiplier, this isn't some random celebrity attaching his name to an action-camera company.
He's one of the world's biggest content creators and has increasingly moved into filmmaking. He has also publicly discussed GoPro's camera technology and his belief that the company is undervalued.
That combination was enough to get retail traders excited.
But there is now an even bigger development surrounding $GPRO.
On September 1, GoPro announced an agreement to merge with Starman Optical, an optical-photonics company.
Under the proposed transaction, GoPro shareholders are set to receive approximately $285 million in cash, or about $1.14 per share, while existing GoPro shareholders are expected to retain roughly 10% ownership of the combined company. Approximately $92 million of GoPro debt is also expected to be repaid as part of the transaction.
The combined company plans to remain publicly traded.
The strategic angle is also interesting.
Starman operates in optical technology that can be used in areas such as AI infrastructure and data centers. The combination potentially gives GoPro exposure beyond its traditional consumer action-camera business, including commercial, defense and other technology markets.
So there are really two narratives colliding at once:
Markiplier becomes GoPro's largest shareholder.
Then:
GoPro announces a transformative merger.
That's rocket fuel for a small-cap momentum stock.
But that's also exactly when traders need to be careful.
This is probably the most important part of this entire blog.
When a small-cap stock suddenly explodes, your first instinct shouldn't be:
"How do I get in?"
It should be:
"Did I already miss the easy part?"
There is a huge difference.
The trader who bought before the crowd arrived has a completely different risk profile from the trader buying after the stock has exploded.
The first trader has cushion.
The second trader is buying excitement.
And excitement is expensive.
Small-cap momentum can be absolutely vicious in both directions.
A stock can go:
+20%
+40%
+70%
and suddenly everyone thinks it's going another 100%.
Then buyers disappear.
Profit taking begins.
Momentum algorithms flip.
Late buyers panic.
And that beautiful green candle can turn into a massive upper wick incredibly quickly.
That's why I constantly tell traders:
$GPRO having legitimate news doesn't mean every price is a good price.
You can be completely correct about the story and still lose money because you entered at the wrong time.
Options add another layer of risk.
You're not simply predicting whether $GPRO eventually trades higher.
You're dealing with:
Direction
Timing
Implied volatility
Expiration
Liquidity
A stock exploding on news can cause option premiums to become extremely expensive.
You can buy calls near peak excitement, have the stock pull back or consolidate, and watch the option get destroyed even though the stock remains well above where it started.
That's why chasing short-dated calls after a massive move can become dangerous very quickly.
There is nothing wrong with participating in momentum.
But understand what you're participating in.
This is not the type of situation where I want someone thinking:
"This is going to the moon, so I'm going heavy."
I'd rather see someone take a tiny speculative position they can comfortably lose than turn a momentum trade into a portfolio event.
If your normal position is $2,000, maybe this is the type of setup where you're using $300 or $500.
The exact amount isn't important.
The principle is:
Not bigger size.
Unfortunately, retail traders often do the exact opposite.
The crazier the stock becomes, the more money they throw at it.
That's backwards.
The market opens.
Let $GPRO show you what it wants to do.
Maybe it holds.
Maybe it consolidates.
Maybe it creates a clean breakout setup.
Maybe it pulls back and establishes support.
Or maybe the opening bell arrives and everyone who bought earlier decides to take profits.
You don't know.
Neither do I.
That's why waiting is a strategy.
You don't have to catch the first candle.
You don't have to catch the exact bottom.
And you definitely don't have to buy because everyone else on social media suddenly discovered the ticker.
Let the chart develop.
Find your support.
Find your resistance.
Watch volume.
Watch whether breakouts actually hold.
Then decide whether the risk/reward makes sense.
This is one of the oldest lessons in trading.
By the time a stock is trending everywhere, screenshots are circulating and everyone is talking about how much money they made, somebody already owns it significantly lower.
That doesn't mean the move is finished.
It means you need to recognize where you are in the move.
The earlier buyer is asking:
"Should I take profit?"
Meanwhile the late buyer is asking:
"Should I buy?"
Think about that.
Those two traders are potentially transacting with each other.
Don't automatically become the person providing liquidity for someone else's exit.
There are legitimate reasons traders are interested in $GPRO.
Markiplier taking a huge position is interesting.
The merger is much more significant fundamentally.
The possibility of expanding GoPro's technology into AI infrastructure, defense and commercial applications gives investors a completely different narrative from the struggling consumer-camera company they previously knew.
That deserves attention.
But attention doesn't equal conviction.
And conviction doesn't eliminate risk.
The proposed merger still has conditions to satisfy, including shareholder and regulatory approval, and the transaction is expected to close later in 2026 if those conditions are met. ([Financial Times][3])
There is still uncertainty.
I actually care more about the lesson here than the ticker.
Every few weeks the market gives us another stock like this.
Different company.
Different catalyst.
Same psychology.
Stock explodes.
Social media notices.
Retail piles in.
FOMO builds.
People increase size because they don't want to "miss it."
Some make huge money.
Others buy the top.
Then everyone forgets the lesson until the next ticker appears.
You don't have to avoid these stocks completely.
You just need to respect what they are.
$GPRO has a genuinely interesting story developing.
A globally recognized creator accumulated 13.5 million shares, representing roughly 8.5% of GoPro's Class A stock, and became its largest shareholder.
Now GoPro has announced a major merger that could reshape the company entirely.
That's enough to create serious momentum.
But momentum works both ways.
If you're already in lower, manage your position.
If you're looking to enter after the explosion, don't let FOMO make the decision for you.
Wait for a setup.
Use small size.
Respect your stop.
Don't chase vertical candles.
And most importantly:
Missing a trade costs you nothing. Chasing the wrong trade can cost you plenty.
There will always be another ticker.
[1]: https://www.theverge.com/tech/986847/markiplier-gopro-investor?utm_source=chatgpt.com "Markiplier is now GoPro's biggest shareholder"
[2]: https://www.reuters.com/legal/transactional/gopro-be-acquired-by-starman-optical-285-million-deal-2026-09-01/?utm_source=chatgpt.com "Struggling GoPro sells majority stake to optical maker Starman for $285 million"
[3]: https://www.ft.com/content/5f643674-bf2b-48f1-bc3e-a7fe54820c99?utm_source=chatgpt.com "Action camera maker GoPro to be acquired after decade-long decline"
[4]: https://www.sec.gov/Archives/edgar/data/1500435/000162828026059839/gpro-20260901.htm?utm_source=chatgpt.com "gpro-20260901"
@trader-joe·Sep 1You can spend years trading stocks without ever touching a Treasury bond.
You should still understand the bond market.
One of the most important numbers I watch outside of the stock market is the U.S. 10-Year Treasury yield, commonly called the 10Y.
You'll hear it constantly on financial television:
"10-year yields are surging."
"Tech is selling off as yields rise."
"Yields dropped after the Fed announcement."
"The 10-year broke above 4%."
For newer traders, this can sound like background noise.
It isn't.
The 10-year Treasury yield influences stock valuations, mortgage rates, corporate borrowing, investor risk appetite, and the relative attractiveness of stocks versus bonds.
Understanding it can help you understand why the market is moving, rather than simply watching candles move up and down.
Let's break it down from the beginning.
The United States government spends enormous amounts of money.
When the government needs to borrow money, one way it does this is by issuing Treasury securities.
Think of it very simply.
You lend money to the U.S. government.
The government promises to pay you according to the terms of that security.
There are different maturities.
You might hear about:
3-month Treasury bills
2-year Treasury notes
5-year Treasury notes
10-year Treasury notes
30-year Treasury bonds
Different maturities tell us different things about the economy and investor expectations.
For stock traders, the 10-year Treasury is especially important.
The yield represents the return the market demands for owning the 10-year Treasury at its current market price.
If you hear:
"The 10-year is at 4.5%"
that does NOT mean the Federal Reserve just set interest rates at 4.5%.
This is an important distinction.
The Federal Reserve directly controls a very short-term policy rate, the federal funds target range.
The 10-year Treasury yield is determined in the bond market.
Millions of investors, institutions, banks, pension funds, foreign governments, hedge funds and other market participants buy and sell Treasuries.
Those transactions determine Treasury prices.
And Treasury prices determine yields.
So the 10Y gives us a window into what the enormous bond market is thinking.
If you remember only one thing from this lesson, remember this:
They move inversely.
This confuses almost everyone when they first learn bonds.
Suppose investors suddenly become nervous about the economy.
Money starts pouring into Treasuries.
Demand for Treasury bonds increases.
Bond prices rise.
As those prices rise, their yields fall.
Now imagine investors start dumping bonds.
Bond prices fall.
The effective yield available to new buyers rises.
That's why you'll frequently hear:
"Treasuries sold off today and yields jumped."
A Treasury selloff means Treasury prices are falling.
It does not mean yields are falling.
Because stocks don't exist in isolation.
Capital is constantly deciding where it wants to go.
Stocks.
Bonds.
Cash.
Real estate.
Commodities.
Crypto.
Private investments.
Everything competes for capital.
The 10-year Treasury is particularly important because U.S. government debt is generally treated as one of the lowest credit-risk investments available.
That creates an interesting comparison for investors.
Imagine Treasury yields are extremely low.
An investor looking for attractive returns may be more willing to own stocks.
Now imagine Treasury yields rise dramatically.
Suddenly an investor can earn a meaningful return from government debt without taking the same business and equity risk associated with owning stocks.
Stocks now have more competition.
That matters.
This is not a perfect definition, but for traders it's a useful mental model.
The 10Y gives you a sense of the cost and required return associated with longer-term capital.
When long-term yields rise significantly, money becomes more expensive throughout the financial system.
Companies may face higher borrowing costs.
Consumers may face higher mortgage rates.
Investors demand higher returns.
Stock valuations can come under pressure.
When yields fall significantly, some of that pressure can ease.
That's why you should have the 10Y somewhere on your radar.
This is probably the most useful section for many of our traders.
High-growth stocks are often valued based heavily on profits investors expect the company to generate years into the future.
Think about a young technology company.
Maybe today's earnings aren't impressive.
But investors believe:
"In five years this company could be enormously profitable."
Those future earnings have value today.
But finance applies something called a discount rate to determine what future money is worth in today's dollars.
As interest rates and bond yields rise, those future earnings become less valuable in present-value calculations.
This can pressure the valuation investors are willing to pay.
That is why rapidly rising yields can hit:
High P/E technology stocks
Unprofitable growth companies
Speculative AI stocks
Small-cap growth
Long-duration assets
especially hard.
The farther into the future investors are looking for the company's profits, the more sensitive the valuation can become to changes in rates.
Imagine two opportunities.
Investment A is a government security offering a very low yield.
Investment B is a risky growth stock that might produce huge returns someday.
If the government security pays almost nothing, investors may be willing to accept more risk.
Now imagine government securities suddenly offer a much more attractive return.
Investment B now has to compete with that.
The risky stock hasn't necessarily become a worse company.
The alternative became more attractive.
That concept is called opportunity cost.
Every dollar invested in one asset is a dollar that cannot simultaneously be invested somewhere else.
This is one reason higher Treasury yields can compress stock valuations.
You've probably seen days where:
10Y ripping
QQQ dropping
High-growth stocks getting smoked
while some traditional sectors hold up much better.
There is logic behind that.
Technology companies often trade at higher valuation multiples because investors expect significant future growth.
If the market suddenly demands a higher return on capital, those expensive multiples become harder to justify.
A stock trading at 40, 50 or 60 times earnings has much more valuation embedded in future expectations than a mature company trading at a modest multiple.
This doesn't mean:
10Y up = short every tech stock.
Never reduce the market to something that simple.
It means rapidly rising yields can create an important headwind for expensive growth stocks.
This is another important connection.
Suppose investors are willing to pay a very high P/E multiple for a company.
Why?
Usually because they expect strong future earnings growth.
But when the risk-free alternative becomes more attractive, investors can become less willing to pay extreme multiples.
Instead of paying 40 times earnings, perhaps investors decide the stock deserves 30 times earnings.
Here's the important part.
The company's earnings don't necessarily have to collapse for the stock to fall.
The multiple itself can contract.
That's called multiple compression.
This is why you sometimes see a company report decent earnings while the stock continues struggling in a high-rate environment.
The business might be fine.
The market simply isn't willing to pay the same valuation anymore.
So far we've mostly talked about valuation.
But there's another side.
Companies borrow money.
They issue debt.
They finance acquisitions.
They build factories.
They construct data centers.
They purchase equipment.
They expand internationally.
They refinance old debt.
If borrowing costs rise, those activities become more expensive.
Imagine a company planning a massive expansion.
When financing is cheap, the economics might look fantastic.
When financing becomes expensive, management may reconsider.
Projects get delayed.
Hiring slows.
Expansion plans shrink.
Companies become more cautious.
Eventually, higher rates can work their way into the real economy.
The 10-year Treasury also has a major relationship with consumer borrowing conditions.
Mortgage rates are heavily influenced by longer-term bond yields.
When longer-term yields rise, mortgage rates often rise as well.
Think about what that means.
A family buying the same house suddenly faces a much larger monthly payment.
Some buyers leave the market.
Some buy cheaper homes.
Homebuilders can feel pressure.
Real estate activity can slow.
Consumers may have less disposable income.
Businesses connected to housing may feel the effects.
The 10Y isn't simply a number on CNBC.
It can eventually affect what ordinary people pay every month.
This is where things get more complicated.
A rising 10Y isn't automatically bearish.
You need to ask:
This is one of the biggest mistakes traders make.
They see the 10Y rising and immediately assume stocks must fall.
Not necessarily.
There are several reasons yields can rise.
Suppose the economy is doing extremely well.
Employment is strong.
Consumers are spending.
Corporate profits are growing.
Investors become optimistic.
Money may rotate away from defensive government bonds and toward riskier assets.
Bond prices fall.
Yields rise.
In this situation, rising yields can accompany a strong stock market because economic growth is supporting earnings.
So:
Yields rising because growth is strong
can be very different from:
Yields rising because inflation is getting out of control.
Context matters.
Inflation is terrible for fixed-income investors.
Why?
Because inflation reduces the purchasing power of future money.
Imagine locking your money into an investment for years while inflation remains very high.
You would demand more compensation.
That means investors may require higher yields to own long-term government debt.
So persistent inflation expectations can push Treasury yields higher.
This type of yield increase can be much more uncomfortable for stocks because it raises the possibility that interest rates will remain restrictive.
The Federal Reserve does not directly set the 10-year Treasury yield.
But Fed policy strongly influences expectations.
If the market thinks the Fed will keep rates higher for longer, longer-term yields can respond.
If inflation suddenly cools and investors expect aggressive rate cuts, yields may fall.
This is why markets react so violently to:
CPI
PCE
Jobs reports
Fed meetings
Powell speeches
These events change expectations about future monetary policy.
And those expectations flow through the bond market.
The United States issues enormous quantities of debt.
More government borrowing means more Treasury supply needs to be absorbed by investors.
If the market requires a higher yield to absorb that supply, yields can rise.
This is increasingly important for investors to understand.
Bond markets care about supply and demand just like every other market.
More supply without enough demand can require lower bond prices and therefore higher yields.
Now flip everything around.
Imagine something terrible happens.
Major recession fears.
Financial crisis.
Geopolitical shock.
Investors panic.
Where does enormous institutional money often go?
U.S. Treasuries.
That surge in demand pushes Treasury prices higher.
And because bond prices and yields move inversely:
Treasury prices rise
Treasury yields fall
That's why you can sometimes see the 10Y collapsing during periods of extreme market fear.
But here's another important lesson.
Falling yields are not always bullish.
If yields are collapsing because investors think the economy is about to enter a severe recession, stocks can fall at the same time.
Again:
You'll also hear traders talk about the 2-year Treasury yield.
The 2Y and 10Y tell us somewhat different things.
The 2-year tends to be more sensitive to expectations about Federal Reserve policy over the nearer term.
The 10-year reflects a broader combination of expectations involving:
Growth
Inflation
Future interest rates
Government borrowing
Term premium
Investor demand
That's why macro traders constantly compare the two.
Normally, investors expect more compensation for lending money for longer periods.
So longer-term bonds often yield more than shorter-term bonds.
But sometimes the opposite happens.
Short-term yields rise above long-term yields.
This is known as a yield curve inversion.
You've probably heard people say:
"The yield curve inverted. Recession incoming."
Historically, certain yield curve inversions have preceded recessions.
But it is not a magical market timing tool.
An inversion doesn't tell you:
Sell SPY at 10:32 tomorrow morning.
It tells you that the bond market is pricing an unusual economic environment where short-term rates are high relative to longer-term expectations.
It's a macro signal, not an entry signal.
This is something I think is extremely important.
Sometimes the actual yield level matters less than how quickly yields are moving.
Markets can adjust to almost anything given enough time.
What markets hate is rapid repricing.
If the 10Y slowly moves higher over many months because the economy is healthy, stocks may absorb it.
If the 10Y suddenly explodes higher over several sessions, markets may have to rapidly reprice valuations.
That's when you can see violent moves in growth stocks.
So don't only ask:
"Where is the 10Y?"
Also ask:
"How quickly did it get there?"
Velocity matters.
I would never trade solely because of the 10Y.
I wouldn't say:
"Yield is up today. Buy puts."
That's too simplistic.
Instead, use it as context.
Suppose QQQ is sitting at major resistance.
Growth stocks are already weak.
The 10Y suddenly starts ripping higher.
Semiconductors begin losing support.
Market breadth deteriorates.
Now several pieces of information are telling you the same story.
That's useful.
On the other hand, imagine yields rise slightly but QQQ continues holding support, NVDA is strong, semiconductors are breaking out and breadth remains healthy.
Price is telling you the market doesn't currently care.
Respect price.
Macro should help explain the environment.
It should not override what is actually happening on the chart.
If you trade regularly, consider keeping these somewhere on your watchlist:
SPY
QQQ
10-Year Treasury yield
VIX
Dollar Index
Oil
You don't need to stare at all of them every second.
You're trying to develop situational awareness.
If QQQ suddenly dumps, you can quickly check:
Did yields spike?
Did the dollar rip?
Did VIX explode?
Was there a macro headline?
Is this isolated tech weakness?
You start building a picture.
That's the difference between simply watching price and understanding the environment surrounding price.
This needs to be emphasized.
You will absolutely see days when:
10Y rises and QQQ rises.
You will see days when:
10Y falls and QQQ falls.
Markets are driven by thousands of variables simultaneously.
Earnings.
Guidance.
Economic growth.
Inflation.
Positioning.
Options flows.
Liquidity.
Geopolitics.
Fed expectations.
Valuations.
Sentiment.
Technical levels.
Treasury yields are one piece of the puzzle.
A very important piece, but still one piece.
Anyone telling you that stocks mechanically move opposite the 10Y every day is oversimplifying the market.
Crypto traders should understand yields too.
Bitcoin doesn't operate in some completely separate financial universe anymore.
When yields are high and cash or government securities provide attractive returns, speculative assets have more competition for capital.
When real yields fall, liquidity improves and investors become more comfortable taking risk, crypto can benefit.
Again, it isn't a perfect inverse relationship.
Bitcoin has its own catalysts.
But if you're trading BTC, ETH, miners or crypto-related stocks, you should still understand what's happening in rates.
Macro liquidity matters.
Small companies can also be sensitive to rates.
Why?
Many smaller companies depend more heavily on external financing.
They may have weaker balance sheets.
They may carry floating-rate debt.
They may need additional capital to grow.
They may not generate enough free cash flow internally.
Higher financing costs can therefore hurt smaller companies disproportionately.
This is another reason the rate environment matters beyond mega-cap technology.
Banks are more complicated.
Higher rates can sometimes help banks because they may earn more on loans.
But extremely rapid moves in rates can also create problems.
Banks hold securities.
They manage deposits.
They manage duration.
They manage funding costs.
A major shift in the yield curve can affect profitability and balance sheets in complicated ways.
So again, don't use:
Yields up = banks up
as some automatic rule.
Understand the environment.
You do NOT need to become a bond trader.
You don't need to calculate duration by hand.
You don't need to become a macroeconomist.
You need to understand what the market is telling you.
The 10-year Treasury yield is one of those signals.
At the simplest level:
10Y rising quickly
Can mean tighter financial conditions, higher borrowing costs and pressure on expensive growth valuations.
10Y falling
Can reduce valuation pressure and make growth assets relatively more attractive.
But then ask the second question:
That question separates surface-level analysis from actual market understanding.
Imagine tomorrow morning you wake up and see:
10Y sharply higher
QQQ weak premarket
Semiconductors weak
High-growth stocks getting hit
Dollar strengthening
Now you have a story.
The market may be repricing interest-rate expectations.
You don't blindly short.
You go to the chart.
Where is support?
Where is resistance?
What happened overnight?
Is QQQ holding the 200 EMA?
Are buyers stepping in?
Is the opening move being absorbed?
Now macro and technical analysis are working together.
That's where this becomes useful.
Anyone who has followed my trading philosophy knows where I stand.
I love understanding the bigger picture.
But at the end of the day:
Price pays.
The 10Y can tell me technology should theoretically struggle.
If QQQ keeps breaking resistance and making higher highs, I'm not going to argue with the chart because of some macro thesis.
Markets can remain disconnected from your expectations longer than your options can remain alive.
Use yields to understand the battlefield.
Use price action to actually fight the battle.
The U.S. 10-Year Treasury yield might seem boring compared with NVDA, Bitcoin, SPY 0DTE or some small-cap stock moving 100%.
But underneath all of those trades sits the cost of money.
And the bond market is enormous.
When the cost of money changes, eventually everything feels it.
Stock valuations change.
Corporate borrowing changes.
Mortgage rates change.
Investor risk appetite changes.
Capital allocation changes.
That's why professional investors pay so much attention to Treasury yields.
You don't need to predict where the 10Y is going.
Just start watching it.
When the market has a strange day, check yields.
When QQQ suddenly gets hammered, check yields.
When high-growth stocks explode higher after an inflation report, check yields.
When the Fed speaks, check yields.
Over time, you'll start seeing the connections yourself.
And that's really the goal.
Not memorizing another indicator.
Not creating another buy or sell signal.
But understanding why money is moving.
If you remember nothing else from this lesson, remember these three things:
Bond prices and yields move in opposite directions.
Rapidly rising yields can pressure stocks, especially expensive growth stocks.
Never look at the direction of yields without asking why they're moving.
The chart tells you what is happening.
The bond market can often help you understand why.
