Sentiment by traders is overwhelmingly negative. This is a great set up for a strong rally.
Markets and Stocks
Market sentiment by traders is overwhelmingly negative. Traders by a 7-1 ratio expect a rise in the Vix which would typically trigger a drop in equities. Such overwhelmingly negative sentiment sets the market up for a strong rally.
Alphabet Google
The catalyst for a broad upturn could be the earnings report from Alphabet Google on Wednesday. The market anticipates positive news on its cloud business and the confirmation that the company is not losing share in search. Google is also expected to raise cap ex guidance for AI. The company is very attractive at current levels. Soon, it will fix and then release a powerful frontier AI model.
Semiconductors
Chips doubled from late March to June 22. Now the group is in a 20% correction. But I expect an imminent sharp bounce higher over the next two weeks as the hyper scalers raise capital spending plans. Encouragingly, the stocks did start to recover in late Friday trading.
Apple
The stock acts great. I think it will run to $400 on this move. That would be about 20% higher than its closing price on Friday of $333.
ASML
In its earnings call, management of ASML said that earnings growth should approach 30% annually through the end of the decade. The stock is a slam dunk buy.
Micron
Fundamentals remain outstanding. My target remains $2,000.
Nvidia
Robots need chips from Nvidia and other semiconductor companies. This is a large new market opportunity for Nvidia.
Optical modules
Growth in optical modules will be explosive. Companies that will benefit include GLW, COHR, LITE and Nvidia.
Glass Substrates
The glass substrate market will also experience explosive growth. Corning and Nvidia will be big winners.
AI monetization
Households are beginning to pay for AI
Leveraged ETFs
These speculative trading vehicles contribute to the heightened volatility of the market especially the technology space. Because of leveraged ETFs over 320,000 retail accounts in South Korea were liquidated in margin calls. Don’t use leverage.
Oil
Hedge funds are very long oil. I expect some kind of new ceasefire deal to be announced this week.
SpaceX
At a price of around $75, SpaceX would be interesting. The stock is currently trading around $123.
Artificial Intelligence Revolution
New business formation is exploding because of AI.
https://www.nytimes.com/2026/07/17/business/economy/american-small-business-boom.html
AI
Now that “good enough”—and sometimes even “pretty amazing”—AI is available to iPhone users and Fortune 500 chief information officers alike, these companies will have to find new moats. Google has its massive search business; Meta has its social-media empire; Microsoft and Amazon dominate the hosting of enterprise software; and Apple sells the most popular hardware for consumers to run AI on.
In the future, the moat that will matter most for AI companies will be access to power, says Eric Zhao, a professor at the University of Oxford who is co-author of a recent paper on the subject. As electricity becomes ever more difficult to access and local communities block data-center construction, efficient use of that power will also be essential. “Frontier labs will need to compete on intelligence per watt,” he adds.https://www.wsj.com/tech/ai/cheaper-ai-commodity-openai-anthropic-0111da73
Kimi K3 , the new Chinese AI model is good but not the best.
Week Ahead
On Wednesday in addition to Alphabet Google, two other top picks report: Texas Instruments and GE Vernova.
Economics
To state what should be obvious to everyone, what a student studies at college strongly correlates with lifetime earnings.
https://bfi.uchicago.edu/insights/college-major-choice-payoffs-and-gender-gaps/
Prison
When inmates settle into being incarcerated and following all rules and commands, the biggest problem for many is how to pass the time. As I wrote earlier, the data says that up to 80% of the men are functionally illiterate. (At Calhoun, using basic phonics, I taught men to read. Before driving drunk, I had become a certified teacher in Collier County. I had taken an accelerated teaching program at Florida Gulf Coast University. The curriculum devoted significant time to reading.)
So, for these inmates, reading a book was not an option. As an aside, many of the men could not do basic arithmetic. As part of my reading instruction, I taught men to add and subtract. Repetition was my method. Most of the men were not interested in learning, the few who were provided some meaning to my incarceration.
Men played cards. The Hispanic men loved to play dominoes. I can still hear the shouting about a game of dominoes. If there were no fights, the corrections officers allowed the men to shout. The officers knew that shouting let off some steam from a boiling cauldron of inmates.
More than a few played chess. Some were quite good but I only know the basics of the game so I am not a good judge of their skill level.
Imagine serving a 30 year sentence and not being able to read. There are a lot of men in prison with very long sentences who become zombies and institutionalized because of the daily tedium.
My Naples friend who drove on a suspended license got out of the Collier County Jail on Friday evening. Apparently, his sentence and probation are now over. He faces no repercussions from his employer. But when I spoke to him, he told me that he would now follow all the rules. He explained that there are too many crazy men in the local jail. I told him that I knew that from my own personal experience.