Why I'm Buying the Dip BIGLY
Overall Thesis
The market is poised to rally over the next 69 days as Donald Trump attempts to pump equities before midterms through geopolitical optimism and lower oil prices.
Narratives
Kevin says his internal 'stock algo' now assigns The Trade Desk a fair value of roughly $4 per share, calling the outlook 'really bad' due to slowing revenue growth and surging costs. He cites a red flag from Netflix as the reason he sold the stock earlier at about $120 a share.
Key Arguments
- Revenue is up only 3% while cost of goods sold increased 22%
- Margin trajectory has deteriorated sharply
- A red flag from Netflix prompted an exit at around $120/share
Predictions (1)
Kevin frames Nvidia's earnings later that day as a key catalyst that could confirm or undercut the broader bullish thesis heading into Jackson Hole. He does not give a specific price or directional call on Nvidia itself, treating it mainly as a market-wide signal.
Key Arguments
- Nvidia earnings could show whether the market is 'overheating' or not
- Earnings will help gauge enterprise AI spending trends feeding the broader bull thesis
Kevin views Salesforce as one of several names sitting near its 200-day moving average that could see renewed buying as capital rotates into advertising/enterprise software plays. He frames this as an emerging opportunity rather than a completed move.
Key Arguments
- Salesforce is close to its 200-day moving average, unlike much of the S&P 500 which is above it
- Sector rotation into advertising-adjacent names is expected
CrowdStrike is mentioned only briefly as one of several companies reporting earnings that day, which Kevin says will provide insight into whether the market is overheating. No specific thesis or price view is given on CrowdStrike itself.
Key Arguments
- Earnings from CrowdStrike are cited as a data point on overall market health ahead of Jackson Hole
Kevin discusses falling Brent crude prices (from around $94 to roughly $86-87) and ties this decline to political pressure from the Trump administration ahead of the midterms. He frames this as part of a broader strategy to keep markets and gas prices favorable, without making his own explicit forward price call on oil.
Key Arguments
- Brent crude fell from about $94 to $86-87 recently
- Trump is reportedly directing efforts to reduce oil price volatility (fewer strikes on Iran, Strait of Hormuz messaging) ahead of midterms
- Lower gas prices are viewed as politically motivated ahead of midterms
Hedges & Caveats
- Acknowledges potential manipulation by institutional players (Citadel/Leopold position)
- Notes 72.5% probability of rate hike this year could be headwind
- Recognizes potential inflationary pressures from trade war escalation with Canada
- Warns that Trump's lame duck status post-midterms could increase geopolitical disruption
- Earnings from NVDA, CRM, and CRWD could change market sentiment
- Jackson Hole commentary could shift rate hike expectations