$Meta Platforms (META.US)$ we're getting to a extreme overso...
$Meta Platforms (META.US)$ we're getting to a extreme oversold position on a daily charting basis. a lot of the sell-off there's two reasons number one it is the sector rotation that's taking place and I think it's right now it's momentum it's shorts covering that's going into the Russell you have to understand that about 70% of these companies in the Russell are not profitable they will benefit for lower rates however we haven't had one single rate cut yet and we had 500 basis points of an increase number one number two If the Fed lowers a half a point in September that doesn't do shit for the small caps that are loaded in debt because they're not going to refinance their debt for a half a point they need about 150 basis points before it makes any financial sense so I'm getting off track of what I wanted to talk about but.. people are using the magnificent seven is a source of funds first we had a rebalancing that took place last month because the positions became so large they sold off so that's number one now we have economic data showing a slowdown well if you think about it a slowdown hurts the Russell type companies they tend to be a lot more dependent upon growth in the economy than a slowdown so that's contradictory to what is actually a reason to buy the Russell because of the country's slowing down these companies are going to lose a lot more business. anyways meta Nvidia Microsoft to a small degree Amazon all have rolled some more than others and this is people just looking for where velocity of money is going..
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36 yrs in the trenches, raised 100mil for start ups, syndicate ipo's, yrs on trading desk mkt maker.
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10baggerbamm OP : so with meta we do have earnings coming up the end of the month the big 800 lb question and I mentioned this yesterday is will they accelerate their cat-x because maybe they underestimated the build out last quarter and they're going all out allocating for not only the n200 but also for the next incarnation chip from Nvidia do out in the fall so are they setting away even more money than what they previously planned for. we saw last quarter they were the first to report and they shocked the world about how much money they're going to invest and they got smacked really hard and the smartest thing to have done would have been to buy that massive dip because it recovered significantly I don't think even if they say they're accelerating their capex we're going to have any worse near the extent of the sell-off because people will have learned that they are going to be one of the greater benefactors from AI long before the Russell companies utilize artificial intelligence to increase their overall operational efficiencies. so 480 would be short-term extreme oversold the lower moving average is turning negative right now which is not a good sign sometimes it'll sell off another few dollars which potentially could put it around a 475 mark.
10baggerbamm OP : pt 3
I think at this point you're going to see some significant accumulation taking place. again with the Russell if you bought it and you owned it it's great there is potential for more upside quite a bit maybe another 10% and if you buy TNA to leverage ETF that would be a 30% increase but you have to understand we have not had any fundamental change to these companies earnings yet and as a basket the Russell trades at about 30 times and that's only factoring the ones that have earnings because most have losses. so I think meta is going to represent a near-term pop as we have a few more dollars in selling off I'm not a big fan of going into earnings and taking a position because the X Factor you really don't know that being said I'm going to be buying the leverage ETF meta there's two of them one of them has options the other one does not so I'm buying the ones with the options available in which case I am wrong I can sell some calls to lower my cost basis.
FBL is what I will be buying