Tippy

No problem can be solved from the same level of consciousness that created it. Trading is a thinking game, and to trade well, you must think for yourself.

[Tippy @TheoryOfTrading]

I think it's about time to restart this account. The bubble grows. The euphoria increases. The endgame is near. It's time to switch over to the short side. Today's closes: $SPY 760, $QQQ 747, $SMH 633. Account $228k. The ride down is going to be wild, and hopefully profitable.

[Tippy @TheoryOfTrading]

Liquidity continues to drain from this market. While this raise isn't a huge deal for $ORCL itself, that's $40 Billion that won't go to someone else who probably needs it more. Financing starting to get more expensive. Look for others to follow with more, draining more liquidity.

[zerohedge @zerohedge]

Oracle Tumbles After Mixed Results, Capex Comes In Hot; Warns Another $40BN Debt/Equity Capital Raise Coming https://t.co/gGTT1tZAd3

[Tippy @TheoryOfTrading]

@RobertBluey Yeah, citizens will be second in line, right behind all the massive debt holders loaning all this capex money out to build AI.

[Tippy @TheoryOfTrading]

@ttaz92 @DeItaone So we're moving the goalposts now? I probably would have too after that "more market crashes" drivel.

[Tippy @TheoryOfTrading]

@ttaz92 @DeItaone "More Market Crashes". LOL.

[Tippy @TheoryOfTrading]

@Goldhedge79 Agreed, those pipelines are really expensive, take forever to construct and eventually end up being bombing targets. True on the insurance too, getting a new cargo insured is a challenge. Just a bad situation for everyone in that part of the world.

[Tippy @TheoryOfTrading]

@Goldhedge79 They are definitely in a tough spot for sure. I think they have nearly tripled the amount of oil going through Turkey. Some income is better than no income I guess. Good point on the tankers, insurance and rental fees have to be hurting them with oil just sitting there.

[Tippy @TheoryOfTrading]

@GeodesicsCap Check out $HUDI. It's another foreign "steel" company like $INHD. It did the same exact move back in late '22. Same sector, same country, same scam.

[Tippy @TheoryOfTrading]

And when every competitor in the AI space is the same and provides the same generic service, competition for users can become fierce. That's when you end up with price wars - and declining profits. What makes one data center any different from another? Nothing.

[Tippy @TheoryOfTrading]

I think what most people don't realize is that AI is just a simple commodity. It's $NFLX. It's $T. It's $CMCSA. It's just another subscription model for a service. Every commodity has cycles, price wars and competition. There's nothing that sets one provider apart from another.

[Tippy @TheoryOfTrading]

There's also the danger (much like fiber optics during dotcom) that all these AI providers eventually find themselves in a price war to attract users. Very few of these names will survive if that happens. We've seen the same in several other areas of the market.

[Tippy @TheoryOfTrading]

This massive first wave of AI isn't the end - it's just a starter kit. This first wave of debt isn't the end - it's only a down payment. You aren't finished when the data center is built. Chips constantly have to be replaced, power is still needed, and tech upgrades too.

[Tippy @TheoryOfTrading]

The question is, how long will markets continue to throw money at AI if it doesn't show a satisfactory ROI very soon? The initial build will become obsolete fairly quickly, will there be any money for round 2, especially if this market corrects and public funding dries up?

[Tippy @TheoryOfTrading]

@Plutonite @00000sol0 @The_AI_Investor The possibility here is that the joint venture with SK isn't strictly for $NVDA to obtain chips, but to increase the price of those chips so they can sell what they don't need for top dollar to others, thereby causing chip inflation for everyone else. Brutal game for sure.

[Tippy @TheoryOfTrading]

@Plutonite @00000sol0 @The_AI_Investor But he still has to pay for those chips, right? And promoting a shortage situation just makes those chips more expensive. Surely the better approach would be to talk down the price of the chips? Just seems like a conflicting position to take, unless there's some other reason.

[Tippy @TheoryOfTrading]

Offerings are multiplying. This doesn't help the bulls at all, especially when it's combined with all the new IPO's coming to market. Draining liquidity isn't going to help this market. There's an equilibrium point where the supply/demand curve flips to supply dominant.

[First Squawk @FirstSquawk]

CIENA PROPOSES $2 BILLION OFFERING OF CONVERTIBLE SENIOR NOTES

[Tippy @TheoryOfTrading]

Well, I was close. $NVDA isn't developing their own memory chip, they are doing it in a joint venture with SK Hynix. Let's see how $MU responds.

[First Squawk @FirstSquawk]

SK HYNIX CONFIRMS LONG-TERM NVIDIA PARTNERSHIP TO JOINTLY DEVELOP NEXT-GENERATION MEMORY FOR GLOBAL AI FACTORIES, ENSURING STABLE SUPPLY GIVEN LENGTHY ADVANCED MEMORY DEVELOPMENT CYCLES.

[Tippy @TheoryOfTrading]

I like Jensen Huang, he's done a great job. But giving one man this much influence within the sector is dangerous. He's always going to say what benefits $NVDA. I think you have to take much of what he says with a grain of salt. I wonder if he has plans to develop a memory chip?

[Tippy @TheoryOfTrading]

@00000sol0 @The_AI_Investor I agree. I should have been more clear, I wasn't suggesting he was trying to crash stocks. I was suggesting he was pumping up the price of memory chips. If he needs those chips so badly, why would he be publicizing the shortage and putting more upward pressure on their price?

[Tippy @TheoryOfTrading]

@Valckrie Not making an excuse for the market's actions, but back in 2000 the market traded in fractions, which often made the volatility worse. Trends would move so fast when every tick was 12 cents rather than 1 cent, the liquidity was a little different, especially around air pockets.