You need a plan for BOTH outcomes: AI keeps running higher... or the most indebted part of the boom gets REPRICED.
Right now, I’m watching 3 signals to tell me which way we’re heading.
1. The Nasdaq line
The Nasdaq 100 is sitting around a rising trend line and its 100-day moving average. If that level holds, this may just be another scare. If it breaks and STAYS broken, selling can accelerate.
2. CoreWeave’s debt
I’m watching its bond price and the cost of insuring that debt. If insurance keeps getting MORE expensive, lenders are getting more nervous.
3. Earnings
At roughly 21x expected profits, stronger-than-expected earnings can make valuations look more reasonable. If profits disappoint... Then the market has a much bigger problem.