Recap of the week 

The Rate Hike Roadmap

The Federal Reserve raised interest rates on Wednesday for the first time in three years, delivering the exact outcome the market anticipated.
Heading into the meeting, investors wanted one thing above all else: clarity. The Fed provided it by signaling two additional rate increases before pausing to assess the broader impact on inflation and growth. The FED’s defined policy path removed a massive amount of uncertainty.

Headlines fixated on the Dow dropping 1.7% in its worst week since March. The DOW weakness concealed where capital actually flowed. Tech and semiconductor stocks posted solid gains:
- Nasdaq up 0.7%
- Semiconductor Index (SOXX) gaining 2.7%
- Micron (MU) adding 3.9%
- SanDisk (SNDK) jumping 11.2%

What to expect for this week 

The Information Vacuum

With virtually no tier-one economic data and an empty earnings calendar until Micron reports on September 30, the market enters a news vacuum.
Without fundamental earnings prints to anchor stock valuations, geopolitical headlines drive price action. Two major events command attention: President Trump's address to the United Nations on Tuesday, September 22, followed by Chinese President Xi Jinping’s visit to the White House on Thursday, September 24.
When trading desks lack economic data, sensitivity to headlines spikes. Any friction from the UN podium or diplomatic posturing at the White House could trigger sharp, short-term pullbacks across major indices.

Off the Tape 

The Semiconductor Divergence

A clear split is forming across the market, and semiconductor stocks are positioned to pull ahead of the broader indices.
The divide comes down to oil prices and pricing power: who gets stuck paying higher energy bills, and who can pass them along.

Consider an airline. Jet fuel is one of its largest operating expenses. If oil jumps 30%, operating costs immediately surge. The airline cannot simply raise ticket prices by 30% to protect its profit margins, because travelers will cancel trips or book cheaper alternatives. The airline must absorb the fuel spike, which crushes its earnings.

Semiconductors operate under completely different economics:
Insulated Margins: Power and fuel represent a manageable fraction of total production value compared to basic industrials or transportation.
Indispensable Demand: Hyperscalers and tech giants are locked in an intense artificial intelligence race. Cutting-edge chips are essential, and buyers cannot afford to pause orders or fall behind competitors.
Full Pricing Power: If advanced chipmakers need to offset rising input or utility costs, their enterprise customers absorb the bill without hesitation to protect their compute roadmaps.

When geopolitical turmoil spikes oil and triggers a broad market sell-off, investors instinctively hide in energy stocks. High-quality semiconductors offer a parallel safe harbor. Because premier chipmakers hold dominant pricing power and strong balance sheets, they provide a reliable buffer against the margin compression hitting the rest of the market.

Before we go further

You're Already Shaping This

Everything above comes directly from tracking institutional flow and your direct feedback.

Keep the replies coming. Hit reply to this email and tell me what market questions or positions you want covered in next week's edition.

Reply to this email and tell me

That's the signal for this week.

Respectfully,
Ian Scott
Founder, Trader

Recap of the week 

The Data Is In

The latest inflation report showed prices are still rising faster than expected, and the slowdown in price hikes has stalled out. With everyday living costs staying uncomfortably high, Wall Street is now betting heavily that the Federal Reserve will raise interest rates this week, putting the chances around 85%.

Companies powering the artificial intelligence boom brushed off that interest-rate worry:

• Computer hardware makers like Dell jumped as businesses poured money into heavy-duty servers.

• Semiconductor stocks kept climbing because the advanced chips needed to run AI systems are still in short supply.

• Cloud infrastructure momentum accelerated this week as Oracle reported robust AI workload demand, while expanding its OCI data center networking footprint via an agreement with Hewlett Packard Enterprise.

The takeaway: Despite renewed rate fears, which typically pressure growth stocks, investors are still willing to pay up for companies directly benefiting from AI infrastructure spending.

What to expect for this week 

To Raise or Not to Raise

All attention turns to Wednesday afternoon, September 16, when Chairman Kevin Warsh and the Federal Reserve announce their next decision on interest rates and share their forecast for the economy.

The standoff comes down to two conflicting clocks:

• 1,146 days since the central bank last raised borrowing costs.

• 50 days until the midterm elections on November 3.

While Wall Street believes another rate increase is necessary to knock prices down, making loans more expensive right before voters cast their ballots guarantees a massive political firestorm.

Off the Tape 

Understanding Inflation

With talk of rate hikes back at center stage for the first time in over three years, it is a good time to look at how these moves actually affect your wallet.

The Federal Reserve has two main jobs: keeping unemployment low so people have jobs, and keeping prices stable so groceries, gas, and rent do not spin out of control. Its main lever is setting benchmark interest rates:

• Raising rates makes mortgages, car loans, and credit cards more expensive. That forces people and businesses to spend less, cooling off customer demand and stopping runaway price hikes.

• Cutting rates makes loans cheaper, encouraging everyone to borrow and spend, which speeds up economic growth.

But the Fed does not operate in a vacuum. While higher rates are designed to reduce spending, government policy can push demand in the opposite direction.

The big complication right now is government spending pulling in the opposite direction. Campaign proposals to send $5,000 cash checks to American adults would inject trillions of dollars directly into the economy. Flooding the country with that much extra cash would cause another wave of price spikes, eroding the buying power of the dollar and fighting directly against the Fed’s efforts to calm prices down.

The View

Markets are pricing roughly an 85% chance of a hike, but I’m not convinced. The inflation data gives the Fed an economic case to raise rates, while the political backdrop makes the timing unusually complicated.

With the midterms less than two months away and pressure on the Fed’s independence intensifying, I expect the Fed to hold rates steady on Wednesday.

Before we go further

You're Already Shaping This

Everything above comes directly from tracking institutional flow and your direct feedback.

Keep the replies coming. Hit reply to this email and tell me what market questions or positions you want covered in next week's edition.

Reply to this email and tell me

That's the signal for this week.

Respectfully,
Ian Scott
Founder, Trader

Recap of the week 

Memory Stocks Shine

Coming into the week, the expectation was that Broadcom’s earnings report could provide the lift the semiconductor space and memory stocks needed. Instead, Broadcom sold off 6.3% as Wall Street digested forward guidance that fell short of expectations. Yet even with that heavyweight drag, memory stocks detached from the broader semiconductor group and had a massive week: Micron gained 8%, SanDisk surged 17%, and the memory ETF, DRAM, climbed 8%. I think the memory stocks still have room to run and I remain bullish on all of these names into 2027.

On the economic front, Friday's jobs report delivered a major upside surprise: the economy added 162,000 jobs in August, way above the 55,000 expected. Despite the release of this data, the odds of a rate hike still sit at 50/50. 

What to expect for this week 

Breaking the 50/50 Tie

Heading into the week with rate hike odds locked at a dead-even 50/50, the market is looking for incoming economic reports to provide clarity. In a holiday-shortened trading week, expect the real fireworks to arrive late: Thursday’s PPI inflation data followed by Friday’s CPI print should break the 50/50 tie.

Although the market sees 50/50, I think the real number is 48. Let me explain: What are the real-world odds that President Donald Trump sits back and allows the Fed to hit the brakes on the economy with a rate hike for the first time in over three years, less than 48 days before voters head to the polls? The market may be pricing a 50/50 coin flip right now, but the political calendar and pressure from the White House makes an actual hike highly unlikely in my opinion.

Off the Tape 

Back to Basics

Thanks for the feedback everyone! We are listening and still receiving great feedback. It turns out we should go back to the basics, so here it is.

Basic Terms:

• Bull Market: The market is rising.

• Bear Market: The market is falling.

• S&P 500: The 500 biggest and most profitable companies.

• Nasdaq 100: The 100 biggest technology companies.

• Stock: A tiny fraction of ownership in a public company.

• Options: A contract that gives you the right - but not the requirement - to buy or sell a stock at a set price before a set date.

• Market Cap: Total dollar value of a company. 

Now let’s try a simple calculation of a Companies Market Cap:
Stock Price x Total Shares Outstanding = Market Cap

Example:
Stock Price: $100.00
Total Shares Outstanding: 1 billion.
Calculation: $100.00 x 1,000,000,000 = $100B Market Cap

Before we go further

You're Already Shaping This

Everything above comes directly from tracking institutional flow and your direct feedback.

Keep the replies coming. Hit reply to this email and tell me what market questions or positions you want covered in next week's edition.

Reply to this email and tell me

That's the signal for this week.

Respectfully,
Ian Scott
Founder, Trader

Recap of the week 

Nvidia Blew Out Earnings - Then the Fed Ruined the Mood

Nvidia posted another blowout quarter, delivering a record $96.2B in revenue - a 106% year-over-year increase fueled by an 89% surge in AI Data Center demand. Management projected 70% revenue growth for next fiscal year, outpacing Wall Street's 44% consensus. Notably, forward guidance was capped solely by high-bandwidth memory supply bottlenecks rather than end-market demand, confirming that compute demand across their entire architecture remains fundamentally strong.

Emphasizing that disinflation progress remains inadequate, Warsh triggered a sharp repricing across interest-rate hike futures. Before he spoke, the implied odds of a rate hike at the next FOMC meeting were 35%. As of Monday afternoon they sit at 66%. A higher-for-longer cost of capital poses a direct headwind for debt-financed AI infrastructure plays, where elevated borrowing costs threaten to squeeze free cash flow and compress valuation multiples.

Marvell rounded out the week with a 45% revenue expansion that nevertheless triggered an 8% post-earnings selloff. Despite strong top-line execution, the market penalized the stock over monetization lag, specifically questioning the runway required to translate their custom silicon and optical interconnect partnership with Google into near-term realized cash flows.

What to expect for this week 

Market Wants Clarity from the Fed and September Seasonality

The market is looking for concrete data to gain clarity on the Federal Reserve's trajectory heading into the next FOMC meeting, especially with benchmark yields pinned near multi-decade highs. The 10-year Treasury yield sits at 4.73% while the 30-year bond trades at 5.22% - levels matching 20-year peaks last sustained prior to the 2007–2008 cycle.

In this restrictive rate regime, the upcoming macro calendar provides critical inputs, highlighted by ISM data and Friday's non-farm payrolls report. Both prints will deliver essential readings on labor market durability, wage pressure, and broader economic momentum, dictating whether the Fed follows through on renewed rate-hike pressures. On the corporate front, Broadcom reports earnings, providing the next major checkpoint for custom ASIC demand, enterprise AI capex, and overall semiconductor momentum.

Compounding macro uncertainty is the calendar itself. Historical data confirms September is the weakest month of the year for equities. Since 1928, the S&P 500 has averaged a -1.17% decline in September, finishing negative roughly 56% of the time - making it the only calendar month with a persistent negative long-term track record. Performance deteriorates further during midterm election cycles, where the index has averaged a decline of approximately -2.0% in September across the last 10 midterms as markets price in uncertainty surrounding congressional control. Between multi-decade yield highs, the potential for Federal Reserve rate hikes, and historical seasonal weakness, the markets are susceptible to an acute downside movement with higher volatility in the month of September.

None of this alters the fundamental thesis for 2027 or the long-term outperformance of structural AI leaders. However, trading the tape requires acknowledging immediate price action: the convergence of elevated long-term borrowing costs, hawkish monetary policy, election-driven risk premiums, and adverse historical seasonality warrants tactical caution in the near term.

Off the Tape 

Beware of Leveraged ETFs

After 26 years as a trader and an ETF specialist, the single most critical lesson I can pass along is to beware of leveraged ETFs. These vehicles were engineered as sophisticated instruments designed to deliver 3x the daily return - or 3x the inverse daily return - of an underlying benchmark. To achieve this daily exposure, fund managers rely on complex over-the-counter swaps and derivatives that suffer from severe volatility drag and compounding decay over time, structurally eroding the ETF's net asset value.

The mathematical drag from the leverage creates a massive headwind, making it nearly impossible to recover invested capital unless your market timing is perfect. The daily leveraged reset mechanics introduce a punishing decay on the NAV that does not exist in standard cash equity or unleveraged ETFs. In a choppy or range-bound tape, that structural decay will bleed your capital regardless of your long-term thesis.

To see this decay in practice, look at what happens when the underlying index drops 1%, 2%, and 3% on consecutive days, and then recovers with gains of 1%, 2%, and 3%. Both ETFs start at $100:

• 1x Standard ETF ($100 Start):

  • Day 1 (-1%): $99.00

  • Day 2 (-2%): $97.02

  • Day 3 (-3%): $94.11

  • Day 4 (+1%): $95.05

  • Day 5 (+2%): $96.95

  • Day 6 (+3%): $99.86 (Net Loss: -0.14%)
    

• 3x Leveraged ETF ($100 Start; daily moves of -3%, -6%, -9%, +3%, +6%, +9%):

  • Day 1 (-3%): $97.00

  • Day 2 (-6%): $91.18

  • Day 3 (-9%): $82.97

  • Day 4 (+3%): $85.46

  • Day 5 (+6%): $90.59

  • Day 6 (+9%): $98.74 (Net Loss: -1.26%)

  
  Even though the underlying index returned almost entirely to breakeven, the 3x product suffered nearly nine times the capital destruction simply due to the mathematics of daily compounding and volatility drag.

Before we go further

You're Already Shaping This

Everything above comes directly from tracking institutional flow and your direct feedback.

Keep the replies coming. Hit reply to this email and tell me what market questions or positions you want covered in next week's edition.

Reply to this email and tell me

That's the signal for this week.

Respectfully,
Ian Scott
Trainer, Ian Scott Trader

Recap of the week 

Market Sees Losses in light trading

The markets ground through a classic late-August lull with a light economic calendar and earnings season winding down, major indexes finished the week lower across the board:

• S&P 500: Down -1.4% (closing at 7,674)

• Nasdaq Composite: Down -2.1% (closing at 26,180)

• Russell 2000: Down -1.6% (closing at 3,017)

Despite the broader market pullback and quiet trading some stocks stood out:

Marvell Wins Major Google Custom Silicon Agreement

The standout mover of the week was Marvell Technology, which surged following the disclosure of an expanded multi-year commercial agreement with Google tied to Marvell’s Tensor Processing Unit (TPU) ecosystem. Under the agreement, Marvell is set to develop custom silicon covering. The scale of the deal is massive: $120B in potential revenue through early 2033.

• Marvell: Gained +6.8% for the week as Wall Street priced in the positive impact of the deal with Google.

• Broadcom: Dropped -4.2% for the week as the market digested Google diversifying away from Broadcom toward Marvell.

Walmart's rare Miss: A Crack in the Consumer?

On the retail front, Walmart fell sharply following its earnings report, finishing down -7.9% for the week after their first miss in over five years. While headline adjusted EPS beat, the company missed on U.S. comparable sales and delivered weaker-than-expected forward earnings guidance.

Consumer spending drives roughly 70% of U.S. GDP. When the world's largest discount retailer misses, it is a direct signal that consumer spending continues to soften under the cumulative weight of inflation and higher borrowing costs.

If this trend persists, broad-market earnings growth will face genuine macro resistance.

What to expect for this week 

Market-Moving Catalysts & Volatility Ahead

The coming week brings an onslaught of economic data points and bellwether earnings reports that could create significant volatility across the tape.

The macro calendar is packed with market moving data that should provide critical guidance on where the Federal Reserve goes next:

• PCE Price Index (Wednesday, 8:30 AM ET): The Fed's preferred inflation metric.

• Jackson Hole Economic Symposium (Aug 27–29): The annual symposium is always a major macro event for global markets highlighted by the Federal Reserve Chair's keynote speech on Friday, which historically sets the tone for monetary policy.

• Current Rate Probabilities are pricing a 39% probability of a 25 bps rate hike.

What to watch - AI/Semiconductor stocks report earnings:

• NVIDIA (NVDA) – Wednesday (AH): The undisputed king of the AI market raised its prices over 15% effective 2027 due to soaring cost of memory. Expect Nvidia's results to provide a powerful catalyst not only for NVDA itself but also across the entire memory complex. Micron (MU) is a primary name to watch for a sympathy move following the print, as high-bandwidth memory (HBM) remains essential to the AI scaling architecture.

• Marvell (MRVL) & DELL (DELL) – Thursday (AH): Marvell will be closely watched for follow-through commentary on its newly expanded Google agreement, while Dell will provide an update on AI server market.

Off the Tape 

Why There Is No Such Thing as a Bad Trade

One of the foundational principles I live by as a trader is simple: there is no such thing as a bad trade.

Anyone who wants to do this for a long time - or trade full-time as a career - must accept that losing trades are an inevitable part of the picture. Positions will go against you. Things will not always work out according to plan.

One of the main differences between traders who fail and those who succeed comes down to how they process losses.

A trade is only truly "bad" if you walk away from it without extracting the lesson and making a tangible change. As long as you can conduct an honest post-mortem, identify what went wrong, and implement a tangible correction, then the trade was a net positive on your future performance.

That post-trade adjustment could be:

• Execution & Sizing: Adjusting your position sizing, scaling rules, or risk-per-trade limits.

• Pricing & Protocols: Refining entry and exit triggers, or making structural changes to your strategy.

• Psychology & Discipline: Recognizing emotional tilt, overtrading, or hesitating on an exit. In reality, probably 90% of your ultimate outcome as a trader will be determined right here by your psychology and discipline.

Embrace the losing trades, refine your process, and let the outcome make you a sharper trader and a better reader of the tape.

Before we go further

You're Already Shaping This

Everything above comes directly from tracking institutional flow and your direct feedback.

Keep the replies coming. Hit reply to this email and tell me what market questions or positions you want covered in next week's edition.

Reply to this email and tell me

That's the signal for this week.

Respectfully,
Ian Scott
Trainer, Ian Scott Trader

Recap of the week 

The Continuation of the Rally & Neocloud Stocks Surge

Following the prior week's 5% surge, the market consolidated near highs while digesting incoming CPI and PPI inflation prints:

• S&P 500: +0.4% for the week.

• Nasdaq Composite: +0.1% for the week.

• Russell 2000: +1.0% for the week, pointing to broader participation.

While the major indexes caught their breath, the real momentum was concentrated in the neocloud computing space.
Leading names delivered massive beats:

• CoreWeave: Reported record quarterly revenue of $2.58B (more than doubling YoY) with order backlogs crossing $104B.

• Nebius: Climbed 23% following $582M in quarterly revenue. The stock rallied a stunning 48% last week.

Demand for specialized AI training and inference clusters continues to outpace legacy cloud providers. Institutional capital is treating neocloud infrastructure as secular growth that remains insulated from broader macro noise.

What to expect for this week 

Summer Doldrums: A Light Week Opens the Door for Semis

We are heading into a classic late-August summer doldrums setup. The economic calendar this week is exceptionally light, with only minor data points on deck:

• Tuesday, August 18: Import Price Index and Housing Starts.

• Wednesday, August 19: Federal Open Market Committee Meeting Minutes.

None of these reports are expected to be major market movers.

On the corporate front, earnings season is officially winding down. While we await marquee reports from Nvidia and Marvell in the coming weeks, this week's few reports of note are largely retail and select analog: Home Depot, Target, and Analog Devices.

Because it is a quiet week macro-wise, expect broad indexes to chop sideways. That backdrop is ideal for memory and semiconductor names. With a lack of noisy headline risk, fundamental buyers can continue accumulating.

Expect a strong week for SanDisk, Micron, Marvell, DRAM, the Semiconductor ETFs, and select infrastructure peers.

Off the Tape 

How to Value a Stock - Beyond the Surface Metrics

Valuing a high-growth tech company requires looking past top-line hype and understanding the mechanics beneath the numbers. Here are principles that separate real secular winners from debt traps:

Trailing P/E vs. Forward P/E

Trailing (Backwards-Looking) P/E: Measures the current share price against past earnings over the last 12 months. It tells you where the company was, not where it is going.

Forward P/E: Measures the current share price against consensus estimated earnings for the next fiscal year.

The Micron Example:
Look at how distorted valuation appears if you only look backwards:

• Trailing (Backwards-Looking) P/*E:

Retail investors see a triple-digit multiple and assume the stock is expensive.*

• Forward (Future-Looking) P/E:

The multiple compresses into deep value territory once structural earnings power is factored in.
In a structural supercycle, trailing P/E is obsolete. Markets price future earnings power.

Debt-Fueled Growth vs. True Operating Leverage

Top-line revenue growth is meaningless if it is entirely financed on borrowed money. When a company relies heavily on high-yield debt or leveraged borrowing facilities to purchase hardware and build data centers, that growth carries massive structural risk.
If utilization drops, pricing softens, or rates stay elevated, that debt service suffocates cash flow. This is precisely why investors like Michael Burry short heavily leveraged balance sheets during cycle turns: debt magnifies downside risk when execution slips. Always be mindful to separate companies that have high debt and risk from companies that are operating with superior balance sheets, and growth stories with great tailwinds.

Before we go further

You're Already Shaping This

Everything above comes directly from tracking institutional flow and your direct feedback.

Keep the replies coming. Hit reply to this email and tell me what market questions or positions you want covered in next week's edition.

Reply to this email and tell me

That's the signal for this week.

Respectfully,
Ian Scott
Trainer, Ian Scott Trader

Recap of the week 

Wall Street Cheers & SNDK Reports Record Earnings

Wall Street Cheers

Buyers stepped in following the collapse of Leopold Aschenbrenner’s Situational Awareness fund, where brokers forced liquidations and dumped high-beta tech and semiconductor names. This week saw relative calm return to the market, leading to healthy weekly gains:

• Nasdaq: Up 5% for the week

• S&P 500: Up 3.5% for the week

Calling the Bottom

In a previous edition of Off The Tape, we mapped out this exact setup. While the Street was in a panic, we noted that QQQ would likely bottom near a 10% pullback around $673, targeting a firm bottom between $650 and $660 before bouncing.

We called the bottom nearly perfectly!

Our newsletter went out on July 27th, QQQ bottomed two days later, and it has subsequently rallied 10%.

SNDK Reports Record Earnings

We saw a classic example of Wall Street short-sightedness following the release. Despite posting exceptional numbers, the stock experienced a sell-off:

• Earnings per share: $43.97

• Revenue: $8.97B (up 372% YoY)

• Gross margin: A staggering 84.6%

Why Did It Sell Off?

Wall Street reacted to near-term guidance that missed Street expectations. The reality: The shortfall isn't a demand issue. It is purely a supply constraint.

SanDisk literally cannot manufacture chips fast enough to meet hyperscaler demand. Data center demand is surging, and memory is completely sold out through 2027, leading analysts to expect that this will most likely stretch into 2028 and 2029.

Through multi-year fixed customer contracts, memory is shedding its historical "boom-and-bust cyclicality" and transforming into a secular utility.

Misinterpreting this fundamental shift leads to a misreading of the tape.

What to expect for this week 

Macro Catalyst: Flying Blind into CPI & PPI

With Chair Kevin Warsh deliberately giving markets less forward guidance, Wall Street is flying without a safety net. Without guidance from the central bank, economic data releases could trigger far larger market swings.

Mark Your Calendars for This Week's Dual Catalysts:

• Consumer Price Index (CPI): Wednesday @ 8:30 AM ET

• Producer Price Index (PPI): Thursday @ 8:30 AM ET

Because the labor market is already softening, if CPI and PPI prints come in cool this week, yields could back off meaningfully, leading to a sustained market rally.

A few big earnings names of note for the week are SMCI, CRWV, NBIS, and AMAT.

Photo by Viktor Forgacs on Unsplash

Off the Tape 

From Rate Hikes to a Probable Hold

Friday’s July Nonfarm Payrolls (NFP) Report showed a cooling in the labor market and shifted the odds of a rate hike.

• Market Expectation: +80,000 jobs created.

• Actual Print: -23,000 jobs LOST!

• Wage Growth: Eased to 3.2% YoY. Lower than expected.

This report, combined with negative revisions subtracting another 103,000 jobs from prior months, almost certainly changes the Fed's calculus and policy direction. Markets agreed, shifting rate hike odds from 67% entering the week to 42% as of Friday’s close.

Before we go further

You're Already Shaping This

Quick note: everything above came from your replies. Last week I asked what frustrates you most about the markets, and you answered - in detail. The "when to sell" series exists because you asked for it.

So keep it coming. If there's a market question that's been nagging you, just hit reply and tell me. I read every one, and they set the agenda.

Reply to this email and tell me

That's the signal for this week.

Respectfully,
Ian Scott
Trainer, Ian Scott Trader

Special Market Update

The Deleveraging of an AI Darling

This week we saw something that was a real eye-opener in the market.
Leopold Aschenbrenner, an AI darling hedge fund manager whose fund Situational Awareness came into the month as one of the hottest investors on Wall Street, was brutally humbled in the month when all of his positions were closed out. Because he was completely over-leveraged, he was forced to sell his open positions to Ken Griffin's Citadel at 40 to 50 cents on the dollar just to keep his hedge fund open.

Why this matters for your portfolio:
His over-leverage could be the exact reason why many of these high-flying tech and semiconductor stocks have sold off recently. This was not a collapse in AI fundamentals-it was a pure, mechanical liquidation driven by reckless leverage.

For long-term, disciplined investors, this gives us a great buying opportunity. We can use his poor decision-making and over-leverage as an opportunity to get into long-term investments that we would not otherwise be able to get into at these great prices.

This week's signal

⁠The Fed Held - But Don't Mistake That for Calm

Last week I told you we'd break down the Federal Reserve. Here it is.

On Wednesday, the FOMC held rates at 3.50–3.75% for the fifth straight meeting - but this was no quiet hold. Three regional presidents dissented, all wanting a rate hike - the sharpest split on the committee in nearly a decade. Chair Kevin Warsh shrugged off the friction: "I asked for a good family fight, and I got one."

Three critical takeaways for your portfolio:

Less Hand-Holding: Warsh is deliberately giving markets less hand-holding - fewer forward-guidance breadcrumbs about the next move.

Fewer Fed Meetings on the Horizon: Warsh introduced a proposal to slash the number of annual FOMC meetings from the long-standing eight sessions down to fewer meetings per year.

Zero Tolerance on Inflation: His message on inflation was blunt: no soft target, and the Fed won't hesitate if prices climb.

This could be bad news because markets crave clarity, and Warsh is deliberately reducing transparency. Wall Street always wants more information, more frequent visibility, and clear guidance. Fewer meetings and stripped-down statements mean less transparency, longer periods in the dark, and higher market volatility whenever the Fed does speak.
The takeaway isn't "rates stayed the same." It's that the Fed just told you, plainly, that it isn't in the business of rescuing your portfolio.

The takeaway isn't "rates stayed the same." It's that the Fed just told you, plainly, that it isn't in the business of rescuing your portfolio.

Behind the scenes

Five Blockbuster Earnings, Five Different Reactions

This was the biggest earnings week of the year, and it was a masterclass in how markets actually work. Every one of the megacaps grew revenue double digits. Every single one. And yet:

Microsoft jumped ~15%. 

Azure crossed $100B for the year, and management said demand is running ahead of supply. Microsoft turned in an impressive $20B free cashflow in the quarter. (Amazing considering their AI spending.)

Amazon rose ~15%. 

AWS reaccelerated, the fastest pace on record. Like Google they have $500B backlog. AMZN increased their capital expenditures by 20B.

Apple ($AAPL) sold off 7.5% 

Despite a record June quarter, the rising cost and tight availability of memory will directly impact future earnings; Apple is facing higher component costs for DRAM while simultaneously being constrained on production volumes for phones and laptops.

Meta fell ~10%. 

As spiraling AI spending and out of control cost-control, including a $2B legal charge related to “youth related cases,” swallowed its free cash flow.

The Lesson: Same growth, opposite outcomes. Guidance matters; Apple’s was weak and they suffered because of it. Cost control matters, especially in the era of such large AI capital expenditures - Meta's cost control is atrocious.

Photo by Viktor Forgacs on Unsplash

What’s next?

The Skill You Asked For: Knowing When to Sell

When I asked what frustrates you most, one answer came back louder than any other-from more of you than anything else: knowing when to sell.
⁠"I pick the right stocks but give back the gains."
⁠"I'm too aggressive and don't know when to pause."
⁠"I get greedy and hold too long."

I heard you. So let's build the missing half of the game. Buying is the easy half. Selling is where returns are actually won or lost and this week proved it, as anyone who held Meta or Apple through the print watched good news get sold.

Here is the general framework I think in, not a call on any specific stock, just a system for taking profits without leaving money on the table:

Decide Your Exit Before You Enter: A target and a stop, written down, before any emotion is in the trade.

Scale Out, Don't Slam Out: If a position runs to your first target, trim a portion - say a third - and let the rest run. You lock in gains without having to call the exact top.

Raise Your Floor as It Climbs: Move your stop up as the position works, so a winner can't round-trip all the way back to breakeven.

Separate the Thesis from the Price: Sell because the reason you bought is gone or fully priced in, not because a green candle made you greedy or a red one made you panic.

The goal was never to nail the top. Nobody does that consistently. The goal is to never give back the bulk of a win. We'll go deeper next week.

Before we go further

You're Already Shaping This

Quick note: everything above came from your replies. Last week I asked what frustrates you most about the markets, and you answered - in detail. The "when to sell" series exists because you asked for it.

So keep it coming. If there's a market question that's been nagging you, just hit reply and tell me. I read every one, and they set the agenda.

Reply to this email and tell me

That's the signal for this week.

Respectfully,
Ian Scott
Trainer, Ian Scott Trader

This week's signal

Google’s AI Platform Explodes (and the Numbers Prove It!)

This week, we got a clear look at big tech’s artificial intelligence buildout, along with a reality check on how the market reacts to news versus expectations. Let’s break down what happened, and what to watch out for in the week ahead.

Google earnings came out this week, and as I expected, the sheer scale of growth in their AI platform is astounding: they added 200M daily active users (DAUs) in just the last two months alone, surging from 750M to 950M DAUs. Demand for compute power is so intense that Google is turning to third-party providers because their own internal capacity can’t keep up. That demand translated into a massive 82% surge in cloud revenue and an astonishing $514B cloud backlog. Alphabet increased its planned infrastructure spending by another $15B - and management said every additional dollar is going directly into AI infrastructure.

My real takeaway isn't Google's earnings. It's that every major cloud provider is now racing to build AI infrastructure. That means AI spending is becoming less of a one-time investment cycle and more of a long-term trend. That's what I believe investors should be paying attention to in the long-term.

Behind the scenes

Making Sense of the QQQ Pullback

Despite Google's outstanding earnings, technology stocks sold off. But here’s the truth: this market pullback is not only completely normal - it’s necessary and healthy. Looking at the QQQ (which is the main index I track), shares traded as high as just over $748 before consolidating. A standard 10% pullback brings us right into the $673 range. I expect the QQQ to find a bottom somewhere between $650 and $660.

QQQ rallied nearly 40% in just two months before peaking on June 3. After a move like that, a 10% correction is completely normal.

Photo by Viktor Forgacs on Unsplash

What’s next?

⁠The Week Ahead: Big Tech, Blue-Chip Earnings & The Big Market Lesson

As we head into this coming week, the big tech earnings parade continues with Microsoft and Meta on Wednesday, Amazon and Apple on Thursday - the other mega-spenders alongside Google. Their updates will give us critical confirmation on whether AI infrastructure spending is keeping its foot on the gas (and there is no reason to think otherwise given Google's guidance).

Beyond tech, we also get major economic telltales across different sectors with earnings from Coca-Cola, UPS, and ExxonMobil.

However, this past week delivered a classic market lesson: You can know the news before it happens - but you can't predict how the market will react. I anticipated that Google would ramp up its CapEx spending, but the stock - along with key memory and semiconductor names - traded down. When the market's short-term reaction doesn't match the underlying fundamentals I stay focused on the long-term thesis.

⁠Macro Watch: The Fed Takes Center Stage

The FOMC reports on Wednesday and investors will be hanging on every word from Fed Chair Kevin Warsh, who has been laser-focused on bringing down inflation. I will be watching how the market reacts if there is a meaningful shift in Federal Reserve policy. We'll break it all down in next week's edition.

Before we go further

I want to hear from you

This letter only works if it solves a problem you actually have. If there's a market question that's been nagging you - or something you want covered - just hit reply and tell me. I read every response, and they shape what comes next.

Reply to this email and tell me

That's the signal for this week.

Respectfully,
Ian Scott
Trainer, Ian Scott Trader

This week's signal

Ugly days could be ahead for the market. This is how I stay focused.

The semiconductor sector just endured one of the most aggressive, mechanically driven liquidations we have ever witnessed in modern market history. If you only watch standard financial news headlines, it probably looked like a structural collapse.

According to a recent Morgan Stanley research note, the 17-day sell-off we just witnessed in high-momentum tech names is officially the fastest and worst unwind in the 27-year history of their tech momentum index. The pain was intensely concentrated in semiconductors, with major ETFs shedding massive chunks of their valuations in a matter of days.

A lot of retail traders look at a 27-year record sell-off and panic. They assume the fundamental thesis is dead. I see a historic long-term buying opportunity. The fundamental backdrop for artificial intelligence, hyperscaler capital expenditure, and next-generation global infrastructure has not changed at all. The underlying earnings power of these core semiconductor companies remains absolutely rock solid. Be mindful that an escalation in the war with Iran could bring additional market volatility. I stay focused on my long-term investment thesis.

Behind the scenes

The Earnings Paradox: Netflix and TSMC

Look no further than this past week's high-profile earnings releases to see the massive disconnect between corporate performance and market reaction.

• Taiwan Semiconductor (TSMC): TSMC dropped an absolutely blowout report. They reported massive jumps in profit, guided for incredible revenue growth, and aggressively raised their capital-expenditure guidance. That is the clearest balance-sheet proof on earth that global AI chip demand is not just stable - it’s exploding. Yet, because of broader momentum selling, the stock actually fell post-earnings.

• Netflix ($NFLX): Netflix crossed the wire reporting a strong revenue increase and double-digit growth. Their actual business performance is completely healthy. However, because their forward revenue guidance fell just shy of the lofty Wall Street whisper numbers, the stock was aggressively punished, falling in after-hours trading.

Photo by Viktor Forgacs on Unsplash

This is the classic earnings season paradox. Companies are delivering solid results, but short-term, over-leveraged market structures are forcing sell-offs anyway. For long-term investors who understand true valuation, this creates massive pricing dislocations to exploit.
When I look at this market, I buy Micron because I am positioning to hold the stock for the longest amount of time. I do this based entirely on the underlying value. To be absolutely clear: I do not give financial advice, and nothing in this communication should be taken as such. My goal is strictly to show you how I approach the numbers and how institutional systems function.

What’s next?

The Week Ahead: Expect the Volatility to Continue

As we head into the weekend, make no mistake: I fully expect this volatility to continue. The sheer velocity of this 17-day momentum flush means the market needs time to find its footing, and the next few days are going to bring massive, highly volatile moves across the board.
The quiet summer daze is officially over. Next week, the macroeconomic and corporate earnings engines shift into overdrive, giving us a massive look across the S&P 500.

Key Corporate Earnings Releases

We will get crucial data points across mega-cap tech, defense, and industrial leaders to see how inflation and capital expenditures are hitting the real economy. Keep your eyes on the tape for:

• ⁠Mega-Cap Tech: Alphabet (Google) and Tesla will be major market drivers.

• Core Industrial & Defensive Bellwethers: Lockheed Martin, General Electric, and Visa.

Critical Economic Data Releasing at 8:30 AM EST

• Thursday: Initial Jobless Claims & Advance Q2 GDP (The ultimate reading on economic growth vs. slowdown). ⁠

• Friday: Core PCE Price Index (The Federal Reserve’s absolute favorite inflation metric).

If the economic data comes in cool and corporate hyperscalers reiterate their massive commitment to AI infrastructure spend, the floor for this semiconductor rout could form very rapidly.

Before we go further

I want to hear from you

This letter only works if it solves a problem you actually have. If there's a market question that's been nagging you - or something you want covered - just hit reply and tell me. I read every response, and they shape what comes next.

Reply to this email and tell me

That's the signal for this week.

Respectfully,
Ian Scott
Trainer, Ian Scott Trader

This week's signal

Microns $250 Billion Blueprint, Hynix debuts and what to expect this week…

In the last issue I showed you how thin summer desks exaggerate every move - how a routine rotation out of chips can look like a collapse to the untrained eye. This week, two events cut straight through that noise, and they point the same way.

First, SK Hynix - the world's leading maker of the high-bandwidth memory that powers AI - pulled off the largest US listing ever by a foreign company, raising $26.5 billion. Demand ran roughly seven times the shares on offer. That isn't retail chasing a chart. That's the deepest pockets on Wall Street paying up for memory capacity.

Second, Micron committed to spending $250 billion through 2035 building memory plants in the US. Micron sees a decade of demand the summer selloff is ignoring.

So while amateurs read the pullback as the end of the chip run, institutions continue writing big checks. That gap - panic on one side from the shortsighted, positioning on the other from experts.

Behind the scenes

Longterm thinking.

When I look at this market, I buy Semiconductor stocks because I am positioning to hold the stock for the longest amount of time. I do this based entirely on the underlying value, ignoring short-term price fluctuations and geopolitical headlines like the ongoing issues with Iran. Sophisticated operators know those geopolitical events are far too volatile to game or plan around. You tune out the noise and lock your eyes entirely on company fundamentals.

It is as easy to get swept up in market repositioning as in political turmoil. As much as I want you to ignore the former, I need you to ignore the latter as well. Stay focused on the long-term investing thesis.

Photo by Viktor Forgacs on Unsplash

Look past the summer desks, and the structural fundamentals for memory chip capacity are ironclad:

• The 2030 Horizon: Global memory demand and pricing are locked into a massive secular upcycle. In fact, supply shortages across high-bandwidth memory infrastructure are fundamentally projected to remain robust until 2030.

• The Historic Wall Street Debut: Look at what happened with South Korea's memory giant, SK Hynix, listing on the Nasdaq via an American Depositary Receipt (ADR). It pulled off a blockbuster debut and surged 13.08% on its very first day of trading, closing strong at $168.01. The deep institutional appetite for memory infrastructure is undeniable.

• Micron's $250 Billion Bet: Micron didn't announce a guess; they committed to a historic capital deployment plan to spend $250 billion through 2035 building out massive, cutting-edge memory manufacturing plants right here in the United States.
  A quarter-of-a-trillion-dollar U.S. infrastructure bet tells you exactly where the puck is going over the next decade.

  
  To be clear, my positions are what I execute for my own portfolio. I don't want to give people financial advice, and nothing in this communication should be taken as such. My goal is strictly to show you how I approach the numbers and how institutional systems function.

What’s next?

The Earnings Catalyst & Our Strategy

The quiet summer daze ends right now. The market is facing a packed calendar of major volatility injections.
First, we have critical macro data dropping at 8:30 AM EST across the week: Consumer Price Index (CPI) on Tuesday, Producer Price Index (PPI) on Wednesday, and Consumer Confidence on Friday. Keep your eyes completely locked on the pre-market action during CPI and PPI, as these will heavily influence future interest rate direction.
Simultaneously, the Q2 earnings season officially kicks off. On Tuesday morning, the major banking institutions—Goldman Sachs, JPMorgan Chase, Wells Fargo, Citigroup, and Bank of America—all report before the opening bell. Tech earnings follow on Thursday, with Netflix and Taiwan Semiconductor (TSMC) crossing the wire. TSMC will give us our first real, raw look into the actual state of AI stock fundamentals this earnings season.

Given how far semiconductors ran up, and how significantly they have pulled back over the last few weeks, you could expect massive, highly volatile moves across the board as these corporate numbers drop. We could see massive moves after these earnings are released.
We are not going to guess which way the coin flips. Over the next few weeks, I am going to explain exactly how I navigate this volatility. I will demonstrate how I spot value entry points in high-conviction stocks without chasing the peak, and how I manage my risk to see a position through to its long-term destination.

Before we go further

I want to hear from you

This letter only works if it solves a problem you actually have. If there's a market question that's been nagging you - or something you want covered - just hit reply and tell me. I read every response, and they shape what comes next.

Reply to this email and tell me

That's the signal for this week.

Respectfully,
Ian Scott
Trainer, Ian Scott Trader

This week's signal

The dinner party test

Think about the last time the conversation shifted to the market, MU, Fed policy, AI stocks - a massive institutional block trade, a Fed pivot, a market move nobody could explain. Did you have the knowledge to lead that conversation, or did you nod along, wishing you understood the hidden mechanics moving the numbers?

My 26+ year WS career has been defined by being a disciplined risk manager. Beginning at Goldman Sachs, I now run an arbitrage fund since 2008. The best success you can have with your money is through the knowledge of markets. I can give you the insiders institutional insight you're looking for with an extremely approachable delivery. This is the knowledge to command the room when the topic of conversation turns to financial markets.

Behind the scenes

The Fed Pivot, Thin Desks, and The Counterintuitive Rotation

The new Fed Chair entered the hot seat focused on one thing: tackling inflation. But the economic data that crossed the wire Thursday came in light, showing a weaker labor market. Ultimately, we'll likely get a cross-current of data that makes it difficult for the Fed - and economists - to determine whether inflation or a slowing economy is the real concern.

If data stays light, that means the economy is cooling naturally, easing pressure on rate hikes - and historically, that's been a setup for rallies.

Photo by Viktor Forgacs on Unsplash

• ⁠The value case — Micron ($MU) trades around $1,000 but is projected to earn $150/share next year. That's under 7 times earnings - a multiple more in line with mature, low-growth businesses than a company at the center of the AI buildout.

• ⁠The Buffett rule — "Be fearful when others are greedy, and greedy when others are fearful." Smart money buys the blood; amateurs buy the peak.

• The summer effect — Thin desks and lower liquidity mean daily moves get exaggerated while traders summer in the Hamptons.

Frameworks & Systems

The Discipline of Buying Strength

Here's a problem every investor runs into: a stock rips higher, and you either FOMO in at the top, or you miss the move entirely because you weren't in early enough.

What I like to do instead is mark the highest price the stock has traded at, then wait for a pullback — and scale in with discipline rather than betting everything at once.

Say a stock ran from $100 to $1,000, and the underlying story is still strong. You're not in it yet, so chasing it here is risky. Instead:

• Wait for a 10% pullback from the all-time high, and deploy 25% of your capital.

• If it pulls back 15% from the high, deploy another 25%.

• If it pulls back 20% from the high, deploy the remaining 50%.

  That gets you a blended entry roughly 16.5% below the all-time high - without chasing the top, and without needing to perfectly time the bottom.

Before we go further

I want to hear from you

This newsletter only works if it solves a problem you actually have. Hit reply and tell me: what's your biggest frustration with the markets right now, or what do you most want out of this newsletter?

I read every reply - it'll directly shape what we cover next.

Reply to this email and tell me

That’s it for this week.

That's the signal for this week. Stay sharp out there.

Respectfully,
Ian Scott
Trainer, Ian Scott Trader