• Current read is 49 on the fear greed index vs 32 last week.

• The Fear & Greed Index finished the week at 49, but with the market just a few percent from all-time highs, I think we are closer to 66 and firmly in greed.

• Market Fearful = Potential Opportunity/Deals. (consider buy calls/sell puts/buy shares)

• Market Greedy = Potential Over Valuation. (consider buy puts/sell shares/take on less risk)

• I like to be bullish when there is extreme fear

• I like to be bearish when extreme greed.

• Opportunity is out there, just gotta find it!

• 30 year fixed mortgage rate increased to 6.48% Today, vs 6.46% last week.

• 10 year treasury bond yield increased to 4.56% Today, vs 4.48% last week

• 2 year treasury bond yield increased to 4.21% Today, vs 4.13% last week.

• Mortgage rates and bond yields ticked higher this week, but the move was minimal. At this point, I don't see anything that changes the overall thesis.

• As I always say, interest rates are gravity!

• As interest rates/bond yields INCREASE, stocks become LESS attractive because bond yields go UP which makes the risk free bond look MORE attractive.

What’s going on everybody!

This week was pretty simple in the market. Nothing too crazy. Nothing that really changes the big picture. But I do think we are at a spot where people are starting to get confused again because the market is near highs, some stocks have run hard, and everyone online wants to scream bubble.

Could the market be a little bit hot? Yes.
Could we get volatility? Absolutely.
Could the market pull back in the short term? For sure.

But do I think this is some giant 2000 dot com bubble where everything is detached from reality? No. I do not see that in the data.

When you compare this rally to other cycles, we are not seeing anything insane. We are not at dot com levels. We are not even close to that. The information technology sector was trading near a 50 PE ratio during the dot com bubble. Right now, it is around 21.

That is a massive difference.

So when people say, “This is just like 2000,” I honestly do not know what data they are looking at.

The market can still fall. The market can still get overextended. But comparing this to 2000 is just lazy in my opinion.

The other thing people are missing is profit margins. I have seen people saying profit margins are rolling over or the market is in trouble because margins are bad. I do not agree with that. When you look at the Magnificent 7, the S&P 500, and the S&P 500 excluding the Magnificent 7, margins still look strong.

And that matters because strong margins help drive earnings per share growth.

EPS is really what moves stocks long term. Not headlines. Not fear. Not people on YouTube yelling crash.

So right now I would say I am medium bullish. The market is probably around fair value, maybe a little bit overvalued. Nothing crazy. Maybe 5% overvalued depending on what data you care about most. But EPS is holding the market up, so if that collapses… the market likely will too. So its critical to understand how that evolves, especially as Q2 earnings are about to start.

So building on that, next week starts to get a little more interesting because earnings season begins. The banks usually kick things off, then we get names like ASML, TSM, Netflix, and then the week after that we get a lot of the big dogs.

That is where things get fun!

Inside Discord, I will be breaking down these reports in real time because this is where we start to see if the earnings story is still holding up & how to potentially allocate int he most opportunistic way with stocks & options.

We also get some economic data next week that matters like CPI and PPI too (inflation data). I do expect inflation data could come in a little hot in the short term, but I do not think it is something to panic over yet. Oil has come back down a lot from the highs. A lot of people are acting like oil is still up 60% or 70%, but when you zoom out, it is not that extreme anymore.

So yes, inflation data might be a little hot. But I still think some of that pressure can be temporary.

So overall… this is what I am thinking:
The market is not cheap.
The market is not crazy expensive.
The market is not 2000.
The market is close to fair value because EPS is supporting it.

Only allocate to the cream of the crop with a solid margin of safety. Ai is here and it will cause lots of volatility & uncertainty. Buy buying great companies for less than they are worth with good EPS growth & only doing options to magnify ultra compelling setups. That is the only way to win in the long term… If you do something else, just know the odds are likely stacked against you.

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Economic/Earnings Calendar For July 13 - July 17
(all times in pst)

Monday July 13:
See how the market reacts to Iran volatility and the eve of Q2 earnings

Tuesday July 14:
5:30a Consumer Price Index Data
7a Fed Chair Kevin Warsh Testifies before Congress
JP Morgan Chase Earnings (premarket)
Bank of America Earnings (premarket)
Goldman Sachs Earnings (premarket)

Wednesday July 15:
5:30a Producer Price Index Data
ASML Earnings (premarket)
BlackRock Earnings (premarket)
J & J Earnings (premarket)
Morgan Stanley Earnings (premarket)

Thursday July 16:
5:30a Retail Sales
5:30a Initial Jobless Claims
5:30a Philadelphia Fed Manufacturing Index
TSMC Earnings (premarket)
United Health Earnings (premarket)
Netflix Earnings (post market)

Friday July 17:
5:30a Housing Starts & Building Permits
7a University of Michigan Consumer Sentiment

Everything will be broken down in real time in Discord!