Breakouts are sticking, failed moves are rarer, and the rotation keeps refueling the next leg. I’m a contrarian by nature, so I do these live sessions as tape-reading therapy: the macro may look messy, but price keeps ripping. If you’re pressing momentum, press it with a plan.
What’s working right now
Rare earths / robotics: USAR finally cracked $18 and sprinted to $22. Rare earths = servos, motors, the guts of robotics. With most processing still in China, reshoring is a policy tailwind.
Energy materials: LAC is the battery-CapEx cousin and keeps getting bid with the “electrons arms race” theme.
Drones/Defense: Domestic drone names are catching flows as DJI stays persona non grata for DoD work. Orders and policy are pushing the space.
AI infrastructure: Names tied to compute, networking, and power keep jamming. Chips, power turbines, natural gas, even coal have been repriced as “AI fuel.”
Storage: Flash and HDD have gone vertical alongside AI data growth.
Physical AI layer: Think OSI model for AI—chips and models below, but the “interface” is robots, AV, sensors. That layer is waking up.
Biotech as an AI proxy: Platforms and data owners (discovery → trials) lag fundamentals but could be entering the results phase as AI work from ’22–’23 shows up in pipelines.
Crypto-adjacent capital markets: Miners and high-beta proxies are re-engaging when BTC flows.
Where the next rotation might surface
Big tech “sink”: After the momentum cohort breathes, does money recycle into mega-caps (MSFT/AMZN/AAPL) or do we get a “dash for trash”? The latter often tags an intermediate top—but it’s tradable.
Health care: XLV is perking up. Policy tweaks plus defensive growth could pull flows.
SPACs: If the dash-for-trash phase appears, under-owned SPACs tied to hot narratives (AI infra, SMRs, quantum) can jam violently—especially via warrants.
The real near-term risk (and how to manage it)
Options structure: Upside skew is inflating across hot names. If price doesn’t outrun that implied, calls bleed delta and IV, forcing dealers to sell and capping spot—classic charm/Vanna unwind dynamics.
Translation: Expensive OTM calls are a tax right now.
Better structure: Use call spreads to stay long while shorting that fat upside vol. For hedges, pick overextended names or liquid high-beta ETFs (ARKK) where puts aren’t 100% vol.
Advanced hedge idea: Pair long stock with protective puts (or put-over-buy / synthetic straddle variants) in names stuck at decision points—lets you scalp deltas while sleeping at night.
What would actually change the story?
A visible slowdown in hyperscaler CapEx payback. If AI spend doesn’t show near-term ROI, infra gets tagged—but we may be a couple quarters from that narrative.
Until then, nearly every runner traces back to the AI supply chain in ≤6 steps. Trade the rotations the tape is giving you, and insure against the rug.
Playbook checklist for next week
Scan weekly +10% movers to identify true leadership (not headlines).
Lean into themes with policy + CapEx + narrative alignment (rare earths/robotics, drones/defense, AI power, storage).
Express longs via call spreads or stock + put structures; avoid paying 150% IV for lottery OTM calls.
Hedge basket risk with puts in a liquid high-beta ETF or a stretched sub-sector.
Keep a SPAC/warrants watchlist ready if “dash for trash” lights up.
Keep health care on the radar as a stealth rotation sink.
Timestamps:
00:00 – Live intro; forgiving momentum tape
00:32 – “Feels like 2021”: clean breakouts and trend persistence
02:08 – Rare earths/robotics: USAR breakout and why it matters
03:06 – Policy angle: China processing dominance; U.S. reshoring push
03:13 – Energy materials: LAC and the battery/AI CapEx link
03:52 – Drones/Defense: domestic plays lighting up; orders as catalysts
04:16 – Robotics tape continues; staying hot vs. “just luck”
05:00 – Where’s the puck going? The AI meta-trade under everything
06:05 – Risk if hyperscaler CapEx payoff slips; timing still ahead of us
06:24 – Why drones run: DJI restrictions; AI-layered autonomy
07:08 – Defense names squeezing; parabolic moves you might’ve missed
07:27 – AI infrastructure: new highs and ongoing bids
07:48 – Chips + power = AI fuel; turbines, nat gas, even coal repriced
08:37 – Storage ripping: flash/HDD continuation
08:49 – The “Physical AI Layer” (OSI-style model) and robotics interface
09:28 – Rare earths + sensors as core enablers; AV as physical-AI trade
10:26 – U.S. dynamism: policy stakes in semis/materials and spillover
10:57 – How to gauge leadership: weekly +10% scan by industry
11:23 – Aerospace/Defense leading; biotech AI-proxy waking up
12:15 – Why AI in biotech is only now showing up in pipelines
12:41 – Platform drug discovery names to watch conceptually
12:41 – Capital markets/BTC miners re-engage as beta lever
13:12 – Diagnostics/research: AI overlays heading into year-end
13:34 – Expect a future rug pull—but don’t try to nail the day
14:06 – Tactical shorts/hedges: extended names for mean reversion
14:46 – Rocket Lab example: trade the breakout, insure the basket
15:24 – Core game plan: rotate with the themes, hedge the tapes
15:56 – Is there any non-AI narrative that can steal flows?
16:11 – Maybe China, but even their leaders map to AI anyway
17:13 – Health care rotation candidates and XLV strength
17:37 – Will money recycle to mega-caps or dash-for-trash?
18:32 – Mega-caps look constructive; AR/AI angle for AAPL/Meta
19:53 – SPACs as under-owned vehicles if the trash dash begins
20:49 – Why SPACs jam: narrative + low offer liquidity + warrants
21:49 – What’s in the SPAC pipeline: AI infra, SMRs, quantum
22:07 – The structural risk: options skew and dealer flows
23:30 – Upside skew explanation and why OTM calls are a tax
24:27 – If price underperforms IV, dealers sell: how rallies cap
25:29 – Some chains are “cracked out”: liquidity and spreads matter
27:14 – Solution set: call spreads; take vol/skew risk off
27:35 – How to manage spreads through pullbacks and decay
28:00 – Housekeeping + where to get my actual trade setups
29:05 – Q&A: memory/storage names; why hedges in hot tapes help
31:11 – ARKK puts as a cleaner liquid hedge vs. stock-specific noise
32:01 – Core principle: ride rotations, overlay hedges
32:17 – BTC treasury “weird” balance sheets: pick your spots
35:06 – Oklo/quantum bear structures if timelines/cash don’t meet
37:41 – Don’t obsess over tops; trend still has fuel
39:27 – Health care relative strength; add to the watchlist
40:00 – Meme/runners mechanics: trapped buyers, IV expansion, unwind
41:44 – Post-OPEX unpins: how that fuels pullbacks
43:32 – Advanced: put-over-buy / synthetic straddle idea at nodes
45:33 – Why call spreads > lotto calls in high-IV tapes
46:18 – Wrap: prepare for next rotation; subscribe for trade setups
