The AI Bust
Wow‼️
The $S&P 500(.SPX)$ fell -4.4% today, its worst day of 2026. The $Invesco QQQ(QQQ)$ dropped -6.5%. Semis got hit the hardest, with the $Philadelphia Semiconductor Index(SOX)$ tanking -12.3%.
Over the past month, the $SPX moved 1.1%, while the average stock moved 13.2%.
This spread ranks in the 100th percentile over the past 30 years.
The only higher return spreads were during the Dot Com Bust and GFC.
AI names got absolutely demolished once again.
At Marlin Capital, we have been cautious on AI stocks since June. 👇
Sometimes, it’s about saving money, not making money.
That’s been our goal for months, and we’ve achieved that seamlessly while watching this meltdown from the sidelines. We’ve been sitting in 100% cash for almost 4 weeks now.
Here’s what subscribers are saying about how we’ve handled this market bloodbath. 👇
The Midterms
Democrats won in a landslide on Tuesday, taking both the House and the Senate.
The market ripped on Wednesday. The Dow had its best post-midterm day since 1982 (+3%).
Today, it gave it all back and more (-3.4%). The Nasdaq erased its entire post-election rally within 6 minutes of the open.
The market is worried that a Democratic Congress slows down the AI data center buildout.
The 50-80 Rule in Action
I talked about the Minervini 50-80 rule on Sunday in “Heading Into November”.
“When a secular leader makes a major top, there’s a 50% chance it will drop 80% and an 80% chance it will drop 50%”
-Mark Minervini
Here it is in action. 👇
Stage 4 declines for AI stocks everywhere you look.
So what comes next?
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