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Lord Fed: In Thin Summer Markets, Round Numbers Can Be Launchpads — Not Ceilings The S&P 500 is once again brushing up against record highs, sitting just a fraction below its all-time close. For some, this altitude feels treacherous — the air too thin to sustain the rally much longer. Whispers of a potential ceiling at 6,500 grow louder among the cautious. But for Lord Fed — the pseudonymous investor behind Lord Fed’s Gazette, Substack’s 13th most popular finance blog — that level is no cliff edge. It’s a launchpad. “Here’s what people keep getting wrong about tops,” he wrote over the weekend. “They’re expecting some orderly rotation, some gentle rolling over. That’s not how this works. Real tops are chaos — euphoric, messy, and loud. Positioning is maxed out, volatility is climbing, correlations spike to 1, and retail is frantically buying index funds at the highs.” None of those signals are visible today, he argues. Instead, the market is methodically climbing “a wall of worry,” brick by brick, while the so-called smart money sits underweight, still waiting for the meaningful pullback that never seems to arrive. “That’s not topping behavior,” he says. “That’s fuel.” He lays out the evidence: Even valuations look sturdier post-earnings season. Twelve-month forward S&P earnings estimates are up 3.6% over the past month — the strongest seasonal start in years. “These aren’t just companies clearing a low bar,” Lord Fed says. “They’re actively reshaping the forward outlook.” Taken together, this paints a market that is under-owned, not overextended — and one that’s rising largely because so few believe it should. “And that’s exactly why 6,500 won’t be a ceiling,” he concludes. “It could be the floor we rocket past on our way to something much higher. You don’t get a real top when half the street is still positioned for disaster — you get melt-ups.” Thin August liquidity, he warns, could accelerate that melt-up. In quieter summer markets, round numbers act like magnets — pulling in stops, triggering systematic buying programs, and forcing dealers to hedge aggressively into the move. To be clear, he admits, shocks like a sudden inflation spike or a major geopolitical surprise could derail the rally. But absent that, investors who have been waiting for a dip will increasingly panic about being left behind — bidding at any price, pushing the market through resistance in a messy, disorderly surge. In Lord Fed’s view, this isn’t the airless summit many fear. It’s the edge of a launchpad — with the countdown already underway. John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com

S&P 500’s Tech Weight Back at Dot-Com Era Levels — Some See Room to Run The S&P 500 came within 0.01% of logging its 16th record close of the year on Friday, while the Nasdaq notched its 18th. Futures suggest more milestones could be reached this week, with many traders viewing the path of least resistance for equities as higher — until it isn’t. Howard Lindzon, co-founder and CEO of StockTwits, says investor conversations are centered on record highs for tech stocks, bitcoin, and gold. The prevailing market posture? Bullish on tech via the Invesco QQQ Trust, bullish on bitcoin and alternative cryptocurrencies, bullish on gold — and a decisive “get me out” when it comes to bonds. At the center of the current boom-or-bust debate is a chart from Charlie Bilello, chief market strategist at Creative Planning, showing that tech now commands 34% of the S&P 500. That’s higher than its weighting at the height of the dot-com bubble in 2000, before the dramatic market collapse that followed. Yet Lindzon points to another chart that may temper fears of excessive concentration. Sourced from Bank of America and shared by Marlin Capital founder David Marlin, it shows that in 1881 railroads represented 63% of the U.S. stock market. That dominance ultimately faded, but it also suggests that the current tech cycle may still have a long way to go before peaking. Ed Yardeni, president of Yardeni Research, is also leaning bullish — particularly on the so-called Magnificent Seven megacap tech stocks. He told clients that “the sky may be the limit” for both these companies and the bull market they’re driving, so long as the broader economy avoids trouble. He cautions, however, that valuations are stretched: forward price-to-earnings ratios stand at 22.5 for the S&P 500, 19.9 excluding the Mag-7, and 29.7 for the Mag-7 themselves. Still, he believes these multiples can hold if recession odds remain low. Lindzon adds that it took 25 years for tech’s share of the S&P 500 to return to its 2000 peak of 34%. Now, with the rise of mobile computing, cloud infrastructure, and artificial intelligence, he sees potential for technology to make up 70% of the index in the future. What could drive such growth? The sheer scale and financial power of the sector’s biggest players. “The 10 largest companies have massive cash reserves, global reach, and strong balance sheets,” Lindzon says. “They have to spend that money on R&D, people, and raw materials — not only to compete with each other but to protect their market positions. While it might be nicer to have 50 or 100 slightly smaller giants, 10 healthy, paranoid giants is better than two or three.” John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com

Why Coal Stocks Are Drawing Interest Despite Their Unpopularity Coal has long been considered one of the least desirable investments, especially as environmental concerns and ESG trends steer capital toward cleaner energy. Yet despite its tarnished reputation, a growing group of investors is taking a fresh look at it—largely due to ongoing demand and limited supply. Energy consultancy Wood Mackenzie recently projected that coal demand could remain resilient through 2030, contradicting many past forecasts of rapid decline. “While the long-term move toward renewables is still in motion, the transition is proving more complex,” said Anthony Knutson, global head of thermal coal markets at Wood Mackenzie. “Energy security and affordability are now top priorities for many countries.” These shifting priorities led Range Fund Holdings to launch the Range Global Coal Index ETF (COAL) in early 2024. Despite its modest $20 million size, the fund is one of the few dedicated ETFs on the market. CEO Tim Rotolo told MarketWatch the fund reflects a broader recognition of coal’s role in supporting energy reliability—especially following Russia’s invasion of Ukraine and the resulting energy crisis. “In a crisis, the goal becomes ensuring access to affordable energy—not climate goals,” Rotolo said. The fund’s top holdings include Yancoal Australia, Warrior Met Coal, and Alliance Resource Partners. It maintains a 50/50 allocation between metallurgical coal (used in steelmaking) and thermal coal (used for electricity and heating). Since launch, the ETF is down around 21%, but Rotolo sees long-term opportunity in the sector’s overlooked fundamentals. He argues that investor aversion to coal has created a market mispricing. For example, Peabody Energy dropped to under $1 per share in 2021, down from $45, and has since rebounded to around $17. Limited financing and regulatory hurdles forced many companies to focus on buying back stock or reducing debt—moves that can benefit shareholders when valuations are low. “There were no other options,” Rotolo said. “And that’s often when you find value—when everyone else has walked away.” He believes the bigger factor for coal prices is supply, not demand. “If demand remains stable and supply contracts, its prices can surge. That’s good for coal stocks.” Countries like India and China continue to drive demand, and coal remains an affordable energy option—especially given the long lead times for gas turbines and the limitations of renewables in fast-growing economies. “Asia’s younger coal fleet is adapting alongside renewable expansion,” Knutson added. Rotolo’s firm also launched a nuclear-focused ETF (NUKZ) at the same time as COAL, which is up 75% since inception—showing that investors are open to energy strategies beyond mainstream narratives. In a market where consensus often proves wrong, some see coal’s deep unpopularity as an opportunity—not a warning sign. John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com

Stock Valuations Soar as Market Faces Historically Weak Season U.S. stocks have stumbled since early August, and Wall Street strategists are warning the slide may deepen. Julian Emanuel, chief equity and quantitative strategist at Evercore ISI, expects a 7% to 15% pullback by mid-October. Deutsche Bank strategists also foresee weakness, though they anticipate a more moderate decline. Despite near-term risks, Emanuel believes the long-term bull market remains intact and says deeper drops could attract dip buyers. Instead of selling outright, he recommends investors consider hedging strategies to protect portfolios. Valuations Back at Extreme Levels The Shiller CAPE ratio — a cyclically adjusted P/E metric — recently topped 38, its highest since late 2021. That previous peak preceded the S&P 500’s worst year since 2008 as the Federal Reserve’s aggressive rate hikes triggered a market rout. While Emanuel doesn’t expect a repeat, elevated valuations leave stocks vulnerable to negative surprises. Seasonal Weakness Ahead The stretch from August to October is historically the weakest for U.S. equities, according to BTIG’s Jonathan Krinsky. Although the relative strength index has cooled from overbought territory, it remains elevated — a signal that the current downturn could extend, noted Mark Hackett of Nationwide. Volatility Starting to Rise Wall Street’s “fear gauge,” the Cboe Volatility Index (VIX), is rebounding from its lowest level since January. Emanuel sees this as mean reversion, implying volatility could continue climbing in the weeks ahead. John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com

Jefferies: Fed Cuts May Spark Shift Away from Big Tech The S&P 500 fell 1.6% on Friday—its worst session since May—after soft jobs data and renewed tariff concerns rattled markets. But U.S. stock futures on Monday hint at a partial rebound, and some strategists remain optimistic despite near-term headwinds. According to Jefferies, investors now face a roughly seven-week period marked by a weakening labor market and limited central bank support. The Fed is widely expected to cut interest rates by 25 basis points at its September 17 meeting, lowering the target range to 4.00%–4.25%. Still, Jefferies remains positive. “It’s a tougher sell after this week, but we still believe equities are heading higher,” they wrote over the weekend. Strong second-quarter earnings are one reason: two-thirds of S&P 500 companies have reported so far, and 85% have beaten expectations—lifting earnings forecasts and supporting stock prices. But Jefferies is growing cautious on Big Tech. The sector now makes up a record 44% of the S&P 500 by weight—surpassing the 2000 dot-com peak. While still delivering solid results and acting as a defensive play, Jefferies questions how much longer that leadership can last. They’re not calling it a bubble, but note that valuations are stretched. The premium on tech versus the cheapest stocks is in the 87th percentile historically—making the trade look “long in the tooth.” More importantly, Jefferies notes that rate cuts tend to favor the equal-weighted S&P 500, which gives more influence to smaller names outside tech. Historically, most periods of outperformance for equal-weighted stocks have come when the Fed is easing policy. “We’re not predicting a major tech selloff,” Jefferies says. “But with the Fed turning dovish, history suggests a rotation may be starting. Friday’s payroll data could be the signal: it might finally be time to shift out of large-cap tech.” John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com