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This Is Not Investment Advice
We simply do not know as of yet. Was that “the top”? Who cares. All that matters is what the market is telling us right now. Let’s look at the charts to take a deep breath and expand the timeline and picture.
First - another very important point shown here from The Market Ear at ZeroHedge.com:
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Hi Tech Equity VOL rising along with spreads widening - interesting and not so bullish combo.
So - what just happened in the world and in life these last few years since ChatGPT launched? I don’t know.
I can look at the charts though and see if we can gain a sense of what might be happening.
Same thing here, the QQQ on a Monthly Chart, just maybe . . . . . some different perspective:
Here’s a search I did and you can see the results:
I am going to work with these figures and be generous in the direction of OpenAI. Here are my assumptions:
Software sold right now annually: $1T/year
Software sold in 2030 annually: $2T/year
I am granting Mr. Altman that the total market will double in a couple years. Purportedly - OpenAI will easily and seamlessly whisk over $60B/year to ORCL in just a couple years.
In order to pay ORCL $60B/year in say 2030, how much revenue does OpenAI need to have in total by then? I suppose the answer doesn’t matter if the market sill lets them raise hundreds of billions in more equity, but let’s focus on Cash Flow From Operations.
If Altman is paying ORCL $60B/year I am going to take a stab and say they have $200B/year in total revenue. Even in this proposed scenario - that still means that AFTER 10xing revenue over the next 4 years OpenAI would still be paying JUST ONE VENDOR about 30% of total revenues!!! How many other vendors will need to be paid in the billions of dollars annually as well to keep the AI machine rolling and moving forward?
A perma-bull can say “well OpenAI is creating new markets so they will expand the software market and scale like we have never seen before”. Okay. This still needs to fit within reality however. Where I am going is that the AI projections are forecasting a world where U.S. Nominal GDP would have to be substantially higher in just a couple years in order for all this revenue to even be plausible . . . . . AND they are also assuming we have nearly 50 new GW of power on hand with just the snap of our fingers.
The market is demanding legit data and projections. That’s part of what it is telling me right now.
Back to the charts - a break or pause doesn’t seem so crazy to me so the market can recalibrate and reassess this entire situation. Nobody knows if we just completed Wave 5 or if this is a new Bull Market or if it’s neither and something entirely different. Open to the rally resuming as well we just don’t know yet.
PLTR Weekly
Every single big Volume week is Red except for one since April. Money Flow is pretty decisively Red.
No predictions. Just watching all the time to use an open mind to see what the market is doing right now.
Alex Grey
Despair
