9:25 on 8/04/25 – Regret Minimization

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Week Behind

Week Ahead

Cold Intro – UNH

You know, it’s really crazy how time flies. Less than two months ago, I was pleading with people to stay out of the UNH drama when the stock first got cut in half. Now, I mean let’s just leave last Friday’s payroll decline aside, but we have the Dow flirting with an all-time high and UNH, one of its 30 components, making a fresh 52 week low. There were so many amateur value investors that did not like my input saying that this was just going to get slammed.

more and more and more. And even if it didn’t, it just was going to be dead money. I don’t like seeing people lose money, but man, those people were mean and stubborn. I got to say it is nice to talk in an industry where there’s actually a scoreboard in the stock market prices. But all of my personal pettiness aside, it’s amazing how quickly that stock went from a permanent compounder to an absolute value trap. All right. Yeah. Sound levels look good.

Full Send

Let’s do this. The clock is ticking to the open on Wall Street. It is 9:25 on August 4th, 2025, and I am your host, Don Foiani. Now, there isn’t much in the way of macro reports this week, which gives me enough time to discuss the volatility of last week in greater detail. In a word, the story boils down to dislocation. Dislocation between the Fed’s position on rates and the financial market’s expectations. And I’m not just talking about the stock market. I’m talking about bonds, currencies, and futures altogether.

FOMC Recap

Going into the meeting, I pretty much aligned with the consensus. I thought Powell would position the Fed for maximum optionality and set the stage for a September cut. Considering that Payrolls and PCE were coming out in the next 48 hours, like together, I figured Powell would keep his cards close to his vest. And I was wrong to make that assumption.

Powell came out very hawkish. At one point he said, and I quote, you could argue we are a bit looking through goods inflation by not raising rates.

All right, let me, let me get this straight. If the Fed is being generous by not hiking rates, the clear implication is that the committee isn’t close to cutting. Even when considering that for the first time since 1993, two members dissented the consensus Thursday, this wasn’t a big deal. PCE was pretty much in-line, maybe a touch hot. In fact, that maybe even helped the hawkish stance kind of go over. No harm done whatsoever.

But Friday, Payrolls showed a labor market with both slowing wage gains and slowing hiring. When we see that, that’s when you want to see the Fed being more accommodative. And 48 hours before, arguably the worst payroll report in many years, maybe even since the pandemic, it did not jive well with the market. It sent things all out of sorts in response. And we’ll have some charts up here.

Dislocation in Bonds, Currencies, and Futures

The US2Y yield and US dollar fell simultaneously. This means to me a unified message from the bond and currency markets that Powell and the Fed need to seriously reconsider this apparent stubbornness to keep interest rates where they are. With respect to the futures market, and we’ll throw up this chart here, focus more on the right side of the chart that covers July and August. The CME Fed watch tool repriced a September cut to an 80% probability after the Payrolls report came out.

That is the highest it’s been on this chart for, for about a year, appears and higher than any time during the month. And you can see that throughout the week, it actually flipped flopped when Powell came out and was so hawkish. There was, there was a lot of movement. I do want to be fair though. Like we, we shouldn’t just throw this all at Payrolls and Powell. It didn’t help things. Friday was going to be a bad day, at least from the start. Trump got bored, I guess, and decided to fan the tariff flames overnight on social, but looking across financial markets, no matter how you slice it, last week was not good for the bullish consensus that’s been the dominant narrative since the bond market got Trump to back off the reciprocal tariff stance.

Reintroduction of Uncertainty, The Opposite of Consensus

Now, this reintroduction of uncertainty, which is the opposite of consensus, mind you, is the entity that financial markets hate the most. It creates opportunities, but you do need to be patient. Either way, no matter how you look at it, the reintroduction of uncertainty and consensus under threat has created exactly the environment necessary for Q3 to live up to its status as a poor time for stocks. Now that concludes what may be the longest explanation ever for one bad trading session.

I think the S&P in total that day lost 1.8%. It wasn’t crazy, especially when you ripped 20%. off the April lows. So I think it’s important that I throw a little bit of balance here and contextualize this. For most people with a conservative portfolio, we’re talking ETFs, maybe a couple high quality blue chips, some bonds, some gold, maybe some adventurous people have a Bitcoin sleeve. There’s no direct exposure to meme stocks, small or mid caps. If you would have taken a blind look at your portfolio, you would have been…

Huh… That’s weird, but it wouldn’t have warranted any consideration beyond that.

However, if you’re a little more active like myself and have taken a few flyers these last few months, this is a message for you:

Regret Minimization

Every recession starts as a slowdown. I’m going to throw up the average, or I’m going to throw up the last 12 months of Payrolls reports. When accounting for revisions, the (3M) average is now below 50,000. That is an undisputable sign of a slowdown. So if your portfolio isn’t ready for a potential recession fears driven pullback, you need to start taking some steps here. At least that’s my opinion.

And if you follow my work, you’ll know that I have been. I like to call it regret minimization.

I’ve been getting rid of stocks that have found new and exciting ways to move lower, despite what’s been an incredible rally off of the April lows.

I’ve been trimming some off of my winners. Some of my flyers since April were up 40, 80%. And I fancy myself a trader and an investor, but I’m just not that good. No one is.

So I had to take some off the table there and some of them I just got rid of outright. There were some I took, I just like, it’s too cheap or I think this has a chance to bounce. I never intended holding them in the long-term. Now’s the time to get rid of those non-core positions that maybe you got lucky or that are just sitting there with a huge gain that you don’t intend on holding.

At the end of this process, it left me with a clean portfolio of nothing but my greatest hits and the dry powder to fortify those hits. If this one bad single day turns into a bad couple of weeks or maybe even something worse, but let’s be clear.

Friday’s Nibbles

I’m not calling the end here. I owe people who listen to me honesty. Friday’s close, I thought Amazon’s quarter was great down 6-7% in addition to the bad (Payrolls) number.

I added a little bit of Amazon Palo Alto one of my favorites alongside CrowdStrike in the space. I own both, added a little to Palo Alto. I think the CyberArk acquisition is brilliant. I think that is going to not only be a fundamental improvement to their financials, they’re gonna get the ARR business that CyberArk, the entire story of CyberArk is how amazing their recurring revenue business is. And it’s going to benefit Palo Alto’s valuation as well, because right now the story on them is that they don’t have the best handle on that side of the, of the cyber business.

I also did a little bit of dipping into Spotify. I thought that the quarter, while wasn’t great and the fall deserving, I just felt as though the core business was intact and this was getting an opportunity to kind of nibble, nibble again, no, nothing crazy. We’re not. We didn’t put all the cash to work, but we’re just nibbling at things that are core.

I used the money from the sales of my non-core positions to fund parts of these new acquisitions.

Position of Strength to De-Risk

Now I mentioned this and I mentioned it in detail because it isn’t too late for you sitting at home to do the same. We see this all the time. Market goes up, everyone gets bullish, banks are like increased price target on S&P. Stocks go lower. We’re closer to the bottom than we are the top and the banks finally capitulate and cut their price target estimates, making everyone feel bearish, et cetera. It’s like, it would have been really nice for the bank to say, hey, maybe takes them off the table while you’re closer to the top than you are the bottom.

Now they’re in a really difficult position from a career perspective. I don’t blame them, but I’m just trying to make the point that right now, if there are positions you aren’t comfortable with in your portfolio and can see yourself panic selling, if this 1.8% drop becomes a 10% drop or something worse. You’re still in a very strong position to sell. We’re not even at the 5% pullback milestone.

Fingers crossed, we don’t get there and you’re just cleaning your portfolio.

I do want to be clear about this. This is not a call to sell everything or even sell anything. It is a call to take a look at your portfolio and make sure you are in position to find yourself panicking. If the 1.6% drop or 1.8% drop becomes a 10% drop.

And to be frank, if we did get a 10% correction, that would be routine and healthy, even in a world where the trend in Payrolls stabilizes or starts moving higher. And for those that have flyers, more speculative positions, if the S&P 500 is down 10%, imagine how much worse something more speculative will look.

S&P 500 Technical Situation

An unbiased way of monitoring this for yourself at home, if you don’t want to take my word for it, which I understand, think everyone should do their own research and think for themselves, would be just to monitor the technical situation of the S&P 500. I’ll throw up some charts as I speak, I’ll move them around.

To start the week, which I think was July 28th, the MACD triggered a bearish crossover, ended the week still in negative territory, that’s not a good sign. We ended the week on Friday with a gap below the 21d SMA and then closed lower this would mark the first bearish crossover since the first quarter of the year.

It appears as though the 5d and 13d EMAs is one bad session away from bearish crossover where the 5d would come below the 13 or The 13 would go above the 5. It’s the same thing But in this case the five is going below the 13. Well, I guess it doesn’t matter semantics. We haven’t seen one of these bearish crossovers since April 2nd and if you would have listened to it then you would have missed the entire tariff tantrum.

RSI not providing much relief either. It came out of overbought territory above 70 and is now trending toward oversold, but it’s not there yet at 47. All this means is that if you’re a bull or you’re a technical trader, there’s no argument to me that we can have a technical bounce. Not, not at this level anyway. As far as my thoughts, weakness begets weakness.

S&P 500 Support Levels

The S&P 500 is on a date with its ascending 50d SMA, which coincidentally aligns with the highs made prior to the tariff tantrum in February and March. Typically, the 50d, especially when its ascending, is support. When you have an old high that was once resistance, meaning the high in February and March, typically when you revisit, you would also expect them to be support. In other words, I would expect the bulls to make a very strong stand there.

But if that doesn’t work out, the next level of resistance in my mind is 6050, which aligns with a 23.6% Fibonacci retracement and would be a little bit more than a 5% pullback from the all-time high. I could see the algos coming and buying once the S&P officially is in the pullback region and also with the benefit of hitting a very well-known technical indicator in Fibonacci.

Let’s just do one more. The cluster 150d and 200d SMAs all around 5,900. Most people are familiar with the technical power of these levels. Certainly worth watching. Fingers crossed. Again, we don’t have to cross that bridge, but let’s just not be surprised if we find ourselves there in the coming month or so.

Identifying Support Levels

All right. Before moving on to earnings, I want you to notice how I’ve been identifying potential support zones by looking for levels with multiple points of interest. Stocks are ultimately based on supply and demand. You get enough demand for stocks at certain levels and they will stop falling. That is the idea in its simplest sense. I am looking for areas of support where I think multiple groups of investors would be interested or have limit orders waiting to buy stocks.

Earnings – AMD and QBTS – via Charts & Checks

All right, with that out of the way, let’s get a little bit more micro specific and we’ll talk about some of the companies reporting this week. yes, if you’re interested in AMD or D-Wave check out EP4 of Charts & Checks. There’s a really nice in-depth preview for you there.

Palantir (PLTR)

For these last three, we’ll start with Palantir. They report Monday right after the close, actually shortly after this gets released, really. Thanks to the mega cap reports, we know their corporate business should impress . On the government side, it’s a little more cloudy. This is also probably more important to the valuation and narrative surrounding Palantir, but I think they have momentum.

Reuters reported on Thursday, the U.S. Army pulled contracts into a $10 billion deal. While these are not new purchases, I think it’s a good sign of a deepening relationship between Palantir and the U.S. government.

Ultimately, with a high-flying stock like this, it’ll come down to if what management says matches the expectations that are embedded in the price.

Eli Lilly

All right, now we’re gonna move on to Eli Lilly. They report Thursday morning ahead of trade. So, full disclosure.

I decided to sell my house money position. In other words, I had a position from two or three years ago, more than doubled or sorry, doubled took the cost basis out and I’ve been letting the profits ride. It’s since grown, but with all the madness going on in the GLP-1 space and the markets unwillingness reward anything beyond GLP-1, it just upsets me that no one seems to care about the work Eli Lilly was doing in Alzheimer’s.

I am concerned that we wake up Thursday morning and by lunchtime, we’re talking about the end of the GLP-1 bull market. I’ve made my money here. just, I just don’t care to see it through the report. The chart doesn’t look good. The demand picture coming out of Novo Nordisk… doesn’t inspire confidence. How about that?

Uber (UBER)

Let’s finish up with Wednesday’s pre-market. We’re going to hear from one of my favorite Uber given the general weakness in the restaurant space – Chipotle, Shake Shack, etc… – I do have some concern that Uber Eats may be under some pressure, but if you take a quick look at DoorDash (DASH) stock, looks fantastic, the market’s telling me I shouldn’t be worried about that part of the business.

Moving on to the core business being rideshare. I am a little concerned that consumer softness may bleed over into this number, but that wasn’t the case in 2023 (or 2024) where similar fears were particularly acute. I remember going into the quarter where everyone was concerned about it, and management – which by the way, the management team, Uber’s fantastic – went out of their way to showcase how the average customer for Uber is middle-to-upper class. Therefore they’re not as phased or cyclical when times get tight.

As for Uber, this is something I’m long. It is one of my favorite positions. If not for Meta growing the way that it has to still be a top five position, I’m going to stay long no matter what happens here. And if it dips, that’s kind of the whole point of the regret minimization cash pile I made.

All right. And that is it for this edition of the 9:25. Sorry, we ran a little bit long here. I do appreciate everyone that stopped in. I hope to see you next week. Good luck on the markets. Goodbye.

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