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Middle East ceasefire collapses… Luc Langeau says corrections are a feature, not a bug… His plan for where to buy… Jonathan Rose’s 14% Contrarian Bitcoin Play…
As I write on Wednesday, the ceasefire between the United States and Iran has ended. At least, that’s how President Trump described it.
Overnight, three commercial ships transiting the Strait of Hormuz were attacked by Iran. The United States responded with what Central Command called a “series of powerful strikes,” hitting more than 80 targets across the country. Targets included air defense systems, command and control networks, and coastal radar sites.
At the same time, the US Treasury withdrew the exemption that allowed Iran to sell its oil on the global market. Trump said he might reimpose the naval blockade on Iranian ports.
Speaking at the NATO summit in Ankara, Türkiye, the president appeared angry:
I don’t want to deal with them anymore…
As far as I’m concerned, it’s over.
He added that the United States was “very likely” to strike Iran again by nightfall.
Iran’s Foreign Ministry described the strikes as a “serious violation” of the memorandum of understanding the two sides signed in June, and the Iranian Revolutionary Guard claimed to have struck military bases in Kuwait and Bahrain in retaliation.
This leaves investors confused…
Is this a real return to war, and with it a continuing rise in energy costs? Or is it just another round of brinksmanship? Trump has hedged before, and hedged again earlier today, saying he would allow negotiators to continue talking “if they want.”
Right now, investment markets are unstable but not panicked, so they are treating it as brinksmanship. Inventories are lower, but it is an orderly decline, not a stampede for the exits. In fact, as I write, they are bouncing off the lows.
Crude oil is the more interesting story – up almost 7% – and this is the number to watch. Higher oil prices mean more stable inflation, which means less room for the Fed to cut.
There is a lot going into how this story will develop. We will continue to track it.
Verification of continuous correction of artificial intelligence trading
Semiconductor and AI-related stocks have been under pressure for weeks, and today’s Middle East headlines didn’t help. But our technology investment expert, Luke Langoeditor Innovation investorParticipants were asked to zoom out.
Yesterday Innovation investor Daily Notes, provide useful context for this AI withdrawal, as well as how to handle it in your portfolio.
In short, the semiconductor sector is currently down about 14% from its highs – the 13th correction of 10% or more since the AI boom took off in late 2022. None of the previous 12 corrections ended the boom. In fact, the semis are still up roughly 565% since the start of 2023, with patches and everything.
Locke sees parallels with the dot-com era: Two separate semiconductor pullbacks of about 40% occurred between 1995 and 1999, and each seemed like the end of the tech bull market at the time. And it wasn’t. The semis still rose more than 1,100% to their peak in March 2000.
Here’s his takeaway:
The thirteenth correction is painful. It’s not the end.
Now a naysayer might answer: “Well, there has to be an end sometime. So why not now?”
Locke has an answer – how hyperscalers are fueling their capital spending on AI, and what that signals confidence.
Yesterday, news broke that Amazon.com Inc. (Amzn) It is reportedly raising another $25 billion in bonds to fund AI infrastructure. This pushes global AI-related debt issuance to nearly $335 billion this year – more than double 2025 levels.
To Locke, that’s a huge signal — investment-grade bonds aren’t being issued in $25 billion worth of tranches, many times oversubscribed, with 30-year maturities, unless the people who signed them expect decades of cash flow to back them.
Here’s a link that’s important to investors:
These are financing decisions made by companies that see an arms race and are raising every dollar they can to stay in it.
Returning to our dismissive stance from a moment ago, yes, the AI boom will end at some point. But Luke says that will happen when the fundamental dynamics that fuel it suddenly and dramatically reverse course, which is not happening today.
So, what’s the actual game plan for AI investors staring at red screens today?
Luke points towards Van Eek semiconductor box (Name it) – Artificial Intelligence trading agent. He says it’s down to the exact level that park-variety patches have historically reached. Buying here in anticipation of a bounce is sensible as part of a planned accumulation programme.
But if SMH does not find support here, there is a deeper pullback coming. Luke recommends holding some cash in this scenario, as SMH drops to $560.
Either way, stay focused on the other side of that flow. On that note, here’s Luke’s summary:
Late July earnings are the real catalyst for the recovery, and being positioned ahead of those reports – even if the entry timing is less than ideal – is the right position for investors with a multi-month time horizon.
So, there is a perspective for technology investors. But if you’re still feeling confused, let us give you a trading idea from a seasoned trader Jonathan Rose This has nothing to do with artificial intelligence.
Inside the Mind of a ‘Creative Trader’ – Jonathan’s Contradictory Play on Bitcoin
Most traders see a stock sitting at a new record low and do the same thing – walk away.
But for a trading veteran like Jonathan, Ed Advanced noticeoverlooked settings can create opportunities – and I want to show you one.
First, if you’re new to Jonathan, he spent 28 years on some of America’s most important trading floors – the Chicago Mercantile Exchange, the bond futures desks, and four years as a market maker at the Chicago Board Options Exchange.
During that time, he made millions in his trading account, rarely because he chased what others were chasing. That’s because he looks for value in places that other traders have completely written off.
He’s recently flagged one of these sites for his premium subscribers, and it’s worth checking out — both because it can be a really lucrative setup, and because it’s the perfect window into how Jonathan thinks. He concludes his alerts to subscribers: “Remember, it is the creative trader who wins.”
Here’s what he found…
There is a corner of the market that most people never look at
Preferred stocks.
It’s a strange hybrid security that trades like a stock but pays a fixed income like a bond.
Hence we find the issuances of Strategy Company (MSTR)the bitcoin holding company formerly known as MicroStrategy.
This version – STRC The “house base” price is $100. Think of this as the value at which the security is designed to trade, similar to the way bonds are meant to trade near their face value.
Recently, this preferred stock issue fell to around $75, a new record low. It has since rebounded, but is still trading in the mid-80s, well below the $100 home base price. However, during this time, STRC was paying cash dividends equivalent to about 14% per year.
Now, the headline reads that STRC is a security company in trouble. But Jonathan noticed something buried in his strategy files…
The company openly announced its intention to defend the STRC price and pull it back towards the $100 home base, using increasing dividends and buybacks as its levers.
In other words, the strategy has an internal incentive to fight for the recovery of this investment.
This brings us to the difference between how Jonathan and the average investor view this setup…
While most investors might consider this a Bitcoin trade, for Jonathan, it’s a bet that the strategy’s proprietary mechanism does exactly what the company says it’s designed to do. If successful, investors will receive a 14% cash return while they wait for a price rebound that could add another 15% on top.
It’s already working for some of Jonathan’s subscribers. Below is a screenshot of a subscriber writing to Jonathan, commenting on his trading results so far.
If you can’t see it, he’s got a 25% preferred stake in STRC and that’s not even including the first dividend payment.
As always, be aware of the risks
Now, Jonathan is frank about the obvious risks – something we should take seriously.
STRC is backed by Strategy’s cryptocurrency holdings, and Bitcoin recently fell to around $59,500 — roughly 21% below what the company paid for it. This reduced Strategy’s cash position, and the company began selling some of its Bitcoin to help cover the profits.
At the same time, the preferred stock payout itself is not guaranteed; It is discretionary, and the board can cut or suspend it if conditions worsen. This risk is exactly why yields are so high – the market puts prices in real doubt.
This is the tension that Jonathan and seasoned traders navigate every day: opportunity and risk, intertwined together.
Want more deals from Jonathan?
STRC was a call made by Jonathan Investor location Premier A wish Subscribers after doing a great deal of research into the recordings and footnotes go over all. But not every opportunity announces itself in the company’s fine print…
Some of them appear first in the funds themselves – where large trading positions are built before the rest of the market notices.
This is what Jonathan built his Convergence Trigger tool to discover. Working with market veteran Mark Chaiken, he paired his team Unusual business activity Tool with two chickens Money flow A system of indicating the moment institutional capital begins accumulating shares – before the move that follows.
Let’s see how it works, Click here to dive deeper.
wrap
There are three stories today, but there is one common thread: Volatility and uncertainty are the price of admission.
The US-Iran ceasefire is fading, the AI trade is going through its 13th check, and Jonathan’s STRC game only pays off if you price in the downside, not just the return.
None of it is risk-free. But this is never the case.
Our challenge is to know which risks are worth taking, not to avoid risks completely. This is what we will continue to help you do here at digest.
I wish you a good evening,
Jeff Remsburg
(Disclaimer: I own AMZN and SMH)
