Episode summary
Trader Called Tech Crash--Now Predicts ‘Black Christmas’ For Stocks | Todd Horwitz
The David Lin Report
· · 40 min · Hosts: David Lin · Guests: Todd Horwitz
Summary
Todd Horwitz argued that the market’s biggest risks are not the election itself but the leverage, earnings pressure, and valuation excess already built into stocks. He said the midterm result may cause only a short-lived jolt, with history favoring a rally afterward, but he expects that move to be sold into rather than chased.
He was much more bearish on technology, saying the recent selloff in Google, Apple, Nvidia, AMD, Intel and Palantir is not finished and could lead to a 40% to 60% haircut in parts of the AI trade. He framed the boom as being fueled by debt and overhyped expectations, and said the market has not yet seen the kind of capitulation bottom that typically ends a correction.
Horwitz also said he remains short oil and expects lower prices over time, while seeing gold as a long-term buy even after its drop below $4,000. He said higher rates and a flatter yield curve would signal more trouble ahead, and he warned that the economy is still weaker than headline data suggests.
Key takeaways
- Todd Horwitz said the election should cause only a short-term market reaction, while history still points to a post-midterm rally.
- He expects the tech selloff to continue, warning that AI and semiconductors could see another 40% to 60% downside in some names.
- Horwitz said he is short oil and sees crude eventually around $77 to $78 a barrel based on the futures curve.
- He remains constructive on gold long term, calling the pullback below $4,000 a buying opportunity for patient investors.
- He argued the economy is weaker than official data shows and said higher rates are needed to fight inflation, even if stocks suffer.
Notable quotes
“I think you have a 40 to 60% haircut coming to this market. I think you saw it with Google last week”
“I can see this market going down significantly and I can see a repeat because let's remember last week's sell-off was under no panic”
“I think the most important part is deal with the high inflation first I think that's that's the big”
“I am buying gold at 3900. I'm buying physical metals that I'm putting that I'm storing and I'm”
“I have orders working right now to sell the S&P at 7620. They're in working and I might get filled around talking to each other”
How the episode opens
It's Tuesday, November 3rd, election day. Markets are waiting for the midterm election results. Will we get a jolt reaction?
Well, a jolt reaction to what the uh prediction markets are forecasting a potential blue sweep. If that happens, what happens to markets? What happens in either scenario?
Todd Bubba Horowitz, founder of bubbrading.com, is here to discuss with us. That's a primary theme of our of our conversation today. Bubba also called correctly called the tech selloff that happened last week.
Is he blind buying into the dip? Obviously, DCA into AI stocks after Google crashed by $500 billion in market cap. And just today, Apple and Palanteer both went down uh on disappointing earnings.
They beat earnings in some respects, but missed forecast in others. We can cover that in more detail in another episode. We'll also go over gold below $4,000.
Is Todd buying into that dip as well? Oil's come down. Bubba called for a short on oil.
Is he still short? And of course, bond yields. So, the bond yields have been coming down steadily in the last couple of weeks.
Will we continue to see a decline in yields and a bid on bonds? We'll find out and much more economic growth as well with Bubba. The ultimate question, what happens to the stock markets into the end of the year?
Not just this week and next. What happens to the S&P 500 by year end? On couch, the largest prediction market in the US, traders are predicting a 32% chance that the S&P will close at 8,000 points or above by year end.
Importantly, that's down about 13 points since yesterday alone. Why are traders feeling more bearish today, despite the fact that the stock market is up? The NASDAQ's up 1% today and the S&P is up about half a percent.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- midterm elections
- tech stock selloff
- ai bubble fears
- recession risks
- fed rates outlook
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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