"Analogue," means something roughly comparable to another. Loosely, we can treat the AI bubble as an analogue to the dot-com bubble—worth keeping in mind as we head into the market's three historically weak months, the "crash window." If it plays out that way, there's no need to change our approach. Our existing "lines on a chart" methodology is built to benefit from a decline like this without any adjustment. The visual parallel is clear: a long parabolic-looking advance culminating in a late-cycle high, followed by a steep, multi-year drawdown reminiscent of the 2000–2002 tech-bubble aftermath (when the S&P fell roughly 50% peak-to-trough, while Nasdaq dropped 78%). Whether those projections play out is, of course, pure speculation — markets don’t repeat history exactly, valuations, liquidity, AI/tech concentration, earnings growth, rates, and geopolitics are all different this time. But the chart does a clean job of illustrating the, “what if we’re at the top of a bubble,” narrative. ----- QQQ 2-Day We can zero-in on shorter-term time frames, (see below) but for now, lets keep close tabs on that initial support trendline, currently about 50 QQQ points lower...and rising about 3 points per day. A break trendline support puts the dot.com analogue in play and would be an opportunity to buy out-of-the-money index puts in QQQ, SPY and/or SMH. ----- QQQ 240 Minute The Q's are literally climbing up this 240 Minute, "wall of worry," that if and when broken decisively, could signal the onset of that elusive hard down we have been waiting for all summer. Aggressive traders only: A hard close below the closest indicated blue trendline support, can be used as an early trigger to Buy puts. I will send out specifics, if and when it breaks.
