Charts We Liked (And Didn't Like) Last Week

Subscribers to Chart of the Week received this commentary on Sunday, August 17.

Hello friends. An immense thank you to everyone that’s subscribed in the last week. We’re so excited to see where this platform takes us! If there’s something in particular you really want to see us cover — a stock, an option strategy, you name it — please reach out, we’d love to hit it.

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Eat my Shorts

Did you know short interest data only comes out twice a month? For someone eager to identify short squeeze candidates, that means the wait for Senior Quantitative Analyst Rocky White’s looks a lot like this:

This week’s offering brought a few insights. Short interest on the S&P 500 Index (SPX) is in the 95th percentile of its five-year range, a rank that legs out the Nasdaq-100 (70.5%) and Russell 2000 (93.3%). It’s an even starker contrast for the last year, where SPX short interest is in the 75th percentile, while the Nasdaq and RUT’s is in the 26th and 66th percentile, respectively. So for whatever reason, short sellers remain way more leery of the SPX than tech on the Nasdaq.

As far as individual equities go, it’s the usual suspects Rocket Lab (RKLB), Oklo (OKLO), MP Materials (MP), IonQ (IONQ), and AST SpaceMobile (ASTS) have all been regulars on this list for the last six months or so. All five of those names still have a huge chunk of their total available float sold short too, so there’s plenty more pessimism to be unwound.

sorry for the janky quality on this one, Rocky is on vacation. Next time around, you’ll get a fancier table.) As an aside: 2025 Top Stock Pick Bloom Energy Corp (NYSE:BE) is one to monitor as well.

A MMO Sneak Preview

Todd covers this sort of stuff in his Monday Morning Outlook, but here’s a little more. There’s massive potential for a pause and/or pivot from the SPX +10% level. The PPI report caused a pullback from this level Thursday morning (yellow dashed horizontal in graph below).

Note that President Trump began thinking about and ultimately toned down his tariff policy when the SPX sold off and was at levels that coincided with 10% below the 2024 close and 20% below the February all-time high.

(Not So) Bad Breadth)

The narrative is out there that a few stocks are driving Wall Street. It’s been true for the most part, but on Thursday, these charts popped up.

A rising tide seems to be lifting all boats, with new highs at 52-week peaks. Make of that what you will.

Looking Back: AMAT Sinks After Guidance Whiff

We won’t always reheat prior analyses (unless to take a victory lap ;) ), but since we’re just getting acquainted here, a lookback on Applied Materials Inc (NASDAQ:AMAT) seemed worthy.

Ouch town. Despite a second-quarter top-line beat, the stock is 14% lower in after hours because the company’s third-quarter revenue guidance fell short of estimates. Friday’s open is set for $161.70 from Thursday’s peak at $188.24. So for now, this looks like a whiff. The closer AMAT can get on Friday to $175, the better. The upside is that when this idea first came across our desk, the shares made a run to $191 in the next four trading days. Per our “idea,” a short-term out-of-the-money puts (a bearish hedge) from there would have been prudent, and now there’s an attractive entry point for a long-term call.

The King Stay the King

While breadth may be getting (temporarily) better, let’s not forget the king stay the king. Senior Market Strategist Joe Hargett shared this graphic from the Fed and Econovis. The value of tech stocks is growing at twice the pace of the money supply. It’s nearing dot com bubble areas. By comparison, during the height of the 2008 financial crisis, this ratio once fell to 25%. It’s enough to put your mind in a pretzel. Stocks are at or around all-time highs, but there’s still enough pessimism abound (see last week’s tome) to say this ain’t the top. Institutional investors are returning, and Big Tech — along with its growth proxies — is doing all the heavy lifting. But at the same time, tariffs and pesky inflation are such a pesky overhang that there’s plenty of reason to be concerned. The answer changes by the hour, and our best stab at it all is to say be nimble and read up on hedging best practices. Or maybe just rewatch The Wire and totally disassociate.

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