Josh Mullins

$XLK is forming a textbook descending triangle. Lower highs compressing into flat support around $135-136. Each rally is shorter and weaker than the last. This is what distribution looks like in slow motion. Sellers are getting more aggressive. Buyers are losing conviction. The triangle is tightening and one side is going to give. If this support breaks, tech doesn't just pull back — it breaks hard. Technology is 32% of the $SPX. Where tech goes, the index follows. This lines up with everything else I'm seeing right now. Former leaders failing at resistance. Breakouts reversing immediately. 200 DMA breadth deep in correction territory. The pattern is setting up. The breadth confirms it. Now we wait for the market to tell us when. Bounce ≠ bottom. 🐻

Good news: NYSE making ATH since 12/5/25 Bad News: percent of NYSE stocks above their 50 / 200 DMA peaked mid-Jan have been trending down. Add to this 7 distribution days YTD on NYSE And this is the best index! Nasdaq and S&P have shown significantly more distribution YTD

S&P 500 - $SPX / $SPY I have no idea what will happen, but below 6,550 there is an air pocket all the way to 6,150. I actually hope we get back up, still, I have to tell what I see.

$MOVE in confirmed uptrend, the downtrend from the April 2025 tarrif lows. More evidence of credit stress

$MSFT Value Trap: Everyone's talking about $MSFT trading at its lowest forward P/E in years. They think it's cheap. It's not. It's a value trap. $MSFT has spent tens of billions on AI integration and the market is telling you it hasn't worked. Copilot adoption is underwhelming. Capex is exploding. Gross margins just hit a 3-year low. And Q3 operating margin guidance came in below consensus. The P/E compression is hiding the real story. Translation: that falling P/E ratio everyone is celebrating? It's not telling you the whole story. Price-to-free-cash-flow: 37x against a 10-year median of ~33x. FCF yield is 2.7% — worse than 75% of its industry. Free cash flow actually declined in FY2025 while capex grew 58%. They're tracking toward $120B+ in capex for FY2026. Cash is going out the door faster than it's coming back. Here's what the "low P/E" crowd isn't thinking about: $MSFT is spending $120B+ this year building AI data centers. That capex doesn't hit earnings all at once — it gets expensed over the next 5+ years as depreciation. In plain English: the costs from today's spending spree will be dragging down earnings well into 2028, 2029, 2030. That "cheap" P/E? It's about to get worse, not better — even if revenue grows. A falling P/E with deteriorating free cash flow and a future depreciation headwind isn't cheap. It's a trap. The stock is down because institutional holders are repricing the AI monetization timeline — not because the market is mispricing the business. Cheap gets cheaper when the tide is going out. 🐻

Once this war is over it’s gonna be a RIPPER $MSFT is dirt cheap

$MSFT Value Trap: Everyone's talking about $MSFT trading at its lowest forward P/E in years. They think it's cheap. It's not. It's a value trap. $MSFT has spent tens of billions on AI integration and the market is telling you it hasn't worked. Copilot adoption is underwhelming. Capex is exploding. Gross margins just hit a 3-year low. And Q3 operating margin guidance came in below consensus. The P/E compression is hiding the real story. Translation: that falling P/E ratio everyone is celebrating? It's not telling you the whole story. Price-to-free-cash-flow: 37x against a 10-year median of ~33x. FCF yield is 2.7% — worse than 75% of its industry. Free cash flow actually declined in FY2025 while capex grew 58%. They're tracking toward $120B+ in capex for FY2026. Cash is going out the door faster than it's coming back. Here's what the "low P/E" crowd isn't thinking about: $MSFT is spending $120B+ this year building AI data centers. That capex doesn't hit earnings all at once — it gets expensed over the next 5+ years as depreciation. In plain English: the costs from today's spending spree will be dragging down earnings well into 2028, 2029, 2030. That "cheap" P/E? It's about to get worse, not better — even if revenue grows. A falling P/E with deteriorating free cash flow and a future depreciation headwind isn't cheap. It's a trap. The stock is down because institutional holders are repricing the AI monetization timeline — not because the market is mispricing the business. Cheap gets cheaper when the tide is going out. 🐻

$MSFT Value Trap: Everyone's talking about $MSFT trading at its lowest forward P/E in years. They think it's cheap. It's not. It's a value trap. $MSFT has spent tens of billions on AI integration and the market is telling you it hasn't worked. Copilot adoption is underwhelming. Capex is exploding. Gross margins just hit a 3-year low. And Q3 operating margin guidance came in below consensus. The P/E compression is hiding the real story. Translation: that falling P/E ratio everyone is celebrating? It's not telling you the whole story. Price-to-free-cash-flow: 37x against a 10-year median of ~33x. FCF yield is 2.7% — worse than 75% of its industry. Free cash flow actually declined in FY2025 while capex grew 58%. They're tracking toward $120B+ in capex for FY2026. Cash is going out the door faster than it's coming back. Here's what the "low P/E" crowd isn't thinking about: $MSFT is spending $120B+ this year building AI data centers. That capex doesn't hit earnings all at once — it gets expensed over the next 5+ years as depreciation. In plain English: the costs from today's spending spree will be dragging down earnings well into 2028, 2029, 2030. That "cheap" P/E? It's about to get worse, not better — even if revenue grows. A falling P/E with deteriorating free cash flow and a future depreciation headwind isn't cheap. It's a trap. The stock is down because institutional holders are repricing the AI monetization timeline — not because the market is mispricing the business. Cheap gets cheaper when the tide is going out. 🐻