Forgotten Profits Trade Setup Archive

Below you'll find Ian's setups stacked up and ordered chronologically. As this service once resided at another home, the alerts only go back to mid July. For a full track record, see the portfolio.

Nvidia AI Backstop

Nvidia AI Backstop: Trader’s Playbook for the AI Ecosystem

TraderInsight • September 2025 • NVDA, AI Infrastructure, Market Strategy

Nvidia’s $100 billion deal with OpenAI reinforces its role as the Nvidia AI backstop — a financing partner to secure chip demand and extend its dominance.

Nvidia AI Backstop

For traders, these moves create ripple effects across tech, semis, and cloud. Here’s the tactical playbook.

Key beneficiaries of Nvidia’s strategy

  • NVDA (Nvidia): Momentum leader; every headline deal has added market cap. Watch VWAP on news days for breakout/fade trades.
  • ORCL (Oracle): Partner in AI data centers with OpenAI. Sensitive to credit rating chatter — trade reactions to Moody’s/ratings headlines.
  • INTC (Intel): $5B partnership with Nvidia to bridge GPUs and CPUs. Swing potential if PC-AI integration gains traction.
  • Private proxies: CoreWeave and xAI aren’t public, but monitor ETF proxies like KWEB (China internet AI names) and BOTZ (robotics/AI ETF) for sympathy plays.

Trader’s Playbook Table

Scenario What to Watch Trade Idea
Nvidia invests in new AI partner (xAI, CoreWeave expansion) Headline spikes in NVDA volume Scalp NVDA long above VWAP; fade after exhaustion wick
OpenAI’s financing risk has been reduced ORCL bonds/equity gap is higher Swing long ORCL on dips into support; target prior highs
Intel–Nvidia PC AI product reveal Semis (INTC, AMD) relative strength vs SOX index Buy INTC vs the short AMD pair if INTC shows relative outperformance
Moody’s or a rating agency downgrade on AI data center debt ORCL/AI infrastructure names weaken Short ORCL into VWAP rejections; hedge with long NVDA on dips
AI ETF rotation Flows into BOTZ, QQQ, SMH Swing trade SMH (semis ETF) long if NVDA leads sector breakouts

Bottom line

The Nvidia AI backstop isn’t just corporate strategy — it’s a trading catalyst.
NVDA headlines ripple across semis, cloud, and AI infrastructure.

Traders should map VWAP levels on NVDA for scalping, use sector ETFs (SMH, BOTZ) for sympathy plays, and monitor credit headlines for setups on ORCL and INTC.

This is a market where financing power is as tradeable as product launches.

Disclosure: For educational use only. Not investment advice. Trading involves risk, including loss of capital.

 

Stock Market Overvaluation

Is the Stock Market Overvalued? What Traders Should Watch Next

TraderInsight • September 22, 2025 • S&P 500, Fed, Valuations

The S&P 500 has set 28 record highs this year and sits near 6,664. But valuations are stretched to dot-com era levels, making many traders ask:
Is this a sustainable rally or a risk of stock market overvaluation waiting to play out? The next few weeks — with Fed policy, earnings, and bond yields in focus — could provide the answer.

stock market overvaluation

Why valuations are flashing warning signs

  • CAPE ratio: Highest since the late 1990s bubble.
  • Forward P/E: ~23x next 12-month earnings, stretched vs. historical averages.
  • Momentum drivers: Half of 2025’s 14% gain tied to earnings growth, half to multiple expansion — a delicate balance.

Bulls’ case: Earnings and the Fed

Goldman Sachs raised its S&P 500 year-end target to 6,800, citing strong forward earnings growth and the Fed’s dovish pivot.
David Kostin expects earnings to remain the primary driver, while Ed Yardeni sees forecasts at record levels — $295/share in 2025 and $305/share in 2026.
Historically, when the Fed cuts interest rates amid economic growth, the S&P 500 posts a median 12-month return of +15%.

Bears’ case: Inflation, yields, and jobs risk

  • Inflation data: Could challenge assumptions of continued cuts.
  • Labor market: Weakening job market risks are feeding into earnings downgrades.
  • Bonds: Rising 10-year yields would imply skepticism about growth and pressure on equity multiples.

If yields break higher while earnings soften, the downside impact to equities could outweigh the benefit of Fed easing.

Trading implications

  • Day traders: Anchor VWAP on inflation/jobs releases; fade failed breakouts in SPY/QQQ if yields tick higher.
  • Swing traders: Overweight sectors with earnings visibility (XLK tech, XLY discretionary) if data supports growth. Shift to defensive positions (XLV healthcare, XLP staples) if job data weakens.
  • Bond-equity watch: Use 10-year yield (TNX) as a trigger. Yield >4.5% = risk-off bias; yield <4% = green light for growth rallies.

Bottom line

Valuations are undeniably stretched, but earnings and Fed cuts could keep the rally alive into 2026.

The question of stock market overvaluation won’t be answered in headlines alone — it will hinge on whether earnings deliver and bond markets validate growth expectations.

Traders should stay flexible: lean into growth if yields ease, but rotate defensively if macro data cracks the foundation.

Disclosure: This content is for educational purposes only and not investment advice. Trading involves risk, including loss of capital.

 

Powell Speech Market Selloff

Powell Speech Market Selloff: Why Stocks Dropped After Fed Remarks

TraderInsight • Today • Federal Reserve, Markets, Equities

Stocks fell sharply today after Federal Reserve Chairman Jerome Powell delivered a speech that rattled investor confidence.
The Powell speech market selloff reflected renewed fears of higher interest rates for an extended period, slower growth, and lingering inflation pressures.

What Powell said

  • Inflation still sticky: Powell noted progress has been “uneven” and warned the Fed may need to keep rates restrictive “for longer than markets anticipate.”
  • Labor market warning: He highlighted persistent wage pressures, signaling inflation risks from a still-tight jobs market.
  • No early cuts: Powell pushed back against expectations of aggressive easing, saying premature cuts risk reigniting inflation.

Why markets sold off

Investors had been pricing in a friendlier Fed path, including rate cuts within the next few months.
Powell’s comments forced a repricing across assets:

  • Bond yields jumped: The 2-year Treasury yield spiked, reflecting reduced odds of near-term cuts.
  • Stocks tumbled: The S&P 500 fell over 2%, with tech and rate-sensitive growth names leading declines.
  • Dollar strengthened: A hawkish tone boosted the greenback, adding pressure on commodities and emerging markets.

Sector reaction

  • Tech & Growth: High-valuation names like NVDA, TSLA, and AMZN sank as discount-rate expectations reset higher.
  • Financials: Banks saw mixed action — higher yields helped margins, but the risk of a recession weighed on sentiment.
  • Defensive sectors, including healthcare, consumer staples, and utilities, outperformed, reflecting a rotation into safer assets.

Trading takeaways

  • Watch VWAP levels: On Fed days, fading extremes that fail to confirm above VWAP often offer high-probability setups.
  • Track the 2-year yield: Sustained moves higher keep pressure on equities; reversals lower could spark a relief bounce.
  • Focus on defensive sectors: If Powell doubles down, sectors like XLV (healthcare) and XLP (staples) can maintain relative strength.

Volatility remains elevated — Powell’s tone suggests that swings in rates and equities will persist into the next FOMC meeting.

Bottom line

Today’s Powell speech market selloff was about recalibration.
Traders expecting rapid cuts were reminded that inflation remains a threat, and the Fed isn’t ready to pivot quickly.
For now, that means higher yields, weaker growth stocks, and a defensive tilt until data prove otherwise.

Disclosure: This content is for educational purposes only and not investment advice. Trading carries risk, including loss of principal.