Welcome to the Breakfast Club, your weekly dose of market insights and trading strategies! Join us live every week at 9 AM ET on Traders Reserve Live, where John Hutchinson breaks down the latest market movements, shares actionable trade ideas, and answers your most pressing questions.
Futures are up over 1%. Every sector is green. Oil is down 3%. It looks great.
So before you get too comfortable — this is very much Lucy with the football, and we are Charlie Brown. Just because we open strong doesn’t mean we close strong. Last week taught us that lesson every single day, and I’m not ready to forget it yet.
Last week was a clinic in false starts.
Economic data came in mostly in line or slightly ahead of expectations — a positive backdrop, especially after the weak jobs report the week before. Markets responded. They opened higher, multiple days in a row.
Then oil rose through the day, and by the close, those gains were gone. Every single day.
I’m calling it the fizzle. And it’s the reason I haven’t averaged down yet in the AI2 portfolio, even though there were days last week that looked like the perfect entry point.
My AI2 portfolio is actually a good illustration of how this played out. The Monday prior, the portfolio swung 8% in a single session — from a 3% loss to a 5% gain — as oil pulled back. By Friday, after a week of fizzles, we were holding just under 2% for the week. This morning we’re up about 2.5%. Nearly the same setup as last Monday.
The difference: oil is sitting roughly $10 higher today than it was last Monday. Same open, different backdrop.
What I’m watching this week are three numbers: oil, the 10-year yield, and the US dollar. All three were moving in the right direction this morning — oil down 3%, the 10-year yield falling, and the dollar pulling back from the critical 100 level. That’s the setup for a broader rally. If we get mixed results across those three, we’re probably looking at another flat-to-fizzle week.
I want multiple up days at the close — not the open. Last week gave me the open every day. That’s not enough. Wednesday is the next inflection point.
Nobody expects a rate cut. Nobody expects a rate hike. The rate decision itself is a non-event.
What the market is watching is the dot plot. Specifically: is the Fed still projecting one or two rate cuts for 2026?
If they hold the line on that — even if they push the timing further out in the calendar year — markets should react positively. The market has already priced in rate cuts as late as September or October. It can live with later cuts.
What it cannot live with is zero cuts. If the Fed revises its projection down to no cuts for 2026, that is a significantly negative market event — and one that is not priced in right now.
Powell’s language is going to matter too. Core PCE is running at 3.1% against a 2% target. Q4 GDP was revised down to 0.7% from 4.4% in Q3. That’s the stagflation setup I’ve been flagging — rising prices, slowing growth. If Powell acknowledges that risk, the language he uses will set the tone for the next six weeks. “Patient” is bullish. Anything that sounds like they’re seeing stagflation and freezing up is not.
Here’s what’s been interesting in my portfolio against this backdrop of daily fizzles.
One stock has been quietly rising all week while everything else stalls: Micron. And I’ll be honest with you — I think someone somewhere knows something, because this move has been happening in the face of a market that’s been selling off everything else.
Micron reports earnings Wednesday after the close — same day as the Fed statement. Wednesday is going to be a full day.
What I want to see from the report: EPS around $8.66, revenue above $19 billion, and margins expanding toward the guided 68% from the prior 56.8%. Those are the numbers. But here’s what Wall Street is actually going to be focused on: forward guidance into 2027.
Micron’s HBM — high bandwidth memory — is already sold out through all of calendar 2026. That’s not the question anymore. The question is what the 2027 order book looks like, and whether Micron can give Wall Street the revenue visibility it’s been missing.
There’s a structural shift happening here that I think is underappreciated. Micron is now taking orders on HBM contracts that extend beyond one year — locking in customers for this year, next year, and the year after. That’s new. It changes how analysts model the business, and it gives the stock a stability argument it hasn’t had before.
The analyst coverage picture is complicated. There are 40 analysts with full-year estimates for 2026, 37 for 2027 — but only 16 covering 2028. And those 2028 estimates show a greater-than-10% decline in expected earnings before what one analyst is projecting as a near-doubling by 2029. That’s the semiconductor cycle at work — the market prices in a trough before it prices in the next expansion.
Wall Street price targets are being pushed into the $500 to $700 per share range. I’ve been in since $220. I’m happy to let them keep revising upward.
One thing I want to prepare you for: even a strong beat on earnings can produce a pullback in the current environment. The market has been reacting unevenly to earnings across the board lately. What I want from Micron is not a one-day gap — I want a steady, sustained move higher. Same thing I want from the broader market. No more fizzles.
The picture this week isn’t complicated. It’s just unresolved.
Oil is still the variable that controls everything. Below $100, the market has room to breathe. Above $100, the fizzle pattern continues. The Iran conflict is now firmly in the moderate scenario — somewhere between three and seven weeks to resolution, based on the commentary over the weekend.
But this week has two events with clear thresholds. The Fed needs to hold the line on two cuts. Micron needs to beat and raise. If both deliver on Wednesday, we have a real shot at a week that closes differently than the last few.
I’m watching the close. Not the open.
