Volume

– NYSE volume 9% below its one-month average; 

– NASDAQ volume 13% below its one-month average; 

– VIX index: down 1.03% to 15.30

Breadth

S&P 500 Sectors

% Movers

Nasdaq 100 Heat Map

Source: TipRanks

Earnings After Close Aug 11:

Earnings Before the Open August 12:

As some are aware, a golfing pal that I am very close to unexpectedly passed on Thursday.

In the last 24 hours there has been two additional and unimaginable tragedies of two young people who were part of dear friends’ families.

I am speechless and full of grief.

I am leaving early today and I won’t be writing on Thursday and Friday as I participate in services related to these unfathomable incidents.

Positions: None

Trade to Black with Shadd Dales and AV on the Curaleaf proposal to acquire Aurora Cannabis!

Positions: Long CURLF (S)

“Off-balance sheet” has a familiar but chilling sound to it.

Positions: None.

With regard to the latest Nvidia $500 billion collaboration, these serious executives sound like used car salespeople. This is just embarrassing (via ZeroHedge):

“Modern compute has emerged as a scarce, mission-critical asset class with compelling investment characteristics that is positioned to drive significant long-term economic growth and productivity gains,” said Apollo President Jim Zelter. “The combination of NVIDIA’s proprietary technology ecosystem and Apollo’s flexible, long-term capital base provides a strong foundation to support the next stage of the AI buildout as part of the broader Global Industrial Renaissance.”

“The AI buildout will require unprecedented investment and a skilled workforce to turn that investment into the infrastructure that will help power future growth,” said Larry Fink, Chairman and CEO of BlackRock. “This partnership deepens our relationship with NVIDIA, including through the AI Infrastructure Partnership, and brings together NVIDIA’s leadership in accelerated computing with BlackRock’s ability to connect long-term capital to essential infrastructure. Together, we can help deliver the compute capacity that companies need to grow and create more jobs, supporting the continued growth of the U.S. and global economies, while creating attractive, long-term investment opportunities for our clients.”

“NVIDIA has created extraordinary demand for its compute through an intense focus on customer value and versatile technology,” said Jon Gray, President and COO of Blackstone. “We continue to be enormous investors globally across the NVIDIA ecosystem, and this announcement further underscores our confidence in their platform and the future of AI infrastructure.”

“As our strategic partner, NVIDIA is enabling us to scale AI factories. We are excited about further collaboration to build and fund the backbone of AI globally,” said Bruce Flatt, CEO of Brookfield. “With demand for large-scale AI compute growing significantly as adoption scales across industries, compute is fast becoming the essential layer of infrastructure and a core pillar of the Brookfield AI infrastructure strategy.”

“We’re in a pivotal moment of a historic AI investment cycle. NVIDIA’s full-stack platform is in high demand and uniquely positioned at the center of that global buildout,” said David Solomon, Chairman and CEO of Goldman Sachs. “Our investment and distribution roles reflect our confidence in NVIDIA’s leadership, and we’re excited for the new opportunity to create a market for credit backed by NVIDIA compute.”

“Compute has become a critical infrastructure asset. As we’ve scaled our approach to digital infrastructure, we’ve learned that delivery, not ambition, is the hard part. That’s why we’re excited to build on our strategic partnership with NVIDIA, a founding investor in Helix Digital Infrastructure, to bring together NVIDIA’s accelerated computing platform with KKR’s long-duration capital, infrastructure expertise and capital markets capabilities to turn growing demand into real capacity at extraordinary scale,” said Joe Bae and Scott Nuttall, Co-Chief Executive Officers of KKR.

Positions: None.

Our newest short Berkshire Hathaway (BRK.B) is -$8/share today (FINTV was so excited about the stock yesterday).

From Monday:

Sorry, Warren (errr Greg)

Following a large run in the shares and this weekend’s announcements, I have initiated a short in Berkshire (BRK.B ) $532.63 this morning on the gap higher.

More during the week.

Positions: Short BRK.B (VS).

BY DOUG KASS · Aug 10, 2026, 2:43 PM EDT

Wolf Street howls about the capital allocation of Intel (INTC):

“Buy Low, Sell High: Intel Boosts its Massive Sale of Shares“

Volume

– NYSE volume 9% below its one-month average;  

– NASDAQ volume 11% below its one-month average; 

– VIX index: down 0.52% to 15.38

Breadth

S&P 500 Sectors

% Movers

Nasdaq 100 Heat Map

chrisideker

16m ago

Soapbox warning.  As a retired CPA who performed many accounting fraud investigations and led the group at a Big 4 that counseled auditors on how to detect financial statement fraud, I find myself damn near apoplectic at the current state of accounting in AI related names.  The only thing worse than breaking the rules is nominally following the rules while achieving the same ends as breaking them.  If Enron should have taught us anything, it is look at the substance over the form.

Alas, that takes auditors with significant understanding of finance and not those simply equipped with a flowchart of arbitrary rules.  You also have to have an auditor with a spine who will stand up and say, “I know this technically meets the stated criteria, but it violates the spirit of the guidance.”  Taking such a stand will likely cost you a client and audit firms from the Big 6 are suffering financially, so they don’t have the backbone.

I fear we are on the cusp of something major. 

Positions: None 

I covered today’s Index shorts for a profit:

Dougie Kass

2h ago

Adding to Index shorts: * SPY $774.88
* QQQ $724.25

Dougie Kass

11m ago

covered today’s index shorts for a quick gain:

• spy  $772.80
• qqq $718.49

Positions: Short SPY M QQQ S

*  The temptation is to discard textbook theory in favor of the assessment of the cold, automated factors that are driving our markets is intense

* Though frustrated and incorporating some fractal analysis into my investing process, I am resisting the temptation to be totally absorbed (corrupted?) by changing market structure  …

“To survive in this ecosystem, an investor must look past the flashy, empty marketing headlines and the short-term algorithmic wiggles. Success requires standing shoulder-to-shoulder with the structural mechanics of the tape — understanding that when the technical and options springs are stretched to their absolute physical limits against an institutional ceiling, fundamental gravity and options expiration math will always look to claim their due.”

– Nina Rosella Strange

In the good old days the core purpose and foundation of our markets was for capital to be allocated based on the calculus of fundamental values.

Companies were evaluated by fundamental research, which included (but not restricted to) the relationship to tangible and intrinsic values, an assessment of balance sheets and present value was based on valuation models. Interest rates were at the core of this calculus, using a risk-free rate of return in model building. 

Portfolio selection was also based on the quaint notion that managements should be visited and assessed, competition reviewed so investors could determine whether secular earnings expectations would exceed of disappoint relative to consensus expectations. 

The analytical process was plodding — slow money vs. fast money, if you will!

This process no longer exists.

Instead (as I recently noted in “An Adverse Market (Structure) Event is Growing More Likely,”  traditional and fundamental analysis has been replaced by what can only be described as an algorithmic battle gound and hyper-financialized casino (all engineered to extract premium), as active investment management is now dominated by passive investment management (that worships at the altar of price, knowing little about value and everything about momentum). 

This helps to explain why rising interest rates (a 4.73% ten year Treasury note) and oil prices, persistent inflation, improvisational and undisciplined foreign and fiscal policy and an equity risk DISCOUNT are increasingly being ignored. (Again this morning the price of crude oil and bond yields are higher, yet stock futures are advancing modestly.)

Nina Rosella Strange (quoted earlier) elegantly describes the structural changes and challenges that “investors” face today. Strange writes:

1. The High-Frequency Mirage and the Passive ETF Loop

The primary engine behind today’s erratic, valuation-defying price action is the symbiotic relationship between High-Frequency Trading (HFT) algorithms and Passive Basket ETFs.

When a major macroeconomic data point crosses the terminal wires—such as a contractionary labor report or an inflation print—human traders attempt to digest the long-term systemic implications. HFT bots, however, operate on tunnel vision. They are pre-programmed to scrape headlines for specific trigger words and instantly execute massive buy or sell scripts within milliseconds based on a rigid, binary logic (e.g., “Soft data equals guaranteed central bank liquidity injections”).

This initial algorithmic impulse triggers the passive basket ETF loop. Trillions of dollars are parked in automated index funds that must maintain strict, weight-adjusted allocations. When the HFT bots jam index futures higher, these passive ETFs are structurally forced to blindly market-buy every single underlying stock in their basket.

Valuation metrics, credit default risks, and balance-sheet cracks are completely ignored. The result is a vertical rocket ship move built on “phantom liquidity”—a superficial pump that creates an optical illusion of market strength while the underlying economic foundation is actively skyrocketing or fracturing underneath the surface.

2. The Options Casino: Gamma Squeezes and Dealer Hedges

Once the HFT machines set the momentum in motion, the modern market’s most manipulative force takes over: The Options Market Maker Hedging Loop.

Retail trading platforms have effectively gamified options trading, turning complex derivative instruments into cheap casino chips. When a wave of momentum buyers floods an asset, aggressively purchasing out-of-the-money call options, they unwittingly trigger a violent, mechanical feedback loop known as a Gamma Squeeze.

Options market makers (the massive institutional desks writing these contracts) are risk-neutral operators. They do not want to bet on whether a stock goes up or down; they simply want to collect premium cash. However, when an asset begins rising toward a heavily crowded options strike, the Delta (the probability of that option expiring in-the-money) violently explodes toward 1.00.

To maintain delta neutrality and protect their balance sheets from astronomical upside risk, the market makers’ automated software is legally and structurally forced to blindly and aggressively market-buy millions of shares of the underlying equity.

The computers don’t care that the stock is fundamentally overvalued. This forced institutional buying hits a thin after-hours or early-morning order book, creating a supply vacuum that vacuums the price upward in a series of long, violent green candles. It is an option-fueled illusion designed to optimize dealer delta profiles and trap late-day breakout chasers right beneath a major institutional ceiling.

3. The Institutional Pushback: Breaking the Machine

The natural frustration for traditional investors is watching bad economic data twisted into a “liquidity party,” while asset prices flatline or surge on completely hollow structures. But the smart money—sophisticated macro hedge funds and risk officers—does not fight the HFT bots head-on. They exploit the structural blind spots of the machine to systematically extract wealth from the crowd.

The institutional pushback occurs through a calculated, two-stage operational playbook:

The Midday Premium Bleed

During the high-volume environment of the morning session, market makers keep their bid-depth dense to absorb the order flow. But as the session marches into the midday lunch hour, aggregate volume naturally thins out.

Rather than chasing the HFT momentum, institutional desks utilize this quiet block to completely flatline the asset. They construct a tight horizontal trading band, letting the clock do the heavy lifting. This allows Theta (time decay) to ruthlessly strip the remaining cash value out of the expiring, overvalued options, turning the retail crowd’s leverage into dust by the minute.

The Power Hour Trapdoor

The true structural reversal triggers when the market crosses into the late-afternoon clearing window heading toward a weekly expiration. By this point, the out-of-the-money options have seen their premium values completely decimated.

The market makers’ automated risk parameters run their end-of-day calculations and realize the probability of those options expiring in-the-money is near zero. Suddenly, the regulatory and capital mandate to hold those millions of shares of underlying stock hedges completely vanishes.

The computers turn off their artificial buy programs and instantly unleash a cascading wave of automated, de-hedging market-sell orders to dump their excess share inventory back into the public float simultaneously. Because the broader economy is facing structural cracks, there is no organic institutional cash buying resting on the floor to absorb that sudden supply shock. The bids are stripped from the Level 2 ladder, the trapdoor slams shut, and the asset suffers a severe, vertical mean-reversion flush to catch up with macroeconomic reality.

The New Market Paradigm

The modern stock market is no longer a pristine measurement of corporate health or a passive vehicle for long-term capital compounding. It is a highly sophisticated, electronic wealth-extraction matrix dominated by algorithmic delta-hedging, passive index inelasticity, and behavioral manipulation.

Positions: None

Upside:

-BW +35% (earnings, guidance; agrees with Siemens Energy to commence work on 20 steam turbine generator sets for data centers)

-RIOT +17% (earnings, color)

-PLUG +15% (earnings)

-ACB +13% (proposed to be acquired by Curaleaf for $4.00/shr)

-SE +10% (earnings, guidance)

-P +7.6% (secures design win and supply agreement with second top-five hyperscaler)

-LEGN +6.2% (earnings, color)

-AMBQ +5.4% (earnings, guidance)

-FLOC +4.8% (earnings, color)

Downside:

-GETY -20% (earnings, color)

-JBI -17% (earnings, guidance)

-UPWK -17% (earnings, guidance)

-BYND -16% (effects 1-for-30 reverse stock split Aug 13th)

-TCMD -16% (earnings, guidance)

-TME -9.7% (earnings, color)

-ACM -6.8% (earnings, guidance)

-GPRO -6.4% (earnings, color)

-ETOR -6.0% (earnings, color; acquires US-focused online brokerage TradeZero for up to $231M)

-SOC -5.9% (earnings, color)

-JOBY -5.7% (acquires defense technology company Resonant Sciences for ~$500M)

-RKLB -4.6% (earnings, guidance; establishes Rocket Lab Germany to pursue satellite and component manufacturing)

-VG -4.0% (earnings, guidance)

-UA -3.2% (Barclays Cuts UAA to Underweight from Equal Weight, price target: $5)

-GAP -2.0% (Barclays Cuts GAP to Equal Weight from Overweight, price target: $20)

Positions: None.

Positions: None.