A Market Charging More For Risk

The S&P 500 fell 0.9% Thursday, its fourth decline in the five sessions since last week’s record high. The Nasdaq Composite lost 1%, and the Russell 2000 fell 1.3%. Through Thursday, the S&P was down 1.9% for the week, while both the Nasdaq and Russell were down 2.5%.

Higher discount rates and energy costs did most of the macro damage. The 10-year Treasury yield rebounded to 4.70%, and Brent crude rose 2.4% to $93.78 as Iran-related uncertainty returned to the foreground. Those aren’t friendly inputs for richly valued growth stocks or consumer spending.

Walmart () supplied the company-level warning. Its shares fell 9.2%, their worst day in four years, after U.S. comparable sales rose 2.6%—the slowest pace in more than six years—and its current-quarter profit outlook disappointed. That left the market dealing with an awkward combination: a more cautious consumer, dearer oil, and a bond market again demanding more yield.

Proof Still Gets Paid

Company-specific catalysts still commanded enormous premiums. On Wednesday, Moderna () surged 177% after its personalized messenger RNA (mRNA) melanoma treatment with Merck () met both key endpoints in a Phase 3 trial. Twist Bioscience () jumped about 17% after Anthropic reported that Claude had designed successful protein binders against 14 of 15 targets, with Twist helping produce and validate them in the lab. Moderna gave back part of Wednesday’s move Thursday, but the larger signal remained intact: credible proof can still overpower a weak tape.

That’s the kind of market in which bottom-up selection matters most. The broad indexes are absorbing pressure from yields, oil, and consumer weakness, while individual companies can still reprice sharply when earnings, clinical data, or technological validation changes the story. Portfolio Armor’s rankings don’t require us to predict which macro pressure eases first; they show us where estimated six-month returns are clustering now.

Tonight’s Top Names show where that strength is clustering. Nine of the ten are tied to the technology stack—semiconductors, storage, cloud observability, or cybersecurity—with the two highest-ranked securities each carrying an estimated potential return of 86%. The lone biopharmaceutical name fits a second source of strength this week, when clinical validation and AI-enabled protein design drove some of the market’s sharpest single-stock moves.

Next week, we’ll watch whether those technology leaders can hold their technical support while yields stay near recent highs, and whether the biotech bid broadens beyond this week’s catalysts.

Our Basic Strategy

Our basic strategy is to buy equal dollar amounts of the Portfolio Armor web app’s top ten names, put trailing stops of ~20% or more on them, and replace them with names from the current week’s top ten when we get stopped out of a position—there are no options involved in this strategy.

Another Use For Our Top Names

We also use our top names in options trades, such as this one we exited this week:

A Top Names Performance Update

Before we get to this week’s top ten names, let’s look at the final, 6-month performance of our top ten names from February 19th.

Over the next 6 months, our top ten names from February 19th, 2026 returned +22.15%, versus +12.35% for the SPDR S&P 500 Trust ETF (SPY 0.23%↑).

So far, we have 6-month returns for 164 weekly top names cohorts since we started this Substack at the end of December, 2022.

[Skipping ahead so this post doesn’t exceed email length—you can see the top names returns for every week here]

And as you can see above, our top names have averaged returns of 17.67% over the next six months, versus SPY’s average of 9.70%. You can see an interactive version of the table above here, where you can click on each date and see a chart showing each of the holdings that week.

This Week’s Top Names

Below are Portfolio Armor’s current top ten names as of Thursday’s close.

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One Makes Sense To Adjust Here

I just repriced all three of our trades from this morning.

Current fair values of the Humana () and Arrowhead () trades are far from their current fair values and unlikely to fill, but GRAIL’s (GRAL 6.21%↑) fair value is right at the midpoint, so I’m raising my maximum net debit on it to $0.90.

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Two Proof Points In One Session

Wednesday supplied two different demonstrations of what can happen when the market starts paying for validated biology again.

Moderna () surged 177% after the company and Merck announced that their personalized mRNA cancer therapy, combined with Keytruda, met both key endpoints in a Phase 3 melanoma trial. It was the first positive Phase 3 readout for an individualized neoantigen therapy and an mRNA-based cancer treatment.

Twist Bioscience () rose 23% during the same session after Anthropic disclosed that Claude had designed protein binders against 14 of 15 testable targets. Twist and Adaptyv Bio independently built and tested the designs in the lab, confirming 354 binders from 1,320 designs.

The catalysts were different, but the investment message was related. Capital is rewarding clinical validation at one end of the biotech stack and tools that may compress early discovery timelines at the other.

Positioned, But Early

We currently have an open TWST trade. We also closed our MRNA trade last month for a 491% return on net debit. That July expiration was too short to capture Wednesday’s move, which is a clean reminder that tenor determines which catalysts an options trade can reach.

Two of today’s trades come from our Multibaggers list, a subset of our Market Watchers X list made up of analysts with multiple 100%+ winners. Those analysts supply potential asymmetric ideas; our technical screens, catalyst work, option structures and price discipline determine when and how we act.

One biotech has positive late-stage data and several additional program readouts ahead. The other has a marketed screening product and a near-term regulatory binary. Both passed our Trend & Consolidation screen, which looks for strong technical ratings paired with constructive setups.

Today’s third trade comes from Portfolio Armor’s Top Names, the securities our quantitative system estimates will have the highest returns over the next six months. It’s a defensive managed-care name that was the only member of Wednesday night’s Top Ten to clear our strict technical screen.

The structures reflect the different roadmaps. The Top Names trade and the longer-dated biotech trade both enter for credits. The regulatory binary uses a debit structure, but only at a price below all three of our fair-value estimates. All three are defined-risk four-leg combos. Paid subscribers will find the names, complete structures, entry limits and exit plans below.

Today’s Top Names Trade

Medicare Advantage recovery / membership growth and margin-normalization theme.

RSI: 49; Chartmill Technical Rating: 7; Setup Rating: 7; Fundamental Rating: 4.

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The $25 Exit We Missed

One of our subscribers, TL, sold his August 21st $95 call on Robinhood Markets () for $25 on July 2nd. We held the same call and eventually sold it for $1.25 on August 19th.

That $23.75 difference cost us $2,375 on one contract.

The call was the long-dated leg of a four-leg hybrid we entered for a $4.10 net debit on March 5th. By July, we’d already resolved its short call and put spread, leaving that call uncapped. If we’d sold it at $25, the completed trade would have made about $1,820, or 190% of its maximum risk. At our $1.25 exit, it lost $555, or 58% of maximum risk.

The mistake was our all-or-nothing treatment of our model target. TL accepted less than our target, locked in an impressive gain, and moved on. We kept waiting for a better exit until the market gave us a much worse one.

The Target Was Defensible

On June 23rd, with 59 days left on the call, we set a good-’til-canceled limit price of $29.50. Our runner process estimated a plausible move in the stock from the current at-the-money straddle, then priced the option at that stock target using Black–Scholes, Bjerksund–Stensland, and the Cox–Ross–Rubinstein binomial model. We used the conservative, model-consistent result.

There was a real case for holding. The call still had time, its upside was uncapped, and Robinhood had another earnings report ahead. Selling every runner at the first large gain would defeat the point of owning convexity in the first place.

But TL’s $25 fill was already about 85% of our $29.50 target. Later on July 2nd, Robinhood scheduled its earnings report for July 29th. His sale came 27 days before that catalyst. At that point, the prospect of squeezing out the last 15% of our theoretical target wasn’t worth risking a 190% return on maximum risk.

Runners Have Earned Their Place

Runner targets still belong in the process. They’ve helped us stay in winners long enough to capture returns that ordinary profit-taking would have cut short.

Recently, our runner process helped us hold a 10x Genomics () call until a $31.90 exit. TXG came from our Multibaggers—our name for a small group of outside investors who’ve posted multiple documented gains of 100% or more. The completed trade returned 380% on maximum risk and 1,309% on premium outlay.

That kind of outcome is why we’re refining the process instead of replacing it.

The 0.60x-Straddle Catalyst Window

Our default runner target assumes a stock move equal to 75% of its current at-the-money straddle: up for a call, down for a put. We’ll keep that default when the option has time and no material catalyst is close.

Inside the 30 days before a scheduled—or reasonably expected—material catalyst, we’ll now reduce the assumed stock move to 60% of the straddle. That’s an explicit 20% haircut to the usual 0.75-straddle move:

Catalyst-window stock target for a call: current stock price + 0.60 × the at-the-money straddle

Catalyst-window stock target for a put: current stock price − 0.60 × the at-the-money straddle

We’ll then price the option at that stock target with the same three models, using the conservative, model-consistent value. The haircut belongs on the assumed stock move, not on the resulting option price; option values aren’t linear, so applying another 20% discount would count the same caution twice.

If that recalculated price is realistically executable, our default will be to take it. If the exit would close the full trade at a loss, it’ll trigger a review instead of an automatic sale. Holding through the catalyst will require a documented exception and fresh modeling—particularly when the trade was built around that catalyst in the first place.

We’re also adding the next material catalyst, its date or expected window, its verification status, and the 30-day review date to our Trade Entries sheet. Our nightly AI watchdog can then flag the position when it enters the catalyst window.

Our separate time-decay rule still applies. With 30 days or less and no material catalyst ahead, a failed runner order can still step down to a target based on 50% of the at-the-money straddle.

The Goal Is Better Decisions

The goal is to preserve enough patience for an uncapped option to become an outsized winner without turning a compelling, executable gain into an all-or-nothing bet on the last few dollars of a model target.

TL made that judgment better than we did in HOOD. The right response is to say so, quantify the mistake, and improve the rule.

When Transplanted Cells Stop Looking Foreign

Last summer, in Chasing A Cure For T1 Diabetes, we looked at Sana Biotechnology’s () attempt to solve the hardest problem in cell replacement: keeping a patient’s immune system from destroying transplanted cells.

Since then, the evidence has matured from a striking six-month readout to a peer-reviewed 14-month result. In one patient with Type 1 diabetes, implanted donor islet cells were still producing insulin and responding to meals, without immunosuppressive drugs and without evidence of an immune response against the graft. That’s the first-in-human proof of concept Sana needed for its immune-cloaking technology.

Importantly, the patient wasn’t taken off insulin. The initial NEJM report says his exogenous insulin dose was increased after transplantation to prevent glucose spikes from stressing the fresh graft. The safety study deliberately implanted only a small fraction of the islet-cell dose normally needed for insulin independence and wasn’t intended to reduce his insulin use. So this isn’t a cure—not even a one-patient functional cure. UP421 established that edited primary donor islets could survive and function without immunosuppression. Sana’s scalable development candidate, SC451, uses stem-cell-derived islets and still has to prove that a therapeutic dose can restore normal glucose control in a formal clinical trial.E

The mechanism is the reason the result matters. Sana’s hypoimmune, or HIP, edits remove key HLA class I and II signals that would flag donor cells to the adaptive immune system, then add CD47—a “don’t eat me” signal—to dampen attack by the innate immune system. The resulting immune cloak can let transplanted cells survive and function without chronic immunosuppression.

The next checkpoints are close enough to fit the trade. Sana is scheduled to present additional UP421 data at the European Association for the Study of Diabetes meeting on October 2nd. The company also expects to submit an IND and begin a Phase 1/2 trial of SC451 as early as this year, and it expects first-in-human data from its SG293 in-vivo CAR-T program as early as this year. Management expects the next six to nine months to provide an initial view of the clinical profiles of both programs.

The larger opportunity isn’t confined to diabetes. If the HIP platform can reliably cloak donor cells, the same logic could extend to other replacement cells and tissues, with potential applications in cancer, autoimmune disease, neurologic disease and, eventually, organ transplantation. The risks are equally real: the human evidence remains narrow, the scalable product is unproven and Sana’s cash runway currently extends only into mid-2027.E

A Familiar Signal, A Second Swing

Multibaggers is our source-of-alpha category for ideas from outside analysts whose records we track and who have had multiple, recent, 100%+ gainers. Our most accurate biotech analyst in that group so far is bullish on Sana too. That matters because recent ideas from the same source have produced some exceptional outcomes, including 10x Genomics (TXG). The completed TXG trade is a useful reminder of why we preserve uncapped upside when a thesis warrants it:

The same analyst is bullish on a second name: an early commercial-stage neuroscience company trying to build an Alzheimer’s franchise through a focused institutional-care launch. Its latest quarter showed sharply accelerating prescriptions and revenue, while expanding payer access, additional real-world evidence and overseas approvals create several ways for the story to improve. The counterweight is that its early real-world evidence is observational, the therapy isn’t disease-modifying and commercial execution still has to outrun cash burn.

The two structures reflect those different roadmaps. Sana gets a long-dated risk reversal with uncapped upside through January 2028. The second trade uses a February 2027 hybrid, partly financed by selling unusually expensive November call premium. Paid subscribers will find the exact legs, model values, maximum entry prices and exit plans below.

Today’s First Multibaggers Trade

Immune-cloaked cell therapy / Type 1 diabetes and broader transplantation theme.

RSI: 58; Chartmill Technical Rating: 8; Setup Rating: 6; Fundamental Rating: 2.

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A Broken Story Repriced In A Day

In Friday’s trade alert, we explained why we we’re willing to try more than once to fill a trade on a Multibagger’s name at a fair price.

A Multibagger’s name we entered a trade on the week before, Capricor Therapeutics (CAPR -14.82%↓), spiked 100% in the premarket on Friday, before finishing the day up 58%.

As we noted for new readers then, our Multibaggers list is a subset of our Market Watchers X list composed of accounts with multiple 100%+ winners. Those accounts supply potential alpha; our technical screens, catalyst work, options structures, and price discipline determine when and how we act on it.

CAPR showed why an unfilled Multibaggers order doesn’t automatically end our interest. A day order can miss because an options market is illiquid. We let the order expire rather than overpay. If the name later clears our screens again and the thesis remains intact, we reprice the complete structure and take another swing.

That’s what we’re doing today with one of our two Multibaggers trades from last Friday, a psychedelic-therapy developer whose earlier orders didn’t fill. The thesis and structure in this case are unchanged; the price is not. We recalculated the structure using Friday’s close and the after-hours quote, and we still require a credit above our three fair-value estimates.

The Other Engine

Our other main source of alpha is Portfolio Armor’s Top Names. Across 164 completed weekly cohorts since December 2022, Portfolio Armor’s Top Names averaged 17.64% over the following six months, versus 9.68% for SPY.

Today’s Top Names trade comes from an advanced-specialty-materials company leveraged to durable aerospace, defense, and industrial demand. It’s a previous winner for us and a different kind of opportunity from CAPR or our psychedelic trade: profitable, capacity-constrained, and tied to the physical supply chains behind reindustrialization.

Two independent idea engines, one execution discipline: confirm the setup, define the risk, price the complete package, and let the order go if the market won’t meet our limit.

Full details on both of today’s trades are below.

Today’s Top Names Trade

Advanced specialty materials / aerospace and defense expansion theme

RSI: 47; Chartmill Technical Rating: 7; Setup Rating: 6; Fundamental Rating: 6.

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Final Adjustments

I’ve completed the final calculation and catalyst review for our positions expiring Friday, August 21st.

These are the last calculated adjustments. If they don’t fill Monday, I’ll take what I can get afterward rather than publish another round of model-based targets. For the call calendars below, we’ll need to cancel our buy-to-close or…

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This Week’s Trade Exits

As soon as I exit a trade, I note that in the comments of the post where I first mentioned the trade; at the end of the week, I try to track them all in one post. Starting in July, 2024, I have also been tracking them in a spreadsheet. These are the trades I exited this week.

Clicking on one of the exit cards should take you to the original alert where we mentioned the trade; exits will be documented in the comments on the dates they occurred.

Stocks or Exchange Traded Products

None.

Options

Comments

Stocks or Exchange Traded Products

No exits this week. I’ve focused on options instead of our basic strategy, which involves buying stocks and ETFs. You can find the performance of our top names since I launched this Substack here.

Options

Two of this week’s full exits illustrate how we refine the process: discard a signal when the evidence turns against it, and stick with a defined exit method when the market gives us a chance at an exceptional payoff.

Retiring a Failed Signal

Palantir Technologies () came from Bearish Rally Failure, a screen we’ve retired after backtesting showed that it didn’t identify bearish setups consistently. The trade lost 98% of its maximum risk. We’re currently conducting research to develop a more effective bearish screen.

Letting a Runner Run

10x Genomics () showed the other side of the process. After we exited its put spread, we left a $31.90 good-’til-canceled (GTC) sell order on the remaining November $25 call. The price looked ambitious, but it followed our runner method.

For a call runner, we add 75% of the current at-the-money (ATM) straddle to the share price, price the call at that target using current implied volatility, dividend yield, and remaining time, and compare Black-Scholes, Bjerksund-Stensland, and Cox-Ross-Rubinstein binomial valuations. We use the most conservative model-consistent result.

The $31.90 order filled this week, completing the TXG trade for a 380% return on maximum risk. We’ll keep applying the same framework to uncapped long options: define the target from the option market’s implied move, price the option conservatively, and adjust the timetable as we approach expiration.

I’m lowering the minimum net credit on our first Multibaggers trade from today,

To $1.30. With GHRS up >5% intraday, our trade structure now has a fair value of a net credit of about $1.24.

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Looking Beyond A Broken Chart

Last Friday, Capricor Therapeutics () was trading near $4 after falling nearly 80% from its July 24th close. We entered an options trade on it then, as we detailed in this alert:

This was the structure we presented to subscribers, with the FDA’s August 22nd action date for Deramiocel, its experimental treatment for Duchenne muscular dystrophy, in mind:

The technicals at the time were terrible, as you can see above. An RSI (Relative Strength Index) below 30 is usually considered oversold; CAPR had an abysmal RSI of 12. And on a scale of 0-to-10, with 0 being the absolute worst, CAPR had a Chartmill technical rating of 0.

CAPR remained a high-risk biotech binary. An FDA advisory committee had voted 9–3 against approval for the cardiomyopathy indication, but the company’s Phase 3 trial had met its primary endpoint in upper-limb function. Our trade structure preserved exposure to a favorable surprise while capping the loss from another collapse.

On yesterday’s earnings call, Capricor said it plans to amend its biologics license application with 24-month extension data and additional analyses supporting a refined upper-limb indication. The FDA has indicated that it is willing to review the amendment and extend the action date after receiving it. At the time of this writing, CAPR was trading near $8.50 in the premarket, up about 102% from Thursday’s $4.21 close.

With CAPR trading near $8.50, our trade is on track for a ~370% gain on premium outlay, assuming CAPR is at $8.50 at the September expiration and we buy-to-close the short call and exit the put spread for a combined $0.20.

Why We Keep Following Multibaggers

CAPR illustrates the potential value of our Multibaggers list, a subset of our Market Watchers X list composed of accounts with multiple 100%+ winners. The list supplies potential alpha; our technical screens, catalyst work, options structures, and price discipline determine when and how we act on it.

That’s why we’re taking new swings at two Multibaggers trades whose day orders didn’t fill on Wednesday, and Thursday. We let those orders expire rather than overpay for them. Today we’ve repriced both structures and are applying the same discipline: if the option market doesn’t meet our limits, we won’t take the trades.

The first company is a psychedelic-therapy developer preparing a global pivotal program after a successful Phase 2b trial. The second is uniQure N.V. (), whose AMT-130 gene therapy for Huntington’s disease now has a long-dated regulatory runway spanning the United States, the United Kingdom, and early European engagement. Today’s paid section gives the repriced limits, complete structures, and exit plans for the new Friday orders.

Today’s First Multibaggers Trade

Psychedelic depression treatment / pivotal Phase 3 launch theme

RSI: 51; Chartmill Technical Rating: 10; Setup Rating: 7; Fundamental Rating: 2.

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A Record High, With AI Still In Front

The S&P 500 rose 0.7% to a record 7,798.99 on Thursday, while the Nasdaq Composite gained 0.8%. The immediate catalyst was a better inflation backdrop: July producer prices were unchanged, following a revised 0.1% decline in June, and their 12-month increase slowed to 4.7% from 5.5%.

The details were firmer than the headline. Producer prices excluding food, energy and trade services rose 0.4% in July. Wednesday’s consumer-price report was more encouraging, with headline prices up 0.1% and core prices up 0.2%. The combination eased pressure on Treasury yields and gave growth stocks another lift.

Tonight’s Top Names still put the AI stack at the center of the opportunity set. Semiconductor designers, chip equipment, data-center connectivity and storage account for half the list, including each of the four highest-ranked securities. That’s a smaller concentration than last week’s first six, but it keeps the industry’s earnings and capital-spending cycle in front.

A Broader Set Of Catalysts

The other half of the list spans digital health, payments, specialty materials, gaming and consumer internet. Our Market Watchers feed echoed that shape this week. Recent earnings summaries included a clean beat from a digital-finance company, but misses from an AI-infrastructure contractor.

Friday’s July retail-sales report and preliminary University of Michigan consumer-sentiment reading will test that broadening. Resilient demand alongside slower inflation would support both sides of tonight’s list: valuation-sensitive AI infrastructure and the more economically sensitive consumer names.

Portfolio Armor ranks securities from the bottom up, but the sector mix shows where estimated six-month returns are clustering. Tonight it points to a market with AI infrastructure as its strongest engine and a second group of opportunities developing outside it. Next week, we’ll watch whether those non-AI names remain in the rankings after Friday’s data and whether the post-earnings AI leaders hold their technical support.

Another Use For Our Top Names

We also use our top names in options trades, such as this one we exited last week:

A Top Names Performance Update

Before we get to this week’s top ten names, let’s look at the final, 6-month performance of our top ten names from February 12th.

Over the next 6 months, our top ten names from February 12th, 2026 returned +3.47%, versus +13.33% for the SPDR S&P 500 Trust ETF (SPY 0.23%↑).

So far, we have 6-month returns for 164 weekly top names cohorts since we started this Substack at the end of December, 2022.

[Skipping ahead so this post doesn’t exceed email length—you can see the top names returns for every week here]

And as you can see above, our top names have averaged returns of 17.64% over the next six months, versus SPY’s average of 9.68%. You can see an interactive version of the table above here, where you can click on each date and see a chart showing each of the holdings that week.

This Week’s Top Names

Below are Portfolio Armor’s current top ten names as of Thursday’s close.

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Our Trade Performance, Updated

Before we get into today’s trade alert, here’s a look at our trade performance year-to-date.

You can see all of our completed trades in this spreadsheet.

The Evidence Keeps Building

During the momentum correction, we wrote several posts arguing that the selloff in AI infrastructure stocks was obscuring what the companies themselves were saying: demand was still accelerating through increasingly specialized parts of the stack.

This week’s reports have continued to support that thesis. Nebius Group N.V. (), on which we have an open trade, reported second-quarter revenue of $582 million, up 454% year over year; annualized run-rate revenue of $3 billion; and four new large AI-cloud contracts averaging more than $1 billion each. Its shares jumped 34% on Wednesday.

The operating evidence shows the buildout expanding. Share-price reactions still depend on the expectations already embedded in each stock, which makes entry price decisive.

Today’s two AI trades approach that evidence differently. The first is a longer-dated trade on a semiconductor-equipment company we traded successfully earlier this year. The second is a short-dated earnings trade on another equipment name. Both stocks appeared in our system’s Top Names on Wednesday night.

One More QURE Trade

Our third trade is a different kind of asymmetric setup. In June, we wrote about the FDA reopening an accelerated-approval path for uniQure N.V. () and its AMT-130 gene therapy for Huntington’s disease.

We already have shorter-dated QURE exposure, but our Multibaggers analysts remain excited by the stock’s potential. As a reminder, Multibaggers are a subset of accounts from our Market Watchers X list with documented, 100%+ winners. Today’s final QURE structure has a January 2028 expiration designed to span the catalyst window we expect to matter most: remaining clinical updates, the planned U.S. and U.K. regulatory path, and early European engagement. Then we’ll let our QURE structures work without adding more exposure.

Today’s First Top Names Trade

Semiconductor manufacturing equipment / AI-capex theme

RSI: 53; Chartmill Technical Rating: 8; Setup Rating: 6; Fundamental Rating: 7.

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What We Changed

At the end of last year, we added relative strength index (RSI) to our entry and reentry process. We tightened that screen this year and recently added a 50-day exponential moving average gate: bullish candidates now need to be trading above their 50-day EMA before we advance them.

Those changes are showing up in our completed-trade record.

Compared with our completed-trade record from July 2024 through 2025, our win rate has risen from 50.8% to 59.2%, while our average loss has narrowed from 93.0% to 70.1% of maximum risk. Our average winner has moderated from 165.8% to 114.2%.

That last comparison needs context. We began using our standard and hybrid 4-leg combos last summer. The bullish put spreads in those structures add defined downside risk, increasing the maximum-risk denominator relative to many of our earlier trades. Part of the decline in average winning return on maximum risk may therefore reflect a change in our structure mix rather than weaker upside results. The cleaner improvements are the higher win rate and the smaller average loss.

Why So Many Trades In the First Half Of This Year

When you’re winning about 59% of your trades, making about 114% of maximum risk when you’re right, and losing about 70% when you’re wrong, you have a real edge—and when you have a real edge, you want as many at-bats as you can get. That was one reason we placed so many trades during the first half of this year. Another was that we wanted exposure across the AI stack. We built that exposure.

But along the way, we lost some of you. Some subscribers felt overwhelmed by the number of trades. Some found the structures confusing. Some weren’t sure how to place them at their brokerages. We listened.

Making the Alerts Easier to Use

Today’s alert is free so everyone can see the new format. Each trade now appears in a cleaner card that separates the idea, the complete order, our price limit, and the trade’s risk. We have also added Portfolio Armor Trade Alerts Explained so newer readers can learn how to enter and follow the structures without deciphering a wall of options notation.

Our goal is to make more money when we’re right and lose less when we’re wrong. Several recent improvements should help:

• Monthly options-expiration reviews now surface positions that need action before expiration week.

• A structured exit process for uncapped options changes with time to expiration and the presence or absence of a meaningful catalyst, as detailed in last week’s Exits post.

• The 50-day EMA gate now works alongside our RSI and Chartmill screens to keep us from entering bullish trades while a stock is still in a broken intermediate trend.

• An AI position watchdog flags positions that need management and automatically adds fresh technical alerts after profitable full exits, so we can reenter prior winners when they qualify again.

Unless an option expiring within 14 days needs adjustment, we will batch trade adjustments into one weekly chat thread, which will also be sent by email, rather than interrupting you with routine updates throughout the week.

Accountability

Starting with our weekly Exits posts, we’ll keep a running year-to-date tracker of our completed options trades: win rate, average winning return, average losing return, and total completed trades, all measured on maximum risk.

That tracker supplements our public trade ledger, where you can see every exited trade we’ve recorded since July 2024, win or lose.

Today’s Trade Alert

Power Behind the AI Buildout

This week’s earnings reinforced one of our core AI-stack themes: all of that compute needs more power and electrical infrastructure.

Babcock & Wilcox Enterprises (), one of our current positions, reported that second-quarter revenue rose 130% to $319.7 million, adjusted EBITDA increased 57% to $21.8 million, and backlog reached $2.6 billion. The company also raised its 2026 adjusted-EBITDA target.

The next day, Hyliion Holdings (), another current position that we reentered last Friday, reported $4.9 million of second-quarter revenue—more than three times its year-earlier level—and raised its full-year revenue outlook to $15 million. Its update included a $41.7 million U.S. Navy contract and growing data-center interest in its modular KARNO power technology. The shares jumped after hours.

We already have substantial AI-stack exposure, so we’re no longer trying to add every beneficiary at once. Today’s alert shows the more selective approach: one trade adds to the power-and-electrification theme after fresh operating confirmation; the other revisits a biotech idea only after a new technical trigger.

Today’s Market Watchers Trade

This trade hasn’t filled yet.

Hubbell Incorporated () makes the electrical and utility equipment that helps move and manage power. Its recent results strengthened the case that utility investment, electrification, and data-center demand can support growth beyond the market’s most obvious AI names.

We tried a shorter-dated HUBB call calendar in an April alert and lost 99% of maximum risk on it. The stock and the operating evidence now present a different setup: this March 2027 combo uses a $10-wide call spread financed by a $10-wide put spread, with all four legs sharing the same expiration.

The complete structure was worth a $2.19 credit under Black-Scholes, $2.23 under Bjerksund-Stensland, and $2.25 under a Cox-Ross-Rubinstein binomial model. At a minimum net credit of $2.30, the max gain on 1 contract is $1,230, and the max loss is $770.

Today’s Multibaggers Trade

This trade hasn’t filled yet.

GH Research PLC () is developing GH001, an inhaled formulation of mebufotenin for treatment-resistant depression. Its Phase 2b trial met its primary endpoint, the company has selected doses for a global pivotal program, and it continues to target Phase 3 initiation in late 2026.

We tried to enter GHRS last month, but that order didn’t fill. A fresh Trend & Consolidation signal has now given us another technical green light. This version raises the put spread to the January 2027 $30–$25 strikes, improving the financing while retaining upside through the January $35 calls. January is the furthest listed expiration; it should cover the planned Phase 3 initiation, though not the eventual trial readout.

The complete structure was worth a $1.67 credit under Black-Scholes, $1.69 under Bjerksund-Stensland, and $1.70 under a Cox-Ross-Rubinstein binomial model. At a minimum net credit of $1.75, the max gain on 2 contracts is about $3,603 if the short October calls expire in-the-money (uncapped if they expire out-of-the-money or are bought-to-close before then), and the max loss is $650.

Unless otherwise indicated, all trades are day orders and will be canceled at the end of the day if they don’t fill.

Exiting These Trades

My plan:

A Wild Day In Biotech

Monday brought three big moves in our biotech exposure.

Tenax Therapeutics () plunged nearly 90% after its Phase 3 LEVEL trial of TNX-103 missed both its primary endpoint and its key secondary endpoint. AbCellera Biologics () moved sharply in the other direction after ABCL635 reduced the frequency and severity of menopausal vasomotor symptoms in a Phase 2 trial while maintaining a favorable tolerability profile. 10x Genomics () jumped 11.8%, extending its post-earnings move after the company raised full-year revenue guidance and reported strong early demand for its Atera platform.

It looks as if we’re going to take a total loss on our TENX trade. On ABCL and TXG, however, we notched a partial win and a full win, respectively:

• Calls on AbCellera Biologics (ABCL). Bought the January 15th, 2027 $6 calls for an average cost of $1.27 as part of a 3-leg combo on 5/21/2026; sold half for $3.75 on 8/10/2026. Profit: 196% on premium outlay (86% on max risk). Signal: Multibaggers.

• 3-leg combo on 10x Genomics (TXG). Entered the November 20th, 2026 $25 call/$20–$15 put-spread combo for a net debit of $2.25 on 5/15/2026; exited the put spread for a net debit of $0.20 on 7/22/2026 and sold the call for $31.90 on 8/10/2026. Profit: 1,309% on premium outlay (380% on max risk). Signal: Multibaggers.

Two Lessons From TENX

Clinical-stage biotechs are often binary trades. Some trials will fail, and no amount of screening can make every readout go our way. Even so, TENX offered two useful process lessons.

First, several biotech-focused accounts on our Market Watchers X list were wary of TENX before Monday’s readout. We’re now adding an advanced X search across those specialist accounts to our pre-trade work on clinical binaries. We ran that check on both of today’s candidates.

Second, the put-spread financing deserves more weight in a true binary. With an ordinary stock, a lower put spread can matter because the shares might drift down without collapsing. When a pivotal clinical catalyst fails, the stock may blow through either spread. If both alternatives are $5 wide, the higher-strike spread can collect more premium and reduce the net capital at risk.

That’s what we’ve changed in the oncology trade that didn’t fill yesterday. The company is developing a bifunctional therapy for head-and-neck cancer, with a pivotal interim analysis expected next year. We’ve moved the put spread $5 higher, preserving its width while improving the financing. Today’s second trade is a multi-program biotech with two separate clinical readouts expected later this year, plus regulatory optionality on another program.

Paid subscribers can see both names, the exact option structures, the maximum prices we’re willing to pay for them (determined by calculating the fair value of the options structures), and our pre-set exit orders below. Both trades come from our Multibaggers list, which is a subset of our Market Watchers list comprised of accounts with multiple, documented 100%+ winners.

Today’s First Multibaggers Trade

Head and neck cancer / pivotal Phase 3 catalyst

RSI: 55; Chartmill Technical Rating: 10; Setup Rating: 8; Fundamental Rating: 3.

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The Rally Changed The Next Trade

Photonics and other AI-stack names ripped higher last week. AXT () and Sivers Semiconductors (SIVEF), two names we have positions in, were among the winners. We had already traded them before successfully, as you can see below.

• 3-leg combo on AXT (). Entered at a net debit of $2.45 on 12/29/2025; exited the February $15/$10 put spread at a net debit of $0.20 on 2/9/2026; sold the August $20 call for $28.50 on 3/2/2026. Profit: 1,055% (return on max risk: 338%). Signal: Market Watchers.

• Shares of Sivers Semiconductors (SIVEF). Bought for $2.24 on 4/15/2026; sold half for $6.75 on 5/14/2026; sold one-third of the remaining shares for $7.61 on 5/28/2026; sold the remaining shares for $4.20 on 7/8/2026. Profit: 170%. Signal: Market Watchers.

Then we reentered both on July 31st:

From when our July 31st trades filled through Friday’s close, AXTI had gained about 53% and SIVEF had gained about 38%.

The rally rewarded the bottleneck thesis. It also weakened the case for fresh entries at Friday’s prices. AAOI finished with a Chartmill Setup Rating of 3; the other U.S.-listed optical names we reviewed ranged from 1 to 3. None cleared our Trend & Consolidation Screen.

Existing positions give us plenty of participation if the rally continues. Fresh capital can demand cleaner setups elsewhere.

Two Signals Away From The Crowd

Monday’s alert follows two independent signals. The first came from Friday’s Portfolio Armor Top Names; the second revisits an earlier Multibaggers biotech after its prior order never filled (as regular readers know, our Multibaggers are a subset of accounts from our Market Watchers X list with multiple, documented, 100% winners).

Both candidates cleared Trend & Consolidation Friday with Chartmill Technical Ratings of 9, Setup Ratings of 8, and prices above rising 50-day exponential moving averages. That alignment offers better timing than chasing the AI-stack names that just ran.

The structures match their risks. One uses simple calls with several months of runway; the other sells shorter-dated volatility while retaining exposure beyond a later clinical catalyst. Paid subscribers will find the names, exact structures, maximum entry prices, payoff estimates, and exit plans below.

Today’s Top Names Trade

Food and facilities services / recurring contracts / earnings catalyst

RSI: 46; Chartmill Technical Rating: 9; Setup Rating: 8; Fundamental Rating: 4.

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This Week’s Trade Exits

As soon as I exit a trade, I note that in the comments of the post where I first mentioned the trade; at the end of the week, I try to track them all in one post. Starting in July, 2024, I have also been tracking them in a spreadsheet. These are the trades I exited this week.

Stocks or Exchange Traded Products

None.

Options

1. Long call on Novo Nordisk (). Bought-to-open the August 14th, 2026 $47 call for $1.64 as part of a 4-leg hybrid combo on 8/3/2026; sold-to-close for $1.08 on 8/7/2026. Loss: 12% of max risk (34% on premium outlay). Signal: Multibaggers.

2. Diagonal call calendar on Space Exploration Technologies (). Entered at a $5.75 net debit on 8/4/2026; bought-to-close the short August 7th, 2026 $135 call for $0.20 on 8/6/2026 and sold-to-close the long August 14th, 2026 $125 call for $7.20 on 8/7/2026. Profit: 22%. Signal: Special Situation.

3. Short calls on Novo Nordisk (). Sold-to-open the August 7th, 2026 $51 call for $0.31 as part of a 4-leg hybrid combo on 8/3/2026; bought-to-close for $0.10 on 8/4/2026. Profit: 68% on premium collected. Signal: Multibaggers.

4. Short puts on Precigen (). Sold-to-open the October 16th, 2026 $4 puts for $0.59 per contract as part of a risk-reversal on 5/14/2026; bought-to-close for $0.10 per contract on 8/5/2026. Profit: 83% on premium collected. Signal: Market Watchers.

5. Short calls on Oscar Health (). Sold-to-open the August 7th, 2026 $35 calls for an average $0.60 per contract as part of a 4-leg hybrid combo on 8/5/2026; bought-to-close for $0.05 per contract on 8/6/2026. Profit: 92% on premium collected. Signal: Top Names.

6. Short calls on CLEAR Secure (). Sold-to-open the August 21st, 2026 $75 call for $2.79 per contract as part of a 4-leg hybrid combo on 5/20/2026; bought-to-close for $0.20 per contract on 8/5/2026. Profit: 93% on premium collected. Signal: Market Watchers.

7. Short puts on Palantir Technologies () . Sold-to-open the August 7th, 2026 $110 put for $2.12 as part of a 4-leg inverted hybrid combo on 7/29/2026; bought-to-close for $0.15 on 8/4/2026. Profit: 93% on premium collected. Signal: Bearish Rally Failure.

8. Short calls on CF Industries (). Sold-to-open the August 21st, 2026 $140 call for $7.77 as part of a 4-leg hybrid combo on 4/23/2026; bought-to-close for $0.20 on 8/5/2026. Profit: 97% on premium collected. Signal: Top Names.

9. Short calls on Ouster (). Sold-to-open two August 7th, 2026 $50 calls for $1.71 per contract as part of a diagonal call calendar on 8/6/2026; expired out-of-the-money on 8/7/2026. Profit: 100% on premium collected. Signal: Market Watchers.

10. Long calls on Compass Pathways (). Bought-to-open two August 21st, 2026 $8 calls for $2.52 per contract as part of a 3-leg combo on 1/28/2026; sold-to-close one for $5.40 on 8/5/2026. Profit: 114% on premium paid. Signal: Multibaggers.

11. 4-leg combo on ATI (). Entered for a $1.50 net debit on 3/24/2026; exited the May 15th, 2026 $130–$125 put spread for a $0.20 net debit on 4/21/2026 and the October 16th, 2026 $175–$185 call spread for an $8.00 net credit on 8/6/2026. Profit: 420% on premium outlay (95% of max risk). Signal: Top Names.

Comments

Stocks or Exchange Traded Products

No exits this week. I’ve focused on options instead of our basic strategy, which involves buying stocks and ETFs. You can find the performance of our top names since I launched this Substack here.

Options

Matching Exit Targets To Time Remaining

Two of this week’s exits illustrate the new, tiered approach we’re now using to manage uncapped long options after their paired short legs are gone:

To set an initial exit target for a remaining long option, we use what we call our runner method. For a call, we start with a target stock price equal to the current spot price plus 75% of the current at-the-money (ATM) straddle; for a put, we use the corresponding move lower. We then reprice the option at that target using its current implied volatility, dividend yield, and time to expiration. We compare Black-Scholes, Bjerksund-Stensland, and binomial valuations and use the most conservative model-consistent result as our initial limit price.

• More than 30 days to expiration, or a meaningful catalyst before expiration: Use the higher of the runner target and the trade’s remaining break-even.

• 15–30 days to expiration, with no known catalyst: Give the runner target several sessions. If a higher target has already failed, use 50% of the at-the-money straddle as a step-down reference.

• 8–14 days to expiration, with no known catalyst: Use the runner target without a break-even floor. Give it one or two sessions, then move toward a salvage price.

• 7 days or less to expiration, with no known catalyst: Give the runner target about one session, then use a quote-driven salvage price, lowering it as necessary as we approach expiration.

• Low-delta, out-of-the-money options: Accelerate the timetable when time decay is likely to outweigh the benefit of waiting for the theoretical target.

• Puts: Apply the same framework in the opposite direction.

Both NVO and SPCX had August 14th calls with seven days remaining and no known catalysts during that period. We sold the NVO call at $1.08, realizing a loss on that leg while leaving its put spread open. We sold the SPCX call at $7.20, completing the diagonal for a 22% profit. We’ll apply these time-to-expiration tiers in future nightly reviews while evaluating known catalysts separately.

A Nightly Exit Watchdog

We now track each options entry in a dedicated spreadsheet, including its opening fill, remaining legs, current standing orders, expiration dates and any catalyst-specific instructions. A nearby earnings report, clinical readout or other meaningful event can justify keeping a higher target in place longer than the default time-to-expiration tier would suggest.

A read-only AI watchdog reviews that spreadsheet every night. It flags resolved short legs, approaching catalyst checkpoints, options crossing into a new time-to-expiration tier, and positions that may need new or adjusted good-’til-canceled (GTC) limit sell orders. I then review those positions, calculate any needed targets, place or replace the orders, and report material changes to subscribers as soon as I make them.

This new workflow gives us a consistent nightly process while preserving judgment where catalysts or market conditions warrant an exception.

The Setups Changed

The two stocks in today’s alert now trade roughly 50% and nearly 90% below their respective 52-week highs. That price damage improved the potential payoff from their options; fresh developments made the stocks timely enough to revisit.

Both names were recommended by members of our Multibaggers X list, a subset of our Market Watchers X list populated by accounts with multiple recent 100%+ winners.

The first is a speculative, AI-adjacent power company. Its shares have been cut in half since June. A sizable new military contract gave its technology additional validation, earnings next week offer another near-term checkpoint, and the stock has now triggered our AI Speculative Recovery Screen.

We introduced that screen alongside our AI Profitable Recovery Screen in this AI recovery post.

The profitable screen watches AI-related companies with current earnings; the speculative version watches pre-profit companies whose upside depends more heavily on future execution.

A Regulatory Read-Through

The second stock is a biotech whose lead program faces an FDA decision later this month. Negative FDA briefing materials and an unfavorable advisory committee vote helped push its shares close to 90% below their 52-week high.

A recent favorable FDA advisory-panel vote involving another biotech offers a more constructive read-through. That other program had already received two complete response letters before the panel voted 10–3 in its favor. Today’s candidate faces a more difficult path because its own panel vote went the other way, so we’re treating it as a small binary trade with defined risk.

Two Defined-Risk Structures

The first trade uses a January three-leg combo that preserves uncapped upside while limiting the damage from another collapse. The second uses elevated biotech-event volatility to help finance a September position ahead of the FDA decision.

Paid subscribers will find the names, exact option structures, maximum entry prices, payoff estimates, and exit plans below.

Today’s First Multibaggers Trade

Distributed power / data-center power / military power theme

AI Speculative Recovery Screen trigger. RSI 52, Chartmill Technical Rating 6, Setup Rating 5, Fundamental Rating 4 (we note these stats in trade alerts and in spreadsheets to track how well they correlate with trade performance).

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The Rankings And Technicals Are Starting To Align Again

The S&P 500 and Nasdaq slipped 0.2% and 0.1%, respectively, on Thursday, but both remained solidly higher for the week. Brent crude rose 3.8%, and the 10-year Treasury yield climbed to 4.67%, adding pressure to growth stocks already contending with sharp post-earnings reactions.

This week’s Top Names lean decisively toward the AI stack. The first six names span compute, cloud observability, memory, data-center connectivity and storage. Five of those six have potential returns of at least 80%. The remaining four add exposure to power, genomics and managed care.

The timing is especially interesting. During much of July’s momentum correction, chip and memory names kept appearing in our Top Names, but most failed the technical screens we use for options entries. That kept us from opening new trades on them after the first week of July.

Now the rankings and technicals are beginning to align again. This week’s #1 name returned to the top after reporting strong earnings, pulling back and clearing our technical screens when we reviewed it Wednesday night. Another post-earnings AI infrastructure name ranks fifth, although Thursday’s sharp decline means its technical picture needs fresh confirmation.

Strong Results, Lower Prices

That tension fits the argument we made earlier this week in the AI buildout keeps accelerating. Demand for AI compute, memory, storage, optics and power continues to grow, while the stocks supplying those bottlenecks have become far more volatile.

Portfolio Armor’s ranking estimates potential returns over the next six months. Lower share prices can improve those estimates, all else equal. Our separate technical screens help determine whether the opportunity is ready for an options trade or still needs time to stabilize.

The next confirmation we want is stabilization among the post-earnings leaders. When six-month potential returns, technical strength and attractive option pricing line up, we’ll add exposure. Until then, the rankings can identify the opportunity without forcing the timing.

Our Basic Strategy

Our basic strategy is to buy equal dollar amounts of the Portfolio Armor web app’s top ten names, put trailing stops of ~20% or more on them, and replace them with names from the current week’s top ten when we get stopped out of a position—there are no options involved in this strategy.

Another Use For Our Top Names

We also use our top names in options trades, such as this one we exited earlier this week:

• 4-leg combo on ATI (). Entered for a $1.50 net debit on 3/24/2026; exited the May 15th, 2026 $130–$125 put spread for a $0.20 net debit on 4/21/2026 and the October 16th, 2026 $175–$185 call spread for an $8.00 net credit on 8/6/2026. Profit: 420% on premium outlay (95% of max risk). Signal: Top Names.

A Top Names Performance Update

Before we get to this week’s top ten names, let’s look at the final, 6-month performance of our top ten names from February 5th.

Over the next 6 months, our top ten names from January 29th, 2026 returned -16.41%, versus +13.66% for the SPDR S&P 500 Trust ETF (SPY 0.23%↑).

So far, we have 6-month returns for 163 weekly top names cohorts since we started this Substack at the end of December, 2022.

[Skipping ahead so this post doesn’t exceed email length—you can see the top names returns for every week here]

And as you can see above, our top names have averaged returns of 17.73% over the next six months, versus SPY’s average of 9.66%. You can see an interactive version of the table above here, where you can click on each date and see a chart showing each of the holdings that week.

This Week’s Top Names

Below are Portfolio Armor’s current top ten names as of Thursday’s close.

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What Iran Thinks It Has Won

Five months of American and Israeli bombing have devastated Iran without forcing Tehran to surrender control of the Strait of Hormuz. Iran’s leaders still believe they can decide who passes, on what terms, and at what price.

Their latest draft arrangement with Oman makes that confidence explicit. As ZeroHedge reported Thursday, commercial vessels would enter the Persian Gulf through an Iranian-controlled route and leave through an Omani-controlled one. Iran’s parliament is reviewing additional terms that would bar U.S.- and Israel-linked vessels and impose penalties on others. Meanwhile, the Houthis have attacked Saudi tankers in the Red Sea and threatened the main bypass to Hormuz.

The gap between military damage and political compulsion is now the core problem. Iran has absorbed enormous losses while preserving a public claim to sovereign control over the chokepoint. President Trump needs a threat—or a bargain—that changes that calculation. He needs a flag or a fleet.

The Missing Ingredient Is Legibility

On March 22nd, in our original Hormuz post, we argued that America’s ability to reopen the Strait would shape more than the price of oil. Failure would advertise the limits of U.S. military supremacy and accelerate the shift toward a multipolar order.

The war since then has clarified the challenge. Airpower can destroy fixed sites, aircraft, air defenses, command nodes, and known missile infrastructure. It can’t occupy terrain, search every bunker, seize senior officials, or replace the flag over a strategic position.

Israel has already acknowledged commando operations inside Iran for intelligence, target designation, and tactical deception. The United States and Israel have also discussed special-forces missions against underground nuclear sites. Those missions improve access and targeting. Their secrecy limits their coercive value.

Tehran can still tell its population that the regime survived, no enemy publicly holds Iranian territory, and Iran controls the Strait. That narrative supports its strategy of outlasting Trump. His aversion to American casualties is well known, Gulf governments want de-escalation, and the war has drawn down U.S. stocks of standoff weapons and interceptors.

A credible escalation now has to threaten something Iran’s leaders value more than another military installation. It also has to be visible enough that they can’t disguise the loss.

A Flag

The most literal answer is territorial. Abu Musa, Greater Tunb, and Lesser Tunb are three strategic islands near the shipping lanes. Iran garrisons them, while the United Arab Emirates claims all three.

A coalition operating with Emirati consent, potentially built around Israeli special-operations units and regional forces, could seize one or more of the islands, destroy hardened military sites, and raise the Emirati flag. Air-backed ground forces could also capture IRGC officers and intelligence that airstrikes leave behind. The image would be unmistakable: the regime had lost Iranian-held territory and failed to protect its own forces.

The obstacles explain why it hasn’t happened. Taking a small island may be feasible; holding it against Iranian missiles and drones would be harder. A foreign seizure could also rally Iranian nationalism and make compromise politically dangerous for Tehran. And the UAE has declared its neutrality, withholding its territory and airspace from attacks on Iran. An Emirati flag can’t provide legitimacy without Emirati approval.

A tightly limited operation could reduce those risks. Removing an Iranian garrison and transferring administration to the UAE could be paired with an immediate ceasefire offer: free passage through Hormuz in exchange for an end to further ground operations. That would give Trump a credible escalation ladder without committing American troops to a march on Tehran.

A Fleet

The diplomatic alternative would make Iran’s concession legible while giving its leaders a face-saving explanation for it.

The Oman framework contains the beginnings of such an arrangement, but its reported terms would formalize Iran as the Strait’s gatekeeper. Iranian permission, selective bans, and tolls would convert a commercial shipping lane into an instrument of Iranian sovereignty.

A broader settlement could transfer navigation and enforcement to a multinational force that includes the countries with the largest stake in open passage: Oman and the Gulf states, India, China, Russia, the United States, and European allies. A United Nations or Omani mandate could guarantee transit without Iranian permission. Any service fees could go to a joint maritime authority rather than Tehran.

China and Russia have already conducted repeated naval exercises with Iran near the Gulf of Oman. Their participation would give Tehran a way to describe the settlement as internationalization rather than surrender. It would also give Washington something it currently lacks: guarantors with leverage over Iran and an interest in uninterrupted energy flows.

Their participation would probably carry a price. Russia might press for changes in U.S. support for Ukraine; China might seek movement on Taiwan. Those demands would reshape separate balances of power and provoke resistance from allies and Congress. They would have to be weighed against the economic and military cost of an indefinite blockade. Narrower currencies—sanctions relief, energy access, formal naval roles, or recognition as guarantors—may be enough.

The fleet would also need a Red Sea component. Renewed Houthi attacks show that reopening Hormuz alone won’t secure the alternative route around Arabia. A durable agreement must cover the Houthis as well as Iran.

The Order Behind The Outcome

The two paths would reopen the Strait on very different terms.

A flag would be an attempt to preserve the old American-led order through coercion: assemble a coalition, take a strategic position, and force Iran to concede. A fleet would reopen Hormuz by acknowledging the multipolar order our March post warned was emerging. China, Russia, India, and the Gulf states would become co-guarantors of a trade route the U.S. Navy once secured.

The next durable settlement will tell us whether the United States can still enforce passage on its own terms, or whether global trade now needs a concert of powers. Hormuz may reopen either way. The flag over its islands—or the flags in its escort fleet—will tell us what replaced the postwar order.

A Chip Leader Clears Our Screens Again

Throughout most of last month’s momentum correction, chip and memory stocks continued to appear among Portfolio Armor’s Top Names. After the first week of July, though, we didn’t enter any new trades on them. Their shares no longer passed our technical screens, which are designed in part to keep us from catching falling knives.

Meanwhile, the demand picture kept strengthening. As we wrote yesterday, earnings and management commentary across the supply chain continue to point to accelerating AI infrastructure spending.

A Turning Point For AI Stack Top Names

Wednesday night marked an important change. A chip stock was our #1 name, but it also had two other factors in its favor: its shares had pulled back after a strong fiscal Q2 report, and they passed our technical screens again.

We’re entering a trade on that chip stock today with a particularly attractive structure. It goes out far enough to cover the company’s next two earnings reports, but it pays us up front. As long as the stock doesn’t fall by more than 20% between now and February, the trade will be profitable. And if the stock hits Portfolio Armor’s potential return estimate for it, we can more than double the amount of money we’re risking here.

We’re also placing a short-term earnings trade today. Paid subscribers will find both structures, our required entry prices, and our pre-set exit plans below.

Today’s Top Names Trade

Theme: AI infrastructure and semiconductors.

RSI: 47; Chartmill Technical Rating: 7; Setup Rating: 7; Fundamental Rating: 6 (we note these stats in trade alerts and in spreadsheets to track how well they correlate with trade performance).

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