A short recharge this week before getting back to the charts and the community. Looking forward to being back soon and diving into the next opportunities together.

No changes to the Cauldron this week. Portfolio allocations remain the same for now as we continue to let current positions play out.

What a theme in space names we have. The ripper across the sector has been truly impressive. I came across a few charts on Twitter and in my equity research subscriptions, and I wanted to share some insights. Active large-cap managers are having another rough year. Only about a quarter of funds are beating the S&P in 2026 so far, right back at the low end of the range we’ve seen since 2008. The pattern is very familiar. Every time leadership narrows into a handful of megacaps or a dominant theme, benchmark-hugging active funds struggle to keep up. For allocators, this is another reminder that “stock-picking alpha” has mostly shown up as factor tilts and fee drag, with very little persistent outperformance.

Positioning is no longer low where it matters. Deutsche Bank’s indicator shows overall equity exposure around the 50th percentile since 2010, but large‑cap and large‑cap tech exposure are well above that, in the mid-80th to 90th percentile range. In other words, investors are roughly neutral on broad risk but very overweight in the U.S. mega‑cap complex, which is doing most of the lifting for the index. That leaves plenty of “room” in under‑owned parts of the market, but it also means any wobble in large‑cap tech is likely to hit everyone’s P&L at once.

Barron’s is literally splashing “Too Big To Buy” across the cover as quantum/AI mega‑cap IPOs roll through the tape, which tells you how far the hype cycle has already run. When front‑page stories start warning about size, valuation, and concentration risk in the same breath, it’s clearly very mainstream already. That doesn’t call the top on its own, but it does underscore that these deals are being sold into an environment where expectations are through the roof, and the burden of proof (love how that rhymes) is maybe shifting back onto the huge “f” word… fundamentals.

I remain cautiously optimistic; however, I am increasingly concerned as I scroll through my X feed, which is almost entirely filled with randoms posting the next AI / Photonics / Memory stocks / AI supply chain participants as 10x opportunities. This is getting awfully bubbly for me, and it feels like we are getting long in the tooth for this mini-cycle. As such, I'm not chasing any of these names and will wait for fear to drive a correction.

Added LIF at $38 during the week, after we added it to our watchlist at the beginning of May. Ultimately, in our view, the stock was oversold following softness in volume growth caused by a technical issue that made it difficult for Android users to sign up for the platform.

Now, while this does place a grey cloud over management's ability to execute, given their historical performance to date, I am willing to give them a pass this time and continue to monitor the stock closely.

The stock is now back trading at the same level it was at the beginning of 2025, despite EBITDA and Net Income both doubling during this time, before the stock nearly tripled, running from ~$40 to a peak of ~$110 in October last year.

Now entering a long-term demand area, I like the risk/return trade-off.

Looking for a TP1 level of $65, with an SL set below $32.50.

The stock got smacked last week and was off ~20% after reporting Q3 earnings on weak performance from the company's low-cost TurboTax product, which saw revenues decline in the mid-teens. The company also announced it would reduce its workforce by 17%, which, to me, seems like it should be highly earnings accretive. 

However, INTU's Q3 earnings were strong in all other respects, with revenue growing 10% YoY, delivering an earnings beat whilst simultaneously raising full-year revenue and EPS guidance.

At these levels, the stock is trading at ~13x 1-year forward P/E, compared with its 10-year historical average of ~30x. That means the stock trades at a valuation multiple more than 50% lower than Constellation Energy's (CEG), a utility. I know the world is changing, but that maths simply doesn't add up!

Even if TurboTax is completely disrupted, the stock's current valuation does not reflect the company's 10% top-line growth rate or its market-leading positions across the small-business tax, accounting, and credit-monitoring markets. Even if this stock only returns to a 20x forward P/E multiple, which is still 33% lower than its historical average, it would trade at $450+, representing ~40% upside for a name that already has a lot of downside baked into the price.

I am doubling down here around the $320 level, bringing my average cost down to ~$350, and am updating my TP levels to $450 and $476.

I'm using this strength in the coal space, following a Chinese coal mine explosion, to exit, as the stock looks weak, and our thesis is not playing out. I am looking to accumulate cash and increase concentration in the portfolio. The stock is looking weak, near-term upside is limited, and I see far more downside risk from here. The stock only bounced ~6% overnight, while many of its comps were up double digits, which says enough. Cutting at $14.80 vs a $16.30 entry for a ~16% loss.

Whilst oil markets continue to whipsaw on US/Iran news flow, and my apathy towards conflict headlines continues to grow by the day, it seems the energy sector is starting to lose momentum. This probably shouldn't be the case, with energy prices likely to remain elevated for a prolonged period even after a conflict is resolved, as infrastructure is repaired and supply chains normalize.

That said, I am putting in an SL at $180, firmly in profit, before looking to tactically re-enter in the future.

Recap: Last week, we saw our SOL short idea dump -10% from our 92.63 entry at Crypto Clarity peak. This week, we got really close to the 88.68 level I mentioned to re-short in the most recent newsletter issue, front-running us at a local peak of 88, then making a new local low at 81.6. 

SOL is consolidating now, and I still have a bearish bias. I am still waiting for this short idea final TP (79.32) to hit before this remotely becomes a range to flip long. Not that I will. Lol. 

Looking ahead, if we tag my reach target of 79.32 from two weeks ago, that leaves us at 76.63 locally, then basically thin air to 68. Stay away from longs, please, until we see something of substance in terms of a bounce. 

If we break down to my direct reach target of 79.32, I would watch for a reaction at 83 to short initially. If there is no real reaction there, we will look to 88.68.

Should we come up to the 88.68 level, whether before or after 79.32, I would start scaling into a heavier swing short while targeting the low 70s into the 60s. Likely would include a DCA order around 91. 

TL;DR: We will be longing the PUMP spot only at CMP 0.0018, with a DCA bid at 0.0015. Our stop-loss is 0.001269, with specific targets of 0.00336 and 0.00454 for now.

This is not one of my normal calls; this is a longer-term spot idea setting up for a potential run-up after this lengthy accumulation phase price is currently in. PUMP (no intro needed) is a revenue-generating, somewhat sustainably profitable, cash-flowing platform. Similar to HYPE, but it is a governance token, and there isn’t any staking/flywheel infrastructure provided by Pump, afaik.

That said, PUMP is a solid beta to HYPE within the “revenue-generating” meta if that ends up mattering again. A lot needs to be fixed and communicated within the PUMP eco to bring back positive attention. But unless you think we will never see meme season again, you should probably own some of this token. 

To gauge your expectations, this idea includes a 30% stop-loss (ik), but the potential for an ATH on the token is not out of the picture, and I will likely look for another entry should our TPs be hit. 

TL;DR: We will long LIT at 1.10 with a stop-loss at 1.014, targeting 1.39 and range highs at 1.48. 

This is another name that can hit ATHs under the right conditions. LIT and PUMP platforms are both winning enough to justify strong outperformance periods during bullish conditions when more retail participants begin to return. From what I can see in daily volume metrics, this isn't just opinion. 

Obviously, I want to short this ticker, but I am more interested in the potential of a long idea should we get a reaction from this wide local range low. This is due to the recent structural break on the HTF (the first of its kind). 

LIT has been in a long downtrend since TGE and will likely show a residual move following this week’s break of structure and local outperformance. I would be surprised if Lighter didn't try to drive this higher with a mixture of farming incentives and supply control. 

Some like to call this a HYPE beta, too. 

However, I would like to identify the weak lows set at the 0.80-0.85 range. If we do not see a strong reaction at our bid level, I will look to flip bias and target the 0.80-0.85 range with a short position. 

I can see us bouncing hard from the low range and either following through to our TPs or stopping us in BE after being in profit. Then we would consider a short position if we start to form a bearish LTF structure.

An important identification from me is the daily bearish engulfing that just closed yesterday, with -15% performance on the day. This leads me to believe that we could see a continuation to the downside after what I believe will be a positive reaction at the local range low of 1.10.

If we break down, then LIT will likely be downtrending for a long time due to heavy trapped bulls and low conviction around the product. 

It’s been a while since we discussed HTF VWAPs. We are trading above the yearly VWAP in the upper quadrant. This is bullish as long as we hold above the yearly VWAP. The quarterly VWAP is holding so far, with the previous quarter's VWAP providing support. I expect these two areas to provide decent support in the coming days. However, the monthly VWAP tells a very different story. May’s VWAP will end in the next few days.

If we close like that on the monthly chart, we will be outside the previous month (i.e., May’s VWAP) and below STD-1. This is bearish in the short term, since the lower border of the Monthly VWAP will act as resistance. In short, the price needs to reclaim $77,200 for a continuation up to $81,000. Otherwise, we are going to correct again to $75,000 to test the lows one more time.

Regarding the trades

We are already positioned for a breakout, with a long from around $75,200 and a stop-loss at $75,000. If this gets stopped out, I'll just look for the trade scenario mentioned below.

The only trade I see right now is a sweep of these lows at $73,200, followed by a close back inside $74,590 on the H1 candle. This would trigger a long for me with stops placed below the low, targeting $81,000.

AAVE caught my interest yesterday after a few tweets about it in the Money Glitch Chat. The fundamentals are looking strong, but that isn't reflected in the price yet, similar to NEAR, which had solid news before its chart caught up.

Looking at the chart, we haven't retraced the October 10th wick, which currently sits at $80. I'm looking for a liquidity sweep of this $80 level, followed by a daily close back above it.

I've highlighted this on my chart and plan to take the trade. It's a very similar setup to the $HOME play shared earlier.

We discussed NEAR/USDT in our last newsletter. Unfortunately, we were front-run, but I'm chasing it by bidding at the 13-day EMA, which aligns with a daily support region. At the moment, it's trading at $2.30. I have layered bids from $2.30 down to $2.00, with a stop-loss set on an H4 close below $1.93.

I am also betting on RHEA, which serves as NEAR’s beta. I will start accumulating in the $3.5M to $2M market cap range and will cut the position if it falls below $1M. If NEAR gains the kind of momentum that ZEC or VVV saw, its betas will pump hard. My target for RHEA is a $10M market cap.

The chart below illustrates these setups:

Last week, we took profits and scaled out of our remaining Worldcoin shorts as we noted a potential double-bottom SFP forming. This made for impeccable timing, as the double-bottom swing-failure pattern did, in fact, play out. Resulting in a rally of over 83% from the lows.

Our thesis for Worldcoin remains the same, and is very simple:

WLD has no reason to exist, yet it has massive supply inflation.

At this time next year, the WLD supply will have increased by another 2.26 billion tokens, valued at around $858 million at today’s prices.

We’ll be looking to short WLD on either a 4-hour or higher double top SFP, or a successful daily sweep of the $0.45 liquidity level.

The invalidation will be a daily close above the sweep candle high, with targets down towards $0.36, $0.326, and $0.237.

This trade can also be taken as part of our usual hedge bets, where we limit our risk to general market upside by entering longs on strong coins like TRX or HYPE, in equal quantities to our weak altcoin shorts.

Similar to Worldcoin, Ondo also saw a major pump recently.

Ondo is approaching the weekly resistance range of $0.475 to $0.503.

While it’s looking somewhat weak already, with a big wick forming last friday, it has yet to take out the May 9th high at $0.487.

I’m looking for ONDO to keep grinding up towards the resistance and sweeping the highs, at which point we’ll enter a short.

The invalidation is a daily close above the sweep candle high or a weekly close above $0.51.

Major targets for this are at 2RR, $0.387, $0.348, and $0.28.

This idea is cancelled if ONDO plays out a major dump from this potential double top, before we get the sweep we are looking for.

Binance coin remains one of the strongest tickers in the crypto space, something that’s held true ever since its initial rally in 2021.

This cycle, it had somewhat fallen out of favour, but its strength remains. As such, it should remain on any crypto participant’s watchlist.

We’re taking a very big picture look at how we want to position ourselves on BNB.

While BNB has held strong, it recently swept local highs and is now consolidating below support.

This brings with it some expectation of lower prices, likely targeting local lows like $560 in the shorter term, as well as the $500 region on a bigger-picture basis.

Given BNB’s sheer strength, it is a top contender for long-term spot buys and swing trades. The mid-$400s would be the first level at which I would be interested in such a buy.

If BNB manages to gain momentum and flip $730 into support, we could look for longs towards $850, $990, and $1300. Though this seems unlikely for now.

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