Everyone's packed in one room with one exit door

Don Kaufman here. 

There isn’t a magnificent seven anymore…

Maybe there’s four stocks in here that really make a difference. 

We're gonna do some higher math over here, okay? 

NVIDIA moved $170 billion in market cap today. Most of the crap in the S&P 500 isn't worth $170 billion.

You want to know why the market breadth is getting worse and worse? Because you have an entire generation right now that is losing all of that diversity in the marketplace.

Everybody is packed towards NVIDIA. If the S&Ps started to back off a little bit, somebody actually tries to move for that door.

The Room With One Exit

Right now, you're looking at a room just packed with people, and they're literally following each other, but there's only one door in that room. 

The structural integrity of the marketplace is what I call into question when you see that one underlying defeats the entire purpose of the other 500 in there.

I ran a scan this morning - there's only 16 products in the entire S&P above the $500 billion market cap. 

NVIDIA's moving today the market cap of all of Disney. It's moving the market cap of all of McDonald's. Put into perspective how stupid large that really is.

The design of all index products is so that you simply do not have single stock risk. Diversification - is that like a bad word now? But you've lost that. 

And you have single stock risk today in the S&Ps. I don't care whether you're bullish or bearish - this is where things get incredibly dangerous.

Holy crap, what other signs do you need? I don't like products when everybody's in on it. Right now, to be honest, everybody's in on this concentration trade.

The Real Trade Right Now

While everyone's shoving money into NVIDIA through options order flow, I'm looking at XLP consumer staples puts. 

I’m long the September $82 puts on XLP, 66 days out. 

When this rotation happens - and it will happen - you want to be positioned for when the crowd tries to move for that exit door. And when that happens, it's not gonna be orderly. It's gonna be a stampede, and the people at the back of that room are gonna get trampled.

It's dangerous times right now. 

Very dangerous times.

But here's the thing about dangerous times - they create the biggest opportunities.

And when markets get this concentrated, this unstable, you need setups that work fast. You can't wait around for some perfect diversified play when the whole structure could crack any day.

That's exactly why I'm hosting a live trading session this Thursday, July 17th at 2PM ET. 

I want to show you the exact setup I've been using to flip trades in 24 hours or less - what I call 'Magnet Moves.

To your success,

Don Kaufman