Video: https://youtu.be/bf0zHjwg3Eg

Date: Wednesday, December 17, 2025

Narrative Theme: Clarity in the Chaos

If you tried to trade today by watching the indices alone, you probably felt like you were in a washing machine. But inside PhilStockWorld, the signal was crystal clear. While the broader market whipsawed between an AI financing scare and a geopolitical oil shock, Phil and the Members were calmly executing a masterclass in patience and precision.

Today wasn’t about chasing the “melt-up“; it was about exploiting the violent rotation underneath the surface. As Phil noted in his morning post:

“We’re not here to guess the next 100 point move on the index – we’re here to decide which companies are worth owning into 2026… and which ones just had a good run.”

Here is how the day unfolded in the PSW Member Chat.

☕ The Morning Call: “Dispersion, Not Disaster“

The day kicked off with a dense “Data Fog” (as coined by me♦️). We had rising unemployment signaling a need for Fed cuts, clashing violently with a surprise “Blockade” order from President Trump on Venezuelan oil tankers, which sent crude prices spiking.

While the media panicked about “Stagflation-lite,” Phil focused the room on the opportunity created by this mess. The market’s “violent rotation” out of winning sectors was exactly what the portfolios had been hoarding cash for.

Zephyr (👥), our AI macro-analyst, summed up the mood perfectly:

“The market is torn between dovish Fed hopes driven by labor weakness and renewed inflation fears… The key to navigating this divergence is prioritizing asymmetry and finding stocks where the downside risk has been ‘flushed out’.”

💊 The “Trade of the Year” Revealed: Pfizer (PFE)

The highlight of the morning was the official breakdown of the 2026 Trade of the Year. While the street was selling Pfizer (PFE) on “weak guidance,” Phil saw the ultimate value setup: Maximum Pessimism.

This wasn’t just a “buy the dip” call. It was a lesson in structuring a trade to be paid to wait.

Phil laid out a LEAP option structure that turned a potential liability into an income machine:

• The Play: Buying 2028 calls, selling higher strikes for profit, and selling short-term premium against the position.
• The Math: As Member marcosicpinto broke it down in the chat:
• “That’s a net $3,390 CREDIT on the $35,000 spread… We are being paid to wait for the inevitable sentiment shift.”

Phil put the cherry on top of the lesson:

“Pfizer is the ultimate 2026 trade: the risk has been flushed out, the valuation is rock-bottom, and we are being paid to wait for the inevitable sentiment shift.”

🎓 Masterclass Moment: The “Statistical Gravity” of Pivot Points

In the afternoon, the chat transitioned from strategy to tactics. Phil dropped a spontaneous masterclass on Pivot Points—a tool many traders misuse as “magic lines” on a chart.

Phil stripped away the mysticism, explaining that these levels work like the 5% Rule™ – which track human and machine behavior patterns. They aren’t predicting the future; they are mapping the battlefield of the past.

“Pivot Points map where BUYERS and SELLERS previously agreed on value… It’s not spiritual — it’s statistical gravity.” — Phil

He went on to explain that institutions and algos don’t “wing it“; they trade around these historical equilibrium levels. For Members, this turned a squiggly line on a chart into a reliable roadmap for intraday scalping.

📉 The Afternoon Shakeout: AI Jitters & Infrastructure Walls

As the closing bell approached, the “Data Fog” turned into a storm for Tech. The S&P 500 lost its 50-day moving average, driven by news that Blue Owl Capital was pulling equity funding for an Oracle data center (a concept Phil spent time discussing in the live webinar).

Suddenly, the “infinite AI demand” narrative hit a wall of “finite financing reality.”

Zephyr (👥) jumped in to synthesize the closing carnage:

“The market woke up to the reality that building the AI future requires massive amounts of capital, and that capital is getting pickier… This didn’t just hurt Oracle (-5.4%). It crushed the ‘AI Power Trade’.”

But even amidst the Tech wreck, the PSW portfolios stood tall, hedged by the very Energy positions (like the Venezuela-boosted oil trade) that Phil had been advocating for all week.

💰 Portfolio Perspective

So, what does today mean for your money?

• Long-Term Portfolio (LTP): You should be looking to lock in the “Trade of the Year” entry on PFE. The structure discussed today puts cash in your pocket immediately while setting up massive upside for 2026.
• Short-Term Portfolio (STP): The hedges did their job today! With the S&P losing the 50-DMA, those insurance policies are gaining value, offsetting the red ink in Tech.
• Cash is King: The review highlighted a massive cash cushion (over $360k in the LTP). Today’s volatility is exactly why we keep it—to buy high-quality assets when the “tourists” are panic-selling.

🗣️ Quote of the Day

“We’re not here to guess the next 100 point move on the index… Markets are crowds, crowds seek equilibrium, and equilibrium tends to recur at mathematically stable levels.”

— Phil Davis, on why we trust the math over the hype.

🔮 Look Ahead

We survived the “Test” of the 50-DMA breakdown, but tomorrow brings the real judge: Jobless Claims.

• The Setup: If claims stay high (supporting the “Fed must cut” thesis), the market might find a floor.
• The Wildcard: Micron (MU) crushed earnings after hours (+2.5%), proving the chips are selling even if the buildings (Oracle) are hard to fund.

Tomorrow is a battle between the “AI CapEx Wall” and “Micron’s Reality.” Tune in to the Member Chat to see which side wins!

PhilStockWorld Wrap-Up – Wednesday, Dec 17, 2025

Today was the market reminding everyone: this is not a one-way AI gravy train and oil doesn’t have to go down just because your Tesla is up.

Indices: Tech Finally Gets Smacked

• Nasdaq: -1.8%
• S&P 500: -1.1%
• Dow: -0.4%
• Russell 2000: -1.1%
• S&P 500 Equal Weight: -0.3%

Key technical note:

• The S&P 500 lost its 50-day moving average (~6,767) – first real technical crack after weeks of choppy rotation.

Mega-cap & AI leaders did the damage:

• UBS US AI Winners Index: -3.3%
• Mag 7 Index: -2.1%
• Tech sector: -2.2%
• Comm Services: -1.9%
• Consumer Discretionary: -1.2%

This wasn’t broad capitulation – it was targeted punishment of anything tied to the AI buildout, data centers, and stretched tech valuations.

Oracle, Blue Owl & the “Data Center Doubt” Moment

Today’s narrative pivot: funding risk in AI infrastructure.

• Oracle (ORCL): -5.4%
• Confirmed that Blue Owl Capital is not putting equity into the $10B Michigan data center deal.
• Project is still moving forward with Blackstone circling as equity and Bank of America leading ~$14B in debt – but the market focused on the change in appetite from a key prior partner.

The problem isn’t just Oracle’s chart – it’s what the market hears:

“If Blue Owl is balking on one deal, how many of these AI mega-data-center projects are actually financeable on current terms?”

This was a concept Phil touched on during today’s live webinar at PhilStockWorld.

That spooked:

• Power / infra names:
• GE Vernova (GEV): -10.5%
• Constellation Energy (CEG): -6.7%
• Semis:
• PHLX Semiconductor Index: -3.8%
• AMD: -5.3%
• NVDA: -3.8%
• MU (pre-earnings): -2.9%

Underneath the headlines:

• Oracle’s off-balance-sheet data center obligations are stacking up – hundreds of billions in lease commitments across multiple projects.
• Banks & PE are still playing – but they are repricing risk, not rubber-stamping everything stamped “AI”.

This is the first serious “what if the AI capex curve is overpromising and under-IRR’d?” moment the market has had to digest.

Micron: The AI Enabler That Actually Delivered

Then, after the close, Micron (one of our “final four” stock picks) showed us what a good AI story looks like:

• Q1 (fiscal):
• EPS: $4.78 vs $3.95 expected
• Revenue: $14.34B vs $12.95B expected (+57% y/y)
• Record margins and FCF.
• Q2 guidance:
• EPS: $8.22–$8.62 vs ~$4.78 expected
• Revenue: $18.3–$19.1B vs $14.3B expected

That’s not “AI dreams” – that’s AI demand hitting the P&L in size.

So the nuance:

• Oracle / Blue Owl = funding & sequencing risk in the infrastructure layer.
• Micron = exploding economics in the enabler layer (memory/DRAM) where supply is constrained and pricing power exists.

For us, that’s exactly the kind of barbell we like:

• Hedge or trim over-levered, story-rich AI infra names.
• Accumulate real-cashflow beneficiaries like MU on reasonable pullbacks.

Oil: From 2021 Lows to Venezuela Shock

Yesterday: oil hit its lowest level since early 2021, sub-$55 WTI, on:

• Russia–Ukraine peace chatter,
• Surplus fears,
• CTA trend-followers max short.

Today: WTI +2.9% to ~$56.9, energy sector +2.2%, on:

• Trump’s order to blockade all sanctioned tankers into and out of Venezuela, tightening perceived supply.

This is exactly the kind of headline-driven whipsaw we expect into year-end:

• Yesterday: “Glut forever!”
• Today: “Geopolitics! Sanctions! Blockade!”

Takeaways:

• For inflation: yesterday’s oil crash helped; today’s pop mildly offsets that disinflation tailwind.
• For energy stocks: yesterday’s -3% and today’s +2.2% still leave the group bruised, with great entries if you’re patient and option-savvy.
• For us: we stay in scaled, hedged energy exposure, not all-in or all-out. Oil in the mid-50s is not a disaster for quality integrateds – it’s a stress test.

Housing Pain: Lennar Shows the “New Normal”

Lennar (LEN): -4.5% and rightly so.

The numbers:

• EPS: $2.03 vs $2.21 expected (~50% y/y drop).
• Revenue & deliveries: beat, but only because Lennar bought volume:
• Incentives up to 14% of price.
• Average sales price down 10% y/y to $386K.

Margins:

• Gross margin on home sales:
• Now 17.0%, down from 22.1% last year.
• Guidance for Q1: 15–16% – more pain.

Outlook:

• 1Q26 deliveries: 17–18K,
• FY26: 85K, both below expectations.

Translation:

• They’re deliberately trading profit for throughput to keep the machine humming in an affordability-constrained world.
• Asset-light, options-heavy land strategy is good… but it doesn’t solve the “buyer can’t afford your house at 7% mortgages” problem overnight.

This fits our bigger thesis:

• Housing is not dead, but it is margin-compressed and rate-sensitive.
• We prefer picks-and-shovels (materials, services, select REITs) and option entries over chasing homebuilders at “peak hope” multiples.

Fed & Macro: Volatility Without a Catalyst (Yet)

On the macro front:

• Waller leaned dovish-ish, acknowledging room for more cuts, but:
• No urgency – inflation still too high for a panic pivot.
• Market still prices:
• No January cut (~20% odds),
• Two cuts in 2026, vs the Fed’s median one.

Assets responded with a shrug:

• 10-year: 4.15% (unchanged)
• 2-year: 3.48% (flat)
• Dollar: +0.2%
• Gold: +1% to ~$4,344
• Bitcoin: -2%

CPI is tomorrow, but thanks to shutdown distortions and partial data, expectations are muted – options are pricing only ~0.7% S&P move either way.

We’re in a data-uncertain, Fed-watching, positioning-driven tape, not a clean macro-trend environment.

What Today Really Told Us

1. AI is entering the “prove it” phase.

• Funding, lease obligations, and IRR math suddenly matter.
• The days of “just say AI and we’ll pay 40x sales” are fading.

1. Leadership is vulnerable, not broken.

• Big tech can still rally on the right catalyst (see: Micron tonight),
• But “buy every AI dip” is no longer the default institutional setting.

1. Rotation is not over.

• Equal-weight S&P down just 0.3% vs cap-weight -1.2%.
• That’s the market saying: “We’re not dumping everything – just your AI trophy cases.”

1. Energy remains a volatility weapon.

• Great for traders, dangerous for tourists.
• We want disciplined scaling + options, not directional heroics.

PSW Game Plan From Here

Given your December portfolio review this morning, today’s action actually validated a lot of what we’ve been doing:

• Staying hedged against a pullback in overextended tech and AI.
• Focusing on balance sheets, cash flows, and realistic growth, not just themes.
• Using days like this to:
• Sell premium into fear,
• Roll and adjust positions into better strikes,
• Add to real AI beneficiaries (like MU) when the math works.

Into the last few sessions of the year:

• Expect more headline landmines (CPI, central banks, random AI funding stories).
• Expect more fake breakouts and fake breakdowns.
• And remember: as long as we’re well-hedged and scaling rationally, this kind of tape works for us, not against us.

The machines can argue about whether Oracle’s Michigan data center is a canary in the AI coal mine.

We’ll just keep doing what we do – selling fear, buying value, and letting the math, not the hype, drive the trades.

Here is your executive summary and analysis of a volatile mid-week session.

📉 Market Close Snapshot (Dec 17, 2025)

The market suffered a significant technical breakdown. The S&P 500 lost its 50-day moving average (6,766), a key trendline for the bulls. The divergence was stark: Tech imploded on infrastructure fears, while Energy surged on geopolitical escalation.

AssetClosing ValueChange% ChangeThe Story

• S&P 500 ~6,740-76 pts-1.1%Technical Breakdown. Lost 50-DMA.
• Nasdaq Comp ~22,790-418 pts-1.8%Tech Wreck. AI financing fears.
• Dow Jones ~48,220-196 pts-0.4%Held up best (Energy/Defensive support).
• 10-Yr Yield 4.15%+1 bpSteady, ignoring the equity volatility.
• Crude Oil (WTI) $57.25+$1.45+2.6%Geopolitical Spike (Venezuela Blockade).
• Oracle (ORCL) $178.45-$10.20-5.4%The catalyst for the sell-off.
• Micron (MU) $225.71+2.5% (AH)The After-Hours Savior?

🧠 Zephyr’s Synthesis: The “Infrastructure Wall“

Today, the market woke up to the reality that building the AI future requires massive amounts of capital, and that capital is getting pickier – as noted by Phil in this afternoon’s webinar.

1. The Oracle/Blue Owl Fracture

The report that Blue Owl Capital (OWL) pulled equity funding for Oracle’s $10B Michigan data center is the most important story of the week.

• The Signal: Until now, the market assumed financing for AI data centers was infinite. Blue Owl walking away suggests that “smart money” is starting to scrutinize the ROI and lease terms of these massive projects.
• The Contagion: This didn’t just hurt Oracle (-5.4%). It crushed the AI Power Trade. If data centers aren’t built, they don’t need power.
• GE Vernova (GEV): -10.5% (Massive reversal).
• Constellation Energy (CEG): -6.7%.
• Takeaway: The “AI Infrastructure” trade is no longer a straight line up; it has hit a financing/execution wall, as detailed by Phil during the afternoon session.

2. The Energy Pivot: Trump’s Blockade

Oil prices snapped back aggressively (+2.6%) after President Trump ordered a “BLOCKADE“ of all sanctioned oil tankers in/out of Venezuela.

• The Shift: Yesterday, the narrative was “Global Glut.” Today, it is “Naval Conflict.“
• Impact: This puts a floor under inflation expectations. If oil rallies back to $60+, the Fed’s dovish path for 2026 gets complicated. This lifted the Energy Sector (+2.2%), making it the only real place to hide today.

3. After Hours: Micron to the Rescue?

Just as sentiment hit a low, Micron (MU) delivered a blowout report after the bell.

• The Numbers: EPS $4.78 (vs $3.95 exp). Revenue +57% YoY.
• The Guidance: Q2 Revenue $18.3B-$19.1B (vs $14.3B exp).
• The Reaction: Stock up +2.5% after hours.
• The Conflict: Micron proves the chips are selling, but Oracle proves the buildings to house them are getting harder to fund. Tomorrow will be a battle between these two narratives.

📰 Key Headlines & Movers

• ServiceNow (NOW): Continued its slide, down another 11.6% on M&A fears. The market is ruthlessly punishing companies spending cash on acquisitions rather than buybacks.
• Fed Chatter: Fed Presidents Goolsbee and Hammack signaled a preference for “slower” cuts or “more restrictive” policy given sticky inflation. This “Fed Speak” is starting to sound less dovish than Powell’s press conference last week.
• Moderna (MRNA): Rose +2.2% as the defensive rotation into Healthcare continues. When Tech breaks, money flows to drugs and doctors.

🔭 Outlook for Tomorrow (Thursday)

We enter Thursday with a market technically damaged (below 50-DMA) but fundamentally supported by Micron’s earnings.

• The Test: Can Micron’s blowout save the Nasdaq, or will the Oracle/Infrastructure fears dominate? If Micron fades the gap up, look out below.
• Data: Jobless Claims tomorrow morning. If they stay elevated (near 236k), it supports the “Fed must cut” thesis, which might help stabilize risk assets.
• Key Level: S&P 500 6,766. The bulls must reclaim this level (the 50-DMA) quickly to prevent technical selling from accelerating.

Verdict: The “AI Capex” narrative has suffered a structural blow today. Caution is warranted until we see if financing for these mega-projects stabilizes.

• Pivot Point Podcast: https://t.co/FzMpdhLD5c

• Video: https://youtu.be/UDr4uF-o5IM

Phil — here’s the clean, Member-ready explanation – No mysticism, no chart-shaman mumbo jumbo — just the actual logic:

How Pivot Points Work — And Why They Fit Hand-in-Glove With Our 5% Rule™

Let’s start by clearing the smoke:

Pivot Points are not magic.

They are not predictive.

They are not “telling the future.”

What they are — and why they work — is astonishingly simple:

Pivot Points map where BUYERS and SELLERS previously agreed on value.

And humans (and algos) are astonishingly predictable about returning to prior consensus levels.

That’s the whole thing.

Let’s unpack it properly.

1. What a Pivot Point Actually Is

Wall Street defines the Pivot as:

P = (High + Low + Close) / 3

It is literally the average sentiment of the prior period.

If you think in PSW language:

The Pivot is the Fair Value Line from yesterday’s battle.

Everything else — the support/resistance bands — are just logical derivatives:

R1 = 2P – Low
S1 = 2P – High
R2 = P + (High – Low)
S2 = P – (High – Low)

These levels define:

• Where buyers defended value yesterday
• Where sellers defended value yesterday
• And how wide the battlefield was (the range)

That’s it.

No goat entrails required.

2. Why Pivot Points Work in the Real World

Pivot Points work for the same reason that the 5% Rule™ works:

Markets are crowds, crowds seek equilibrium, and equilibrium tends to recur at mathematically stable levels.

Institutions, quants, algos — they’re all trained to react to known levels of probability-rich behavior.

Why?

Because if you’re running billions in capital, you don’t “wing it.”

You trade around reliable historical behaviors with enormous liquidity.

Pivot Points give you exactly that:

• Obvious take-profit zones
• Obvious fade zones
• Obvious scalp zones
• Obvious breakout/breakdown levels

It’s not spiritual — it’s statistical gravity.

3. Why They Fit PSW’s 5% Rule So Perfectly

Our 5% Rule states:

Markets move in predictable, fractal ranges based on prior movement.

They overshoot by a predictable % (strong and weak bounces) before returning to a stable range.

The 5% Rule defines macro behavior over days/weeks.

Pivot Points define the micro behavior inside those same ranges.

This is the key insight:

Pivot Points subdivide yesterday’s 5% Rule box into intraday battlegrounds.

Both tools assume the same human truth:

• Markets don’t instantly reprice
• Supply/demand equilibria persist
• Participants cluster trades around “comfort levels”
• Algos enforce these levels with high-frequency precision

So the Pivot sits right at the centroid of yesterday’s trading — the fulcrum of sentiment — and acts as the natural gravity well.

The R1/S1 and R2/S2 levels line up shockingly well with:

• Weak bounce / weak retrace
• Strong bounce / strong retrace
• Expected overshoots

Which is why you almost always see intraday reversals at these levels.

Not because the market gods ordained them…
…but because buyers and sellers feel the same way today as they did yesterday — unless something truly new enters the picture.

4. Why Pivot Points Are the Best Short-Term Indicator for Non-TA People

Pivot Points have three massive advantages over all the other chart debris:

(A) They are static for the day

If you calculate them at 9:29 AM, they do not change all session.

That alone makes them far more usable than moving averages or stochastic spaghetti.

(B) They are derived from price reality, not arbitrary smoothing

They come from objective highs, lows, and closes — not “let’s average the last 14 candles because some guy in 1978 said so.”

(C) They show where everyone ELSE is watching

The best indicator in trading isn’t what you think.
It’s what everyone else is going to act on.

Pivot Points are baked into:

• Quant models
• Execution algos
• Institutional hedge programs
• Market-maker positioning
• ETF arbitrage logic

They’re literally part of the plumbing.

5. Why We Use Them

Because:

• They tell us where to expect resistance.
• They tell us where to expect support.
• They tell us where to sell premium.
• They tell us where risk/reward flips from good to stupid.
• And they mesh perfectly with our 5% Rule structure.

In PSW language:

Pivot Points turn the 5% Rule from a map into a working GPS.

You already knew where the road was —
now you know where all the potholes, gas stations, and police traps are.

6. The Takeaway Members MUST Absorb

Pivot Points are NOT “predictions.”

They are memory.

Markets have memories, and memories have gravity.

A Pivot Point is simply:

• Yesterday’s fair value
• With two bands above
• And two bands below
• That define the path of least resistance

If you understand the 5% Rule, Pivot Points are just the intraday version of the same behavioral math.

Combine them, and you have:

• Macro equilibrium
• Micro equilibrium
• And extremely high-probability reaction zones

Which is why you see us use them over and over on intraday Futures plays:

Buy support (S1/S2).

Sell resistance (R1/R2).

Don’t be a hero at the Pivot — let it prove itself first.

It’s mechanical.

It’s logical.

And it works because humans and algos repeat the same patterns every damn day.

If you’d like, Phil, I can now create:

• A PSW Cheat Sheet (“How to Trade with Pivot Points & the 5% Rule”)
• A visual diagram Members can reference
• Or a combined Futures-trading lesson for the book section on short-term tactics.

Just say the word.

How well do they work, you may wonder?

To set up pivot points on thinkorswim, search for “Pivot Points” or “PersonsPivots” in the studies library (the beaker icon), add the study to your chart, then configure its settings by choosing the period (daily, weekly, monthly) and adjusting plots like R3/S3 for different timeframes to see key support/resistance levels for day or swing trading. 

Adding Pivot Points to Your Chart

1. Open Studies: Click the beaker icon (Studies) on your thinkorswim chart.
2. Find the Study: Type “Pivot Points” or “PersonsPivots” in the search bar.
3. Add to Chart: Select the study and click “Add” or “Add Study”. 

Don’t forget you can always call TOS support – they are generally good.

I’m sure most brokers have some version of this.

You may see things asking you to set the points but DON’T DO THAT – as with all TA, it’s better to use the default as that’s what most users do and the whole point of TA is to see what most users are using to predict the moves, right?

Oh no, what did you guys do to the markets?

That was a fantastic webinar – lots of good explaining about how we pick things and how and why we do our set-ups and mechanically how our trades make money…

Worth watching!