Market Talk
Trading Through the Fog
Well folks, in recent Jones Reports, I've tried to convey a more cautious approach to investing and trading based on market signals.
As a small investor and trader, I recognize that signals can be clouded by fog. But certain flags have appeared, suggesting that 2026, so far, has NOT been the same bullish trading environment we enjoyed in 2025.
We've seen modest climbs followed by sharp selloffs and endless sector rotations. One week the tech bulls are charging. The next week it's concerns about excessive AI spending, followed by rotation into the supposed "safety" of consumer stocks or energy stocks that can be just as fickle.
Even solid corporate earnings can't protect investors. Look at Lam Research, which reported strong earnings, only to undermine investor confidence with talk of "supply chain constraints," helping send an entire semiconductor sector lower.
For small investors holding too much of stocks being whipsawed, this can produce a serious case of agida!
And sometimes it feels like there's outright manipulation going on, with big money managers and hedge funds, or "hedgies," piling on short sales to exacerbate downside volatility.
Whether that's actually happening or not, these are the kinds of conditions that call for watchful caution.
Look, let me put it plainly.
2025 was a great year to trade and invest. But for many investors, 2026 has been a LOUSY trading climate — so far — even with major indexes bouncing around their highs!
That's why Jones continues to favor small "test positions" in selected stocks while keeping plenty of dry powder.
Now, in the coming days, the midterm elections will be completed. That's one uncertainty that will be checked off. What follows remains to be seen.
Perhaps the unstoppable growth of AI will erase recent doubts and bring the bulls charging back. The anticipated Anthropic IPO, for example, could reignite bullish enthusiasm for AI-related stocks and perhaps even help turn market sentiment around.
And those same hedgies who were shorting stocks could suddenly reverse course, screaming "Buy, buy, buy!"
And the game goes on. Until the next earnings warning, geopolitical crisis, expanding war, or another round of profit taking sends investors scrambling again.
Sometimes markets just can't be predicted.
If you made good money in 2025 and managed to hold onto it through this year's market fog, that's an accomplishment in itself.
Jones writes these reports freely, drawing on years of experience in science, engineering, and investing, with the hope of sharing useful observations with fellow small investors and traders. And if stopping by here helped you exercise a little caution, perhaps these reports have served their purpose.
Don't get me wrong. Jones still has a longer-term conviction in some stocks on his watch list. Scroll down through recent reports and you'll see them. But buying too much, or even holding too much through a downturn, is no damn fun!
That's why I favor keeping more dry powder, perhaps a small test position here or a few "fun bucks" in a speculative stock with big possibilities, always mindful of the risks of having too much on the table.
Even when we have conviction in our own due diligence, there's no room for arrogance. Too much remains beyond our control when it comes to stocks.
Having conviction, yet staying nimble when called for, is part of the dance we do.
Now, speaking of AI, here's a true story about Jones's recent experience with artificial intelligence.
Yikes!
Artificial Intelligence — When “Smart” Machines Meet Human Judgment
Well folks, artificial intelligence (AI) is rapidly becoming part of everyday life, from financial research and medical information to engineering, national defense, and just about anything imaginable.
And Jones has been experimenting with it.
The results? Sometimes remarkable, sometimes downright impressive, and occasionally downright wrong.
Consider a simple experiment involving lawn grass.
Jones asked AI to recommend a fine-bladed zoysia variety for an attractive, low-maintenance lawn. AI confidently recommended a particular cultivar, and Jones purchased and planted 128 plugs.
But the grass looked considerably coarser than expected. After weeks of examining photographs and offering conflicting opinions, AI finally acknowledged that its recommended cultivar was actually classified as coarse-textured, not fine-bladed.
Oops!
Now Jones is left waiting until next summer to watch the grass spread and determine whether he wants to dig it all out.
One might dismiss this as a trivial mistake involving lawn grass. But consider the larger implications.
What happens when the subject isn't grass, but a stock investment, a medical diagnosis, an engineering problem, or a decision involving human lives?
When the Stakes Become Serious
Consider AI in military and national defense applications.
AI can analyze enormous amounts of intelligence, radar data, and satellite imagery at extraordinary speeds.
But suppose it misinterprets incomplete information, identifies a harmless aircraft as hostile, or mistakes routine military movements for preparations for an attack.
A commander relying on that assessment could authorize military action based on faulty assumptions.
The consequences could involve the loss of human lives or even trigger a wider war.
And here's the troubling part. The AI system might be functioning exactly as designed,yet reach the wrong conclusion because its information or underlying assumptions were flawed.
Of course, humans make mistakes too. But human oversight must mean more than approving whatever the computer recommends.
In Closing
Jones is not suggesting that AI should be avoided. And it's way too late for that anyway.
Its potential to advance science, medicine, engineering, and productivity is extraordinary.
But there's an important distinction between using AI to assist human thinking and allowing AI to replace it.
And consider what can happen when human emotion enters the picture, turning faulty AI conclusions—or information constrained by flawed initial assumptions—into bad decisions.
The danger isn't just artificial intelligence getting something wrong. It's human beings acting on those conclusions with fear, anger, or misplaced confidence.
Stay Watchful.
- Jones Report
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More later so ....Stay tuned, if you dare!
For now, we close by noting that any view on the market and stocks on any particular day may change in the days to come. That is why we watch and see how our views match up with reality. Looking ahead a few months may be a way to do things - but thinking too deeply about world events and the recent alliances forming, can make projecting ahead a dicey endeavor.
All in all - we use the word maybe "some", not "too much" and play it accordingly. Never get arrogant in our notions because things do change - and individual stocks are subject to many factors outside our control. So, we try to -stay aware.
With all the above caveats and attempted prognostications, I will close this post. Stay tuned for more opining on the market and stocks to watch.
ALL in my humble opinion, scroll down and read more. This site does NOT make Buy / Sell recommendations.
