5/31 Recap

Today is the debt ceiling vote. As I’ve mentioned a few times, once it passes, short term there should be a pullback as the TGA refill occurs. I don’t think it’s anything that should change the course we are on for now. I think the prevalent theme at this moment which is that AI is going to be a big boon for big tech is going to persist for a long time. The mistake many investors make is thinking the stock market has to reflect the economy. The economy is horrible, we all know that, but the stock market is a place where investors place bets on future outcomes. How long will the economy be horrible for? Who knows, but the potential for AI to be something of a great magnitude is there and as we’ve seen this year, nearly everything is down but a handful of tech stocks. Those tech stocks happen to make up the bulk of “the stock market” in terms of weighting. The big 7 make up over 50% of the Nasdaq for instance.

So if investors want to ignore the macro news, and it seems that is the case with Apple reporting a year over year revenue decline yet a few points from all time highs, then there isn’t much investors can do but ride the train. The reason markets sold off so hard last year was the same thing, big tech sold off and took the market down, so the question you have to ask yourself is what will it take for big tech to sell off, and if it isn’t going to because of revenue declines, then what is the bear case at this moment when everything else outside tech has sold off hard?

The SPY pulled back to the trendline perfectly and bounced so far, it’s been 2+ months of chop in this tight zone, we’ve yet to breakout or down. So for now there isn’t much to say other than we’re just rangebound.

Oil as you can see below did break down further today touching $67. Copper and many other critical materials are breaking down signaling we are in a recession most likely. Of course lower fuel prices is not a bad thing for anyone from consumers to businesses reliant upon it. It does show the weakness in our markets which oddly enough means a higher likelihood of the fed having to cut rates and possible even QE again to jump start the economy. Perhaps that too is part of the big tech thesis playing out now.

Trends

CCJ and CNC are emerging as the top trends this week along with INTC. All 3 are green in this red tape today.

Week To Date

2 Week

1 Month

2 Month

Today’s Unusual Activity & What Stood Out

107 Trades Today