Ivanhoff Capital

MarketSurge powers the charts in this video.

Volatility tends to spike at turning points. Was last week one or was it just another shakeout in a bull market? After all, the Nasdaq 100 just tested its 50-day moving average and bounced, making a higher low. We can talk about the possibility of a more serious correction if QQQ quickly goes below its 50dma and start trading there.

The Fed cut rates by 25bps and yet rates went up again reflecting the market’s expectations for higher inflation and a more hawkish Fed in 2025. Algos panicked and the stock indexes had their biggest one-day selloff since 2022. We saw a bounce attempt on Friday, so now the question is if this will be just another quick V-shaped recovery or the beginning of a deeper pullback. Is this buy the dip or short the rip market? We will know soon enough. What we know so far is that market breadth has been deteriorating for the past few weeks. Momentum leaders have been under pressure as well. Look at the price action in anything crypto-related, TSLA, quantum computing, or semis. The best swing trade opportunities come right after a market correction so even if we get one, there will be much better opportunities down the road.

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MarketSurge powers the charts in this video.

SPY and QQQ are getting all the headlines with closing at or near all-time highs, but the price action under the surface has been deteriorating. Micro, small, and mid-cap have been under pressure lately. Most high-momentum stocks (the ones that are up the most year to date) also had a sizable haircut last week. Maybe the reason is the rise in interest rates or people are taking profits but we are back to a market held by a few mega-cap stocks.

The big news came from Google last week. They announced a major breakthrough in quantum computing and the stock broke out new new all-time highs. Quantum computing stocks have been on fire in the last few months – IONQ, RGTI, QUBT, etc. Google reminded us that they are a major player in almost any cutting-edge industry nowadays – from AI to self-driving. What many missed to point out is that Google used Nvidia CUDA Q platform. 

Yes, Nvidia is at the center of everything but it has been acting as a source of funds lately. It could not rally even on a strong earnings report from Broadcom (AVGO). Maybe it needs a proper shakeout to 120 before it tries to rise again. 

In the meantime, crypto is in its own world. Bitcoin and Ethereum are near all-time highs. Every day we hear about a different company announcing a strategic reserve in Bitcoin. We will likely see many more of these announcements. This should not make you complacent. Nothing is fully immune against rug pulls and risk-off selloffs. The good news is that portfolio protection is currently cheap.

Try my subscription service which includes a private X feed with option and stock ideas, emails with concise market commentary, real-time market education, the Momentum 40 list of market leaders, and much more. See what subscribers say about my educational service.

Check out my free weekly email to get an idea of the content I share with members. How my ideas/alerts did.

You can find my trading books on Amazon here.

Disclaimer: Everything I share is for educational and informational purposes only and it should not be considered financial advice. Read my full disclaimer here.

MarketSurge powers the charts in this video.

We have been talking about crypto being the undisputed leader since the election results. Another trend until recently was the underperformance of mega-cap tech companies. This changed last week. META, AMZN, and AAPL erupted to new all-time highs. TSLA and MSFT are almost there. GOOGL and NVDA are still lagging but at least they stopped pulling back.

Interestingly, this pullback coincided with a decline in interest rates. Small caps were supposed to outperform in such an environment. We saw a rotation back into Big Tech instead. 

Anything related to crypto remains in play – COIN, MSTR, HOOD, MARA, BITX, etc. It shouldn’t be otherwise with BTC reaching 100k for the first time in its history. Will this historic round number lead to a rug pull that will shake many out or the underlying demand will keep any dips tepid? No one knows. The latter is more likely as of now but the situation could change quickly. Imagine this – Bitcoin was 0.10 in 2010. That same year, a developer spent 10,000 BTC (then worth $40) to buy two Papa Jones pizzas. The opportunity cost of this transaction is $1Billion as of today. I wonder how many Bitcoin the guy had at the time?

Some say that MSTR has peaked and it’s now on the way down because it is underperforming Bitcoin. I say, not so fast. It is still trading above its rising 20 and 50dma and until this is the case and Bitcoin remains north of 100k, the dips are likely to get bought. Crypto miners like IREN and MARA are setting up for a potential breakout. While it is true that each halving makes mining less lucrative, the increase in the underlying crypto price can more than make up for it. Besides, what matters in the short-term is sentiment. There’s no hotter industry than crypto right now which means the outcome can be both wild and unpredictable. 

In the meantime, other high-momentum stocks continue to rise – RDDT, PLTR, APP are just a few examples of the fact that in a bull market, stocks can go to levels no one can imagine.

The semiconductor sector has been showing relative weakness in the past few months. NVDA has stalled for now which is impacting the entire space. There are exceptions. CRDO and MRVL gapped up after much better-than-expected earnings. AVGO is also setting up for another push higher.

Try my subscription service which includes a private X feed with option and stock ideas, emails with concise market commentary, real-time market education, the Momentum 40 list of market leaders, and much more. See what subscribers say about my educational service.

Check out my free weekly email to get an idea of the content I share with members. How my ideas/alerts did.

You can find my trading books on Amazon here.

Disclaimer: Everything I share is for educational and informational purposes only and it should not be considered financial advice. Read my full disclaimer here.