Ivanhoff Capital

MarketSurge powers the charts in this video.

Over the past few months, the market rallied on every positive news about the peace treaty in the Middle East. Now that it has been signed, what is the next catalyst? Falling oil prices should help consumer discretionary and transportation stocks, or the infrastructure rebuilding in Iran? Caterpillar (CAT) made new all-time highs every single day over the past week.

The dip in AI stocks was bought again. Semis (INTC, ARM, MRVL, SNDK, WDC, MU, AMD, AMAT, LRCX, etc.) made new all-time highs after a brief pullback towards their 20-day EMAs. QCOM and NVDA might be the next ones to break out. Fiber optic, like GLW and server stocks like DELL, are working on a new base. Data center stocks are breaking out  – NBIS, CRWV, HUT, WULF, CIFR, IREN, etc. AI energy stocks like BE had a bigger pullback of around 30% towards its 50dma, and it also bounced to new all-time highs. 

Not even a “hawkish” Fed has been able to stop this bull market. The Fed kept the interest rate unchanged despite a strong jobs market and inflation readings well above its 2% annual target. Maybe this is why even housing stocks are starting to stabilize and set up for a potential breakout. Software remains among the weakest so far, and it will likely need another temporary rotation out of semiconductors to bounce back.

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MarketSurge powers the charts in this video.

We saw a couple of high-volume distribution days in the Nasdaq 100, mostly caused by a pullback in AI infrastructure stocks. They were so extended from their 20 and 50-day moving averages that a mean reversion of some sort was normal. The important part of this decline was that it didn’t impact many stocks. The small and mid-cap index, IWM and MDY, made a higher low and are already back to new all-time highs, helped by strength in financials and healthcare. Corrections through sector rotation are one of the defining characteristics of bull markets. This one is not any different. 

SpaceX’s IPO was oversubscribed four times. They raised $75 Billion dollars at an almost $2 Trillion valuation. There was a brief worry that the money had to come from somewhere, and the transfer would impact other tech mega caps. Well, it did. QQQ and SPY are now underperforming small and mid caps, but this is also usual during strong uptrends. The next big IPO raises are likely after the summer; the large caps might also see new highs soon, especially ahead of the 250th birthday celebration of the United States. 

Software stocks’ pullback was a lot deeper than the rest of tech over the past week. IGV tested its 50dma, where it printed a tight-range inside day on Friday. This would be a good spot for a bounce next week. In the meantime, industrials (XLI) and semis (SMH) are setting up for a potential breakout.

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

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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.

Anytime there’s a parabolic move and lasting enthusiasm in the market, the supply comes to cool things down.  The supply comes in the form of IPOs, secondary offering and debt raises. SpaceX is raising $75 Billion; Anthropic – $65 Billion. OpenAI is likely a few weeks from announcing its IPO. Google just had an $85 Billion secondary offering. Amazon will probably also raise money in order to keep paying for its AI infrastructure spending. Of course, the supply will matter at some point, and it could lead to a pullback that is faster and deeper than most expect. We saw it on June 5th, when the Nasdaq 100 (QQQ) dropped almost 5% on more than 2x its average traded volume. Semiconductors ETF, SMH, declined 9% on the biggest volume since its last base. It is normal to see market leaders like MU, MRVL, DELL, INTC, ARM, AMD, SNDK, and others pull back and test their 20 or 50-day moving average. It is a different question, for most of them, such a pullback would mean a 20% to 40% correction.

The April jobs report came much stronger than expected, while March was revised higher. In the meantime, the latest inflation readings came much higher than the Fed’s target. In theory, this means more hikes ahead, which would shake the confidence in this bull market. In practice, I don’t think many of the Fed members will dare to raise rates, but the potential for it could keep the market on edge.

This bull market is not likely to be over. We might see a deeper-than-expected pullback that will scare people out of their positions. This is normal market behavior. The best thing that could happen for the sustainability of an uptrend is a multi-day pullback. It would create much better setups and entry points. I am excited about the possibility of it.

Sign up for my premium service to read the rest of my market view and ideas.

My subscription service includes a Discord room and private X feed with options 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. See how my ideas/alerts performed.

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.