Ivanhoff Capital

MarketSurge powers the charts in this video.

Software stocks were looking strong coming into last week. Then, there was a rug pull, and most of them pulled back. Even strong earnings gaps like SNOW faded. Nothing is immune to the current chop in the market.

After a brief sideways consolidation, crypto broke out again, lifting with it crypto-adjacent stocks like Robinhood (HOOD) and Circle (CRCL). 

The August jobs report came well above estimates, which increased the odds of a rate hike later this year. The Dollar rallied on the news; gold and crypto pulled back. Bitcoin, Ethereum, and Solana are still looking constructive. They might need more sideways consolidation before they attempt to break out again. The move last week was Dollar-related. They might need another catalyst for a more sustainable move. 

AI-related stocks finally benefited from the constant sector rotation. DELL, SNDK, and MU broke out. Let’s see if this is not just another trap. There will likely be some enthusiasm ahead of Anthropic’s IPO, and we will see some outsized moves in AI stocks in anticipation. Most of them are still technically broken. I view them as short-term trading opportunities, not as potential multi-week and multi-month holdings.

Overall, the indexes are holding relatively well for a seasonally weak period like September in a midterm election year. 

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Two themes stood out last week: the rotation back into AI and the follow-through in crypto that boosted crypto-adjacent stocks like HOOD and CRCL.

1. IREX +56%, 2x long IREN. Bounce in an oversold data center stock due to rotation into AI.

2. BEX +41%, 2x long BE. Bounce in an oversold AI stock near its 200dma.

3. HUTG +35%, 2x long HUT. Former Bitcoin miner that pivoted into AI data centers. Benefited from the rotation in AI stocks.

4. SNDU +35%, 2x long SNDK. Rotation into AI, led by memory chip stocks. Breakout out of a range contraction.

5. EOSU +34%, 2x long EASE. Bounce in an oversold AI stock.

6. ROBN +34%, 2x long HOOD. Crypto followed through, and crypto-adjacent stocks benefited. 

7-10. CIFU (CIFR), CBRS (CBRS), CRCG (CRCL), ZCSH – up 30-33%.

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.

MarketSurge powers the charts in this video.

No one wanted to touch software stocks earlier in the year. The narrative was that AI would squeeze their margins as much cheaper competitors would be vibecoded. Fast-forward to today. Software is one of the strongest groups in the market. Many software stocks had two back-to-back bullish reactions to their earnings. Last week brought more of the same. CRM, OKTA, and CRWD sparked another rally in the group, lifting MSFT, NOW, FROG, among many others.

In the meantime, the bounces in AI stocks keep getting faded. Even a solid earnings report from NVDA, which this time rallied on it, was not enough to stop the selling. It seems the whole world is overleveraged on AI-related stocks, and every bounce is viewed as an opportunity to lighten up. The semiconductors ETF, SMH, is already 17% below its all-time highs. It made an attempt to retake its 50-day moving average two weeks ago, which failed spectacularly. SMH is looking vulnerable to lower prices.

Gold and crypto pulled back on Friday on the Fed Chair’s inflation comments. The belief is that now the odds for a September hike are higher. We all know that they are not likely to hike ahead of the Mid-term elections, but algos are programmed to react quickly to any short-term comment.

Either way, September is seasonally weak during mid-term election years, so it pays to remain cautious.

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.