Ivanhoff Capital

MarketSurge powers the charts in this video.

The market chop continues. Just as the AI universe was setting up for a potential breakout, the CEOs of Anthropic, OpenAI, and SpaceX suggested that progress should slow because AGI threatens humanity. OpenAI postponed its IPO for 2027. The market didn’t like the message, and anything AI-related gapped down, led by semiconductors. Capital didn’t rush to safety. It just rotated back into software. After a 2-week, 10% pullback, the software ETF, IGV, rallied 5% on heavy volume. The leaders came out of cybersecurity – CRWD, NET, OKTA, ZS, FTNT, etc. In a world of expanding AI influence and regulation, cybersecurity companies are viewed as the middlemen that can benefit.

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

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.