Ivanhoff Capital

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%.

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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.

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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.

Believe it or not, 8 of the 12 best-performing ETFs for the last week were inverse ETFs. Space, quantum computing, and AI stocks were smoked, while a couple of software stocks gapped up after stronger-than-expected earnings. 

1. CRMG +44%, 2x long CRM. Crushed earnings estimates, gapped up, and boosted the entire software space – NOW, FROG, CRWD, TWLO, etc. 

2. QBTZ +35%, 2x short QBTS. It has been in a downtrend for months. All bounces to its declining 50dma were brief and led to more selling and new lows.

3. ASTN +34%, 2x short ASTS. Space stocks have been demolished since SpaceX IPO-ed. This trend continues. 

4. IREZ +29%, 2x short IREN. AI stocks have been in a chopfest over the past couple of months. IREN is one of the weakest-performing ones. It bounced to its declining 50dma, then accelerated lower. 

5. AAOZ +29%, 2x  short AAOI. The AI stocks with the weakest bounce are now leading the downside in the group.

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.