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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