Category: Uncategorized

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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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.

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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.

After many months of hibernation, crypto erupted and didn’t look back. Some say that the reason is the Clarity Act, which seems closer to reality. Others: the accelerated attempts of the Treasury to monetize government debt (buy long-dated Treasuries to reduce interest rates). What matters is that the narrative has changed and now anything crypto-related is likely to remain in play for the foreseeable few months. We approached via ETHU, which is 2x long Ethereum. There will be more to come.

Gold also had a sizable bounce for basically the same reasons as crypto. It already started to perk up two weeks ago. Other metals like silver and copper also rallied. We approached this theme via FCX, which broke out from a multi-month base. 

In the meantime, the market remains allergic to almost anything AI-related. Semis tried to reclaim their 50-day moving average last week, only to be swiftly rejected. Some of the biggest downside movers came from the AI theme last week – NBIS, BE, AEHR, etc. The whole group has been very choppy lately. Most trending moves in the space only last a few days before a quick reversal in the other direction.

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.

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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.