Ivanhoff Capital

MarketSurge powers the charts in this video.

The market often does the least expected. September was supposed to bring weak seasonality for stocks. Instead, we saw one of the strongest monthly performances of the year with multiple stocks rising 50-100%. November is supposed to bring bullish seasonality. Instead, we have seen an increasing number of stocks breaking down.

The momentum high flyers from September have given back most of their post-summer gains. Mega-caps are also showing signs of exhaustion. Many of the stocks that looked constructive ahead of their earnings were demolished after the reports. And yet, important support levels are holding – QQQ tested its 50dma near 600 and bounced. AMZN tested 240 and bounced. NVDA tested 180 and bounced. PLTR tested 170 and bounced. It is possible that those bounces are just knee-jerk reactions after being down multiple days in a row, or they could be another sign that buyers are not chasing blindly and prefer to enter at spots that offer better risk-to-reward opportunities. As of now, the recent market weakness looks like a normal pullback, but if Friday’s bounce fizzles quickly and the indexes make new lows, the situation will be very different.

In the meantime, Chinese ADRs are showing relative strength. It’s as if someone is betting on the Supreme Court ruling on tariffs – PDD, BABA, and BIDU seem to be setting up above their 50-day moving average. Stocks like Wayfair (W), which import most of their furniture from China, are also showing incredible relative strength.

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MarketSurge powers the charts in this video.

Last week started with a big gap in most tech stocks, especially the semiconductors, after it became clear over the weekend that the United States and China are getting close to a trade deal. We have heard this many times before, as there seems to be a constant back and forth. Chinese stocks gapped up too; then retreated in the second half of the week. Chasing gaps on expected news has never been wise. 

The Fed cut rates 25 basis points to 4% as anticipated. Just like last month, interest rates actually went up afterwards. The market rarely does the obvious. The endpoint might be clear, but the path there is often unpredictable. The only thing we can control is our position sizing and exit strategies. 

QQQ and SPY are consolidating near their all-time highs, and yet there are plenty of stocks that are breaking down. The equal-weighted versions of those indexes have been lagging by a wide margin since July. A small number of mega- and large-caps are doing the heavy lifting. AMZN and GOOGL were good examples last week. Both crushed estimates and gapped up. Those are not stocks to chase. They often pull back to their rising 20-, 50-, and 200-day moving averages, offering much better risk/reward entry points.

We remain in a market of stocks environment. The bounces in the high-momentum groups of the summer are getting faded – nuclear, quantum, rare earth metals, robots, etc. New groups are starting to emerge. Contrary to all expectations, solar stocks keep making new 52-week highs – FSLR, DQ, CSIQ.

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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.

The market remains resilient. Corrections continue to take the form of sector rotation. The selloff in the momentum high-flyers didn’t even cause a dent in the indexes. Support levels are held. QQQ and SPY briefly dropped near their 50-day moving average when Trump announced new tariffs for China. A couple of days later, he softened his stand, and the indexes quickly recovered to new all-time highs. 

In the meantime, Chinese ADRs have also stabilized and are perking up – BABA, BIDU, PDD, FUTU are some examples. Trump is meeting Xi in person. The market is seeing that as a positive. Common sense says that there will be some version of a deal, even though both countries will continue to work towards bigger trade independence.  

Market sentiment is still mostly bullish. I judge that by market reactions to earnings. Last week, we saw a few downside earnings gaps that were quickly scooped – IBM and TSLA. In the meantime, upside earnings gaps are holding or following through – RTX, ISRG, LRCX.

The next FOMC meeting is this week. The market has priced in another 25bps cut. This is probably the reason why housing and mortgage stocks are getting a bid. Solar, biotech, and small caps are also showing relative strength.

Five of the so-called Mag-7 companies report earnings next week – GOOGL, MSFT, AAPL, AMZN, META. They are followed by so many people that it is hard to produce a sizable surprise. Higher volatility is a given next week, but dips near important support levels are likely to continue to work – just like last week saw PLTR bouncing near 170, SNOW bouncing near 240, QQQ bouncing near 600, VRT bouncing near its 50dma, CEG bouncing near its previous breakout level, etc. 

Try my subscription service, which 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.