Yesterday's and today's profit realisation on BitTechs following the publication of very strong results by Microsoft, Alphabet and AMD gives food for thought and suggests that the market's growth over the past three months has most simply gone too far stretching valuations to levels at which even such good results do not meet expectations embedded in share prices. We won't know the results of Apple, Amazon and Meta Platforms until tomorrow, but they too are already clearly retreating today.
The question, then, is whether the recent gains on the Nasdaq 100 have not carved out a stock market top?
On the technical side, the risk of such a scenario seems considerable. The January rise, although it took the technology market to a new ATH, was unable to match the earlier rally from the October low in terms of momentum. Negative divergence reminiscent of the situation in July appeared on the D1 chart. The analogy does not, of course, guarantee a repeat of the index's behaviour in the following days and weeks, but it can be taken as a kind of warning.
According to strategists at JPMorgan Chase & Co, the dominance of the top 10 stocks in the US equity market increasingly resembles the dotcom bubble, increasing the risk of a sell-off. The share of the 10 largest companies in the MSCI USA index, including all the so-called Magnificent Seven technology stocks, rose to 29.3% at the end of December. This is only slightly below the historical peak of 33.2% in June 2000.The strategists also note that only four sectors are represented in the top 10, compared to the historical median of six. "The key finding is that extreme concentration now poses a clear risk to equity markets in 2024. Just as a very limited number of stocks have been responsible for most of the gains in the MSCI US Index, declines in the top 10 could drag equity markets down."
The next 62-63 day cycle high is due in the next 3 days. Theoretically, it may be similar to the May high which was only a short term high, but unlike in May SPX is overbought on the weekly timeframe now so the odds of an intermediate term high are much bigger now.
"the strong dollar is pressing on the neck of gold and silver a bit this week. Given the balance sheet expansion and fiat debasement we have seen since 2010, silver should be ashamed of itself. Any way you slice and dice the data, equities and crypto have been a much better hedge for fiat debasement than precious metals. And to make matters worse, precious metals are negative carry. And to those that bought GDX. Man. That thing is a pig. Worse than the metals!"
Barrona got long article on Microsoft, that it's pricey and maybe could not deliver in 2025.
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For technology investors, this coming week is the Super Bowl. Earnings reports from the five most important companies in the business are just days away. Alphabet and Microsoft provide updates on Tuesday, then Amazon, Apple, and Meta Platforms check in on Thursday.
ECB POLICYMAKERS OPEN TO START DISCUSSING FUTURE RATE CUTS IN MARCH IF DATA POINTS TO INFLATION HITTING 2% THIS YEAR: SOURCES 🔸 ECB POLICYMAKERS SAY MARCH PIVOT WOULD PAVE WAY FOR RATE CUT MOST LIKELY IN JUNE: SOURCES
Look at smic (super micro). From 300 to 500 in days.
Vertiv is also doing great.
Market forget about plain IT like Logitech and focus on "next". And this next is AI. Maybe it will end up like blockchain, nft etc but it's a wave. You ride this wave till drop.
When I was in Oslo I passed by a showroom for that Chinese EV car maker. I forget the name. My God those cars were gorgeous. And there was a whole line of them.Â
Norway is a one of the leader in terms of EVs penetration In Europe.
EV‘s only work with massive subsidies. Take them away and the EV market breaks down.
Yes, China keeps subsidies for their industry players. They invested state money, hired best car designers from Europe etc. China need to stop this, if not then we would see more trade tarrifs.
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Waiting for the Dough Day 2 - 1/31/24
in The Daily Stool - Stock Market Message Board
Posted
Yesterday's and today's profit realisation on BitTechs following the publication of very strong results by Microsoft, Alphabet and AMD gives food for thought and suggests that the market's growth over the past three months has most simply gone too far stretching valuations to levels at which even such good results do not meet expectations embedded in share prices. We won't know the results of Apple, Amazon and Meta Platforms until tomorrow, but they too are already clearly retreating today.
The question, then, is whether the recent gains on the Nasdaq 100 have not carved out a stock market top?
On the technical side, the risk of such a scenario seems considerable. The January rise, although it took the technology market to a new ATH, was unable to match the earlier rally from the October low in terms of momentum. Negative divergence reminiscent of the situation in July appeared on the D1 chart. The analogy does not, of course, guarantee a repeat of the index's behaviour in the following days and weeks, but it can be taken as a kind of warning.