Tech titans skyrocket: dancing on the edge of overheating
NDX vs Equal Weight NDX is printing a new recent (daily high). Impressive.
Source: Refinitiv
The rich are getting richer
NYFANG is up 50% in the last 12 months. The narrow rally is still very narrow. Investors will have to decide whether they want to chase the rest of market or not.
Source: Refinitiv
I'm sure...but a little overspent
The mega cap (AI narrative) continues to drive the Mega tech cap bull (described in early May to premium subscribers).
Here is a link to the article
NYFANG has gained around 13% from early May... and note that RSI is becoming very overbought. Overbought stocks can remain overbought much longer than many people think, but it is not too early to trade for the short-term.
Source: Refinitiv
SOX on Fire
Where credit is due, it should be given. GS trading team highlighted the relatively low SOX exposure, and that the crowd has started chasing semis a couple of days ago.
Here is a link to the article
Since touching the large trend line, SOX has surged to the upside. First, note that the bigger resistance is slightly above.
Source: Refinitiv
It's time to move beyond the debt limit
JPM market intelligence team adds some color:
"The passage by Congress of the debt limit may signal a return to fundamentals. Earnings are better than expected, with margins (ex Energy/Fins), higher on a quarterly basis. There is also an expectation that earnings will continue to rise. I can understand the fear sparked by the inverted curve. However, it is unlikely that we will see a recession with the unemployment rate at 3.5% and the fact that we are creating more than 200k new jobs every month (the last printing was 253k; the average for 23Q1 was 295k).
The debt ceiling hedge of hell
Many people considered gold to be the "ultimate" hedge against debt ceiling risks. The opposite has been proven. Gold is continuing to fall sharply. Gold is trading below the 50-day moving average and at levels that must be held. At 1920ish, the 100-day moving average and longer-term trend will both be in play if we close slightly below.
Source: Refinitiv
Who needs protection?
SDEX index is moving down. We haven't seen this in a long time. As the market continues to rise, people are less willing to pay for downside protection.
Source: Refinitiv
Who needs protection II?
The crowd is back to hating puts. They love them when the local market is low, but hate them when it's high.
Source: Tradingview
Bears wet dream
The first half of a downturn is always marked by a panic sale as nobody knows just how bad things will be .... It's not clear why this time around should be different ..."
Source: Deutsche
On That Short
We have been saying for weeks that the big SPX is short but there may be a number of "neutralizing positions" against this big short. The long NDX is one of them, but there are others.
Source: Refinitiv
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Here is a link to the article
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