The Nasdaq is rolling over, duh. The oils are headed higher. No kidding. So, let’s sell tech and buy oils. Solid idea? Everything else, except, perhaps a handful of industrials, as well as Walmart (WMT), which reports this week, and Club name Costco (COST, which reports next month. And, the defensives are almost as toxic as the artificial intelligence-infused techs. That’s really where we are, isn’t it? It’s like the whole stock market changed without anything changing. We are still gaga over everything AI. We are still leery over oil and gas. We keep talking about nearing the end of the Federal Reserve tightening cycle. We know inflation is cooling. But, since this dreaded month began, we have stopped believing in anything to buy except oil and we truly feel that to own Nvidia (NVDA) means you are as dumb as a bag of hammers. How could you have not sold Nvidia? That’s what I keep hearing. Why are you holding that dog, I am being asked, without even a sense of sad history that my late dog Everest was re-christened Nvidia during what now amounts to the heyday of the company’s incredible arc. What’s the truth here? Did the fundamentals change and we didn’t observe it? Or are the stocks that are now hated going to turn out to be precursors of the next downturn? Here’s what I think’s going on right now, and it’s neither exceptional nor Earth-shaking. There are simply competing camps for your dollars and some camps, like those with AI, have too many mouths to feed while others, like the industrials, lack competition for dollars. So as the Fed reaches its interest rate-hiking conclusion, the industrials can continue to rally. That’s how the Nasdaq could look like a hideously developing head and shoulders pattern and the Dow looks like the place to be. .IXIC .DJI 1M mountain Nasdaq vs. Dow 1-month performance It makes sense. We had too much hoopla involving a legitimate concept, generative AI, and we had too little love for industrials because we knew the quarters…
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