New Address as of 10/4/24 — 60 Broad Street, 39th Floor, New York, NY 10004
DJIA: 51,712
Stocks are not companies… they are pieces of paper. Many things affect those pieces of paper – the overall market trend, group behavior, the federal reserve, and what everyone believes to be most important, earnings. The driver at its root, whatever the cause, is supplying and demand. So, when surveys find 80% of respondents believe semiconductors are a crowded trade, a record number for Semis or anything for that matter, seems logical that most who want to own them already do. These are great companies, at the heart of the AI buildout, in some cases with reasonably valued stocks, but when all the buyers have bought, none of that matters. And how do you know when that’s the case, it’s simple – you don’t. The charts of course help, the 50-day and the 200-day, but these big uptrends don’t die easily.
The Semis seem to be struggling to hold on, but they’re still up some 60% over the last 12 months. Meanwhile Software is struggling to improve. In other words, for Tech the key word seems to be a struggle. They’re not alone here, you might generally say up-stocks, the recent strong stocks are having their problems. Space is no longer cool, even Electrification and others building out AI are struggling. Thank goodness for those replacements, so to speak, the Financials, Healthcare, and handful of Staples and Retailers. The result is new highs in the Advance-Decline Index and close to the same in the Equal Weight S&P. That leaves the market technically healthy, with the issue there is no THE market.
Frank D. Gretz
PLEASE NOTE: Unless otherwise stated, the firm and any affiliated person or entity 1) either does not own any, or owns less than 1%, of the outstanding shares of any public company mentioned, 2) does not receive, and has not within the past 12 months received, investment banking compensation or other compensation from any public company mentioned, and 3) does not expect within the next three months to receive investment banking compensation or other compensation from any public company mentioned. The firm does not currently make markets in any public securities.
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