Technology (XLK) remained in the driver's seat on last Friday, but the opposite of Thursday, when a surge in software (IGV) stocks offset weakness in other industries. One-day moves in chip and memory are now at insane levels. Undoubtedly, the underlying fundamentals have improved, but the volatility is wild.

More, More, More

It's all about momentum and more momentum. It's become a beast that is feeding on itself. The higher it goes, the more demand, as panic buying hits new levels.

Reactive Strength Test

The last time the S&P 500 Momentum ETF (SPMO) traded hands at this level of relative strength was back in the summer of 2024.  Back then, they traded at 90, and briefly slipped below 80, only to quickly rebound. In Nov 2024, 90 had become key support, and the launching pad for the next leg higher. 

Summer IPO Bonanza

Artificial Intelligence (AI) chip designer Cerebras will go public this week and could hasten the initial public offering (IPO) mania that was already poised to rewrite the record books. The company is valued at $35.0 billion, but betting markets indicate it could open with a market capitalization (market cap) above $50.0 billion.

There is a school of thought that tech stocks could slip ahead of SpaceX and other IPOs, as investors cash in current positions to buy. I haven’t figured that out yet – there always seems to be fresh cash for hot markets. And this market is sizzling.

The drumbeats of resumed battle in Iran are growing louder. I think Iran has been stalling and not acting in good faith. Everyone would like to see a civilized end to the conflict, but it may take more military destruction to set the table.