Catch the “Making Money” Town Hall on October 27 on Fox Business at 2:00 PM. Click here to register.

As for rebounds, yesterday’s session was something of a yawner. When the Technology (XLK) rally began to stall, it could have swooned into the red, but buyers emerged. Still, most technology names finished below their intraday highs.

Software (IGV) was the standout in technology, suggesting superintelligence will not live up to the hype as a destroyer of all other technology. Storage names rallied to the top of the advancers, followed by a couple of hot software names.

Chips are at a key support – semiconductor (SOX) stocks need a spark to climb off support that goes back to May toward resistance, or they risk testing the 200-day moving average.

Utilities (XLU) are at a key resistance point – the October bounce is fading quickly, and the low could be tested.

It all comes down to SpaceX (SPCX) reporting after the close.

Today’s Session

Pressure continues on the superintelligence trade, particularly around data center buildups.  Each day there is news of delays and postponements, and overnight the data center IPO in Korea sold off 32%.

Like the postponement of the Firmus IPO in Australia last week, I think it's great news these deals are being delayed or getting the Bronx cheer upon trading.  Nobody could argue there is irrational exuberance.

As for this being an indictment of the superintelligence revolution, I disagree.  Greater scrutiny is always welcome in investing, but some people turn every development into a red flag.

Bottlenecks are now being described as reasons to avoid these names rather than embrace them, and strong, visible, and profitable projections going out even three years are being dismissed.

If Elice were up 100% on its debut, the headlines would focus on frothiness and hysteria.  That said, the superintelligence trade is significantly fragile right now.  Any would-be good news like a $45 billion deal between Nscale and Anthropic is viewed with skepticism and as proof of desperation.

This earnings season should spark a reversal of the downside bias, but for now the bears are winning the messaging battle.

Important Charts

SOXX (semiconductors): Key support is from here down to the 200-day moving average – if it holds, it could see a strong snapback.

All the focus is on Technology, but banks are down seven weeks in a row – something isn’t right.

Tweet

 

Home | Products & Services | Education | In The Media | Help | About Us | Disclaimer | Privacy Policy | Terms of Use | All Rights Reserved.