SOFTWARE, BITCOIN STUFF, GOLD/SILVER AND ALL THAT

SOFTWARE stocks did not just start going down recently. As a whole, they topped out November 4th on the break below the 50 day moving average for the IGV and has crumbled ever since. There has been nothing but clues. ORACLE announces a monster backlog with quite the few calling for $1,000 target yet the stock topped and was blasted. The almighty MICROSOFT announces good numbers and not only breaks down but is also blasted. If these two do not tell you something, you could have also looked at ADOBE in a bear market, SALESFORCE in a bear market and how about SAP in a bear market. AND THESE ARE THE BIGGIES. Lesser software names were being taken apart. You got one bounce into the important 50 day average in December that failed and then game on…and unfortunately, to the downside. This is how a bear market process works. For a while, nobody was even talking about these drops but it is now getting noisy. The many are now coming around to it. This actually may be good news that it is now being recognized. We even see a downgrade of MICROSOFT this morning. We are being told this is all about AI but we do not rationalize why. The why usually comes out later. Just know we have been reporting this bear process for weeks and will alert if we see any changes. We promise if earnings going forward come in strong, the eventuality will be a bottoming process and a move back up but for now…ugh! We do also have to make note that both the NASDAQ and NASDAQ 100 are now trading below the 50 day moving average. This must be paid attention to as quite a few high powered glamour names in the semis, storage, opticals and all that may have put in near term tops in past days.

Speaking of bear markets. How about that bitcoin, ethereum and all that? Very simply, another classic bear market with one big problem. There are no sales, earnings, products and services to value this stuff. And that is whether going up or down. We highlighted the top in October as just like the software, broke below the all-important 50 day moving average and could never recover. Since, nothing but misery. A big drop into the end of November stalled the downside. It then went into weeks and weeks of what we call a bear flag. Just turn over a flag and you will get it. Our one thought was if price broke below that bear flag, it would invite more selling as another give up phase would ensue. That occurred a few days ago and as you can see, there has been no let up. We loathe tout artists that have the nerve to come out and call for $1.5 million by 2030, for example…because we all know things go up more than 20-fold in less than 4 years. Sure! Do not forget that there are many others in this area that are down 50, 60, 70%+ from the highs. They are not talked about much.

Both these areas are in bear markets. The market will decide when it ends and not opinion. Just realize that in the last bear market for bitcoin, it dropped in the 70s. We never predict how far or how long, just that it is on the way until it isnt. We do worry about this Microstrategy, now called Strategy and will never understand the strategy of using leverage to keep buying any asset class as bear markets do occur and that leverage can destroy. You do recall the mortgage backed securities from 08?

GOLD/SILVER…tough call because of how spastic but pretty darn sure a climactic high has been put in off of what one can only call a vertical move in silver and an almost vertical move in gold. This doesnt mean the final high is in, just that probably expect some backing and filling for a while with some serious swings.

The money is flowing elsewhere, big time. And we mean big time! Areas that were left for dead are storming higher. Let’s start with the transports. Anything that moves things is strong and moving into new high ground. Rails, truckers, and the like on the move. Economically sensitive everything have been coming on strong which includes materials, industrials and all that. We call it stuff. OILS now at highs. Regional banks have broken into new high ground. Yes…regional banks. Still way off the Silicon Valley Bank high but doing very very well here. We are even seeing better action in consumer staples. Names like Coke and Pepsi are at yearly highs. It is most definitely a big changing of the guard. Let’s call it revenge of the nerds. How long it lasts? Not a clue. How far it goes? Not a clue. All we can tell you is that right now it’s going.