SOUNDING OFF ON MARKETS, FROTH AND ALL THAT

Since we warned you weeks ago about the excessive froth and speculation in areas like nuclear, quantum, rare earth, space, drones, and all that, we felt it necessary to tell you that after 50%+ drops in many of the names,  we did want to report to you that today, a lot of these names with no sales woke up today. They are high beta, frothy and speculative so if they get going again, they can really get going. Just remember, if nothing changes and companies continue to have no sales, there will always be one eventuality but just letting you know they woke them back up today. Of course, a little bit of help from DC as they are talking about rare earth names again but unfortunately, some no sales rare earth names. The last time DC made the announcement on rare earth, many soared but then crashed. Just be aware of valuations as well as sales. We really don’t even have to discuss earnings because most do not have. We have no clue how far they go or how long another move lasts, a day, week, month, longer?

As far as the rest of the market goes, we do not have a lot of complaints at this juncture as major indices are now all back above the 50 day.  As we have always stated, if financials and semiconductors are acting well, the overall should be in good stead. As we write this, all the big banks are either at new yearly highs or a stone’s throw away. It is also good news that regional banks have been coming on. And then there are the semiconductors. After a nauseating reversal on Nvidia earning’s day a couple of weeks back, most all have been forgotten. While Nvidia lags, other names have come to the fore. It is also not a bad thing that the DATA CENTER, ELECTRONICS, DATA STORAGE, ENERGY, CONSTRUCTION and all that looks like it is waking up also.

Let’s also add that the broad market has really picked up evidenced by both the small cap Russell 2000 as well the MID CAP 400 getting close to their old highs. That’s a lot of names.

Near term, our own sentiment indicators have gone coast to coast as we are now seeing a good bout of optimism, bullishness and now back to another round of froth, at least for today. We think nice controlled pullbacks would do wonders for the market heading into the new year in where the fed is now easing and we are not talking rate cuts but stopping their QT but also the chalk being a very easy and we mean very easy next head of the fed.

As always, if we see things changing, we will let you know.