SOUNDING OFF ON UH OH

It started a few weeks ago with the very often warned NO SALES froth and speculation in the many nuclear, quantum, rare earth, drones, robo and all that. As we have stated, if nothing changes, NO SALES stocks will EVENTUALLY go back where they came from. Amazingly, we saw a nuclear stock go to a $25 billion market cap. That’s with a B. It has been cut by a half. Amazingly, as we reported, many others totaled over $100 billion in market cap…WITH NO SALES. We never know when EVENTUALLY comes. It has been here for weeks and worsening.

And then there is the concentration in everything TECH/AI/DATA/SEMIS and all that. We have highlighted on a daily basis how concentrated the market has been in these areas lifting some names vertical. The numbers that have been promoted from the many for the next few years has been amazing. Those numbers have been stunning. Some of the numbers have been now questioned because we are seeing some backtracking but also a ton of debt and we mean a ton of debt being announced to reach those numbers.

Let’s call it a jail break in those areas yesterday that will continue today. Most importantly, THE NASDAQ and NASDAQ 100 will open BELOW the all-important 50 day moving average. If they finish below, it will be the first time since late April and could have serious meaning. To put it bluntly, a goal line stand is quite needed.

Money flows have gone from TECH/AI/DATA to a lot of EVERYTHING ELSE. Dormant areas like PHARMA, HEALTHCARE, OILS and just a bunch of stuff have picked up while the massive concentration in TECH/AI/DATA/SEMIS are now coming off…and quickly.  Vicious rotation indeed.

Be careful of the “don’t worry” talk. The areas being hit are about as over-owned, over-loved, over-leveraged and over-concentrated as we have ever seen and that goes for 1999. Of course, we have also reported the over-valuation by many measures. We can promise you that institutions that recognize and then add up how much owned will be questioning how much owned. We can promise you we have seen many times where valuation will go from coast to coast.

As always, will let the market decide. Again, goal line stand time. We have no bias to what the market tells us.