The battle inside tech
Something is happening under the surface of the technology trade, and most people are still watching the wrong half of it.
Software is trying to take the leadership away from semiconductors.
I have written about this in previous letters, and the evidence keeps building. Chips carried this market for a year and a half, and every one of those runs eventually hands the baton to a different corner of the sector.
Watch where the money goes inside tech over the next few weeks, not just whether tech is up or down. The rotation inside a sector tells you more than the sector does.
Metals already turned
Gold and silver have bottomed.
I said it in the third quarter forecast at the end of June, and the setup has played out. The dollar breaking down was the catalyst, and the miners have been leading spot for weeks now.
Crypto looks like it has bottomed too. That one is less clean, and I will say so plainly, but the character of the tape has changed.
The one nobody wants
SpaceX (SPCX) put in a low at 104.83 and has recovered to mid-$120s. The stock came public at 135, ran to 225, and gave all of it back and more.
Everybody spent this week terrified of the lockup expiration. It came; 911 million shares hit the market, and the stock went up.
RSI bottomed near 30 and has recovered to 46. Volume spiked on the low and has come down since, which is what a capitulation looks like after the fact.
This does not go straight back to 210, and I would not pretend otherwise. What I am saying is the low is in, and the crowd is still positioned for the opposite.
What I am doing with it
The growth confirmation, the rate picture, and the metals turn all point the same direction into the back half of this quarter.
The names that carve out lows first are the ones that lead when the index finally follows, and those are the ones I am hunting right now.
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