It’s quite clear that the heady, new-highs-every-day insanity ended on March 28th. Since then, in stages, things have begun falling to pieces. Here, for example, the NASDAQ Composite has utterly busted its ascending channel and has instead completed a distribution range from which it has already broken.
The same can be said for the NASDAQ 100.
Much of this juicy tech failure can be attributed to, at long last, the decimation of the semiconductor sector, in which stocks like AMD and NVDA are really starting to feel the heat.
And to say that the AI fad (and it was a fad, like I said all along) is past its prime is putting it kindly.
It isn’t just tech, either. The S&P 500 and S&P 100 (below) have both broken down in a similar fashion. Sure, we might have a bounce here and there – – maybe even a big one – – but the die is cast.
A different twist on this “things are failing” narrative is the Dow Transportation Index. It has been treading water for literally months, but now it is in an unmitigated free-fall. The enormous base it was building has failed completely.
Sadly, it was not a great day for me, since the Utility Index (and the individual symbol NextEra) were so strong. The strength in XLU and NEE kind of spoiled the day for me, but at least I trimmed them both on Tuesday, which mitigated the damage. I am hoping that they re-weaken soon. After all, I figured they were a completely lost cause a week ago, and now they look a lot better.
