What Are the Semiconductors Telling Us Here?

One of the big reasons behind the incredible market strength this year has been the much-touted “A.I. narrative” that has invaded almost every feature of the news cycle. Even coffee shops and tattoo artists are involving A.I. into their business models to the extent that they can get away with. It’s been amazing and strange, even perhaps surreal.

Be that as it may, many of the semiconductor companies have been especially strong this year, with the most obvious stock being NVDA, with it’s jaw-dropping, mind-frying 20+% gap up to a new high earlier this year.

Now if we are looking for signs that a market top of some kind is looming—we have this open question about whether the Fed’s hiking cycle will lead to a recession—we would at least hope to see signs of such a top coming from more than one direction. And since the semiconductors were so strong already this year, I do find it amazing to be presented with a structure like this on AMD now:


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The Weekend Review of the Markets: The Three Coming Errors

In this weekend’s article, I will examine a few of the things I have been discussing about the situation locally, and then I will turn to a discussion about the long-term picture. In that discussion on the long-term picture, I will lay out “Three Coming Errors” that I expect market participants to make over the coming 6-9 months, and I believe those 3 errors will govern the structure that unfolds ahead of us. I’ve hinted at some of these here and there, but I wanted to organize them together into a cohesive picture where you can see them laid out in clarity.

Let’s look at some things.

The S&P 500 has been in something sort of bull flag-like, and it’s broken out:


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