Overbought Mania
NASDAQ mania
NASDAQ has not been this overbought since early 2018.
Source: Refinitiv
Another day...
...another new high print for the NDX vs NDX equal weight ratio. Impressive.
Source: Refinitiv
Under the hood...
Callahan with some stats: "...NDX is up ~7.5% over the last month .. under the hood, only ~50% of the index is even up over this 1-month stretch and nearly 70% of the gains (e.g. ~5pts of the ~7.5pts) can be attributed to just three stocks (NVDA, AVGO, AAPL)."
Overboughter
Earlier this month (here) we explained the psychology of Apple and when big stocks break out of big ranges. Mighty Apple continues pushing higher and RSI stays at extreme levels, but as we all know, overbought can stay overbought for long periods of time.
Source: Refinitiv
and it's back
Spot up, volatility up in NASDAQ is making a comeback. The crowd is busy chasing upside exposure, as this remains the number one force. These are the things you pay close attention to...especially with markets in very overbought territory.
Source: Refinitiv
AI and the narrowest of rallies
Artificial intelligence sparked the narrowest of rallies. Chart shows S&P 500 equal weight vs market cap, 3-year annualized relative returns.
Source: BofA
Not all tech is equal
Small vs big cap tech gap is very wide. Time for a catch up trade by small caps, or is small cap tech telling us something is "wrong"?
Source: Refinitiv
NVDA - cheaper and cheaper
JPM market intelligence: "For those not involved in NVDA, the stock continues to cheapen on a P/E, e.g., last fiscal year the stock was +200% and earnings were +581% (Jan 29, 2023 – Jan 28, 2024)."
Source: JPM
Asymmetry is cheap
Based on low ISM new orders, weak FCF yield vs 10Y rates, elevated ROE, middling US Capacity Utilization and the rise in jobless claims, our model shows a high probability of a large move…yet index options prices are low, writes GS' Marshall. What are you waiting for...? Just decide on your directional preference...
Source: GS
The big buyer is taking a pause
The buyback blackout has just started and is expected to last until July 19.
Source: GS
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