Tech is lurching back toward market leadership with MSFT and GOOGL bullish, along with many others
Back on October 28th NFTRH+ noted that the Cloud ETF, CLOU, was in a bullish posture with a target of 23. Well, it hit 23, pulled back, and then rammed through it. Currently CLOU is consolidating just above 25. This was part of a market rotation theme that we have been tracking and trying to stay aligned with. The Goldilocks phase we have been in (inflation signals generally easing, with a softening Fed and with the economy still putting on intact appearances) made sense with a catch-up move in these software items.
At that time big Tech had been going sideways, as had its ratio to the broad SPX. But lately NDX/QQQ have been impulsing to retake market leadership. The QQQ/SPY ratio’s trend is actually still sideways, but boy is it a volatile sideways. Picture the machines getting whipsawed and then diving all-in once they realize “oops, we got a rotation here!” and the move becomes an impulse…
…much like what happened with the Cloud stuff back in November. Here’s the CLOU/QQQ ratio.
Lately, good old big Tech is the place to be once again. We’re talking the big boys that the machines (and advisor herds) love to over-populate. Stocks like Apple (AAPL), Meta (META), Amazon (AMZN) and my own Google (GOOGL) and Microsoft (MSFT).
I had two positions in GOOGL, but the profit-taking urge got me last week on of the positions, in the non-taxable (IRA) account. I am holding the other indefinitely. While I have been burned in the past coming back to the scene of a successful stock trade, my revisit to GOOGL (after taking a solid profit on the first burst out of the shaded pattern) has worked out, as it was bought back on a hard pullback and now… well, blue sky.
Just trying to have a few good vehicles for riding out the remainder of the mania while also managing risk. Google has fit that bill.
The other big Tech captain I hold (I have several smaller items) is Mister Softee, MSFT. Frankly, the daily chart pattern had disgusted me for weeks, especially each time the price slipped below the converged moving averages (support). But I thought, it’s in the portfolio for balance in the area of big Tech and if there is a final surge in the mania, ole’ Softee is likely to participate. It is not in blue sky, but it is lurking above a new key support level.
Just a little something different from the gold stock ignominy currently in force. Got to “play” the market you got.
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