With the continued breakout in Treasury yields (ref. today’s entry #4 in the daily notes), the spike in the US dollar and what looks like a head fake in the Silver/Gold ratio and its implications for precious metals and commodities, just what is getting bid?
Well, today it’s certainly not the commodity trade. It’s not Semi. It’s not Tech in general.
But it is a sub-segment of Tech, the Software segment that had been so brutalized by the negative AI hype over the last several months.
The likes of DDOG (profit taken)…
…and CRWD (I neglected to buy) are leading.
I believe the machines are programmed in the same way we are using logic to interpret the market’s internals. Or, if you will, the hedgehogs are sniffing out an area in which to deploy. This could be very temporary, or it could extend.
Be that as it may, I am holding ZS (a Crowdstrike “me too!”) and the bottoming pattern it is trying to break out from.
MDB, which already broke upward from a pattern.
Big boy MSFT.
Also SAP, for a company based in Germany. It’s not really off the bottom at this point and its chart is unremarkable.
Other candidates, assuming the machines don’t rotate right back out:
NOW, which I continue to watch after a failed trade (chart unremarkable). TYL (chart unremarkable).
And SNOW, with a chart that looks somewhat similar to ZS above. These are by the way, items that research has indicated are not particularly vulnerable to AI obsolescence. But who among us can quantify where the heck AI is going on the way to ending the world as we know it? That’s a joke (sort of).
I am not recommending software stocks, so much as noting a rotation into them. The rest is up to you, dear readers, to consider or dismiss. If we are getting a 2022 style bond market tantrum and the market correction bites deeper, most segments will likely feel the pain at some point.
