Stabilizing markets was the ‘order of the day Friday’; proving once again to all neurotic types, that while patterns don’t have to match historical ones, they often rhyme. While I was undergoing some ‘stress tests’ (apparently unrelated to stocks) there were just a couple members persisting to agitate me with dire messages to undermine confidence, while another couple recalled my adage to ‘buy with there’s blood in the street’. Obviously the latter was appropriate.
We have an era of unleashing American capitalism and growth; hence there ought to be more discussion about extending the ‘relative boom’, rather than so many worries about ‘unfolding recession’. While I continue skeptical of all things crypto; I believed the last couple days were for buying, not selling, of equities..as well as thinking that the brief flirtation with ‘consumer staples’ was an excuse to hold S&P up, which it did; setting-it up for higher highs when the ‘actual heart’ of this market perked-up anew, which it certainly did on Friday.
I didn’t know things would revive so quickly ahead of a military weekend (or as negotiations may determine, but probably not result in any overt action quickly (regardless if the talks in Oman bear fruit or just buy time for our ‘positioning’, as well as for Iranian regime monsters to wire money out of Tehran rapidly as I hear the top mullahs are busy doing… also they are corrupt and own foreign property while they profess to be religious zealots… they robbed their nation).
I did believe it appropriate to adjust and/or add to or buy new-era tickers in the previous two days, and history thus shows it was. Also essential to maintain discipline and not get overly excited, during the retrenchment that cooled the jets of the old-guard mega-tech stocks, along with ‘cross-asset’ selling related to the insane speculation in crypto… (even if it comes back it’s playing with fire or similar to the possible rebounds in Gold & Silver). Some won’t yield easily.
Market X-ray: the other day I wrote that the correction likely clears the decks somewhat of traders, who only watch price and lack conviction in ‘what they own’, and correlated the drop a bit with ‘Deepseek’, the Nvidia slam against Quantum, Trump’s tariff panic and so on earlier last year … plus warning that also rhyming with 2025, February of 2026 would get a correction; preceding a Spring Rally, the nuances of which could even have been set-up already.
There is lots of money around. There is not an imminent debt crisis; though of course the concern is there. There is a need for re-balancing and hedgers for sure had a lesson about that this past week. Again similar action to February a year ago; similar outcome, only faster this go-round. And new DJIA highs. I note that the flirtation with broadening-out helped the Indexes and notably is psychologically helpful to a next-generation of possible winners; our so-called ‘new era’ tickers. That doesn’t mean some old-guard won’t make money; just that the percentage gain potentials are considerably greater in new-era stocks allowing for volatility. But in an algo-driven era; the old-guards get volatile too.
In fact, it took an extra day, but even Thursday evening, certain pundits clung to saying ‘it’s not too late to sell’ rather than realize that day was ‘margin calls’ and related compelled liquidations being the follow-on to Wednesday’s hit. So the combination days afforded an adjustment, cleansed the late for a moment (or longer), and rewarded those who were calm, holding or adding ‘new-eras’.
Once again the inverse of naysayers was the approach; even as Bitcoin and other cryptos cratered and are probably only having bounces (you won’t find me embracing that; so look elsewhere if you insist on suggestions there)… I’m not going to do that, and after being amazed that several Wall Street folks I knew were actually promoting crypto systems that I viewed as a variation on ‘multilevel marketing schemes’, I steered away regardless how it all turns out. To us Bitcoin is an annoyance because some otherwise-fine people promote it perhaps without knowledge, and works out or not, I’ll stick with what I know in tech. Crypto’s an annoyance because of spillover effects when it breaks hard.
Bottom line: software stocks (big-cap huge CapEx ones; not conflated with Generative AI in the new application software) will need more sorting; but that’s not our focus… actually two days ago you saw new-era stocks ‘hold’ or firm while the big-cap gargantuans declined. Then on Thursday all capitulated as it was ‘margin-call’ liquidation day. Friday was the needed recovery and we’ll see how the market acts when (likely) put back on the defensive.
The AI story certainly hasn’t ended; the big-enterprise spin has impacted, and more sorting-out (understanding or differentiating should persist as ‘process’). So we’re not opposed to going higher without an interruption; just very willing to deal with a process sort of being this market’s variation of ‘the dust settling’.
