AI Bulls Run The Market (Why Fade Them?)

AI Bulls Run The Market (Why Fade Them?)

Good morning RIGD.

NVDA is set to join the Trillion Dollar Marketcap Club today after they announced a ton of new AI products and services that may or may not materialize into anything.

[ bloomberg ]

Have to love Jensen Huang acting like a normal person (not in his leather jacket) casually shopping at a Taipei street market after pulling off the biggest mega-cap rally of all-time.

On the other end you have Zuck posting numbers for his Memorial Day Murph challenge celebrating America by running a mile, 100 pullups, 200 pushups, 300 squats then another mile in a 20lb vest in 39:58.

That’s an insane number we doubt science-experiments Bryan Johnson of Jeff Bezos could complete.

Market Rotation

On Thursday and Friday more stocks hit 52-week lows than new 52-week highs, but this didn’t stop the Nasdaq 100 from surging over 2%. The stock market rally continues to be tech and tech only.

Which means you can sit on the sidelines or chase the momentum and pray to your preferred God that you’re not the one holding the bag at the end.

If you’re long these names (or selling puts), then 2023 has been your year. For bears, it has to be difficult seeing negative data come in over and over again - the Fed continuing to raise rates then only to be stomped on in the name of artificial intelligence.

It’s a similar story for the S&P 500.

Trailing three months the number of stocks beating the index is at levels not seen since 2000.

2000 = Y2K = dotcom bubble = ???

This phenomenon isn’t limited to the USA.

Germany’s DAX is at record all-time highs while the economy contracted in Q1 2023. This follows a Q4 2022 decline of 0.5%. Double declines = recession and Europe’s largest economy doesn’t look good. Again - the markets are not economic reality so that’s why we get the DAX at all-time highs.

[ ft ]

Perhaps the only market taking reality pills is Hong Kong’s Hang Seng which is at the lowest levels of the year.

RIGD REPORTS on Stonks

We’re up up up and away this morning and by looking at market positioning many were caught offsides with the P/C ratio at 2.75 for today and open interest of 70k at 415 and 55k at 418.

There are a few “AI” names reporting this week that we’re looking to take some lottos on.

Tue 5/30 $AMBA

Wed 5/31 $AI $CRM

Thu 6/1 $AVGO $MDB $IOT $ESTC

Look for market makers to drag them down before they report to bleed out the call premium and then position for the $NVDA type pop.

Our approach to this is simple… if $ONFO can pop 90% on adding AI to MightyDeals (LOL) - there’s nothing holding these other names back.

Note: $ONFO is down -12.86% today and gave back Friday’s entire rally.

(insert sad trombone noise)

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