Welcome Friends, 

Here’s an assortment of posts shared this week on Trends with Friends. Let’s dive in…

GOODBYE NEW YORK… HELLO AMSTERDAM

Howard Lindzon is checking in from Amsterdam. He shares his recent activity traveling to NYC and upcoming adventures in Europe. Here are a few photos for your viewing pleasure… 

Read Lindzon’s latest here.

THIS WEEK IN AI

Michael Parekh reviews reactions to OpenAI’s o1 “AI Reasoning” models, Microsoft’s nuclear deal for AI data centers and more in this week’s AI Summary.

It’s a must read. 

THIS WEEK IN CHARTS

Charlie Bilello curated this week’s most important charts and themes in the market. 

The downtrend in US inflation continues, with headline CPI falling to 2.5% in August. That’s the lowest inflation rate since February 2021.

While still above the Fed’s 2% target, the rate of inflation is now 6.6% lower than the cycle peak of 9.1% in June 2022.

What’s driving that decline?

Lower inflation rates in every major component of CPI…

See Charlie’s full post here.

THE BUSY ADDICTION

Phil Pearlman shares how busyness is killing us. Here’s the money quote, 

We wear this busyness like a badge of honor and we don’t even realize it.

Busy busy busy.

You have to be busy because everybody else is so busy. It’s kinetic. It’s mimetic. Or maybe it’s just the Joneses or angst. 

It doesn’t matter why, but It is a society wide addiction like alcohol or cell phones.

It’s even worse than alcohol or cell phones because people at least know they are addicted to those poisons but nobody even realizes they are addicted to being busy.

Read the full post here.

A SHORT TERM SHORT

Larry Thompson provides a compelling well-defined risk/reward short to add to our arsenal.

Larry writes, 

It’s a Bull Market, and I’m net long in my primary account. In bull markets, long ideas generally outperform short ones, but sometimes a short setup with a well-defined risk/reward profile is worth taking a swing at.

The Nasdaq 100 experienced ~16% drawdown over 18 days from late July into early August—classic “escalator up, elevator down” action. Since then, we’ve seen a constructive rebound. But when I dive into the details of price, momentum, and breadth, I’m seeing a pretty compelling setup to get short.

1.) Price – The rally off the August lows is impressive, but in the short term, there are some indecisive candles forming below the July 17th gap down. If I wanted to add long exposure, it wouldn’t be below this overhead supply.

2.) RSI (Momentum) – Since the July high, RSI has failed to climb back above 60 to reassert bullish control. Currently, it’s curling lower before reaching 60, the same level it failed at during the previous rally.

3.) % Above a 50 Day Moving Average (Breadth) – The bottom panel shows the percentage of Nasdaq 100 components trading above their 50-day moving average. It’s been a reliable signal of exhaustion when this percentage breaks above then drops back below 70%.

NEW YORK’S HIDDEN MONUMENTS

Ted Merz shines light on New York City’s Hidden Monuments. Merz mentions, 

New York is home to cultural treasures, some of which were brought here long ago only to end up largely forgotten in the most random of public places… 

Central Park, near the Metropolitan Museum of Art at 83rd street, contains the oldest immigrant monument in New York City, a 3,500-year-old obelisk from Egypt.

The obelisk sits up on a knoll, partially obscured by a grove of trees.

There is almost never anyone there.

Nicknamed Cleopatra’s Needle, it was one of a pair commissioned in 1450 BC by the pharaoh Thutmosis III to commemorate the 30th year of his reign.

The pharaoh ordered the obelisks to be constructed to sit aside the entrance to the sun temple in Heliopolis. Each obelisk was cut from a ­single piece of red granite in the quarry at Aswan.

The story behind the journey is incredible. The two obelisks stood overlooking the Nile for more than 1,000 years until they were toppled when Persians raided the city. They then spent hundreds of years buried in the sand.

Around 12 BC they were dug up by the Romans and moved to Alexandria to be placed at a temple honoring Julius Caesar. And there they stood for almost two thousand years until a mania for Egyptian artifacts prompted a British businessman to fund the transportation of one to London. It now stands near the Embankment Underground station.

RELENTLESS POSITIVE ENERGY

Relentless Positive Energy is the theme of Tadas Viskanta’s Saturday linkfest. Here’s a sneak peek… 

TRENDS WITH NO FRIENDS

Trends With No Friends sifts through the noise and discovers stocks above $1B market cap with high relative strength and low social following.

The publication shares 52-Week Highs and Lows sorted by followers on Stocktwits. 

Why is high relative strength and low social following important?

Stocks that are outperforming tend to continue to outperform. Stocks that have a low social following are, by definition, undiscovered by the crowd. Stocks that have both Relative Strength and Low Social Following can really outperform as more investors discover them.

This week, Trends with No Friends featured… 

Edgewise ($EWTX), CompoSecure ($CMPO), Smith Douglas Homes ($SDHC), Nuvalent ($NUVL), MDU Resources ($MDU) and more.

THIS WEEK’S EPISODE

And in case you missed it… Mike Maples Jr. joins Howard Lindzon and Michael Parekh to discuss the state of Venture Capital, the AI era and more in the latest episode of Trends with Friends.

Tune in today.

GET IN TOUCH

If you share insight on the market and would like to contribute to Trends with Friends, send us an email.

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