Momentum Monday – All-Time Highs, Memory Growth and Why Prices Are The Best Source of Truth

Howard Lindzon Howie Town

11 hours ago

4 MIN READ

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Good morning…

The war, excursion, foray with Iran is the headline, but the markets are looking past whatever Trump, Iran and the media are labelling it. The buyers are looking past higher rates, inflation and higher oil prices as well. Will that continue?

I do not know. For now, the semiconductors Apple, Google and the memory products are pulling the market higher. Space is working too and now that Amazon has offered to buy Globalstar, the space race becomes more real.

From the strong price action in these leaders it seems the only thing that will derail the markets is China messing with Taiwan.

The most interesting change in technology is the emergence of ‘memory’ and ‘storage’ as growth leaders. When I first learned to invest and trade in the 1990’s, semiconductor stocks and memory stocks were considered cyclical. Along came the internet and by the early 2000’s, many more semiconductor stocks became growth stocks and the $SMH ( ▼ 0.75% ) (semiconductor ETF) has now long outperformed the $QQQ ( ▼ 0.54% ) . Today, Micron and Sandisk, Western Digital and the whole Taiwanese economy is in a raging bull market.

If I were to form fit the narrative at this point, if this trend continues the media will catch on to the idea that this new era of machines and agents is fuel for the endless demand of memory, human beings be damned.

Have a look at the profit profile below…I do not recall any prediction that had Micron having this kind of success. This is why I continue to follow price as my source of truth when I scan the markets every day.

As always, Ivanhoff and I tour the markets looking at the trends and sharing some fresh ideas.

Welcome back to Momentum Monday!

In today’s episode of Momentum Monday, Ivanhoff and I discuss the following:

Market Indices and $QQQ ( ▼ 0.54% ) Analysis
Macro Drivers: Oil and Treasury Yields
Software Sector Distribution and Tech ETF
Infrastructure and Space Sector Momentum
Big Tech: $NVDA ( ▼ 1.24% ) , $GOOGL ( ▼ 0.95% ) , and $TSM ( ▼ 1.04% )
Fintech Outlook: $HOOD ( ▼ 0.71% ) and Financials

In This Episode, We Cover:

Market Indices and $QQQ ( ▼ 0.54% ) Analysis (0:00)
Macro Drivers: Oil and Treasury Yields (2:39)
Software Sector Distribution and Tech ETF (3:23)
Infrastructure and Space Sector Momentum (5:42)
Big Tech: $NVDA ( ▼ 1.24% ) , $GOOGL ( ▼ 0.95% ) , and $TSM ( ▼ 1.04% ) (7:43)
Fintech Outlook: $HOOD ( ▼ 0.71% ) and Financials (18:18)

Here are Ivanhoff’s thoughts:

The US indexes just had their fastest V-shaped recovery in recorded history – it took only eleven days to go from being oversold under their 200-day moving average to a new all-time high. Granted, the correction wasn’t very deep, but the sheer velocity of sentiment change has been epic. There was a lot of bearishness and talk about stagflation two weeks ago. Now, we have a major FOMO (fear of missing out). There are many underinvested managers and traders, so every dip is likely to be bought aggressively. Obviously, this doesn’t mean that we won’t see shakeouts and sector rotations. The market never makes it obvious or easy.

Today’s market has become much faster. What used to play over months now happens in weeks. The collective access to more and timely information, to working strategies, has accelerated everything. We already saw the typical stages of a recovery. First AI infrastructure stocks (mostly fiber optics and semis) showed relative strength by staying near their all-time highs while the indexes were under their 200-day moving averages. They led the market higher. Then the bounce spread over more stocks – the lagging megacaps recovered at an impressive pace. Even the highly-shorted stocks with questionable fundamentals started to outperform, which typically happens later in a new rally.

The ceasefire end date is April 22nd. There is a possibility that if both sides don’t reach an agreement, we might see an escalation. Under such a scenario, oil prices will rally, and most equities will pull back. This is the dream scenario for everyone underinvested. If such a dip happens, it will be bought. The market has already shown politicians what will happen if there’s peace in the Middle East and what will happen if the negotiations fail. By doing it, it has essentially created or at least influenced its own future.