Dangerous Temptations

This market regime, centered around the Nasdaq names, will not end unless and until we see the recurring theme (likely in the hundreds by now since early-2023) of opening gaps down aggressively getting bought begins to effectively punish bulls. In order to do that we need to see a plethora of daily closes on the lows, or near them, and then follow-through lower.

As they say, it is, indeed, a process. 

But the key point is that the brazen, manic, euphoria surrounding AI/growth names continues to slowly abate before most catch on to that fact. If you think about it, that is the essence of how folks gets trapped at market tops and major inflection point--The boiling frogs in water metaphor. 

This morning's robust economic data comes as a disappointment to markets clearly pining for most easing and rate cuts. With this Fed, they still might get it. But it will come in a more measured way barring some type of financial calamity first. Note that rates on the 10-Year continue to climb higher yet, around 4.185% as I write this. That is clearly no helpful for mortgage rates and other parts of the economy tethered to rates on the long end of the curve. 

Palladium and platinum continue to shine in metals alongside silver, even as gold and miners pause a bit today. As noted here and with Members, this type of intra-asset class rotation after years of being out of the limelight is the essence of bullish price action.