Is That the End?

Without question this market has to rank as one of the all-time epic melt-ups in the Nasdaq, especially considering the economic backdrop and geopolitical tensions, not to mention monetary and fiscal blunders. 

Still, the party has rolled on, with many of the main characters/CEOs in the AI story having been at the epicenter of the dot-com bubble twenty-five years prior. Those folks seemed to have learned how to try to postpone the inevitable demise of the mania, namely through “round-tripping," which is essentially a game of three card monte amongst the AI firms. 

Gold and the precious metals continue to act like they know something major is afoot. And tons of consumer names either remain noticeably weak (CMG SBUX SFM) or are only now beginning to wobble or even break down (BKNG OLLI HD LOW SHW). But it will not mean much until the monsters crack: AAPL GOOGL MSFT NVDA PLTR, etc.. 

We know that October can--I repeat can, so as to not be a fear monger--be a pivotable month in terms of prior market tops and crashes, be it 1929, 1987, 2007, just to name a few memorable Octobers. I recall watching a documentary about the 1929 crash where some veterans of Wall Street noted that once October rolled around the weather inevitably got colder and, much like squirrels, investors suddenly considered storing some nuts for winter, so to speak. 

The main technical point about today's action can be found in the semis, with the SMH sector ETF giving up all of yesterday's gap up (on AMD/Open AI news) down to last Friday's range. This gives more credence to the idea that yesterday was an exhaustion candle after a prior steep uptrend and possibly the end of the trend. 

Indeed, throughout the course of this melt-up we have seen sparse evidence of any downside follow-through from the semis before today.