The Future, Mr. Gittes!

The latest evidence of market euphoria, at least with respect to the Nasdaq, semiconductors (even the S&P 500 to a degree) came on the back of hope for an imminent peace deal based on some postings made by President Trump on Saturday of the holiday weekend. However, the odds of an imminent deal with Iran now seem to be fading as attacks restarted in Lebanon against Iran-backed Hezbollah, and the U.S. military struck Iranian boats and missile launch sites.

And, yet, despite that as well as the MAGS (Magnificent 7 ETF) and quite a few consumer stocks in the red as I write this, we have the semis in the SMH ETF up nearly 4% thanks to the likes of Micron (and many other chips up sharply) up 19%.

While I fully understand the excitement in pricing in the future, with AI and whatnot, once again just like we saw in 2000 with the internet stocks there can certainly come a point where the market obviously detaches from reality with respect to valuation and disregarding any and all bad news, risks, etc.. Given the reckless disregard for any and all bad news by the Nasdaq and semi at this point, it is highly likely we are in the midst of classic, textbook, once in a generation euphoria. 

As noted, consumer stocks are weak. But so are the big financials in the XLF ETF. And Mastercard sits at the cross-section of both sectors. 

On the MA weekly chart, below, you can see the stock "leaning down" against support. As weak as Visa has been for quarters, MA has been weaker. And I view this as a short setup back below $490 with a major top already in place.