There’s an old Wall Street saying: There’s always a bull market somewhere if you focus on trends and don’t zoom in too much.
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The Big Picture
I don’t know what can stop this train. At some point we’ll have some kind of real reversal. But if you go back to that big gap-down day on May 15, people were panicking.
My read was that we just needed a down day. I was saying “give it a week, and if we have an actual downtrend I’ll eat my words.” The next Monday was a little shaky, too. But I look for trends. I’m a big trend follower.
I know a lot of people don’t like it, but the reality is, it was one down day. It’s just the reality. Markets can’t go up every day.
Fast forward a week to last Friday, and we closed near all time highs.
Obviously you gotta be smart. You have to have stop losses and trade plans. You can’t stay in trades that aren’t working. But I look at all of the potential out there…
I’ve been talking about semiconductor stocks all year. AI is hot. I look at my news feed and it’s basically nonstop space news. So, I expect space stocks to continue to go higher.
Then, last Thursday (May 21), quantum stocks popped up. Now they’re on a multi-day run.
My Take
I know it’s a corny saying, but I like it: The trend is your friend.
Wait for that trend to shift before you start panicking. Focus on opportunity until we see a real appreciable pullback. I haven’t seen ANY of that this year. Let’s put that into perspective…
Through wars, negative news flow, ebola, and hantavirus, the market just seems to shrug it off.
Watchlist
Bloom Energy Corporation (NYSE: BE) first hit my radar years ago. Back then it was a single digit stock. You could even have called it a speculative penny stock.
I’m a big believer in energy. I’ve even said that energy is all that matters. Think about it, without energy you have no economy. Now, with AI data centers we need more energy than ever before.
BE has been on a heck of a tear this year. The last month or so it has consolidated, but held really close to the highs. It’s trading within a range. I like to look for those bands because it allows you to build a trade plan. I like to trade the channels.
So you trade the breakout and risk the bottom of that channel. BE finally busted out of that channel on a $2.6 billion deal with Nebius for AI data center power.