Inflation Spikes, Tech Stocks Waver: What Charts Reveal

Summary

Today's trading plan kicks off with a look at hotter-than-expected inflation data. CPI year-over-year rose to 3.8%, and core CPI, excluding food and energy, also exceeded forecasts. Despite this, S&P futures are showing a slight bid, suggesting the market anticipated worse news. We're seeing early weakness in semiconductors, a sector that has experienced massive gains. Technically, the NASDAQ has touched a significant trend line, and its reaction here will be key. The speaker highlights an 18-year secular market cycle, noting we're in the 18th year, a period historically associated with bull market peaks. A shift in narrative is also observed, with a Barron's headline calling the chip rally fragile, potentially signaling institutional unloadings. The speaker views the current low P/E ratios in some tech stocks as a sign of high risk, not opportunity, contrasting it with historical buying opportunities at cyclical lows. Analyzing the S&P 500 and SOXX indices, both show trend lines being tested after significant rallies. The 10-year yield is rising due to inflation, pushing back any expectations of near-term rate cuts. Oil prices are back above 100, influenced by geopolitical tensions. Specific stock movements are discussed, including Reggtti and QBTS showing pullbacks after initial gains, and Hims and Hers Health, and Space Mobile facing significant drops. Micron and Intel are analyzed for potential Fibonacci retracement levels, suggesting significant pullbacks are possible. Gold and silver are showing volatility, with the speaker advising caution until key resistance levels are broken. Bitcoin remains neutral for now, with potential shorting opportunities at higher levels. The core message emphasizes relying on technical analysis and chart patterns for probabilistic trading outcomes.