It is late in game but Big Tech is showing incredible resilience and has not rolled over. Until it does, the indexes will continue to grind higher, masking the weakness beneath the surface in smaller and lesser known stocks that have fallen by the wayside – “Bulls Win Again As Big Tech Shows Resilience”, Top Gun Financial, Saturday 10/30
You wouldn’t know it from the performance of the leading stocks (like chip maker Nvidia (NVDA) Thursday) but beneath the surface the market is gasping for air. Big Tech continues to mask enormous weakness beneath the surface in smaller and lesser known names that have already fallen by the wayside. When it too finally rolls over, look out below.
The latest example of a former highflyer falling by the wayside is Peloton (PTON). PTON topped earlier this year and Thursday afternoon reported weak earnings. Already down 50% from its highs, PTON looks set to be taken out back and shot Friday.
Two weeks ago former darling Snapchat (SNAP) underwent a similar drubbing – and its stock has continued to trend lower since.
While nobody knows when Big Tech will roll over and the bull market with it, I am fairly confident this is the last eighth. Prudent investors should be selling into this strength and aggressive ones looking for signs of a top in Big Tech in order to short it IMO.
October Jobs Report Friday at 8:30am EST.