Stalking A Blow Off Top, Beneath The Surface: PTON & SNAP, The First and Last Eighths Are The Most Expensive – Livermore

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

The market gets thinner & thinner at market tops but this is masked by strength in the leaders which hold up the indexes…$QQQ: +1.28%$NVDA: +12.08%$OEF (S&P Mega Caps): +0.70%$RSP (S&P Equal Weight): -0.21%$IWM: -0.04%

NYSE + NASDAQ Advancers/Decliners: 3,528 / 4,375 pic.twitter.com/pTAdMmshVk

— Top Gun Financial (@TopGunFP) November 4, 2021

$NVDA up 46% over the last 16 sessions, best such run in at least a decade. Even better than off the March '20 bottom! pic.twitter.com/w1a2xPvKip

— Jonathan Krinsky,CMT (@jkrinskypga) November 4, 2021

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.

$PTON stock topped at the start of the year. Now they are taking it out back and shooting it…

Stock -28% after hours 📉📉📉 pic.twitter.com/nT58KrXcyT

— Top Gun Financial (@TopGunFP) November 4, 2021

Looking at Peloton’s stock price after reporting earnings pic.twitter.com/BD1eoNqtpn

— litquidity (@litcapital) November 4, 2021

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.

$SNAP: This is the problem with buying a $120 billion market cap stock at 30x sales with no profits pic.twitter.com/5ZIiwQ9izG

— Top Gun Financial (@TopGunFP) October 21, 2021

Two weeks ago former darling Snapchat (SNAP) underwent a similar drubbing – and its stock has continued to trend lower since.

Other stocks that have been hit on earnings and stayed down include Starbucks (SBUX), Intel (INTC), Federal Express (FDX), Twitter (TWTR) and Pinterest (PINS).

The qualification “from a fundamental perspective” is important – especially when shorting:

One of the most helpful things that anybody can learn is to give up trying to catch the last eighth – or the first. These two are the most expensive eighths in the world – Livermore pic.twitter.com/8U1pYNH99A

— Top Gun Financial (@TopGunFP) November 4, 2021

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.