Closing Market Report: Jan. 25th, 2024

Another day of epic divergences. This time, the divergence is between the two highest dollar volume stocks on the Nasdaq - Nvidia v.s. Tesla. As we see in the chart below, since the start of the year Nvidia has gone straight up and Tesla has gone straight down. Today's combined dollar volume for Tesla, Nvidia, and AMD equaled the dollar volume of the next 27 stocks combined. In the case of Tesla, it was negative dollar volume, and for Nvidia/AMD positive dollar volume. It's clear that once the semiconductor "AI" bubble explodes, the Nasdaq will be bidless.

Another thing that Nvidia and Tesla have in common is a charismatic CEO who is prone to making outlandish growth projections. At the top in November 2021, Elon Musk was predicting 50% growth as far as the eye could see. His prediction didn't even last one quarter into 2022. Now it's Jensen Huang's turn to predict the AI bubble will go on forever.

On a similar note, IBM "beat" estimates with a 4% revenue growth rate which the CEO attributed to what else but artificial intelligence, the new buzzword that every CEO is obligated to mention as many times as possible on every earnings call.

In the event, the stock hit a 10 year high. I have no doubt that more than one insider executive will be hitting that decade high bid.

On the topic of sentiment, below we see that active manager positioning has bounced back this past week as hedge fund managers got steamrolled by robo market.

For those who must own something in every type of market no matter the obvious level of global risk, I suggest should start to build a position in Chinese stocks. These are by far the most beaten down and low valuation stocks on the planet. And without question, China is the most hated market on the planet.