You simply can't have a bull market without semiconductors.

They’ve been the poster child of this cycle. But, it’s bigger than that.

They are the most important companies in the world. The lifeblood of the global supply chain. The gas for the globalized economy. Semiconductors make it all work. They are in everything.

However, for the last six months, semis have been catching their breath, chopping sideways in a tight range on both an absolute and relative basis.

That changed today as the VanEck Semiconductors ETF $SMH finally broke out, clearing a shelf of Q4 highs around 264.50.

If we’re above this polarity zone, the path of least resistance is higher, and all-time highs feel inevitable.

The chips are on the table, and they’re stacking up for the bulls....

Infrastructure companies play a key role in supporting the global economy and are at the forefront of some serious mega trends. 

These companies literally build and service our everyday lives. 

After 17 years of no progress, the iShares Global Infrastructure ETF $IGF is now challenging its pre-financial crisis highs as buyers work to complete a massive base.

This ETF holds a well-diversified basket of stocks, offering exposure across three primary sectors: utilities (40.4%), industrials—including transportation (38.6%), and energy (21%).

If IGF can break above its former highs around $52, the path of least resistance points higher, paving the way for a fresh leg up in these groups of stocks.

Alfonso

Bitcoin broke out of a multi-year base back in November and surged rapidly from $70K to $100K, hitting my initial target in a matter of days.

Fast forward to today, and it has been consolidating within a tight range, digesting gains just below the key psychological level of $100K. 

This level is also the 161.8% Fibonacci extension from the 2022 bear market.

Earlier this week, BTC quickly dipped below support and then reclaimed it, trapping the bears as price reversed higher. It’s booked several bullish follow-through days since.

With the bulls proving themselves and BTC above $100K, I think a fresh leg higher could be around the corner.

The next target is around $155K.

See you there.

For the market to experience a meaningful correction, we need to see clear signs of defensive rotation—and so far, that hasn’t happened.

In the bond market, U.S. Treasuries are viewed as the defensive play, especially compared to their High Yield counterparts. 

It’s the same concept in equities when you compare Consumer Staples to the broader S&P 500. If the environment favors risk-taking, both Treasuries and Staples should underperform.

Overlaying the Treasuries versus High-Yield ratio (IEI/HYG) with the Staple vs S&P 500 ratio (XLP/SPY), you’ll notice they move in the same direction.

Currently, both are trending lower and making new lows, signaling no defensive positioning from bond or equity investors.

As long as these lines keep trending down and to the right, there’s nothing to worry about for risk assets. But if they start to turn higher, that would be a key warning sign of trouble ahead, potentially...

Whenever the market enters a corrective wave, regardless of the magnitude and time, section rotation comes into play.

While we haven't seen any signs of defensive rotation yet, there's movement beneath the surface worth paying attention to.

The chart of the equal-weighted S&P 500 $RSP relative to the market-cap-weighted S&P 500 $SPY can provide valuable insights. 

It gives us a read on future leadership trends and helps guide how we position ourselves in various vehicles and themes.

The SPY is dominated by mega-cap tech stocks, while RSP, with its equal-weight structure, provides a broader market picture with greater exposure to cyclical sectors like Industrials, Materials, and Financials.

The RSP/SPY ratio is currently testing a key support level that was last seen during...

The market’s been a hot mess this past month. Failed breakouts are piling up, with prices slipping back into their ranges and falling below key overhead supply zones.

Beneath the surface, the average drawdown for S&P 500 stocks stands at 18.2%, and the weakness is spreading across major sectors and industry group indexes.

It began with lagging areas like metals and mining, which have already rolled over, and now, groups such as banks are breaking below their prior cycle highs.

Let’s break down the choppy action and highlight the struggles across various groups to hold their breakouts.

Let’s start with the Equal-Weight Consumer Discretionary $RSPD:

One of the most important...

The market of stocks has been a chop fest for the past month, prompting me to keep a close eye on market internals.

While trends in the major indexes remain unaffected, short-term weakness has been steadily creeping in beneath the surface.

The average 52-week drawdown of S&P 500 stocks has reached -18.2%. This means the average stock is experiencing its sharpest decline in over a year.

This kind of internal weakness begs the question of whether this is just a standard corrective wave within an ongoing bull market? Or are we witnessing the start of something more consequential, and even deeper drawdowns are ahead?

While there’s no need for alarm just yet, it’s crucial to stay mindful of how market participation is shifting.

While the uptrends in the major indexes are holding up well, it's been a tale of mixed signals beneath the surface.

Some sectors and groups are showing strength, while others continue to lag behind.

Banks, for that matter, are an important piece of the puzzle. They are the backbone of the financial sector. They are some of the most important businesses for the US and global economy. 

How bank stocks perform gives us a good read on where the broader market is headed.

The SPDR S&P Banks ETF $KBE took a shot at breaking out of this monster base following November’s election. This marks the second attempt at reclaiming its pre-GFC highs in the past few years.

But here we are today...

In a healthy bull market, you want to see offensive groups performing well. When these groups lack strength, it often signals problems ahead for the broader market.

Homebuilders, one of the most cyclical subsectors within the Consumer Discretionary space, come to mind when discussing this theme. 

They are a reliable gauge of global growth and investor risk appetite.

Historically, when these stocks trend higher, it reflects an environment conducive to risk-seeking behavior. On the flip side, sustained selling pressure on them tends to indicate a more cautious market stance.

When we overlay the SPDR S&P Homebuilders ETF $XHB with the S&P 500 $SPY, they typically follow the same path.

Homebuilders often act as a leading indicator for the broader market. The chart highlights multiple...

It’s hard to ignore the strength coming out of Argentina this past year.

The MSCI Argentina ETF $ARGT has been an absolute beast, finishing 2024 as the best-performing country ETF, with a jaw-dropping gain of 63.50%.

The series of higher highs and higher lows remains firmly intact, and it doesn’t look like the trend will change anytime soon.

Javier Milei’s ascent to the presidency in November 2023 has been a key driving force behind this recent surge.

His free-market policies, emphasis on entrepreneurship, and commitment to economic growth have been a game-changer, attracting investor attention from every corner of the globe.

Investors with exposure to Argentina have been richly rewarded by the market as ARGT...

Quantum computing stocks have been on an absolute tear, making this group one to watch closely as we head into 2025.

These companies are pushing the boundaries of what’s possible, solving problems and processing workflows traditional computers never could.

From AI and cybersecurity to drug discovery, quantum computing has emerged as a critical driver of innovation. And with plenty of public companies operating in the space, quantum stocks offer an exciting investment opportunity.

IonQ $IONQ stands out as a leader in this revolution, fueling a surge of investor enthusiasm.

I remember when Sam highlighted it in our Freshly Squeezed report back in March last year.

What started as a promising pick has since turned into a major market leader.

The stock has been...

When assessing risk appetite and the health of the market, several approaches come to mind. One of my favorites is comparing Consumer Discretionary stocks with their Consumer Staples counterparts.

Discretionary stocks represent products or services consumers spend their "extra" income on—like leisure activities, retail, and other non-essential goods.

In contrast, Staples are those companies whose products and services we continue purchasing regardless of economic conditions. These include essentials like toothpaste, laundry detergent, beer, soda, and cigarettes.

Historically, Staples outperform significantly when markets face pressure, which makes sense given their necessity-driven demand.

How...