Key insights
- The author expresses concern about the rapid rise in the QQQ, SP500, and SOXX, highlighting overbought conditions and comparing the current rally to previous unsustainable surges. They question the sustainability of the current market environment where growth stocks are significantly outperforming, suggesting a potential correction is looming. The author points to stretched valuations and excessive optimism as warning signs.
QQQ is up ~30% is the last 30 (trading) days. Last time it went up that fast was when 🥠🌮 on the April lows last year, going up 30% in 29 days. Before that it was Covid, 83% in 112 days. SOXX is as overbought (on the weekly) as it’s ever been. And SP500 is up 18% from its previous low. All I see is: “X stock is up 800% this year and here is why it’s still undervalued and could go another 100%.” I don’t even want to mention the names since we all know them.
This can’t go on forever, can it? Everything and everyone is winning (except for value investors, a moment of silence…). What causes this to stop? Can it even stop? Space, chips, memory.