The Bottoming Process Has Begun
What section of the market I think is in the process of forming a big picture bottom.
The most bullish charts are failed bearish charts, from failed moves come fast moves.
That’s become very clear over the past few days, hasn’t it?
Just as everyone got bearish the AI trade, we saw one of the biggest snapback moves we’ve seen in quite some time.
Textbook market mechanics…
When one side of the boat gets too crowded, the boat tilts and those on the crowded side are often the first ones thrown overboard.
I want to quickly highlight that over the past few weeks, I wrote two separate articles discussing why I thought the bottom was near for AI stocks.
In these articles I discussed why I thought the risk/reward was heavily skewed to the long side for the AI trade.
Just as everyone flipped bearish the trade bottomed.
And I believe we’re seeing this happen to another sector/asset/group right now…
If you’re not already in the subscriber chat, I strongly suggest paying attention to it.
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It’s basically become a live market group chat. We have a ton of smart people sharing ideas, setups, headlines, and observations throughout the day, and there’s a lot of genuine alpha in there.
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In the remainder of this article, I’m going to discuss:
The asset I believe is either bottoming or has already bottomed
Why I believe the bottom is close
My broader thesis
My plan for trading and investing around this setup
The different ways market participants can position for a potential bottom
My current positioning and long term investments within the group
And more.
Bottoms are hard to come by, but I believe we’re seeing one form across one of the most popular assets and groups in the market.