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Closing Market Report: Feb. 12th, 2024

This is the closing market report for February 12th, 2024.

As a reminder, tomorrow morning is the next CPI report. Lately, markets have been ignoring stronger than expected data and hawkish Fedspeak, so it will be interesting to see if the trend in denial continues. Or explodes "without warning".

Today was another strong open but by the end of the day stocks had given up their gains. The parabolic semiconductor sector gapped up to the highs of the day and then gave much of it back. It was a rare reversal of fortune for artificial intelligence. At the highs this morning, I showed on Twitter that Arm Holdings was up 35% on 10x average volume, which equals +100% gain in three days following last week's "better than expected" earnings report.

Barron's ran a story last Wednesday on AI darling, Super Micro Computer. It was a follow-up to a story from this past December in which they mused the stock could go much higher in 2024. They were right, as the stock is now up over 150% in six weeks. In last week's article they said the stock should trade up to $800, which was a 20% gain from Wednesday levels i.e. the high today. But they couldn't say it's time to start selling last week, because that's against their rules. Better to watch everyone pile out the same door at the same time.

Barron's Feb. 7th, 2024:

Before everyone else.

Regional banks are making their third lower high which is the same pattern that took place after the 2022 high (see chart below). Those who adamantly believe that the Fed will bail them out at the first sign of trouble should know that the Fed has an unbroken track record for imploding investors and THEN bailing them out. That's their order of operations:

"New trouble for New York Community Bancorp and America’s top regional banks feels right around the corner—just as the Federal Reserve is getting ready to shut the emergency lending window it opened nearly a year ago"

"It’s unlikely, for now, that the Fed will extend BTFP. The Fed would need to establish that the circumstances are unusual and urgent"

Lastly, on the topic of Bitcoin, pundits have invented all sorts of reasons for why it's going back to the moon. First off there's the recent advent of spot Bitcoin ETFs. Pundits have already forgotten that the advent of futures-based ETFs attended the Bitcoin all time high.

Next there is the impending Bitcoin "halving" event set for April. The last time Bitcoin halved was May 2020 ~ four years ago. After that event it sky-rocketed. But right before that event the price got halved -60% during the March meltdown. I have yet to find one pundit who remembers.

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