Momentum Monday – Software is Hungry All The Time

I am out of country, but the show must go on. Momentum does not sleep.

Actually, In Italy, momentum never woke!

Since Ellen and I were first invited to a Tuscan vacation by Amy and Brad Feld (2011), I have joked that the $VIX is always under 10.

In this week’s show I open (from the saltwater pool of course) with a look back at Italian stock markets and the mess it has been for the past 30 years. One reason may be their cloud software system still looks like this:

In the USA, momentum has stopped sleeping because of the machines. Software is hungry 24/7/365 and it continues to show in the Nasdaq 100 and Semiconductor stocks.

What is NOT working right now (besides Italy) are the large money center banks. Wells Fargo, Citibank, Goldman Sachs and even JP Morgan are in sideways mode. In an era of digital money, the semiconductors might just be the money printers and it might take much higher interest rates to slow these ‘new’ banks down.

As a reminder, Marketsmith (by Investor’s Business Daily) is now a sponsor of the weekly show. All the charts you have been seeing and will continue to see are from Marketsmith. They are offering my readers a three week trial for $19.95. Click this link if you would like to try it out.

As always in the show, this one 22 minutes, Ivanhoff and I go through some new ideas and our SL50 list of momentum leaders. Here is the show:

One that stood out was $IDXX:

Overall, I do not think I have ever seen our list of 50 momentum companies/stocks so dominated by technology, specifically consumer software and consumer enterprise stocks. One could argue that the market for momentum was narrow if software were not such a giant part of the global economy.

It will end when it ends. Surely it has not been due to valuations.

I hope you enjoy the podcast/show and have a great day.

PS – Here is Ellen at the fantastic Tuscan home of our friend Xenia…

We spent the afternoon in Florence. Here is Max and his cousin Ben enjoying the sights…


Also published on Medium.