As discussed previously, the 2023/24 market advance which was mostly predicated on extreme concentration and money selectivity towards the blue-chip glamour stocks of the day, is showing yet more signs of percolating weakness.
A bull/bear ratio of financial advisors crossing far above the meme stock extreme of 2021 has heralded a whole horde of market participants to start speculating wildly in the typical kind of stocks that herald an approaching market top (at least for the medium-term time-frame), namely stocks that are or were up until very recently: microcaps, penny- or low-priced, high turnover-of-float, illiquid, coming off the Lows and rallying into large overhead supply, typically involved in some early & non-profitable venture into a “new era”-type technology and discussed broadly on social media and online forums.
As of yesterday, we’ve not merely seen hairline cracks but gaping holes forming in such stocks that had been rallying for many months on exuberance, signaling anything from commencing selling bouts to heavy dumping:
- QUBT: -43% in a day, down -68% in 14 days
- SOUN: -16% in a day, down -41% in 9 days
- QBTS: -36% in a day, down -59% in 8 days
- RGTI: -45% In a day, down -58% in 3 days
- IONQ: -39% in a day, down -52% in 2 days
It will be interesting to see whether this marks the beginning of the end, the end of the beginning, or quite likely – as we’ve already seen such a wave in late 2023 – just another blip of volatility observable while this runaway train of a thin market runs towards the cliff, month over month, year over year.
So long,
TGS
