Market Volume Turns up to Eleven

Last week the thumbnail on our Closing Bell YouTube video said, ‘This Could Get Ugly’.

I think it is a fairly apt description of what happened this week.

After a lot of umming and ahhing over the last few months, the market finally snapped.

With gold, silver, and now bitcoin getting hammered you have to wonder whether hedge funds are now raising cash to cover margins.

One of the most crowded trades in the US would have to be the software companies that are currently falling off a cliff.

Rather than being a rational reappraisal of their prospects as AI starts to disrupt them, I think it is becoming a case of forced sellers creating more forced sellers.

Going forward, the trick will be finding the companies that won’t be disrupted.

The ones with a wide moat, solid network effects and sticky clients.

The dust will settle at some point, but the charts are pointing to further volatility ahead before it’s time to back up the truck to buy the fallen angels.

Charlie is away and there is a lot to discuss this week, so we have shifted the viewer stock request session to next week. In future months we will stick to the first Friday of each month for viewer requests.

I hope the warnings we have given over the past few weeks have been useful for you. Volatile markets can be stressful, but they also lead to great opportunities if you remain standing at the end of them.