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This sunny financial forecast comes from Cestrian Capital Research’s Alex King. King vehemently asserts that the only way to evaluate markets is through their price. According to him, the NASDAQ has seen a powerful surge, and he predicts that it still has a long way to go. Analyzing various methods such as Elliott Wave and Fibonacci level, King suggests a potentially significant increase in the NASDAQ’s future. He uses the QQQ ETF as a benchmark, estimating that it could climb to levels between 418 and 463 before any signs of a downturn.
Rena Sherbill: Alex King, welcome back to Investing Experts. Great to have you back on the show.
Alex King: Thank you, Rena. Always a pleasure. Thanks for the repeat invite. Much appreciated.
RS: Yeah, absolutely. It’s great to have you back. You’re talking tech with us. You’ve talked tech previously with us at Cestrian Capital Research, that’s Alex’s team at Seeking Alpha, and he runs Growth Investor Pro, which is his Investing Group on Seeking Alpha. I’m interested how you’re looking at the market.
Last time, we were, kind of green shoots everywhere. And now we just had Julian Lin talking to investors about how it’s not a bubble. So, you were also talking about the volatility that’s inherent in this part of the market. I’m interested how you’re looking at the market in general and then vis-à-vis tech.
AK: Yeah, I’m happy to talk it through. We run a service called Growth Investor Pro here on Seeking Alpha and one of the things we do is we cover tech stocks as the name suggests, but we also do a ton of market index work.
If you zoom out, I would say, Rena, that we saw a bottom in the market around this time last year. And we’ve had a really strong bull market all year, certainly in the S&P and the NASDAQ. And it’s been a hated bull market. People have written it off as a bear market rally or this or that, or it’s not real, and of course, none of that matters. The only thing that matters is the price, and price has shot up, particularly in the NASDAQ.
“Some forms of technical analysis,” King states, “will tell you that this rally probably has some way to go.” He goes further to elaborate on their work and projections for the NASDAQ. He emphasizes their “base case,” which projects an upward trajectory for the NASDAQ, potentially reaching 418 to 463 on the QQQ before any downward movement.
According to King, the big question is not about an immediate market dump, but rather a possibility of a continued surge in the markets through 2024, at least until the upcoming presidential election. While many might find these projections ambitious, King contends that history has shown that the initial price targets of large bull markets often sounded implausible at the time they were predicted.
Despite this seemingly positive outlook, King acknowledges the possibility of being too cautious in their assessments. He emphasizes that the real concern lies in potentially missing out on the market’s positive momentum. Reflecting on those who doubted the legitimacy of the current bull market, he highlights the significant losses incurred by those who underestimated the market’s resilience.
## The Tech Market and Solid Performance
In a recent discussion, we had a surprisingly interesting conversation about the nuts and bolts of stock analysis with Alex Keenan of Cestrian Capital. While they may not realize it, looking at charts and graphs for extended periods can often leave one feeling like they’ve stared too long at a fruitcake; colorful, but ultimately unsettling. However, despite the drowsy effect of analyzing charts, Keenan gave some compelling insights on the state of the market, specifically addressing the financial prospects of certain stocks and the undying influence of the tech market.
### Contradictory Analysis: Elliott Wave and Fibonacci
When it comes to stock analysis, the process often involves two kinds of in-depth examination: technical and fundamental analysis. Keenan firmly believes in keeping these two forms of analysis separate, treating their convergence as a rare and fascinating occurrence that reinforces each other’s credibility. He provides a unique perspective on utilizing the Elliott Wave and Fibonacci method, which many others also employ, particularly those on Seeking Alpha. Echoing sentiments from the financial community, Keenan indicated that the technical call for an imminent rollover based on Elliot wave analysis did not align with the current state of the U.S. economy, hinting at a potential paradigm shift in the market.
### The Unpredictable U.S. Economy
Amidst the comical yet matter-of-fact observations on the health of various socioeconomic groups, Keenan amusingly asserts that the health of rich individuals, rather than the less well-off, significantly influences the market trends. In the finer details of technical analysis, Keenan emphasizes that starting the same method and charts from different points in time significantly alters their interpretation. For instance, from the perspective of the COVID lows, the market sell-off in 2022 resembles a wave two down, portraying a major correction following an initial upsurge, rather than a final sell-off.
### Market Prediction and Technical Jargon
Without divulging into eye-watering technical details, Keenan delves into scenario-specific analysis of the QQQ base case. He details how the market movements of 2022 mirrored a significant retracement from the wave three highs. Through an interesting lens, he portrays the market in the early innings of a bull market, citing the chart pattern as the chief advocate of this trajectory.
### Seeking Alpha and the Long Bull Market
Keenan pointed to an exhaustive article titled “The Long Bull Market To Come” on Seeking Alpha, elucidating his perspectives further. Encouraging discussions, feedback, and comments, he emphasized how a multitude of intellects fuels the vibrant environment on the platform, complementing their market insights and predictions.
### Intel: The Flag Bearer
Transitioning to discussions about Intel, Keenan highlighted the bullish outlook on the tech giant, lauding their strategic position as a major player in the semiconductor space. While pointing to a momentary weakness, he remains optimistic, attributing it to a slight pullback after a vigorous upward momentum. Keenan appreciated the efforts of the new CEO, Pat Gelsinger, albeit acknowledging the enormity of the challenge given the size and complexity of the company.
Keenan’s discourse, though peppered with dry humor and unconventional beliefs about the stock market, provides a unique vantage point to understand market intricacies. His outlook on Intel and the broader market makes for compelling speculation, interwoven with invaluable insights and perspectives that can shed light on the otherwise enigmatic world of stocks and finance.
Rising from the Ashes: Intel’s Potential Turnaround and the AI Sector Surge
When a company’s business takes a nosedive and things start to look worse than a cat in a room full of rocking chairs, it’s usually a sign for a new CEO to come strutting through the door. They clean house, vent the bad news, and hope for a rebound in about three to six months. That’s exactly the kind of turnabout we could soon be witnessing at Intel, according to market rumors.
Despite the global landscape staying pretty much the same, there seems to be a thaw in the chilly relationship between the U.S. and China. However, underneath this seemingly peaceful exterior, there’s a thunderstorm brewing over who will win the semiconductor supremacy battle – the U.S. or China. And stuck in the middle is Taiwan, home to TSMC, which is one of the key players.
It’s a high-stakes game, and Intel is right in the middle of it. Despite some risk, this is one horse that Jim Cramer, the famous financial expert, is still willing to bet on. Intel, he also notes, has become one of his biggest investments, and it has been doing pretty well. He admits he almost trimmed his holdings a few weeks ago, but he’s holding on for a big payday down the road.
AI: Beyond the Hype
Here’s the beef. Artificial Intelligence (AI) has been the talk of the town. But amidst all the excitement and razzmatazz, Jim Cramer urges caution, claiming that AI isn’t just another bubble waiting to burst. He attributes the recent hullabaloo to a CapEx refresh cycle, something that tends to happen roughly every decade or so in the tech industry.
The last time we had a CapEx refresh cycle was between 2010 and 2012. However, AI is now driving similar changes, resulting in another cycle. It’s not just a figment of someone’s imagination but a real game-changer. Jim Cramer believes this round of CapEx spending will impact the entire tech ecosystem, causing a ripple effect through the industry.
And amidst the AI clamor, certain stocks have gathered a lot of attention. Take NVIDIA, for example, which has been shooting up faster than a rocket. Nevertheless, Jim Cramer isn’t convinced it’s a bubble. In fact, he thinks the fundamentals look pretty good, with impressive growth in cash flows. Out of all the players, NVIDIA seems to be the top contender.
Playing the Field: Where to Invest
If you want a piece of the AI action, Jim Cramer suggests hitching your wagon to tech companies that will likely benefit from this CapEx whirlwind. He stresses that you don’t need to chase after some obscure stock with promises of overnight success; simply being on the NASDAQ will get you a piece of the action. Companies like Palantir and NVIDIA are on his radar, but he also acknowledges that not all glitter is gold.
A Rollercoaster Outlook: Surging Highs and Terrifying Lows for Tech ETFs
Navigating the tech sector undoubtedly feels like riding a turbulent rollercoaster these days – soaring up to exhilarating heights one moment, only to be sent plummeting down the next. The recent chatter around tech ETFs and the NASDAQ has certainly been no exception to this wild ride.
NASDAQ:NVDA has been under the microscope, with mystery and bewilderment swirling around trading desks. The stock has caught the eye of some optimistic traders, claiming it’s at a prime position to keep heading skyward, while others anticipate a rocky path ahead. Amidst all this commotion, the recurrent question arises: Are exchange-traded funds (ETFs) the safest bet for those who’d prefer not to stomach such volatility?
Pros and Cons of ETFs in the Tech Sector
In the clamor of market speculation, debate rears its head over whether ETFs are the optimal choice for investors seeking refuge from the tempestuous storms of tech stocks. Some pundits contend that for the average retail investor, diving into the deep end of individual stocks requires a savviness and expertise that most simply lack. That leaves ETFs as the go-to solution, especially for those who favor a more hands-off approach to investment.
Warren Buffet gave his seal of approval to this strategy aeons ago – advising those who aren’t inclined to dabble in the nitty-gritty of stock-picking to opt for low-cost S&P trackers. This sage wisdom suggests that such investors should steadily pour their funds into these trackers, abstain from selling, and watch their fortunes multiply over time. By this logic, simplicity trumps complication, and patience is virtuously rewarded.
However, as always with investments, the murky waters contain a few warnings. It’s crucial to remember that ETFs can wildly swing on the market pendulum, their movements more exaggerated compared to individual stock options. Thus, these ETFs often prove to be a hair-raising experience, seemingly catering to the daredevils of the trading world. But for the pragmatic investor, it’s the long-term horizon that matters most, not the occasional jolts of turbulence.
Mapping Out the Future of Tech ETFs
As the tech industry races ahead, leaving a trail of dust in its wake, the looming question remains concerning the risks that plague this sector. With the seers of the market eyeing the NASDAQ like a crystal ball, the impending decision point grows ever nearer. The shape of the NASDAQ, they argue, will serve as a harbinger for the tech stocks it houses. If the NASDAQ peaks, so do most tech stocks, and vice versa – or so they claim.
The journey forward seems beset with uncertainty, flanked by twin specters of potentially heart-stopping market peaks or a thrilling upward trajectory. The battle lines have been drawn between the prospect of a sharp nosedive or a sustained ascent – and the stakes couldn’t be more precarious.
The Obscure Arts of Hedging and Leverage
For those who desire more control over their investment outcomes, hedging and leverage represent esoteric arts worthy of exploration. Enter the fabled NASDAQ:TQQQ and NASDAQ:SQQQ – complex instruments that tantalize with a triple-leveraged daily performance. These provocative tools, while not for the faint-hearted, offer a cloak of protection for investors who wish to shield themselves from abrupt market turns.
Admittedly, these instruments may seem daunting to the uninitiated, but their allure lies in their ability to act as a safety net if you’ve already made a bullish bet that’s gone awry. In a market swirling with uncertainty, these nifty instruments provide a brief respite, allowing contemplation before deciding the next move.
Charting a Course Through Uncertain Waters
The tech sector appears to be standing at a monumental crossroads, teetering on the precipice of a game-changing pivot. The tug-of-war between growth and decline rages on, leaving investors on the edge of their seats. The impending days could herald either a glorious dawn or the grim twilight for tech ETFs and the NASDAQ at large.
As we dolefully peer into the looking glass of the market, the all-consuming question lingers: Can we navigate the stormy seas of tech investments, or will they mercilessly cast us adrift in the tempest? Only time will reveal the twists and turns that fate has in store for us on this wild ride of tech investments.
In conclusion, as we brace ourselves for this rollercoaster adventure in the tech sector, the only certainty is uncertainty itself. So, fasten your seatbelts, dear investors, for we embark on yet another hair-raising thrill ride in the volatile universe of tech stocks and ETFs.### The Magnificent Seven Dominates Yet Again
Lately, I’ve been feeling a bit like a sheep in wolf’s clothing when it comes to the stock market. You see, I’ve been keeping my eye on some of these tech sector earnings reports, and while the majors are strutting their stuff and soaking in glory, the smaller-cap stocks are like the underdog trying to steal the show. Take CrowdStrike, Snowflake, and Salesforce, for instance. Sure, they didn’t knock it out of the park with their earnings, but somehow their stock prices shot through the roof anyway. It’s like the market is throwing a party and everyone’s invited, even if they’re just bringing chips and dip.
Where’s the Logic in the Earnings Frenzy?
Now, don’t get me wrong – Microsoft and Meta Platforms are like the rockstars of earnings. They’ve been churning out impressive numbers like a well-oiled machine. On the other hand, the energy sector’s reaction to not-so-stellar earnings is a head-scratcher. It seems like very few folks took the opportunity to buy low. The media was all doom and gloom about the market hitting rock bottom in 2022, and even some big-time fund managers missed the memo. Talk about a missed opportunity!
Professionals and Their Missed Chances
If you’re a pro investor and you missed out on the market’s generosity in 2022, you better believe your clients aren’t going to let it slide. The volumes traded during the 2022 lows were laughably low, and it’s no wonder that so many folks missed the boat. The correction between July and October was like a second chance for those who missed the first bus. I can almost hear the professionals’ excuses now – “But everyone else was doing it!” Sorry, folks, that’s not going to cut it, especially when it’s performance review time.
A Cure for the “Fear of Missing Out”?
What’s boggling my mind, though, is how these money managers missed the mark. Were they playing it too safe, not believing enough, or simply losing sight of the bigger picture? It’s so easy to get swept away by the hype, to buy into the headlines, and to follow the crowd. Whether it’s Bitcoin or the market sentiment, it’s like everyone’s drinking the Kool-Aid regardless of the flavor. In the financial jungle, it’s essential to shut out the noise, ignore the echo chamber, and focus on the facts – because the crowd isn’t always right.
Clear Skies Ahead
For us seasoned folks, keeping a level head amidst all this noise should be as easy as shooting fish in a barrel. We should have been able to sniff out a spike low, a significant market high, or a triple test of the lows – and then have the confidence to act accordingly. But last year, fear and negativity clouded our judgment. Now, it seems like a big tornado of positivity is brewing and threatening to blur our vision once again. The key is to remain level-headed, have a keen sense of the market, and not get swept up in the frenzy. Because let’s face it, when it comes to investing, the hype doesn’t pay the bills, the numbers do. And we’d all do well to remember that.## Bulls, Bears, and What to Make of It All
“There you have it folks! The S&P and the NASDAQ are riding high. If you had the good fortune to buy in at the lows last year and wrapped up your purchases by around April or May, then congratulations, you’ve hit the jackpot! You’re now in the so-called Wyckoff markup zone – a magical place where you can kick back, relax, and watch the value of your portfolio soar as latecomers rush in to join the party. That’s right, late money is your best friend at a time like this!”
### Late Money – Your New BFF
“Ah, but hold on just a minute, my friends. Have you come across those articles enticing you to throw your hard-earned cash at Bitcoin, asking whether a $40,000 investment is a stroke of genius? What happened to drowning in bearish sentiment? It seemed like everyone was sucked into that whirlpool back in ’22. If you found yourself unable to see through the noise and make confident buy decisions, well, tough luck, my friend.”
### Dare to Take a Cold, Hard Look
“Now, before you start waving the ‘it’s always going up’ banner again, do yourself a favor and take a step back. Let’s face it. At any market top, whether it’s three months from now or two years down the line, the ‘up forever’ mantra will rear its head once more. What’s the key, you ask? It’s simple – take a cold, hard look at the price action. Find a method of technical analysis that’s as effective as a farmer’s almanac. It isn’t voodoo or nonsense, I promise you that. You just need to find a set of tools that works for you, no matter what anyone else thinks. If they help you make sense of the major market ups and downs, then congratulations, you’ve struck gold.”
### Seeking Alpha – A Treasure Trove for Investors
“Feast your eyes, dear investors! Seeking Alpha, the land of boundless opportunities! It’s a goldmine of tools and quantitative analysis that’ll make your heart flutter. There’s Alpha Picks, a treasure chest of other useful services, and they all share one glorious characteristic – they’re devoid of emotion. Look, I’m not finished yet. I urge you to browse through our profile on Seeking Alpha – the home of our free articles, and a hub for all things financial wisdom. And hey, why not delve into our low-cost basic tier of service that won’t cost you an arm and a leg? For a fleeting $99, the doors to a world of financial enlightenment will swing wide open. Want more? How about our full real-time service, Growth Investor Pro, where we cover 50, 60 stocks, a bunch of ETFs, and offer real-time chat and trade disclosure alerts? Well, doesn’t that sound like the pot of gold at the end of the rainbow?”
### A Final Tip
“Well, well, my friends, it’s been a pleasure, as always. Before I go, a little parting advice for the road – spend some quality time on Seeking Alpha. It’s a place brimming with potential discoveries. And who knows, you might just stumble across our profile. If you like what you see, there’s a world of wisdom waiting for you. That’s my two cents. Until next time!”
So there you have it! Food for thought from a man in the know. Always remember, this article discusses securities that don’t trade on a major U.S. exchange. Please proceed with caution!