The Power of Tech: Nasdaq Dominates, AI Takes the Lead and Small Caps on the Rise

June 4 - 2023 UPDATE

Important: this is not investment advice. Consult a licensed financial advisor before making any investment decision.

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The Nasdaq is the strongest index right now:

Also, the Sp500 looks good but most importantly, for the first time, we can see the participation in the stock rally improving, meaning more stocks are finally waking up.

Last week, looking at the equal-weighted groups, the best performers were Real estate, Materials, Financial, and Industrials.

While over the last month, only the tech sector stands out for performance.

In any case, Consumer Staples and Utilities and Healthcare underperformed, confirming a low-risk perception of a recession by the market.

Looking at a basket of ETFs the best charts belong to things like CYBER-SECURITY, DISRUPTIVE AUTOMATION, DISRUPTIVE TECHNOLOGY, ARTIFICIAL INTELLIGENCE, CLOUD COMPUTING, and EV.

My take in a nutshell:

• there are no catastrophic data about the economy yet;

• the advancements in the tech sectors are real and likely will keep going up despite an economic slowdown;

• I believe Artificial Intelligence, Automation, Robotics, Software, and the needed Infrastructure are areas of a great deal of investment and experimentation that is hard to contain;

• If inflation keeps going down and the FED can pause its restrictive monetary policy, then we may see broader participation in the market rally from other sectors;

• We need to keep looking at economic data for clues of strong deterioration that have not manifested yet;

• In the meantime, the market should keep climbing around the sectors described above over the next months;

• The IWM 0.00%↑ index that comprises 2000 small caps literally popped last Friday which is a good sign: let’s see if there will be a positive follow-up next week.

MY PORTFOLIOS

10X LARGE CAP MOMENTUM POT

• Last week my SNPS 0.00%↑ order was triggered and now I have 3 open positions;

• I am creating a BUY STOP ORDER for 30 shares of TWLO 0.00%↑ at $67.16 and if triggered, I will place a Stop Loss at $53.30

• I am raising my Stops as follows: OTEX 0.00%↑ at $37.9, AMAT 0.00%↑ at $117

Here is what this portfolio looks like right now:

10X SMALL CAP MOMENTUM POT

I am adding 2 new and very promising names to the Small Cap Portfolio which looks good right now with 6 open positions for an average gain of 37%. Since inception, I am in the green at +6% ROI.

Both the new picks are companies that are growing above 70% YoY in revenues and come from the Tech sector. All details are below.