Big Picture - A Million Million

The market was looking a bit rocky mid week as the S&P filled the gap from May 7th. As with enough time the broad index loves to fill a gap. After we filled the gap, it did seem like more weakness was in store. 

But with an overall bullish backdrop, the market found some buyers and pushed the overall market back inside what with either be the next bull flag or next topping pattern. For now 720 is support while 760 is resistance and we should expect to see the market respect those area's for the time being. 

Sector wise, we know Semi's have lead the charge with tech not to far behind and with the recent extremely small pocket of weakness early last week. Semi's seemed like their days might be numbered. 

But, that weakness barely lasted a week before they snapped back higher and keep the sector as a whole still very much in a breakout stage. Other than the clear leadership from Semi's and Tech. There is another sneaky sector setting up to try and take the lead. 

Industrials have quietly been forming a textbook blue sky breakout as they set up on tighter risk each week to take out the all time high area. 

Now the talk of the street on Friday was SpaceX going public, making Elon one of the first public figures listed as a trillionaire. 

For Elon this was a massive haul, as SpaceX was the largest IPO ever, raising over $75 billion dollars. As it took NVDA and AAPL decades to reach trillionaire market caps, SpaceX is starting out day 1 worth nearly 2 trillion. As the t word starts to get throw around more, this is what 1 trillion equals 1,000,000,000,000, or one thousand billion or one million million. Insane numbers. 

Now with this record setting day, retail investors got an unusually large allocation, where more than a quarter of the shares went to retail investors. In all of my years investing, retail never got such easy access to prices lower than the opening print. I know a handful of friends who all got shares at $135 and there are plenty more that also got such a deal. The issue is that and what we will see with time. Is that moving large companies is hard work. Moving Apple or NVDA takes alot of money. Retail investors by definition do not have this pull compared to "smart money" with much larger pools of cash. 

If the largest IPO ever was back by smart money more than retail getting a big chuck, it would be a far more bullish sign. For the handful of people I know who invested in SpaceX, mostly non members. I asked them all the same question "how does SpaceX make money?" Only one person knew, which was the revenue they earn from Starlink and that they are not profitable. 

For Elon, it is another amazing feat as we are seeing a modern day Henry Ford in action, but for stockholders blindly investing in an IPO day one, we often know how that goes. It will be interesting to see if or how long SPCX takes to get above and hold above that IPO high. When that time comes, we will know what to do. 

 

                                                                            

From Bennett

Macro Rotation Outlook

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