Ivanhoff Capital

MarketSurge powers the charts in this video.

Last week, we discussed how extended semiconductor stocks are from their 50-day moving average and how likely it is for them to pull back. They tried to pull back earlier in the week. SMH and QQQ didn’t even test their rising 10-day simple moving average, and they shot back to new all-time highs. The V-shaped recovery has left many underinvested, and now they are eager to buy every small dip. This is what creates the so-called lock-out rally – if you are patiently waiting for a good entry, you might miss the first 30-50% of a move. 

If you are a retail trader, it’s always better to be on the sidelines wising you were in, than to be in, wishing you were on the sidelines. The situation is entirely different if you are managing other people’s money. If you are missing a rally is the biggest professional mistake you can make. This is why the dips are so tepid, and the buying is impatient. The strong earnings reports are making the FOMO even stronger. Semis continue to crush estimates. SNDK is expected to earn $160 per share in 2027. They made $3 in 2025. Megacaps AAPL, AMZN, GOOGL also beat estimates and the market reacted favorably. Even select software stocks are gapping up to new 52-week highs on better than expected earnings – we hadn’t seen that in a long time. SBUX and COCO broke out last week, too. So it is not just AI-related stocks getting all the inflows. The market rally is expanding into other areas. 

Don’t get me wrong. I am not suggesting we drop all proper risk management guidelines and start chasing. There will be dips. Even in the strongest tapes, there are dips. Even if they are to a rising 10 or 20EMA, it’s better to enter on a pullback with a tight stop, then to mindlessly chase extended stocks. We saw it last week. AAOI, AXTI, AEHR dropped 20-30% in a few days. They found support near their rising 20EMAs and bounced back 30-40% in a few days.

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MarketSurge powers the charts in this video.

It is a bull market. Even the tiniest dips are getting bought. Everything is very extended, especially semis, but they are not really pulling back yet. Earnings keep coming hot and, in a way, justifying the chase. TXN, INTC, LRCX crushed estimates and guided higher again, foreshadowing that any other semiconductor company will probably do the same. ARM and AMD area already at new all-time highs after gaining 50% in a couple of weeks. Even the slower-moving NVDA broke out. The market is not waiting. It only needs a small hint and is quick to price the expected future. The beginning of a move is always based on fundamentals. But the last one-third to one-half of a momentum move is pure speculation driven by fear of missing out and short squeezes.

I know semis might seem invincible right now, but keep in mind that nothing goes straight up. Even the strongest stocks regularly test their rising 10, 20, and 50dma as we saw with the aerospace group last week. Most semis are currently so extended that a normal test of their 20EMA would mean a 20-30% pullback.

In the meantime, the Strait of Hormuz is still closed, and the US doesn’t seem closer to a peace deal with Iran. Crude oil has begun to perk up. If anything can scare market speculators right now, it is another spike in crude oil and escalation in the Middle East.

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Check out my free weekly email to get an idea of the content I share with members. See how my ideas/alerts performed.

You can find my trading books on Amazon here.

Disclaimer: Everything I share is for educational and informational purposes only, and it should not be considered financial advice. Read my full disclaimer here.

MarketSurge powers the charts in this video.

The US indexes just had their fastest V-shaped recovery in recorded history – it took only eleven days to go from being oversold under their 200-day moving average to a new all-time high. Granted, the correction wasn’t very deep, but the sheer velocity of sentiment change has been epic. There was a lot of bearishness and talk about stagflation two weeks ago. Now, we have a major FOMO (fear of missing out). There are many underinvested managers and traders, so every dip is likely to be bought aggressively. Obviously, this doesn’t mean that we won’t see shakeouts and sector rotations. The market never makes it obvious or easy.

Today’s market has become much faster. What used to play over months now happens in weeks. The collective access to more and timely information, to working strategies, has accelerated everything. We already saw the typical stages of a recovery. First AI infrastructure stocks (mostly fiber optics and semis) showed relative strength by staying near their all-time highs while the indexes were under their 200-day moving averages. They led the market higher. Then the bounce spread over more stocks – the lagging megacaps recovered at an impressive pace. Even the highly-shorted stocks with questionable fundamentals started to outperform, which typically happens later in a new rally. 

The ceasefire end date is April 22nd. There is a possibility that if both sides don’t reach an agreement, we might see an escalation. Under such a scenario, oil prices will rally, and most equities will pull back. This is the dream scenario for everyone underinvested. If such a dip happens, it will be bought. The market has already shown politicians what will happen if there’s peace in the Middle East and what will happen if the negotiations fail. By doing it, it has essentially created or at least influenced its own future.

Sign up for my premium service to read the rest of my market view and ideas.

My subscription service includes a Discord room and private X feed with options and stock ideas, emails with concise market commentary, real-time market education, the Momentum 40 list of market leaders, and much more. See what subscribers say about my educational service.

Check out my free weekly email to get an idea of the content I share with members. See how my ideas/alerts performed.

You can find my trading books on Amazon here.

Disclaimer: Everything I share is for educational and informational purposes only, and it should not be considered financial advice. Read my full disclaimer here.