Strategas' Chris Verone talks cracks in the technical market picture
Speakers
Chris Verrone
— Head of Macro, Piper Sandler
Summary
Chris Verone discusses technical cracks in the market, highlighting extreme extensions in Micron, weakness in bank stocks, and attractive setups in mining stocks like BHP, Rio, and Vale. He advises risk management on overextended names and sees potential in copper-related AI plays.
- Micron is extremely extended above its 200-day moving average, suggesting risk management.
- Bank stocks, particularly Wells Fargo and JPMorgan, show signs of weakness due to yield curve flattening.
- Mining stocks BHP, Rio Tinto, and Vale have strong technical charts tied to copper and AI infrastructure.
- The overall market is on alert with a key level at 7750 on the S&P 500.
- Consumer stocks remain weak, with no defensive rotation yet.
- Energy stocks may see a relative low if the Strait reopens.
Trade Ideas
Manage risk on extended Micron
Micron is trading 170% above its 200-day moving average and is in a manic melt-up mode. While the exact timing of a reversal is unknown, the extreme extension suggests investors should manage risk and protect longs or profits.
BHP, Rio, Vale look great
BHP, Rio Tinto, and Vale have strong technical charts and are part of the AI trade through copper buildout. They also benefit from geopolitical factors and look attractive here.
