The Elusive Santa Rally: An Unexpected One May Be Coming. Further discussion on Semiconductors, Tesla, and China
Strategic Commentary on Semiconductors, Tesla, and China
Note: This is a brief strategy note outside of our usual Bi-Weekly report schedule that is simultaneously being sent to Private Substack and Patreon Members. Given intensive market volatility in the tech sector (Semis, Tesla/EV, High-Growth, software & internet), I wanted to be proactive and send our Members an update.
If you’re new to my Community, please read my previous posts & research leading up to this one for context.
Members,
Even with our successful general risk-reduction guidance at SPX 4100, the violent turn south in markets has left many people feeling a bit of discomfort. Particularly if you’re positioned in tech, FAAMG, Semis, and high-growth themes.
In this note, I want to provide some context behind the rapid decline in tech (namely semiconductors/associated themes) with a brief analytical recap of Micron.
Then I’ll provide some commentary on why I believe there was an intraday rebound, and whether this reason is a good cause.
Finally, I’ll give a quick update on my thoughts on Tesla and China-related shares based on the last couple days of auction.
Key considerations that I’m sure folks are keen in getting updates on:
What’s the intermediate-term setup for Semiconductors after Micron’s earnings?
What does Tesla’s break of 130/share Weekly Demand mean?
A brief note on China ADRs recent stability and how to think about looming risks
My thoughts on Jerome’s sudden change of heart on getting more hawkish (is it really inflation, or something more geopolitical?)
Thoughts on a Santa Rally caused by Congress? 🎅
I know that members definitely appreciate a bit more updates when things look exceptionally frail.
As a reminder, do not worry - I will be here to provide thoughtful guidance when things are tough. Please remember that asset allocation positioning is paramount when it comes to psychological endurance.
With that said, let’s discuss these points in my strategy note below. If you want to understand the reason behind China ADR’s relative strength, Tesla’s investor base positioning, and the Semiconductor landscape post Micron earnings, this note discusses all of that (and more).