Mike Santoli spent his first half watching semiconductors dominate the market. Then the Mag7 broke down. Now he's concerned about the rally's integrity. That's the word he used. Integrity.
Markets don't have integrity. They have price and volume. Santoli might as well worry about the rally's credit score or whether it returns its shopping cart to the corral. The S&P went up. Semiconductors led until they didn't. The Mag7 stopped working so money rotated into non-tech stocks. This is called a market. It's what markets do. They move around.
But Santoli sees "erratic behavior" in this rotation. He wants equilibrium. He craves balance. He's searching for some deeper meaning in the fact that different stocks went up at different times. This is technical analysis for people who took one philosophy class in college and never shut up about Aristotle.
Here's what happened: chips ripped for months. Retail traders piled in at the top because they read that AI was the future. Then those stocks sold off. Money moved to banks and industrials and other boring shit that doesn't have a Reddit thread. The market tried to figure out what to buy next. That's the whole story. No integrity required.
Santoli calls this a "stretch of semiconductor dominance" like he's narrating a nature documentary about apex predators. NVDA went up a lot. Then it went down a little.Imas bought at $140. The rally continued without him. He's still waiting for equilibrium.
The broader roster of non-tech stocks rallied recently. This is supposed to be bullish. Breadth expansion. More stocks participating. Every technician with a breadth indicator celebrated. But not Santoli. He's skeptical. The rally moved wrong. It lacked integrity. It didn't ask permission.
Markets that go up in a straight line have integrity problems. Markets that rotate have integrity problems. Markets that do anything other than confirm Santoli's thesis have f*cking integrity problems.
Photo by David Todd McCarty on Unsplash
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