Growth says somethings wrong

I'm seeing real risk-off in growth. Software and cybersecurity are where the relative strength is, and I'm tracking names that do look good and would be what I want to buy for potential new leadership. But that strength doesn't negate what the rest of growth is telling me.

If SMH keeps breaking lower into a bigger downtrend, I don't think software and cybersecurity can withstand the pressure. My concern is that these become the last names to crack.

If semis, memory, and all of the AI infra names stabilize then I can see Software/Cyber continue to lead, but I don't see any signs of stabilization yet.

The Nasdaq is on the 30-week

QQQ finished the week essentially on its 30-week. For my system, trading below the 30-week is risk-off, especially with SMH leading lower. I don't need every group to break before respecting that. We may bounce, we'll see what next week brings... but QQQ breaking below the 30-week is always risk off for me.

USO and XLE broke to a new 52-week high and finished at highs of the week. Oil moved 4% Friday alone.

Growth stocks generally do not do good when energy is leading and they ended the week very strong.

Its not optimistic seeing oil and energy push higher while semis break lower, especially with QQQ on its 30-week. It doesn't mean the rest of growth has to crack, but it gives me another reason to be cautious here.

Looking at the last 4 weeks below there has been a clear unwind across AI infra. That is massive distribution.

Software & Cybersecurity are green, they can lead, but they still have been outperformed by energy. By a lot too.

So I'm not in much of a rush yet to try to get in any growth.

Over the last week below though software and cybersecurity did outperform energy. Worth watching this week how that continues.

I also added biotech because it was up too and showing RS. A lot of people consider it growth. I view biotech as speculative.... and usually speculative stuff sees strength last.

HOOD and PLTR were two of the original leaders of last year's market. When they broke below their 30-week earlier this year in Feb that was one of the first major warnings for me. The indexes were still holding up but the stocks that had been leading were breaking.

We corrected sharp in March shortly after. Watching the original leaders of the cycle is something I learned from William O'Neil.

Now we still have software names acting strong but look at all of the original leaders of this cycle... semis, memory, neoclouds. They look like HOOD from the post in Feb below.

SNDK one of the original arguably THE original leader closed below the 30-week and not buyers showed up.... made a new low last week.

We have also so far had pretty bad earnings reactions. The reports can be great but the reactions aren't. SPCX one of the biggest names in the market gapped up and the entire earnings move was sold into. Not healthy action.

I dont want to sound overly pessimistic, if things improve I will change my mind fast as I always do. I'm also wrong alot. But at the moment there is enough evidence for me to continue to really take risk seriously.

I am going to share a few stocks in the notable charts section I am observing for different reasons, not any of interest to me yet to pull the trigger.

Observe and preserve. Financial and mental capital.

Regardless of how this plays out, if software/cyber lead the whole market higher or not, there are no fat pitches for my approach.

The biggest opportunities I am waiting for to set up, patiently, are shorts in AI Infra if they can bounce into good r/r areas.