4 Major IPOs Slump; and the QQQ 50-Day Catches Up to the Price
After the long red streaks in the S&P and Nasdaq, be on the lookout for a bounce.
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Note: I will be on vacation for the next week. My next column will be Tuesday, Sept. 2.
Longtime readers will know how I feel about these long streaks in the market: The longer they go on, the more apt they are to spurt in the other direction.
So with the Nasdaq now at six straight red days (the first such streak since fall 2022) and the S&P at five straight red days (its first since the calendar turned to 2025) a bounce is likely.
But the indicators have not changed. I would love to tell you that they have but they have not. There are a few things to point out, though. Let me start with four recent IPOs. They were all generally in the tech and/or crypto areas. They were chattered about and hotter than hot when they came public.
Circle Internet CRCL went from 70 to 300 in a heartbeat. Anyone who was around in 1999 would have had thoughts of some of those IPOs, and who could blame them? But now it is less than half what it was after that spurt. That’s probably why no one fusses over it anymore.
Remember Figma FIG? That was earlier this month. It tagged 140 and is now half that.
Coreweave CRWV actually took its time soaring, probably because it came public in late March. But see how it went from 40 to 180? And now it has halved since the peak in June.
Finally there is Bullish BLSH, where I still can’t believe they named the company that. The stock tagged 115 last week and as of two days ago had almost halved.
I am certain someone can cite some IPO that has been super-terrific in the past few months, but these four high-profile ones are not those. For me it just proves my point that there has been a lot of selling in the past six or seven weeks; it did not start just five or six days ago.
The other thing I wanted to point out is the 50-day moving average of the QQQs. It has not been breached, or even tagged, since it jumped over it in May. This is the first time it is even flirting with it. But worth noting is that the moving average has finally caught up to the price.
The SOX visited the 50-day moving average in early August but did not break it. It tried to break it earlier this week but has recovered, barely. Fifty trading days ago is around mid-June, so the line is still rising. But notice that the longer the index goes sideways, the easier it is for the moving average to catch up.
The worry should come when the moving average line curls over. Right now that is not an issue, but it would be about a month from now if the SOX can’t crack back over 5800.
Finally on the sentiment side of things, the NAAIM Exposure lifted back to 98 this week. That’s complacent.
