Storage Solutions Stocks Are Partying Like It's 1999
Back then, they were called disk drives. No matter, they've just gone parabolic.
You're reading 0 of 1 free page.
Register to read more or Unlock Pro — 50% Off Ends Soon
The other day, we looked at some AI charts that I thought had gone parabolic, but they were not stock charts. Rather, they were related to the business of AI and AI investments. At the time, I noted that NVIDIA had not gone parabolic, and I showed you what Qualcomm looked like back in 1999 as an example of a parabolic stock.
At that time, I said I wanted to show you a chart of Iomega from 1999 because that was truly a parabola. A disk drive company! Now I want to note that while beloved NVDA has not gone parabolic, we have stocks like Western Digital that have. So has Seagate Technology. Disk drive companies! Oh, I know they call it storage solutions now, but oh my, it really is 1999 again!
I am sure there are plenty of others, but I chose to highlight these two because they really were both hot stocks in 1999, so I couldn’t resist. As an aside, I think I finally got rid of my Iomega disk drive when I moved houses two years ago!
Away from that, the indicators have not changed much. It’s been three months of this grind, and while we haven’t yet heard the term thrown around, many of the old economy stocks really have languished while the new economy stocks have been favored.
I see lots of statistics thrown around about ‘the most shorted stocks’ having outperformed by x-percent since the April lows. These are not statistics I have ever used, and as I noted the other day when we discussed the drug stock rally, which I thought was partly a result of shorts running for cover, all rallies begin with short covering.
As I have noted since early September, I think we are in a group rotation/stock picking market as folks search out a group/stock that hasn’t budged, and they rally it. Then, as soon as that is done, they move on to another name/group, so while those charts of WDC and STX are relentless in their rises, there are many more that rally and slump, rally and slump. Yet the entire time, the S&P creeps upward in a very clear channel. This channel has been in place for the entire third quarter.
The S&P has now been green for six straight days. And you know what else was green every day last week? The VIX. I’m sure someone with fancy computers can tell us the last time that occurred, but I can tell you it hasn’t occurred in at least a year. I am no expert on the VIX, but I do know that being green for five days is unusual, even when the S&P is not green every day. Maybe it’s time for a little volatility just to keep things interesting.
