Meta shares nosedived 25% after the company's recent Q3 results. Meta's expenses are rising and the company is seeing softer revenue growth and softer margins. The slowing advertisement revenue has forced the company to look for new investments and the market is doubting when or if these investments will pay off.

Panic selling commenced in the broad market after the FED's recent attempt to stop a rally. Interestingly, the bond market doesn't seem to buy it, nor do many key value stocks in the U.S. The divergences we have been discussing for weeks are only growing. These divergences are not what you see prior to a deep drop in the market, instead they tend to signal a trend reversal that is developing. The good news about yesterday is that if the market can move back above the 3912 level, which was the high going into speach, then we have a clear signal that inflation and rate hikes are fully being discounted as we setup for a larger rally.

Netflix lost it’s status as a FAANG when the stock fell from a $300 billion market cap to a $100 billion market cap this year. My firm entered Netflix in August as we fully expect the stock to become a FAANG again due to its revenue potential from ads and improving cash profile.

Markets do not top together, nor do they bottom together. For this reason, identifying the leading markets can help you stay ahead of the trend. We continue to see evidence of these divergences, which is suggesting a meaningful low is being put in. While everyone is focused on Big Tech making new lows, they are failing to see that new leadership is pushing the market forward. Bellow, we look at the mounting evidence that this rally could extend farther than most think, and also provide the levels to watch so that you can manage risk just in case the bear market continues to new lows.

Divergences are important to track. There is always a leading market that can provide advanced warning that a top or bottom is ahead. For example, from the COVID low in 2020 through February of 2021, all major global indexes were moving up together. When you see an all-encompassing trend, it tends to be a powerful one, much like we saw into early 2021.

Despite an enormous increase in Big Tech capex primarily driven by data centers, this line item does not get the attention it deserves in terms of follow-through to the semiconductor industry. Below, we look at FY2022 budgets to draw the conclusion that H2 spending on data center chips is equal if not greater than the first half of 2022.

The stock market continues to power higher on the heels of bad news. We are up over 6% since the CPI reading signaled that inflation is stickier than hoped. The last time we saw the broad market ignore bad news was in mid-June, just before the S&P 500 pushed up over 18% in less than 2 months. However, unlike the mid-June rally, sentiment today is at historic levels and it's being accompanied by multiple markets already starting a new uptrend before the S&P 500. In this week’s video, we take a deeper look at the markets that are not following the S&P 500 to new lows and also show the critical levels that will define whether we retest the August high or break down to new lows.

Inflation data continued to surprise to the upside this week, yet the market is up nearly 3% on this information, as investors contemplate a potential end of the bear market in 2022. Also, while big tech, semis and the S&P 500 made new lows this week, biotech, transportation stocks, many high beta stocks made a higher low. The last time we saw the market shrugging off bad news with this many divergences was in mid-June, just before the last large bear market rally began. In this week’s video we dive into the possible paths this market can take into year-end, while also providing overhead levels where the risk will be high.

The U.S. Dollar is acting like a wrecking ball across global economies, and is one of the primary culprits for the current stock market crash. As the dollar continues to strengthen, other currencies get weaker, which only intensifies global inflation pressures. Once the dollar tops, which foreign central banks may force, expect a rally in equities --- specifically in beaten down growth stocks. Last week we said to expect a rally in equities as the U.S. Dollar is potentially putting in a bigger top, which we are now seeing. This week, we discuss what needs to happen, which will determine if this will be a multi-week rally or a multi-month rally.

Earlier this week, I/O Fund CEO and Lead Tech Analyst Beth Kindig joined Jeremy Owens, Tech Editor, and San Francisco Bureau Chief of MarketWatch, on Barron’s Live. They discussed cloud valuations including those that are trading at 2X above Covid lows, what metrics matter when evaluating cloud companies, and what to watch for in upcoming earnings season --- including a few comments on ad-tech.

We are now moving into the final quarter of the 2022 stock market crash. Below, we outline two scenarios for how the 2022 stock market crash will end. In the first five minutes of this video, we look at the bottom either occurring around the 3550 SPX region (following a minor bounce) or it will bottom in the 3400-3350 SPX before we see a year-end rally.

The FED is fighting inflation but what does this mean for the markets when there is real evidence that inflation is slowing down? In technical analysis from a month ago, we stated that if the market broke below 3920-3900, then odds were high of a continuation of the bear market. Two weeks later, the S&P 500 is trading in the low 3600 range and we have updated our analysis to discuss what comes next in this complicated and frustrating broad market environment.

Nvidia had a big week with GTC 2022 and management is clearly ready to rumble against any excess inventory from crypto mining. The negative catalyst from crypto mining and Nvidia's price action is eerily similar to Q4 2018/Q1 2019 —- yet the company is not the same company it was four years ago. This is apparent by Nvidia flexing some major product muscle by timing it's best-ever gaming release and it's best-ever AI chip to hit the market in October.

Next Week is going to be important. We explain what to favor when a market low is in place and reveals when the next key inflection point and swing pivot will be. Find out what the weekly market signals tell us about the current market outlook and learn about how the I/O Fund approaches de-risking its growth portfolio stocks.

Last June, we discussed key reasons that cybersecurity stocks would hold up particularly well compared to other cloud verticals. The analysis pointed to enterprise spending expected to increase in 2022 from the previous year, according to Chief Information Security Officer (CISO) surveys.

Knox explores potential bear market scenarios. With the help of basic trend analysis, he hopes viewers will be able to filter their emotions, so they can be on the right side of trend changes. Knox also covers September 16th's quadruple witching event, he details what supporting markets contributed to this bear market and ends the technical analysis by discussing the market impact of a potential recession in 2023.

Solar energy stocks have outperformed the S&P 500 Index YTD with the most noticeable divergence June-August. The S&P 500 index is down 17% YTD and Nasdaq-100 index is down 26%, yet solar stocks are leading the tech industry as Enphase Energy is up 72%, Maxeon Solar Technologies is up 62%, and First Solar is up 56% YTD.

For most of August, we have been providing free webinars in prior blog posts outlining an “imminent pullback.” You can access these here, and here. In this article, we will discuss key levels that must hold in order to maintain a long-term bullish bias. We also discuss why a direct drop to new lows may not play out, even if the bear market resumes. We then discuss the supporting markets that need to work in unison with equities before we can see a meaningful uptrend resume.

While examining the current broad market, Knox discusses whether or not the first leg of a larger bear market will last until 2023 or if there's something else going on. The broad market update also includes an overview of three scenarios that will be likely going forward and takes a look at the supporting markets such as crude oil and the U.S. dollar.

The pullback we've been warning about is in effect. We are in the middle of our target zone with 4000 SPX next. As long as we hold 4000/3975 and then turn back up to make one higher above 4330 SPX, the case for a new long-term bull market development remains intact.

In early July, the broad market failed to make new lows even despite bad news. The CPI print came in at a 40-year high, followed by the producer price index surprising to the upside. This told the market that inflation was still an issue and would likely be into the near future. This was then followed by mixed banks earnings, as reports of a looming economic slowdown and run-away inflation was starting to show up in earnings.

The ad-tech sector's performance is closely linked with the macroeconomy. This sector has been hit hard in the last few months due to global uncertainty. We believe this sector will recover when the economy starts picking up. It is practically impossible to time the market. However, we believe that being prudent and buying stocks during the downturn helps to outperform the market in the long term.

High-Frequency data continues to point toward a slowdown with inflation. The ECB is tone is getting more aggressive, while the FED’s tone is getting less aggressive. This would suggest that a new bull cycle is building as we speak.

Semiconductor stocks have gained prominence due to growth drivers such as artificial intelligence, high-performance computing, 5G, robotics, machine learning, and electric vehicles. Despite semiconductor companies underperforming YTD, there is evidence that more supply will come online by the end of the year that will be met with equal or greater demand.

Most investors agree that cloud is a critical trend to have in a portfolio as the category’s growth has been resilient due to increasing productivity while reducing costs. This is especially true for software-as-a-service whereas cloud infrastructure as-a-service does not always result in lower costs compared to on-premise servers.

In this week’s Broad Market Analysis, Knox discusses why there’s still some uncertainty about whether this is the bottom or not. Watch the broad market update pulled from the Premium Webinar where the I/O Fund covers six other portfolio stocks.

In this last week’s Broad Market Analysis, Knox reviews the evidence building the current uptrend that could extend into Fall 2022. Watch the preview clips taken from I/O Fund’s 1-hour Premium Technical Analysis Webinar below with written commentary from Knox himself.

Big Tech earnings were off to a solid start last week when Microsoft and Google reported stable revenue growth and margins that are unchanged from recent macro conditions. The strong margins were especially welcomed as many companies have been missing on operating margins and cash flow.

Knox continues the Bear Market correction discussion and analyzes FAANG stocks and three other premium stock positions. Watch this clip taken from the 1-hour technical stock analysis below for upcoming trends leading us into the fall season.

Netflix is trading at a 10-year historic low valuation, which means this is an opportune time to discuss the pros and cons of this stock should there be upside potential.