Software Portfolio Components Deliver Blow Out Earnings. Caution Creeps in as Iran Situation Evolves. New Biotech Stock Added. Twenty Percent Off Discount Offer Winding Down.
When name stocks trade like meme stocks, it signals that the market is getting ahead of itself.
This morning, three of our holdings, Datadog (DDOG), Palo Alto Networks (PANW) and Digi International are trading in spectacular fashion. That’s great if you own them. But it’s also a sign that this market is starting to get a bit frothy.
When name stocks trade like meme stocks, something extraordinary is happening. Sure, it’s a momentum run, the type of market which makes you giddy on the way up and makes you wonder why you trade on the way down.
This is where we are. And although the fuel for rally is slowing down as liquidity’s rate of rise decreases, there is still got some pop left before the liquidity spigot gets turned off. The question, of course, is when do you get off the train before it runs into a wall.
The first step in getting off any train is waiting for it to slow down. And we’re starting to see some of that developing.
Certainly, the rules I posted yesterday are worth repeating:
Don’t fight liquidity;
Don’t fight momentum;
When you get the BUY signal – don’t hesitate; and
If any position you hold is working, stick with it. If it’s not working, SELL it.
Yet, it’s probably a good idea to add two more.
Take some profits and
Trade in smaller lots, with perhaps a shorter time frame.
Liquidity Update – Adequate but slowing down.
This week’s NFCI Index shows liquidity is still adequate but the pace of increase we’ve seen over the last month is slowing down. The latest number is -0.51 from last week’s revised -0.49.
Portfolio Delivers the Goods
Our portfolio remains in solid shape. This morning, three of our software/networking stocks, Datadog (DDOG), Palo Alto Networks (PANW) and Digi International (DGII) are up quite nicely as the selling in the software sector was well overdone and earnings beats have proven that AI isn’t going to dent software as much as the market expected.
We delivered nearly $12,000 in profits for the month of April.
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SOLD Nvidia Inc. (NVDA). Bought 4/15/26: $198. SOLD 4/30/26: $206. Return for this trade: $800/100 shares (4.04%).
SOLD - GNRC Holdings (GNRC). Bought 4/14/26: $209.50. 4/29/26 intraday price: $244. Return for this trade: $3450/100 shares (16.46%).
SOLD - Cirrus Holdings (CRUS). Bought 4/1/26: $142.50. SOLD 4/28/26 intraday price: $166. Return for this trade: $2350/100 shares (14.15%).
SOLD Toll Brothers Inc. (TOL). Bought 3/31/26: $136.52. SOLD 4/29/26: $142. Return for this trade: $548/100 shares (3.85%).
SOLD- Lattice Semiconductor Corp. (LSCC). Bought 4/6/26: $95.50. SOLD 4/28/26 intraday price: $112.69. Return for this trade: $1719/100 shares (18%).
SOLD - ViaSat Inc. (VSAT). Bought 3/26/26: $48.75. SOLD 04/28/26: $59. Return for this trade: $1025/100 shares (17.4%).
SOLD - Arm Holdings Plc (ARM). Bought 4/1/26: $153. 4/17/26 intraday price: $165. Return for this trade: $1200/100 shares (7.84%).
SOLD - Astra Zeneca (AZN). Bought 03/31/26: $194.25. SOLD 04/13/26: $201. Return for this trade: $675/100 shares (3.47%).
Oil vs. Stocks – Oil Breaks Critical Support. Market Breadth Signals Caution
The price of oil is again down aggressively this morning after news of a potential Iran deal continue to develop. As we suggested a few days ago, oil was vulnerable as it had delivered multiple breaches of its upper Bollinger Band.
The United States Oil Fund ETF (USO) is below $130 and its 20-day moving average. A test of the 50-day moving average looms.
The New York Stock Exchange Advance Decline line (NYAD) made a marginal new high yesterday but is slightly negative this morning.
Chart Update
The New York Stock Exchange Advance Decline line (NYAD, see above) is turning a bit cautious this morning.
The S&P 500 (SPX) is above 7300 this morning but is becoming very overbought with the RSI trading above 70 for the past several days. That means we should expect at least a consolidation in the short term. 7100 still important short term support.
Bond yields are lower this morning, but remain above important support. The U.S. Ten Year Note yield (TNX), was pushed lower after a slight breach of the upper Bollinger Band corresponding to the 200-day moving average yesterday. That upper band is now established itself as the yield area where bonds will have to make a big decision. Now let’s see what happens at the 50-day moving average. If 4.5% is breached on TNX we can expect some negative fireworks.
Bitcoin is pulling back after its recent run but is holding above $80,000. We may see some consolidation here with $75-78,000 likely providing support. The 200-day moving average is the next test on the upside The next important resistance band above the 200-day is $90-$95,000.
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Disclaimer: The Smart Money Passport offers market analysis and opinion not financial advice.
