Hey, Ross here:
Yesterday I talked about how the Equal-Weight S&P 500 has been outperforming the cap-weighted S&P 500 since November.
That outperformance continued yesterday, with the S&P 500 falling nearly 1% – but the Equal-Weight S&P 500 hitting another new high.
As I said, this shows how the “average” stock is outperforming their mega-cap counterparts – telling us there’s still plenty of opportunities to take.
For today, however, I want to point to one big reason the tech sector has been struggling lately…
The death of software stocks.
Chart of the Day
This IGV – the Software Sector ETF.
And as you can see, it’s almost touching the April lows – having fallen nearly 30% from the late-October highs.
One big reason for this is AI.
As the big AI companies like Anthropic and ClaudeGPT continue to expand their features…
They’re eating into the domain of other software stocks.
For instance, earlier this week, Anthropic announced some major new features to its Claude Cowork tool…
And it immediately sparked a further selloff in software stocks (that has continued for every day this week so far).
Back in the day, there was a famous Silicon Valley saying – software will eat the world.
Today, it looks like AI is eating software.
What does this mean for us traders (beyond avoiding software stocks for the moment)?
I elaborate below.
Insight of the Day
There are often huge divergences in a choppy sideways market.
Too often, traders look at choppy sideways action and think “boring, stagnant” action.
It’s easy to understand why.
But if you look beneath the surface, you’ll often find that these sideways markets often hide huge divergences.
Take a look at tech, for instance.
It’s been chopping sideways for months.
And yet as you’ve just seen, software has been dragging the entire sector down.
But if it’s only been moving sideways, that means there must be another component lifting it up to compensate.
In this case, it’s semiconductors – which has more than doubled since the April lows.
That’s an example of a massive divergence within the broader tech sector itself.
And like with any big divergence – it always leads to big opportunities.
That’s why tomorrow, Friday February 6, at 11 a.m. Eastern…
I’m going live to show you exactly how to take advantage of all these hidden divergences most traders never see…
And exploit them to target rapid gains – even in a so-called “sideways market”.
February is probably going to be a choppy month – but you don’t need to let that stop you from going after triple-digit wins.
I’ll walk you through everything Friday morning.
Just click here to save your free seat…
And I’ll see you tomorrow at 11 a.m. ET.
P.S. If you’re planning to attend on a mobile device, make sure you download the presentation app now so you don’t miss anything when it starts. See you there.
iOS: https://apps.apple.com/us/app/goto/id1465614785
Android: https://play.google.com/store/search?q=goto&c=apps
Customer Story of the Day
“IF YOU WANNA MAKE MONEY, DO IT.
Hands down the best investment I’ve ever made.
Clear, simple and the most effective method I’ve come across. I’ve invested in training with other “gurus” who although they were good, they left out the most important part. … HOW TO FIND STOCKS.
Ross and his crew have completely hit it out of the park. With his method of entering and exiting my account is up 13% in a month.
I have multiple stocks currently at 50% gains after only a few weeks. The cost to join his memberships will be made back in less than a month. ….. unlike others out there”
Embrace the surge,
Ross Givens
Editor, Stock Surge Daily
