We have traded down just 1 time in July the past decade; but today is a not a good way to continue this trend. Aside from the breakout in coal, which I will get to in a second, we are seeing more distribution in many key areas of the market save the financials. It’s also worth noting US treasury yields are skyrocketing today, +11bps.
Aside from $AAPL, $TSLA, $AMZN and a handful of other mega cap stocks, we are in sell mode with breadth bogged down at around 30%. It should be noted, we haven’t enjoyed breadth of more than 60% since June 10th, which points to the fact rallies have been mean and narrow.
I am +25bps with 63% cash and a $TZA hedge ay 6%. I’m not particularly bearish, since I am net bullish. But the action speaks for itself and I see no reason to risk too much in a tape yielding so little.
On the matter of coal:
There was a report out today suggesting coal will benefit from the rapid scale out of datacenters, due to AI.
PMVirginia has long been known as ?“Data Center Alley,” with about 70 percent of global internet traffic passing through its servers, according to The Wall Street Journal. Dominion Energy said that because of data centers, its electricity demand in Virginia could quadruple and represent 40 percent of total demand in the state over the next 15 years. Georgia and Tennessee have also seen much data center construction and speculation. Utilities like TVA, Duke, and Dominion have announced plans to build more gas plants and keep coal plants open longer in those states, along with building renewables.
(rolls eyes)
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