This Week At Cestrian (The Cestrian Circle Newsletter)

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by Alex King, CEO, Cestrian Capital Research, Inc. 

Well, that was quite the week. Everything only-up until Friday, which was only-down, unless we’re talking software which finally broke out of the basing pattern it has put in these last few months. When stocks or ETFs move up and out of their high-volume, sideways-price-action accumulation phases, it is usually triggered by a “good news story” or event; it’s not really the story or the event that is causing the rise in the price, it is that bigs are done accumulating and want the little people to start buying too, thus to generate the free profits for their holdings.

Here’s what happened with $IGV, the software sector ETF, this week. A convincing move up into the Markup Zone, the ‘good news story’ being the Bill Ackman stakebuilding in $MSFT.

Semiconductor has been on fire since the Liberation Day lows last year. Software is now seeing capital rotate into it; I don’t think semiconductor collapses from here - if it even goes sideways or just drifts down a little, a recovery in software should be enough to push the indices higher.

We talked about this during Monday’s live, interactive real-time webinar for our Inner Circle members. The replay is available below, together with a summary of all the Cestrian staff personal account trades disclosed this week.