Is this market giving you whiplash?
If so, you’re not alone.
Not a day passes without some major headline spooking the market.
Two weeks ago, the Stargate announcement got everyone super bullish on the artificial intelligence (AI) trade. But just a few days later, the DeepSeek news challenged that narrative.
This week, it’s been all about a trade war breaking out between the United States and its trading partners.
What will next week bring? Your guess is as good as mine.
It’s enough to make your head spin.
The financial media loves the drama. It’s their job to play on your emotions.
But as traders, we’re interested in one thing: making money.
To do this, we can’t jump from one narrative to the next. We need to cut through the noise and focus on what actually matters: price action.
Often, price tells a much different story from what the headlines are saying.
Consider last week’s DeepSeek news... The Chinese startup announced it had created a high-performance AI model on a shoestring $5.6 million budget. That’s a fraction of what leading US AI companies have spent to develop models like OpenAI.
The consensus was that this would spell doom for chipmakers and other AI infrastructure stocks.
The thinking is that companies can invest a lot less money into AI and still get incredible results. This triggered a sharp sell-off in leading AI stocks, which depend on CapEx spending.
At the same time, it triggered an explosive rally in software. Leading software names like Palantir Technologies (PLTR), Duolingo (DUOL), and Atlassian (TEAM) hit new all-time highs yesterday.
If you read last week's issue, you know I called software my #1 DeepSeek trade. So far, that’s exactly how this rotation has unfolded.
But I never said AI infrastructure stocks were doomed.
In fact, many leading names have already bounced back in a major way.
Celestica (CLS)—one of the market’s leading data center plays—has rallied 51% since last Monday. Credo Technology Group Holding (CRDO)—a leading semiconductor name—has also bounced back in a big way. It rallied 47% off last week’s lows.
Broadcom (AVGO)—one of the world’s largest semiconductor stocks—has already bounced 18% since last Monday. As we go to press, it’s trading back above its 10-day moving average.
These moves tell a much different story than the bearish picture the mainstream media is painting about AI stocks.
That’s why we can’t chase headlines. Focus on the tape. Let price be your North Star.
Justin Spittler
Chief Trader, RiskHedge
PS: In my Express Trader advisory, I use my proprietary PRO Meter to shut out the noise and determine what kind of market environment we’re in. It’s a guiding light that orients me on how to approach the market each week. After analyzing the PRO Meter, I target the three strongest stocks to buy.
I created Express Trader to take the complexity out of trading. Want in? Go here for more details.
