Mark Minervini

September is historically the market’s most difficult month, and this year we entered the period with another significant headwind: rising interest rates and oil prices. Yet the major averages held up relatively well in the face of a surge in both last week. What we may be witnessing is more of a rotational correction and consolidation beneath the surface. The S&P 500 can appear relatively healthy while a large percentage of its individual components are already experiencing corrections. The breadth statistics illustrate this divergence. As recently as mid-August, roughly 69% of S&P 500 stocks were above their 50-day moving averages. By September 11, that figure had fallen to roughly one-third of the index. On September 9 alone, 383 of the 500 S&P stocks were declining, while decliners outnumbered advancers by nearly 3-to-1 on the NYSE. That's considerable internal deterioration without a comparable collapse in the headline index. In fact, from August 18 through September 8, the S&P 500 declined only about 0.2%, even as broader measures of participation deteriorated substantially. We may already be experiencing a stealth correction—one stock and one group at a time. With September historically the weakest month of the year, we still need to respect the seasonal risk, particularly with interest rates on the rise and elevated oil prices. But if the indexes can hold together while individual stocks complete their corrections and begin rebuilding technically, the market could emerge from September in considerably better shape than the major averages alone would suggest, and the historical tendency then shifts to a strong year end rally. The key is patience; to wait for proper setups and not let the indexes pressure you into sub standard trading decisions. The real story right now may not be what the S&P 500 is doing. It's what the stocks beneath it have already done and are currenty doing. We are seeing a very sharp rotation beneath the surface today, with the selling concentrated in the areas that have been at the center of the AI infrastructure trade. The Nasdaq opened down roughly 1.2%, but the damage is considerably worse across semiconductors and AI-related hardware. MRVL, MU and INTC were down roughly 6% or more early, LRCX was hit around 8%, and NVDA fell more than 3%. The weakness is global, with ASML and major Asian semiconductor names also under significant pressure. The immediate catalyst is a weekend push from several prominent AI leaders—including Anthropic's Dario Amodei, Sam Altman and Elon Musk—calling for greater restraint in the pace of frontier AI development. Investors are extrapolating that into the possibility of a slower AI capital-spending cycle, which directly challenges the earnings narrative supporting semiconductors, memory, networking and data-center infrastructure. What's particularly interesting is that this isn't simply broad risk-off selling. Money appears to be rotating within technology itself. While chips and AI infrastructure are getting hit, cybersecurity names are showing relative strength. Bottom line: this looks like more than an ordinary down day in tech. The market is aggressively questioning one of its most crowded leadership themes while simultaneously searching for new sponsorship elsewhere. The key now is whether AI infrastructure stabilizes quickly—or whether today's action marks the beginning of a more meaningful leadership transition. https://t.co/JXzFFTmMtn

September is historically the market’s most difficult month, and this year we entered the period with another significant headwind: rising interest rates and oil prices. Yet the major averages held up relatively well in the face of a surge in both last week. What we may be witnessing is more of a rotational correction and consolidation beneath the surface. The S&P 500 can appear relatively healthy while a large percentage of its individual components are already experiencing corrections. The breadth statistics illustrate this divergence. As recently as mid-August, roughly 69% of S&P 500 stocks were above their 50-day moving averages. By September 11, that figure had fallen to roughly one-third of the index. On September 9 alone, 383 of the 500 S&P stocks were declining, while decliners outnumbered advancers by nearly 3-to-1 on the NYSE. That's considerable internal deterioration without a comparable collapse in the headline index. In fact, from August 18 through September 8, the S&P 500 declined only about 0.2%, even as broader measures of participation deteriorated substantially. We may already be experiencing a stealth correction—one stock and one group at a time. With September historically the weakest month of the year, we still need to respect the seasonal risk, particularly with interest rates on the rise and elevated oil prices. But if the indexes can hold together while individual stocks complete their corrections and begin rebuilding technically, the market could emerge from September in considerably better shape than the major averages alone would suggest, and the historical tendency then shifts to a strong year end rally. The key is patience; to wait for proper setups and not let the indexes pressure you into sub standard trading decisions. The real story right now may not be what the S&P 500 is doing. It's what the stocks beneath it have already done and are currenty doing. We are seeing a very sharp rotation beneath the surface today, with the selling concentrated in the areas that have been at the center of the AI infrastructure trade. The Nasdaq opened down roughly 1.2%, but the damage is considerably worse across semiconductors and AI-related hardware. MRVL, MU and INTC were down roughly 6% or more early, LRCX was hit around 8%, and NVDA fell more than 3%. The weakness is global, with ASML and major Asian semiconductor names also under significant pressure. The immediate catalyst is a weekend push from several prominent AI leaders—including Anthropic's Dario Amodei, Sam Altman and Elon Musk—calling for greater restraint in the pace of frontier AI development. Investors are extrapolating that into the possibility of a slower AI capital-spending cycle, which directly challenges the earnings narrative supporting semiconductors, memory, networking and data-center infrastructure. What's particularly interesting is that this isn't simply broad risk-off selling. Money appears to be rotating within technology itself. While chips and AI infrastructure are getting hit, cybersecurity names are showing relative strength. Bottom line: this looks like more than an ordinary down day in tech. The market is aggressively questioning one of its most crowded leadership themes while simultaneously searching for new sponsorship elsewhere. The key now is whether AI infrastructure stabilizes quickly—or whether today's action marks the beginning of a more meaningful leadership transition. https://t.co/JXzFFTmMtn

The rally in $NVDA is impressive so far today, but the broader action in technology is much less convincing. One stock—even a market heavyweight like Nvidia—doesn't make a healthy tape. In fact, early today only 161 S&P 500 stocks were advancing, with Nvidia effectively accounting for the index's entire gain. I think we still need to remain cautious going into September with its seasonal headwinds directly ahead. I would like to see better participation, stronger leadership and improved tape action across tech. Before concluding we are out of the woods, let's see how we close today and what subsequent follow through days look like. https://t.co/JXzFFTmMtn

Here's a note I just sent out to my clients: The U.S. market remains in an uptrend, but the character of the advance is becoming increasingly complicated. The follow-through-day rally is now testing what I consider its last meaningful line of defense, while several major catalysts are converging at the same time. NVDA earnings, PCE inflation data, Jackson Hole, and a series of important software reports all have the potential to change the market narrative quickly. The follow-through-day pullback needs to hold here. SPY 760 is the logical line in sand—a break below that level would constitute an FTD failure and add pressure to the technical picture. There are plenty of catalysts that could force or settle the issue. NVDA, PCE, Jackson Hole and several important software earnings reports all hit this week. Any one of them could change the current narrative quickly. The bigger-picture risk remains a potential regime change toward financial repression, which historically tends to emerge alongside financial stress. The massive amount of capital being committed to AI infrastructure is an obvious area to watch. NVDA and the roughly $500 billion alternative-asset financing story have become the market's best guess for where the epicenter of the next financial problem could develop if the AI/datacenter boom runs into trouble. Anti-datacenter sentiment is also building and could intensify heading into the midterms. Jackson Hole could provide more clarity on the Fed's function, but regardless, hard assets are back on the radar. GLD, SLV and COPX continue to show strength. Software looks to be transitioning from a laggard rally to potential leadership. PLTR has shown some recent power, which could be a tip off of a rotation from semiconductors into software. Several software companies report this week, so we should get more evidence very soon. Bottom line: The uptrend is still intact, but the FTD needs to hold here. More importantly, individual stock setups need to proliferate. With major catalysts directly ahead, there's no reason to anticipate. Let the market show its hand. We're becoming more selective, cutting names that aren't acting right and improving stops on open positions. If SPY 760 holds and new leadership develops, the rally has room to continue. If it fails, we respect the message and adjust accordingly as we head into a seasonally weak September. https://t.co/JXzFFTmMtn

Normally, when I'm hedged with an index short against a portfolio of individual long positions, I'd rather get stopped out of the short and participate in a rally through my longs. That's typically where the leverage is—you give up the hedge but gain much more from the individual stocks. Today, we were stopped out of the overweight portion of our $SPY short, but the longs didn't provide nearly the upside participation I would have expected. Our best performers were $ADPT, $YETI, $CYRX, $VIK, $NET, and $HSBC—not exactly a high-octane leadership group. While some names continue to act well, we're still not seeing the type of participation or proliferation of setups that typically accompanies a healthy institutional advance from a correction. Looks like the bulk of the rally came from a cap weighted oversold bounce - names like $META, $MSFT, $AMZN, $GOOGL, $TSLA, $NVDA, and $SNDK. Maybe we're experiencing a delayed fuse, but until we see better quality setups, we'll proceed with measured caution. https://t.co/JXzFFTmMtn

With both PPI and CPI coming in hot, I see risk continuing to rise. The Fed’s hands are now tied, and rate cuts appear to be completely off the table for the foreseeable future. Interest rates have already been moving higher, and if inflation remains sticky, the market could soon begin pricing in the possibility of rate hikes. While there are currently no clear signs of a meaningful economic slowdown, persistently higher rates could ultimately lead to an “engineered” recession. Mega-cap stocks continue to lead the market, with GOOGL and NVDA showing the strongest relative performance, while META remains the clear laggard among the group. At the same time, market breadth has been deteriorating and participation continues to narrow. Currently, only 40% of Nasdaq stocks are trading above their 200-day moving average, and just 46% of S&P 500 stocks are above their 50-day line. Be careful chasing extended stocks in this environment. This may be a good time to finance risk by taking partial profits in names that have already produced solid gains and that allows you to freeroll the rest of the trade risk free. https://t.co/JXzFFTmMtn

With both PPI and CPI coming in hot, I see risk continuing to rise. The Fed’s hands are now tied, and rate cuts appear to be completely off the table for the foreseeable future. Interest rates have already been moving higher, and if inflation remains sticky, the market could soon begin pricing in the possibility of rate hikes. While there are currently no clear signs of a meaningful economic slowdown, persistently higher rates could ultimately lead to an “engineered” recession. Mega-cap stocks continue to lead the market, with GOOGL and NVDA showing the strongest relative performance, while META remains the clear laggard among the group. At the same time, market breadth has been deteriorating and participation continues to narrow. Currently, only 40% of Nasdaq stocks are trading above their 200-day moving average, and just 46% of S&P 500 stocks are above their 50-day line. Be careful chasing extended stocks in this environment. This may be a good time to finance risk by taking partial profits in names that have already produced solid gains and that allows you to freeroll the rest of the trade risk free. https://t.co/JXzFFTmMtn

With both PPI and CPI coming in hot, I see risk continuing to rise. The Fed’s hands are now tied, and rate cuts appear to be completely off the table for the foreseeable future. Interest rates have already been moving higher, and if inflation remains sticky, the market could soon begin pricing in the possibility of additional rate hikes. While there are currently no clear signs of a meaningful economic slowdown, persistently higher rates could ultimately lead to an “engineered” recession. Mega-cap stocks continue to lead the market, with GOOGL and NVDA showing the strongest relative performance, while META remains the clear laggard among the group. At the same time, market breadth has been deteriorating and participation continues to narrow. Currently, only 40% of Nasdaq stocks are trading above their 200-day moving average, and just 46% of S&P 500 stocks are above their 50-day line. Be careful chasing extended stocks in this environment. This may be a good time to finance risk by taking partial profits in names that have already produced solid gains and that allows you to freeroll the rest of the trade risk free. https://t.co/JXzFFTmMtn

With both PPI and CPI coming in hot, I see risk continuing to rise. The Fed’s hands are now tied, and rate cuts appear to be completely off the table for the foreseeable future. Interest rates have already been moving higher, and if inflation remains sticky, the market could soon begin pricing in the possibility of additional rate hikes. While there are currently no clear signs of a meaningful economic slowdown, persistently higher rates could ultimately lead to an “engineered” recession. Mega-cap stocks continue to lead the market, with GOOGL and NVDA showing the strongest relative performance, while META remains the clear laggard among the group. At the same time, market breadth has been deteriorating and participation continues to narrow. Currently, only 40% of Nasdaq stocks are trading above their 200-day moving average, and just 46% of S&P 500 stocks are above their 50-day line. Be careful chasing extended stocks in this environment. This may be a good time to finance risk by taking partial profits in names that have already produced solid gains and that allows you to freeroll the rest of the trade risk free. https://t.co/JXzFFTmMtn

We are in a very concentrated environment. The Nasdaq 100 is up 16.2% year-to-date. Four stocks – Alphabet, Nvidia, Micron, and Intel – are responsible for 8.4% points, or 52.3% of the gains. With the market hitting all-time highs, only 40% of Nasdaq stocks are above their 200-day moving averages, so it's a selective environment. Money has chased a small list of names which is producing a number of climax moves in individual names. Examples include: $INTC, $MU, $SNDK, $BE, $STX, $AMD. There is some serious momentum in these names, but investors need to be careful of getting caught up in the emotion that comes with a parabolic rise. The nature of this market has been one of concentration and selectivity. With many stocks becoming extended, the landscape is becoming more selective. The bull market is intact, but with pockets of froth forming. https://t.co/JXzFFTmMtn