1. The Tech Wreck Is Here And We Saw It Coming
There’s a tech wreck happening, and it’s pretty bad out there.
We don’t want this to sound like a brag post, but at Zulfiqar Research, we’ve been warning about this for months. Back in the summer, we called a number of these stocks’ bubbles. It’s all well-written and well-documented, and you’re more than welcome to go back and check.
It’s happening. Nothing has to go wrong. Just people taking profits would cost damage.
Know what you own and why you own it. Keep the basics in mind: when something goes down 50%, it has to go up 100% just for you to break even.
Also, remember that during selloffs like the one we’re seeing right now, great companies can go on sale too. Those who have cash are in a position to buy them at a good discount.
2. Gold Breaks $4,000, Silver Breaks $53
Like we’ve been saying for weeks, $4,000 for gold and the $53–$55 range for silver were major support levels. Gold has now broken below $4,000, and silver has broken below $53.
We’ll be watching these levels closely. The trend appears to be pointing downward, and selling momentum could pick up from here.
We might see a retest of $4,000 for gold and $53 for silver. But that may not happen if momentum really kicks in.
Keep in mind, this is also a seasonally weak period for gold. Gold tends to sell off between now and late November. Then, a decent seasonal opportunity often emerges in mid-December and lasts into the early new year.
For now, be careful with precious metals. Miners are likely to take the biggest hit. That’s just how it works: miners tend to get hit hardest when precious metal prices come down.
And keep our long-term view in mind: the lower gold goes, the better opportunity it becomes.
3. Money Rotating From Stocks to Bonds?
Yields are coming down fairly quickly. The U.S. 10-year Treasury yield is at 4.9%, while the 30-year has been relatively flat at 5.3%.
Overall, yields have cooled, and this has happened as stock prices have come down. This could indicate some rotation from stocks into bonds, although it’s obviously too early to tell. Stocks, especially tech stocks, have reasons to sell off. There’s been a lot of bad news for the sector.
This is a trend worth watching. This rotation from stocks into bonds could put even more pressure on equities.
4. Refineries Hit, War Drums Louder: Oil Stays Hot
If you’ve been following the oil market, you know prices have been high. We know there are issues in the Middle East, and the war drums are getting louder over possible strikes against Iran after the midterms.
On top of that, Ukraine has attacked Russian oil refineries. All of this is impacting oil prices. WTI is trading at $104, while Brent is at $113.
The oil market is being very reactive. Could prices go higher if energy infrastructure continues to be attacked? Very likely.
If the new U.S. strikes hit Iranian energy infrastructure, then energy infrastructure in other Gulf countries could become fair game for Iran. We also know that tankers have been repeatedly coming under fire in the Strait of Hormuz.
It’s a very messy situation, and it’s going to create a lot of volatility in the oil market.
5. Bitcoin at $76,000: A Very Big Level
There’s actually a lot going on, and it can’t all be covered in five things. We try our best to cover what we know and what we’ve been following closely.
With that said, Bitcoin is at $76,000, a very big level to watch. A break below $76,000 could turn out to be really ugly for Bitcoin, potentially taking it down to $64,000. Below $64,000, $58,000 is another major level to watch.
We’re keeping a close watch on the U.S. dollar index as well. It seems to be recovering this morning after falling a bit. It will be worth watching how it finishes the day.
Keep in mind, the stage is being set for the Anthropic IPO, and everybody is talking about it. But given the current selloff, we think there’s a chance the Anthropic IPO gets shelved. That would be big news if it happens. We’ve already seen some AI IPOs get shelved in recent weeks.