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Stock Market Reversal

Please click here for a chart of S&P 500 ETF (SPY) which represents the benchmark stock market index S&P 500 (SPX).

Note the following:

  • In the Morning Capsule, we shared with you that Microsoft (MSFT) had moved down on poor earnings.
  • The momo crowd is already latching on to the potential artificial intelligence (AI) frenzy.  They are excited about ChatGPT.
  • On Monday, OpenAI, the maker of ChatGPT, confirmed that Microsoft would be making an additional multi-billion dollar investment.
  • Investors are excited about AI, so they bought the dip in Microsoft stock, ignoring the pain in terms of earnings and slower growth that Microsoft has admitted that it expects.