Monday was a good session, considering all the negative chatter over the weekend.  There is lingering anxiety. The NASDAQ Composite was the best-performing index, but finished below its 50-day moving average.

New Leadership

Coming into the session, the script had been completely flipped, as the also-rans were dominating the sectors that had been on top for so long, even though everyone had anticipated them slowing down. I doubt anyone thought the gap between performances would be this wide.

I’m still not convinced Energy (XLE) or Consumer Staples (XLP) can keep up this pace, but I think Materials (XLB) and Industrials (XLI) will outperform all year. As for Technology (XLK), it led the way yesterday, as semiconductors (SMH) took off again, but there are big challenges for software (IGV), which is oversold on a near-term basis.

Applovin (APP) was the top performer in the S&P 500 (SPX) after a short-seller apologized for “inaccuracies” in recent allegations. It truly blows my mind how many short attacks this stock and its shareholders have endured. There must be bigger deterrents against these kinds of assaults.

Intriguing action in Oracle (ORCL) and Palantir (PLTR), two names that shorts have also targeted.

Growth and Momo

Large-cap momentum is the trade everyone wants to kill, so all the other stocks can trade higher. It didn’t happen yesterday.

The latest inflation reading from the New York Fed was benign. Several important economic data releases this week will influence how the market plays out.

Too Enthusiastic?

I keep hearing experts say the market is overly enthusiastic and therefore should be avoided. I’m not seeing it, and neither did Gallup (see below) in their most recent survey.

Today’s Session

Retail sales were unchanged against consensus expectations of +0.4%.  We haven’t been able to dive deep into the report, as we’ve had a lot of positions post results overnight and this morning.

I don’t think it’s a disqualifying report, but more on the afternoon note.

That Dog Will Hunt

Once again, Data Dog (DDOG) posted a fabulous number and is up big in pre-open action. 

Interestingly, Salesforce.com (CRM) is getting smashed again.

There is also a significant weakness in the data analysis companies, including Moody's Corporation (MCO) and FactSet Research Systems (FDS).

The AI-software destruction story continues to unfold.

Comments

"a short-seller apologized for “inaccuracies” in recent allegations." That's got to be new one. Not in all cases, but I was under the impression that for years, some promoting it were directly tied back to after they already had taken large short positions themselves. All in an attempt to get others to jump on board, drive the stock price lower and creating fear in those who were holding the stock and leading them to sell prematurely. All while at the same time, once some semblance of their goal is achieved, they cover their position to walk away with a profit and leave those who followed them hanging out to dry. The ability to short shares in excess of the number outstanding, still needs to seriously be addressed. One then has to wonder why it hasn't? Terry Dowler on 2/10/2026 10:51:39 AM

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