Hey Peter Navarro here with the latest podcast and Substat.

Here we go.

On Earning Season and Fed Watch, the Varro's market wrap July 21, 2023. This week was purely a momentum week as all major indices have been hitting new

highs and breaking through what technicians call levels of resistance. The idea is once you get above

resistance a stock will run for a while without the worry of traders cashing in at a

point where they initially took a loss, just want to get their money out.

Momo is a purely technical play based on charts rather than a fundamental play based on parameters like

earnings. And at least part of this momentum is due to small retail investors now coming into the market in greater numbers and

buying equity neutral funds as the frenzy not to miss this current rally increases. As a rule the big Wall Street smart money

gets in early in the trend and retail investors coming at the end.

But this is another way.

Retail investor enthusiasm can often be a contrarian indicator.

So I note this trend with caution. This is particularly true now since global macro

hedge funds have been cutting their exposure to U.S. equities. If you get the picture, smart money out, dumb money in,

guess who gets left holding the bag.

As another cautionary note, U.S. markets or party in like it's 1999, even as parts of the globe are struggling.

Communist China, for example, reported slower second quarter growth than expected,

while the Eurozone economy has been suffering from a technical recession.

Here's why this matters. If foreign countries are not prospering, they are not buying US exports, and all that trickles down to a

slower US growth rate.

One other thing to consider here is the clear schizophrenia developing between traditional stocks

and those in the artificial intelligence space, many of which are

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