Notes From The Road 1/13/2025 - Market Tops Are A Process: QQQ's Back At July 2024 Levels, NVDA Too

Don't look now, however, momentum is fading in some of the market's favorite momentum stocks...

• Market tops are a process.

• On this note, both the Invesco QQQ Trust and Nvidia have plateaued since mid-2024, trading in a choppy, volatile range.

• Bonds typically top first, followed by stocks and commodities; recent bond performance supports this narrative.

• Model Portfolios are off to a strong start in 2025, with the Best Ideas and Contrarian All Weather portfolios showing notably strong early 2025 performance.

• Stay even-keeled; market conditions are choppy, and the bigger picture backdrop resembles the Nifty Fifty era and 2000-2007 market cycles.

"Most people get interested when everyone else is. The time to be interested is when no one else is. You can't buy what is popular and do well."

- Warren Buffett

The Nifty Fifty taught me: It's not what you buy, it's what you pay."Best companies in America" lost 90% in 5 years.

- Schwar Capital

Travis's Intro Note To Members

Right now, I am still traveling, however, working my way back this week to my home base.

Given how the last couple weeks have gone, I don't want to end this routine, as getting away can be cathartic and therapeutic.

Returning home after being away can feel good too.

On that note, the Invesco QQQ Trust QQQ 0.00%↑ is back at its July highs with the dip in pre-market trading this morning, adjusted for subsequent dividends (the actual high for the QQQ's dividend unadjusted was a little bit higher).

Said another way, there has been a lot of churning in the market. In fact, market leader Nvidia NVDA 0.00%↑ in June of 2024, and NVDA shares today are below both their June 2024 and July 2024 highs.

There is a famous saying that tops in the market are a process. Could the topping process be playing out in front of our eyes, hidden in plain sight?

QQQ's Back At Their July 2024 Highs In January of 2025

As I write this note, the Invesco QQQ Trust QQQ 0.00%↑ is trading at $502.60 in pre-market trading on Monday, January 11th, 2025, and it traded as low as $499.60 in pre-market trading earlier this morning.

On July 10th, 2024, the QQQ's traded as high as $503.53, unadjusted for dividends, and closed at $502.96 that same trading day, also unadjusted for dividends.

The chart below is adjusted for dividends, however, the point is that the QQQ's have essentially been flat now here on the morning of January 13th, 2025 from their July 10th's peak level.

Invesco QQQ Trust Daily (Author, StockCharts)

In summary, this is six months of running in place. Tops are a process, and we will only know with the benefit of hindsight that we put in a top in the broader market indices.

Thus for now, this is something to monitor.