Gareth Soloway argues the Nasdaq and semiconductors are showing late-cycle, dot-com-like excess, with valuation relative to M2 and multiple technical markers suggesting a potential top near 25,000 in the Nasdaq and possible exhaustion in chip names.
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Gareth Soloway opens by saying there are “very concerning similarities” between M2 money supply and Nasdaq valuation, arguing that the Nasdaq is now at or above dot-com-era extremes when measured against M2. He frames this as evidence of possible irrational exuberance in the AI trade. He then walks through a chart setup on the Nasdaq: a parallel channel drawn from the 2022 bear-market low and extended through the 2025 tariff low, which he says has neatly aligned with the 2021 and 2025 highs. He believes the index can still push through 25,000, but treats that level as important resistance and a possible topping area, especially because the recent ~13% pullback retraced to the midpoint of the channel. He reinforces the top-risk argument with the Nasdaq divided by M2 money supply, saying the current reading is back at the same region that marked the dot-com top. …
Tactically, the Nasdaq is pressing into a major resistance zone near 25,000 while semis look extended and vulnerable to a sharp pause or pullback. The immediate risk is chasing a late-stage rally into resistance if momentum fades.
Over the next few weeks or months, the market likely needs to prove it can sustain the AI/semiconductor advance without deteriorating breadth or failing at overhead resistance. If the chip complex rolls over first, it could mark the start of a larger Nasdaq correction; otherwise the top call is simply deferred.
Structurally, the thesis is that AI-linked semiconductors may be entering a late-cycle valuation regime reminiscent of the dot-com era. The long-run implication is that liquidity-adjusted valuation extremes, not just earnings growth, may again define a major equity market top.
The Nasdaq’s valuation relative to M2 money supply now resembles the dot-com-era top and is therefore a major warning sign.
He explicitly says Nasdaq valuations are equal to or greater than the dot-com high based on M2 money supply.
The Nasdaq may still push up and pierce 25,000, but that level is likely significant resistance and a potential top.
He says he thinks the index can go to 25,000 but sees it as a major resistance zone and possible endgame area.
The Nasdaq’s recent 13% pullback went to the midpoint of the parallel channel, which he interprets as confirmation of the chart’s relevance.
He uses the retracement to argue the parallel channel has technical credibility.
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