The tech rout of July reversed this week. It has been a tough month for the “Magnificent Seven” and other high-growth companies. What at first started as a little profit-taking, turned into a rout and a full-blown correction. Most of these firms ended up down ten percent or more. Now with earnings for these being reported, they are recovering, somewhat.

However, the Bull and his partners do not expect these to power on to new highs. Their present rich valuations already indicate high expectations. Instead, we expect these to be sources of funds for some time to come. Investors are likely to sell from these positions to pay for broader diversification or for other cash needs.

Although the “great rotation,” we have been writing about reversed last week, we feel confident it will continue. No trend is a straight line, after all. The technical indicators we watch tell us that the trend to broader stock market participation will continue. Lower interest rates soon should give fuel for that trend to continue. Expect outperformance by all manner of companies’ stocks that benefit from lower interest rates. Hurray for that, “the rebellion lives”! Stay steady my friends.

The Lonely Bull