Everybody Loves Semis. Nobody Loves Software.

The Software Rotation

In mid-April we outlined our software bounce thesis. We wrote: "IGV has been absolutely crushed, but is now sitting on major support just as positioning looks washed out and momentum starts to turn. After four failed attempts, the setup for another bounce is building again."

IGV has since rallied roughly 33%, reclaiming the 200-day moving average for the first time since last year's washout. The squeeze remains alive and well, but the easy money has already been made. Even so, software continues to trade well below the highs.