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Momentum Monday - Correction in AI Stocks and Do You Trust Apple?
Howard Lindzon
October 19, 2026
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Good morning…I covered most of how I am thinking yesterday.
This morning, Ben Thompson had a good piece on $AAPL ( ▼ 0.39% ) titled ‘Do You Trust Apple'?’. I do, but that’s relative to Goldman, JP Morgan, Wells Fargo, Elon, Zuckershmuck etc. I use Apple Pay more than ever. I live on my Apple laptop and dekstop and iPhone. Sure, I get too many spam text messages of late but compared to the social spam in my everyday life it is a tiny inconvenience.
As always, Ivanhoff and I toured the markets and shared some ideas. Ivanhoff caught me up on how poorly I have played the energy moves - I have owned $XLE ( ▲ 2.52% ) - but it has been the ‘refiners’ that have had the massive moves (Ivanhoff walks through the charts). I hope you enjoy…
Welcome back to Momentum Monday!
In today’s episode of Momentum Monday, Ivanhoff and I discuss the following:
Correction mode: accelerated selling in anything AI (0:00)
Jensen steps in for $CRWV and $NBIS — but bond traders aren't listening (1:34)
A $34B CoreWeave and why AI is now too big to fail (3:41)
Money stays in the market: $WMT and the beaten-down names bounce (4:45)
$NET pulls back and software's wide, loose base (5:31)
Anthropic has to get public (6:36)
Inflation-fueled spending: $V and $MA at all-time highs (7:24)
The degenerate-economy exchanges resolve higher: $CBOE, $CME, $ICE (8:30)
Energy leads: $EOG at all-time highs, $FANG, crude at 52-week highs (9:12)
Refiners are the year's sleeper winners: $VLO, $PSX (10:15)
Rotation to defense: $LLY, $PM, $XLV — while biotech pulls back (11:23)
Ignore the headlines: Europe's Putin worries and SpaceX earnings this week (12:38)
Here are Ivanhoff’s Thoughts
Anything AI-related is currently under distribution, which notably accelerated last week. Software and semis lost their 50-day moving average last week. Biotech is on its third week of declining below its 20- and 50-day moving averages. Small caps are on a 9-week losing streak and below their 200-day moving average. Tech mega caps are in a better shape, but even META and AAPL are starting to crack. The market is in a correction mode.
Last week, we saw a rotation into defensive assets – US Treasuries, consumer staples, healthcare. This is typical stage one of a correction. Stage two is widespread panic selling – everything goes down together. Stage 3 is characterised by bullish divergences – the indexes make new lows, but select stocks are making higher lows and starting to show clear relative strength. These stocks are the likely new leaders. A correction might last a couple of weeks or a couple of months. In 80% of the cases, it leads to another strong rally. In 20% of the cases, it leads to a multi-month bear market.
In the meantime, crude oil keeps pushing higher, and energy stocks are the current market leaders. Both CPI and PPI September inflation reports came well above estimates. So unless the Fed plays complacent or unemployment suddenly spikes, we are likely to see more rate hikes this year.
The new earnings season has just begun. Most companies tend to beat earnings estimates. What matters is the market reaction. When the market sentiment is sour, most stocks sell off even after strong earnings. When the market is in a good mood, most stocks go up eventually, even after questionable earnings reports.
And here are the charts discussed:
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