Software has been the weakest link in the market for months. We have watched industry titans get cut in half, or worse.
Now, on a clear puke day with everything down across the board—from international to U.S., from Discretionary to Materials to Technology—one group is refusing to make new lows.
Ironically, it is the one that led to the downside.
Here’s today’s standout:
Software $IGV is currently exhibiting a Squeeze Score of 87.
Here's what the chart looks like:
Volatility on the Strazza Indicator has compressed on $IGV as the group finds support at a polarity level that has held for the past two years.
Amid today’s broad market liquidation—across sectors and asset classes alike—the worst-performing group of the past few quarters is stabilizing at major support. With sentiment still at extreme levels, the setup for a contrarian mean reversion trade could not be clearer.
We typically favor continuation setups, but we take what the market gives us and adapt accordingly. Just yesterday, we sold a fresh mean reversion double in $PLTR and redeployed capital into another one of our favorite mean reversion candidates.
