This Rally Seems Crazy: Until You See These Money Flows

This week’s update at a glance

• The weight of money is making a major statement. US markets continue to act far stronger than the headlines would suggest, with growth, technology and semiconductors leading the move.
• Earnings still matter. For many US companies, current valuations may look less extreme when measured against past and forecast earnings growth.
• The commodity trigger remains critical. A break lower in the US dollar could become an important signal for commodities, particularly gold and silver.
• Risk management remains essential. Markets may be improving, but energy security, AI disruption and geopolitical risk still need to be managed with clear rules.

What you’ll learn

• Why this market rally can look irrational, yet still be supported by powerful money flows.
• Why semiconductor strength remains one of the most important signals for the broader US market.
• The key US dollar level that could help unlock the next move in commodities.
• Why gold and silver remain constructive, despite short-term volatility.
• How to think about risk, opportunity and entry timing in a difficult market environment.

The thinking shift

The natural response to this market is to look at the headlines and conclude that the rally makes no sense. But markets often move ahead of the obvious news. Price action reflects money being committed, and when that commitment is broad, aggressive and led by growth sectors, it deserves attention.

That does not mean investors should ignore risk. It means the first job is to separate emotional reaction from observable evidence. Right now, the evidence from money flow is making a clear statement.

What history shows

Historically, strong leadership from technology, growth and semiconductors has often been difficult to ignore. Semiconductors in particular tend to be an important risk-on indicator, because they sit at the centre of many major economic and technological trends.

That does not remove volatility, and it does not remove the need for exit rules. But when money is flowing into aggressive areas of the market, it can be a mistake to dismiss the move simply because the macro backdrop looks uncomfortable.

Where I’m focused now

• US equities: The NASDAQ, technology and semiconductors continue to send strong money flow signals.
• Commodities: The US dollar remains the key chart to watch. A break below important support could support a stronger commodity move.
• Gold and silver: The long-term setup remains constructive, but volatility should be expected.
• Energy: Hydrocarbons remain essential to daily life, and Australia’s energy security risks cannot be ignored.
• Stock selection: I want businesses that are supported by major trends, have strong upward momentum and offer lower-risk entry points after short-term pullbacks.

Important information

_{Any advice in this video is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly, you should consider how appropriate the advice, if any, is to those objectives, financial situation and needs before acting on the advice. Garry Davis, AR No. 317590, is an authorised representative of Primary Securities Ltd, AFSL No. 224107.}

_{Note to traders: The publishers of this article, information or promotion wish to disclose that they may hold stocks discussed in their portfolios and that any decision to purchase any stock should be made only after the purchaser has made their own enquiries as to the validity of any information in this article, information or promotion.}

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