7/2/26 Recap
The SPY continues to move within this uptrend, the overall market is looking ok for the moment but I don’t like this series of lower highs you can see with the June 1 peak followed with a lower peak around June 16 and where we are now. I would like to see start to push to new highs or this is going to roll over. Tomorrow is a holiday and we have bank earnings kicking off in 2 weeks. Until then we really don’t have any catalysts the next 2 weeks. Right now momentum is rotating out of semis and back to software. So watch your semi longs because lots are losing the 21 ema which is a sign that short term, they will be weak.Bottom line lots of stuff is working, just not the ai names and I’m sure most of you are only in the 100% ai names because they’ve worked so well all year but if you zoom out, other sectors are looking great and the market is technically in an uptrend, even if it is a weak one so far.
The SMH, below, is losing the 21 ema on a close today for potentially just the third time since the ceasefire. The yellow line below is the 50 day and the next major support level. Chips have had an incredible run but Meta really threw a wrench in the capex thesis yesterday and until we hear more during earnings season from the big spenders, it seems that the semi trade is in timeout.
The money is rotating to software for now, this is making its second push towards the 200 day overhead right below 97.5 and a move through there could send this hard. The whole software crash as based on the semi boom and relative weakness in semis naturally reignites this. The market is always rotating somewhere and for now software has a bid.
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