7/7/26 Recap

The SPY is pulling back to the 8 ema today and this needs to hold or it will be a confirmed 3rd lower high. The market is actually fine outside of semis/memoroy, but with how gigalong everyone is semis/memory, the pain you’re seeing in this unwind is real. We really have nothing at this moment that can stop this bleeding until we get to megacap earnings but those don’t start for a few weeks. I imagine we will hear more of the same on how capex is rising and this was really just a rinsing of levered players in the market and not a real structural issue with semis. Everyone just happens to be very levered up into the same names so the moves down get violent when they occur.

The SMH continues to be the big drag on markets down another 5.5% today and losing the 50 day for the first time since the ceasefire in April!. The QQQ has the same chart as below because it is so heavily skewed to semis now. This is a big trend shift for semis and you’re seeing it in names that led us for months finally losing the 50 day for the first time since the ceasefire. Now the door is open to that 100 day way lower at 500. You can also see the big gap below at 400, what goes up must come down and semis in particular have been really overdone recently. I would say with these you really don’t want to buy until you see things settle down and that 50 day reclaimed.

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