Transcription
When experts on Wall Street start to freak out, you need to be paying attention. And whether you're a trader or an investor, everybody is now aware of the leverage and liquidity problems that are starting to appear in semiconductors. With the cues pushing some extreme levels, it's clear that somebody has a lot of fear. But could these markets have pushed too low too quickly? Today, we take a look at some of the key levels, the macro that's moving these markets, and what some of the insiders potentially are doing. Stocks, commodities, and cryptos. Doesn't matter which one you like, guys. We've got a lot to talk about. I'll see you very soon.
Well, welcome back to one of the largest daily shows on the planet when it comes to everything to do with markets. It's great to have you here. Today though, we need to discuss some big signs as certain stocks dropped almost 30% in just one week, leading to one of the largest sell-offs in market capitalization history. But have we really seen a total freakout across the board? Well, today we'll answer some of those questions by looking at the hard data, going through some of the key zones on options, and of course going through some of the key levels technically. And it's great to have you here. If you love markets like we do, remember to subscribe and smash that bell. There's so much to get into, guy, guys, as we kick off one of these big earning season weeks.
Let's now get into semiconductors because semiconductors is the talk of the town for good reason. Everything is now selling off. And according to the latest read from Blue Kurdic, 0%, yes, you read that correctly, of semiconductor stocks are now trading above their 20-day moving average. What is this? Well, it's basically a blanket sale. Doesn't matter whether the company is good, bad, or ugly. They're all going down at the same rate kind of right now. And that basically means that it is a real capitulation from Wall Street.
But could it be a leveraged kind of position? Well, according to Blue Kurdic, when we've seen similar things like this before, which we do have a couple of reads, two weeks later, 81% of the time, markets are bullish. Now, does that mean it's going to happen just like that this time around? Well, that's not necessary. But we do know that this could actually still stem worse things for the markets to come. And the reason is because what does Wall Street know that maybe you don't? Could it be that earnings has actually peaked and we just don't see it yet? Have they done this before? And more importantly, what does it look like moving forward?
Well, Blue Kic over on X as well has some really good reads for this and has actually gone through all of the reads all the way back into the 1990s when we've seen similar sell-offs and what the market did over the next 12 months. And it's actually not that pretty. 9 months later, only 28% of the time were semiconductors actually up. So, we asked you guys in a poll whether you thought this was the topping of semiconductors, and it came back somewhere around almost 50/50. So, clearly the jury is out on that, but it just goes to show why we've been mentioning so much earnings, earnings, earnings, and IPOs, IPOs, IPOs this year, because what Wall Street does and what they end up doing in terms of the price action can be very different. Remember, they tend to trade in the future 12 to 18 months away.
So that's where it comes back into this chart. And Holga over on X, we actually linked him in our Twitter feed or X feed in the description down below. So follow us and follow Hular actually has this great chart here from Bloomberg that shows very similar things to what Duality Research has shown leading into this earning season. the insiders potentially are selling, but at the same time, we've also got the earnings per share being upgraded by the bofins on Wall Street while the index itself for semiconductors is dropping. And you may note if you're a little bit sneaky and you know what's going on, pause the video here and see if you see it. Okay, now unpause that this has happened before back in only 2021. In fact, the Buffins continued to upgrade the markets and upgrade earnings while actually what ended up happening was semiconductors got blitzed and sold off very aggressively.
So, is this important to note? Yes, it does tend to be that when Wall Street starts to sniff out something wrong, they can actually figure it out early and that leads into usually drastic price action. So remember a study of history sometimes can be quite helpful and at the same time we have to ask ourselves the question of was this the top of semiconductors and that's going to be a very difficult question to answer straight away.
What we have seen though is a little bit of insider selling. This one here from EPFR global and sourced from the Kobassi letter over on X. We also retweeted this one. Basically shows that insider buying and selling for the first half of the year has shown more insiders selling. Now, you might say, "Well, no doubt they always sell more." And that is correct. But you may remember that chart we shared just before where insiders sold super heavy back in 2021. And by 22, what were they doing? Well, they were ended up in a kind of earnings peak. So, remember, there had been some stocks in particular that have run so hard that do have insiders selling. And it's not really a timing tool. But what they do tend to be is really early, sometimes even wrong, and sometimes they're just cashing out saying that's good enough. But when they all do it together, well, you do need to be paying attention. And it's just one of those other reads that you can bring into markets.
Another thing we like to do here on the channel is think about things differently. And one of the things we think about all the time, guys, is this one here. And I guess it's exciting in 2026 to still be able to look at the markets from a human psychology perspective. And this is basically just a search here that basically shows the AI bubble. Now, late last year, we talked about the idea that people had searched the AI bubble to a maximum degree. Now, what we kind of speculated or at least thought about at that time was that the there was a potential here that the observation was that if everybody thought it was a bubble that maybe the market would continue to go up in semiconductors. That is because when everyone thinks it's something, it usually doesn't happen. And if you go back to the 1990s and to other bubbles throughout history, when everyone thinks it's a bubble, often that's not the case.
Well, interestingly, we did just get a new peak in June. So, for the bulls, I guess one good case is that, yeah, more people actually thought was a bubble in June. And I do see a lot of videos coming up all the time that tend to be AI is really, really good or very polarized to AI is the worst thing I've ever seen in my life and it's going to destroy humanity and we've got to get rid of it. So, you know what I mean? There's a polarization here between things and it does seem like at least data centers are historically unpopular at this stage. Interested to know your thoughts though when it comes to again whether you think we've seen the peak right now in semiconductor markets. Put it in the comments down below and let everybody know because I think it's always an interesting discussion.
So let's talk about whether we expected this type of volatility to come through. Well, you may remember the first half of July tends to be okay in midterm election years. The second half of July, depending on where you take it, can get a little bit more volatile. And the actual real market is nowhere near as volatile as the NASDAQ and the semiconductors. In fact, we're only about 2 to 3% away from all-time highs on the SPY. And we're about 7 to 8% away on the NASDAQ. And this shows a very different market when it comes to earnings. But why is it so important if we lose the NASDAQ? Well, we're losing the leadership, the capex spend. And that could bring back all of that spend that suddenly businesses don't want to do and something we need to talk about especially over the next coming weeks because these earning seasons may show us in the after earnings calls whether some of these companies are pulling back or whether they continue to go ham and go absolutely crazy into these markets.
Second presidential midterm election years, depending on when you take the data from, often can be very choppy. And you may have seen some reads where we've had it where October is actually a really bad month followed by often strength after the election itself. Well, as it turns out, right now we're kind of in that choppy period. And for the semiconductors, it's not choppy. For the S&P, it's actually trading pretty much the same way you would expect.
Here's where things get really interesting, though. Uh, volume leaders has a couple of big reads that have came in last week. One of them is VIX M. Now, I'm just going to read out a couple of dates here that Bruce at volume leaders shared. And basically, it shows that before the 2024 yen crisis, we also got some large transactions on VIXM, suggesting that maybe there's some volatility still in these markets moving forward. We've also seen the 25th one which I think was around the uh 2026 sell and then of course we saw a reversal of that around this period here. So should we be paying attention to some of the big transactions? If they are what these ones are which is dark pools and their sweeps which if you're unfamiliar with basically just means two massive institutions or maybe even a few more institutions have done a deal. they've done it quickly and they've said, "I need execution very quickly on these charts." And if that does end up leading into volatility, then maybe we're just seeing the beginning of all of this. And we'll try to look at it on the chart perspective a little bit later on. Remember, it's putting together as many pieces of the puzzle as you can do to make a better informed decision whenever you're making anything in markets. And of course, you've got to come up with your own concepts and bring them together.
When you have a look here at VO, this is Vanguard Midcaps. We've also seen some weird activity. Now, we got a number one back in 2021 and the market soon after that actually topped out and ended up selling. And you may remember that was a pretty brutal sell during that period. Well, now we've seen the number four and the number two for VO and it goes to show that although the rest of the market hasn't fallen off, some transactions are starting to come through. Do we know their buys, sells? Do we know the timing? You don't quite know that yet. But as we know, earning season is coming and so far it's been pretty good, but the market doesn't seem to care. That is financials are up. That's pretty good because it shows that the debt overall seems to be healthy at least at this level. We've seen some prelim earnings and earnings from tech being very good, but it could be more of a buy the rumor because remember a lot of these stocks were up almost 100% in a quarter and sell the fact causing liquidations across in particular the Korean market. We've talked about the South Korean market. It is getting wild out there. We've got some big reports coming in on that over this week. So, it's going to be a big one because that is pretty wild.
But this week does kick off some major earnings. We can see here that we've got Tesla, we've got Alphabet, I believe we've got Intel. We're going to learn more when it comes to these markets in particular from some spend and what's going on when it comes to AI tech and everything around there. And this means that we have to pay attention to the overall options markets. Now, that one there was from earnings whispers. This one here is from earnings watcher. And what it shows us, guys, is that the options market is expecting some pretty big moves. Keep in mind that some of these companies are trillions of dollars. Now, Google is expected, according to the options market, to move upwards of 6.6% plus or minus. So, it's going to be a huge day. That's happening after the close on Wednesday. IBM already gave us a bit of prelim. Really wild market already of course for that one, but that's 6.9%. And Tesla's expected to be 7.1% with Intel. Just just wait a moment, guys. 15%. Whoa, that's big. And you know that that's big, guys. 15% plus or minus. The market doesn't even know what it's doing with Intel clearly with a move like that. So, what's this kind of telling us? It's leading into more semiconductors having crazy moves potentially this earning season. So, it's going to be one of those ones that I think each and every earnings is going to count to potentially hundreds of billions of dollars of movement in these stocks.
Comparing current PE ratios to historical averages, the market's doing something really strange. This chart here from Duality Research really breaks it down for us. And have a look here. I love these charts. I got to say, all these charts, everyone that's sharing this stuff on the internet, you guys are all legends. Why? Because, man, it's just amazing what you can get nowadays. It's amazing what we can share here on the channel. It's amazing the charting software we've got nowadays. You know, bringing power back to us, the retail traders and investors out there. It's pretty beautiful stuff. When I first started a long, long time ago in these markets, you didn't get a fraction of this type of thing on the internet.
Anyway, let's have a look here at technology. So, technology is actually trading really down from its 5-year average. In fact, 18% negative to where it's usually been trading. Now you could say, "Oh, well that means it's cheap." Or you could say, "What is Wall Street figuring out?" Because they are doing different things with other sections of the market. In fact, a lot of the markets trading pretty normally, except for, of course, energy, which is just starting to come back up to its kind of 5-year average at this point. But this is interesting. 18% underneath. Good work, Duality, for figuring this out. And I've got to say, what it's telling us is potentially there is a problem here in semiconductor earnings. Could it be that we've hit no more good news? That is, we can't get any better news. Remember, markets don't top on bad news, guys. And those earnings aren't bad so far. They top when the news can't get any better. So, that's the real question we have to try to answer in 2026.
Let's have a look at TSM now. It is battling with the most important level. We shared this one, of course, in our last video, and that is the 20weekly moving average. If you ask pretty much most people on Wall Street, they've heard of this moving average. It's a king. It's I call it mean reversion. Most people do. And that's because it's such an important zone. You can see here we've bounced off this level three times so far. One, two, three. Will it be a fourth? The market barely held on. It came down to the demand and it's doing battle with that 400 zone for TSM, which is such an important options level as well for this particular stock. So, a lot going on there.
So guys, you know that a lot of us pay attention to sentiment and one of the reads for sentiment is not only just to see Google trends, but it's also to see public or or basically, you know, press opinion. Now Baronss, many other newspapers, articles, magazines, they often put out articles when it becomes something becomes super popular as a theme. Well, get this. Have a look at this one. July 20th, 2026. This one shared from JC Parrots over on X. Good share here, JC. Always love these ones. Software's hard truth from Baronss. AI is eating away at software superpower. Profitri reoccurring revenue. Oh no, that sounds pretty bad. But as you already know, if you've been following markets for quite some time, yeah, software has already been beaten up. So, what's been happening over the last kind of month? Well, stick around to find out. But semiconductors have been going down and software has been stabilizing and again finding some bullishness. Why? Well, people are probably waking up to, hey, maybe some of these businesses actually do have modes. Maybe some of these businesses don't create certain levels of slop and that they actually can benefit from some initial AI code with some of their staff. It's actually pretty amazing how Wall Street tends to do this.
Let's take a look here at VIX seasonal pattern midterm years. We know that of course volatility tends to come through during these years. This one here from Polycarp FX. Will it happen again? Well, your guess is as good as mine, but one thing is that we are going into a very important period of time for markets. And historically that kind of late July, August, September, October, November. These are the periods that often give those kind of most volatile periods.
So, let's now take a look at the good, the bad, and the ugly from the charts perspective. We'll go through some options levels as well. We'll start off here with the RSP. You might be thinking, "Oh, the world's ending. Everything's dropping. The market's dead." Well, not quite. When you start to look at the RSP, as we've been talking about recently, it's been holding up pretty damn well. In fact, each time it's sold off to the 20 daily, so far it's been making a series of higher highs and higher higher lows. I will note though that there is a lower high here and it's pressing the 20 daily again. And this has actually been continuous cuz it's done this twice now, hitting around that 216 zone and then rejecting from there. So, is the market weaker than it's been in a little while? I would say yes in some ways. Even though the markets are still going up, it's a little weaker here when it comes to RSP.
What about the VIX and the bonds? Well, the VIX went to 18, but it's not quite past the 20 threshold. So, again, not a total freak out across the board. It's basically telling you that the markets aren't freaked out about everything. They're just kind of repricing themselves. And junk versus LQD, that is that the junk bonds aren't really getting decimated either. So risk factor-wise, people are still prepared to lend and borrow in these markets.
Another thing that's happening at the moment is have a look here at the Bofer yield spread. It's doing nothing. In the past, we usually saw this kind of start to stack up and go wild. We also started to see usually the move market going wild as well. But we haven't seen bond volatility going crazy, this particular sell-off. And it kind of suggests again that maybe people on Wall Street are sniffing out top peak earnings, but they're not seeing what they would say is h, you know, systemic failure. And of course, things like that can change very quickly. So, this puts us in a super dangerous position if we actually have topped out in semiconductors because you may not think about it, but that was the leadership. This is the hardware backbone of the market. It's so important that certain zones here do tend to hold.
Let's move over to oil. the other elephant in the room right now. Oil breakthrough, continues up higher. You can see here it did a little pit. So nice little technical last week and it already started to show of course signs of turn a little while ago before it even became really in the press that much. The 7th of July was a pretty big day and of course the Sunday weekend always seems to be the weekends at the moment leading into more and a lot of people are thinking that oil is on the move and I guess rightfully so because it did close again a very strong week. We saw Brent as well do something similar and when we take a look at Angie stocks over the week themselves they also had a pretty good movement up. So coming off that little bit of an island reversal, another decent session for energy stocks. And if these start to break out again, guys, that could cause also systemic failure because then you're going to start getting a ton of different concerns about price of cost of living, the K-wave economy, whether people can afford it, all these things would come into it. So that's a story that's ever evolving.
Let's move over to software for a second. So we talked about software improving against semiconductors. It's actually been doing that since June. So, it's actually been a little while since software has been improving against semiconductors. And you can see here when you look at semicondu software, it actually held pretty well considering the market started to get volatile last week. So, again, interesting to see the press kind of getting in negative against that. But at the same time, the price action stabilizing at least for now. So, we're seeing some stabilization.
Let's move over to the dollar index. big movements in that in recent weeks, but not so much the last two or three. It's stabilized around the 101 level. So, uh could it be a bit of a pit is some people are looking at this as a flag in the direction of trend at the moment. It's just kind of dealing with this supply on the left hand side. So, a lot going on there with the dollar, but really it's the SanDisks. It's the semiconductors of the world.
So, let's take a look at all of the majors. What was leading where they are now? Remember just a month ago, these guys were upgrading out of control on this particular stock as well. So, first up, SanDisk. One important one. What's it done? It's come down to the demand or support area. So, we look at this on the weekly. You can see it's a pretty bad weekly close, but it's right around where you would expect the markets to possibly try to find some support. When we look at socks, one of the biggest ETFs for semiconductors, you can kind of see here that we have a major put support and also a technical support potentially here. So again, markets have sold off pretty aggressively into these zones. And if we take a look at TSM, it's the 20weekly moving average as we mentioned before. We've also got the Q's as well. At the same time as semiconductors falling off, the Q's actually fell outside their Ballinger on the daily. And you might say, well, that's not too big a deal. But oftent times when you fall outside the Ballinger there can be a little bit of a snapback. So you can see here a little bit of a snapback falls outside the Ballinger obviously a huge snapback back then. So when you go through and you take a look at your Ballinger we always pay attention on the channel to the second standard deviation. So basically when you have these standard deviation breakouts from the 20 you've got to be paying attention. This is just a standard Ballinger. You don't need to get fandangled with it guys. This is the kind of thing I look for because I think if this happens on the semiconductor, semiconductors, happens on the Q's, happens on SPY, any of these types of markets, you want to be paying quite a lot of attention to it because it can show significant oversell.
So, we got kind of a potential support here even when you start to look at semiconductors versus spy. But we don't know that yet because the problem is is this market is coming down like a freight train. that is semiconductors are falling off a cliff and they've come in and they've smashed into this support. So things like the Cosby in particular has come into focus as we see more and more stories come out of there that are just terrifying really when you see the numbers the sheer numbers of people that were unfortunately taking too much risk in these markets and according to the latest reports some of them I mean just you know it's just horrible. So why is this so important? Well, at the moment, what's it doing? Lower lows and lower highs currently in this market. And that's suggesting that we haven't necessarily seen anyone step in right now. Is this is an important level? Seems to be technically. Have we seen people step in yet? Well, I guess not.
Let's now take a look at the mags. Different story. Magnificent 7 actually improved over the last week versus going down. So, again, the market is the tale of two things. The rest of the market and then pretty much the semiconductors. And if we have a look at banks like regional banks actually made a new high on the week. So take a look at this. The closure was a new high. I mean not all-time high but new high. And that's not the type of thing you see in a systemic debt failure. So pretty interesting stuff from the financials there. US 2k again you'd usually expect this to be getting absolutely destroyed with markets like this but it's just not that way. So there's a definite rotation kind of thing going on. And why that's important to note is because we did see similar things in the past. I guess most notably if you load a chart up, you could probably look at the 2020 late period where we saw kind of the big tech stocks then rotate out and then we actually saw uh the rest of the market rotate in yet the market still ended up going bullish. So it's, you know, one of those things you have to observe. You have to look at it. You have to really start to pay attention to each and everything by the day. And of course we do create these videos all the time, 5 days a week. So, if you want to subscribe, smash that like button, all those types of things. It's going to be pretty helpful, I think, moving forward to look for these things, especially this earning season. So, it's great to have you on board.
So, let's take a look at the NASDAQ from the options level perspective. Here are the updated options high and low levels for the next session, which will be the Monday session. But take a look here at the put support. We're actually trading in negative gamma at the moment, according to the NASDAQ. And it's going to be pretty important for the NASDAQ to try to hold above 700 over the next coming trading sessions. Why? Well, this could force dealers to actually have to hedge their position off. And you'll notice where the market closed was actually the put support on the zero DTE. That is the next closest kind of expirations. Options low and high levels are always important to note, but we're nowhere near the call walls at this stage and then comes to this market. So, it really does come back to the weeklys. Is this a bad weekly close? It's certainly not positive. It's the lowest weekly close we've had in quite some time. But I guess the positive action is we're holding above the weekly 20 and the semiconductors themselves have slammed into some of these key supports. So it'll be all eyes on these markets.
S&P 500 time. If we take a look at the advanced decline line, guys, it's a different story. Close to the all-time highs. Really not a market that looks absolutely diabolical at this stage. So pretty much trading close to its kind of mid-range trade for a little while. And here are the updated options levels. And you'll note that we're actually underneath the put supports for the zero DTE, but we're not underneath that real negative gamma kind of area, which sits still at around 7,300. So, the markets themselves, tail of two things, uh, when it comes to what we're seeing on the charts.
What about gold? So, a lot of people always think gold, it must be some kind of hedge and the markets should be going up when there's times of concern. Well, that is part of the thing that people think about in gold, but gold's a lot more complicated than that. as you know, it is a currency and there's actually some interesting things happening out of China when it comes to gold and paper gold. So, there's some stories to be talked about there, but this video is going to be too long if we continue to discuss that concept. Some notables are that the RSI on the daily is showing some divergence from the lower lows that we've been seeing. So, that could show stabilization at an important demand area, but realistically, it's still early days for gold. It's such an important zone. We often have a saying on this channel that basically says to stop a freight train takes market structure and in this case we're creating market structure but we haven't seen you know levels like 4200 being closed above or things like that. So gold still kind of you know finding a base potentially here and you know getting ready for maybe a big move in the future.
Let's take a look at Bitcoin. Bitcoin and Kweb. Uh this one here from Heisenberg over on X Mr. derivative. Shout to you did come up with kind of an interesting idea there of overlay. But if you take a look at Bitcoin, we'll move back over to a candle chart for a moment. You'll note the weekend trade actually is pretty positive. We've got here bit of rejection the weekly itself. You know, multiple wicks coming off the bottom. And if we actually go to Ethereum as well, do remember that Ethereum actually managed to close above that kind of double bottom base. So, it's come back down. It's retested that level. uh you know will it go to something like 2130 again and and kind of hit into that supply. Some interesting stuff coming in the crypto markets and again very different to what you'll read in the press because the press has been so negative the last kind of two weeks yet the market itself has started to show flow changes started to show some signs of price action too early to really say yeah yeah yeah but at the same time it's just it's always interesting to observe these things in the markets guys for the week ahead we've got plenty of news and other things coming out I will share with you in the next video all of those things but if you'd enjoyed today's video please remember to subscribe smash that like button follow us on some of the socials in the description down below. It's great to have you here.
And in summary, at the moment, what is probably most important? Well, we often look at crossorrelation in markets. So, is the NASDAQ at an important zone? Yeah, it looks like it. Are the semiconductors are a pretty important zone? Yeah, there's an arguable areas of reversion, support, and of course, something we've been following for so long now, semiconductors to spy. The backbone of the market is back to these important demand support zones. So, there's a decent amount at stake here for the semiconductor trade and it really comes back to what is Wall Street up to. Unfortunately, for now, it seems to be that they've been a lot of liquidations. So, remember guys, stay safe, risk manage, control the opportunities, and at the same time, always come from optimism and abundance whenever possible. It does help you to keep a more positive attitude in these tough markets. Thanks so much. We'll see you next time. Bye for now.