Transcription
Wow, you do not see this every day. A huge move in semiconductors over the last 24 hours and the largest trading volume in almost 2 years. Yes, guys, it looks like Wall Street could be getting heated for a massive turn.
But what exactly is going on for us as traders and investors as the NASDAQ makes new lows and the Cosby enters another sidecar halt? Yep, it looks like leverage is coming into focus and unfortunately that means liquidations. So, when Wall Street starts to put the panic on, what should we be thinking about?
Today, we take a look at the charts that matter the most right now, including what's happening with yields this week and of course, earnings season. Remember guys, we often say earnings, earnings, earnings, and this week could be the biggest we've seen in almost 6 years. We'll see you very soon. This is going to be a very big one.
Well, welcome back everyone to one of the largest daily shows on the planet thanks to you guys when it comes to everything to do with markets. It's great to have you here and what a wild 24 hours we just witnessed with huge macro story lines, of course, some big data to discuss and yes, you guessed it, Wall Street flows starting to come through.
But let's start the story where the flows are. Remember on this channel we talk about price action, data, and flows. If that's something that interests you, make sure to subscribe and of course smash that bell icon. It's great to have you here. We all love markets together and you guys are the best community around.
Let's talk about what just happened though. Semiconductor daily chart. Take a look at this guys. The volume is out of control. That is a big day. In fact, it's the biggest day in almost 2 years. And the last time we saw it was actually August of 2024.
Now, why is this so important? Well, it all comes back to another thing that no one's talking about, the Bank of Japan and the current US dollar yen problem. We do know that they're starting to talk about making a decisional change, but this could have implications over the next couple of months as well as the carry trade comes into question. Now, that's exactly what happened in August of 2024. But during that period of time, we saw a massive sell-off in semiconductors led into with a big rally through the days of these huge volumes.
Now, it's what happens here that's so important. Remember back last time we ended up seeing an intraday gap down followed by a massive session V-shaped reversal. And that shows that someone on Wall Street was very excited. But I also want to look at the market structure. Remember to stop a freight train, we often have a saying. We need to see market structure. And this was actually a lesson that I first learned back well over 15, 16 years ago now where I started to observe in markets that it would take a long time to see a recovery off a huge dip. Why? Well, basically confidence was lost. And I think this is the problem with where we find ourselves right now when it comes to semiconductors.
For a long time, people have just expected BTFD. It's all good. Everything's going up, but you've got to put yourself into the mindset of what's happened to some of you out there in the world. Leveraged ETFs have caused some serious pain. And something that we've really talked about in terms of risk management and being careful out there because remember they became the most popular exchange traded funds in certain markets, especially in Asia over the last months.
Now, if we do follow a similar path, at what point could we be seeing a recovery? Well, we'll be looking for, of course, Wall Street to actually show us the way. We have a saying, patience, react, don't predict. But if we're looking at similar market structures, here's where the problems get a little bit more wild. Blue Kurdic actually over on X has actually gone through all the way since the 1990s. Shout out to Blue Kurdic. And taking a look at socks in terms of performance after seeing a 20% plus draw down. Remember, 20% actually equals what we call a technical bear market. And that's where we found ourselves here in 2026.
Now, the average path is actually a very interesting one. Up, down, and all over the place, followed by often further capitulation later on down the line. And this has led to the 9-month stat being pretty scary. Now, if you're a long-term viewer, you would already know that we've shared this now for about 2 weeks. And the main reason was because only 28.6% of the time in similar circumstances did we see the market actually bullish, that is to go back to a new high when it came to semiconductors and I think this is a really big observation that a lot of people are missing.
When you start to lose confidence, yeah, you start to see multiple, of course, movements and this means that at the moment we've got compression on so many hyperscaler stocks and semiconductors while Apple and the other likes are starting to move up. The market's not stupid, guys. It's actually already making these moves and it has been doing so for about almost 2 months now at the time of this recording.
So, let's talk about where things get a little bit more complex and then go back to some of the data. First up, Citadel. They've just come out and they actually believe that Walsh could deliver a surprise Fed rate hike. Do you guys actually think that's possible? Let us know in the comments down below. I tend to not think that, but that is according to a story coming out here from Bloomberg. And you can see that the Fed decision day, the poly market stats here from Heisenberg at Mr. Derivative over an X basically shows that 28% of the chance the Fed raises rates this week. Now, Citadel obviously agrees with that, but always interested to know your comments. If I was making a guess, I would say probably not. And of course, Trump is already saying, hey, he doesn't want any rate hikes. He's looking for a cut already.
Now let's talk about what is going on right now though from the big upscale kind of like you know we're looking from the top down approach. Now when I learned in institutional investing many many years ago I always learned that top down was one of the best strategies actually what we're really well known from because the thing is you've got to put yourself into the mindset of what would an institution do, how would they think, something we talk about here all the time on the show.
Now the Qs actually hit one of the most important levels and now they're moving below it. But remember the weekly close will be all important here and that is the 20 weekly moving average. So we've actually reached a very critical point here in markets. If we lose this level, well you could be looking at a weekly 50 and on top of that we might even see way bigger sell-offs, especially if the S&P 500 comes with it.
But is this already starting to build into sentiment? If you look at a CNBC fear gauge right now, we're sitting at about 40. Not extreme fear, but in the fear kind of, I guess you'd say trajectory. When you take a look here at the Aouble Bull Bear spread, according to Duality Research, this was actually the biggest weekly change in over a year. So that is that everyone was bullish and now everyone is bearish. So, a quick switch like this, it happens so fast now in 2026, probably driven by social media and so many retail traders being involved in the markets.
The important factor here, we're going to need to stop a freight train on several markets, including semis. So, the next couple of sessions coming into this week's earnings are going to be so important, guys. I cannot stress how important this could be for changing sentiment just like that.
The S&P 500 here, we can see S&P 500 versus low volatility. Good one here from Duality Research as well. Basically just showing that the market dynamics are starting to shift. And when we've seen similar market dynamic shifts occur, that has sometimes led into choppy markets and even further falls. And it starts to look a little bit like that kind of movement of a midterm election year. That is up, down, and all around which we've been talking about. Then followed by a little bit of a freakout and then, you know, time will tell whether, you know, it really is something bigger or just the standard midterm election year.
Let's now have a look at the S&P 500 Hindenburg omens. Now, a lot of you guys hate this read, but I always talk about the clusters. We have now seen eight Hindenburg reads in just 2 months. Now, this is pretty wild and again it creates generally a choppy market. Now, it's not about one read. Remember, it's about plenty of different reads together. And this actually tends to lead into up, down, and all around, which is exactly what we've got going on right now on the S&P 500. So little surprise when you take a look at things like the Hindenburg omen, but this week is really probably defined by not only Walsh's statement about what's happening with interest rates, but then of course Microsoft, Meta, Apple, and Amazon.
This chart here from earnings whispers, but the chart that we also need to be looking at is earnings watcher one here because this shows us what the options market expects from the move. And if it's your first time here or if you've never seen these types of charts before, this is so important, guys. This is what the options market is basically pricing in in terms of volatility. And I find that too many people trade stocks and maybe even you've been there before as well where you trade stocks and you're not aware of what the market's already pricing in and then you see a massive move and you're left scratching your head saying, "What just happened? Oh, why is the market rigged against me?" Well, at least by understanding what the options market is expecting, then you can start to get a little bit more information. And we do write newsletters around this and this type of stuff all the time. Institutional style insights, things that you learn when you've been around some of these bigger portfolio managers and just people that you know trade some big money.
Let's take a look here at ARM. What's going on there? 15% plus or minus expected move. That's huge. But of course, these are in the size of hundreds of billions of dollars of move plus - 7% from some of these largest businesses. This is just it's big stuff, guys. And notice that Apple is only plus - 4.3. Of course, it could be more, but the market is nowhere near putting the volatility on these stocks like they are on the hyperscaler components. Remember, Apple didn't go as hard into AI, which might be considered possibly a good thing when it comes to their share price in the future if people really do lose faith in how much money is being spent.
NASDAQ seasonality, this one here from Polycarp FX basically shows that the seasonality is expected to be extremely volatile around this time. But probably more interesting than all of this is the darkpool data. Now, we did see the third largest transaction. And a lot of you guys in the comments down below were like, "Oh, Tom, I don't know if it's a buy or sell. Who cares about dark pools? Why does it matter?" Remember, it's all about recognizing where it's occurring, guys. And we have the saying, patience, react, don't predict for a reason. It's about understanding, yes, darkpool activity, that is large institutional activity is there. They're doing it in a monstrous transaction. Remember, darkpool means that it's done off-market reported by the end of the day. And it could be one institution doing deals with heaps of different ones to try to get their trade volume. And a lot of the time, it's because they want to make a quick move. You've got to remember the guys on the street buy information. They spend millions and millions and millions and millions and millions of dollars getting better info than you do. Then they actually put their money where their mouth is. It's up to us to actually see where that is, recognize it in price action. And remember, we treat markets differently here. We think about the price action, the actual technical analysis as the story of human psychology. It's such a powerful concept and I love it. You love it. I love it. We all love it. It's amazing thing.
Let's now take a look here at semiconductors. You might think, well, they're clearly not buyers, man. They're all sells because semis are falling off the cliff. H not necessarily. It really comes down to you think they have stop losses. They don't. Instead, what they do is they up and downscale their positions over time. They position-based trade, and it's actually a a phrase that we often coin here on the channel.
Now, this one here from volume leaders shows that the market went up initially and then got trashed back down. So, the next couple of sessions, how all of this market reacts could tell us whether there's a trap in the system. We've also seen big ones moving here from DRAM, uh, that is also, of course, a large exchange traded fund, and we've even seen some larger transactions come into gold as well. So, it's interesting because cross assets, different assets are starting to get a little bit more love and defensive markets are also seeing this because of course when we look at healthcare a little bit later, we're starting to see a very similar thing.
Now, over on X, we've started writing kind of like the things that you need to know about the day and I'm posting those before this video. So, if you ever want to check it out, check out our X channel, follow FX Evolution, links in the description down below. But the reason I want to bring this up is because something interesting is occurring. Nvidia's credit default swaps. Remember guys, this is such a huge component. We talked about it in January of this year and we are following it very closely. Why? Because it's all got to do with that record movement in basically risk. If we start to see the market say, you know what, I don't like what I'm seeing here. And they're doing it on big stocks. Yeah, we need to be paying attention. Guess where that's starting to happen? Well, it's been, of course, in Oracle for quite some time. And Oracle's credit default swaps kind of looks like this right now, making new higher highs. But Nvidia's coming in and they've just entered, of course, big big big data center style plays with Open AI and hardware financing and soft bank and all these types of things. And this is where it gets a little scary. The market is not rewarding this anymore. So, what if they pull back on the spend? Of course, right now they're not, but if they do, well, you're losing a massive part of the GDP. And we've got a special coming up very soon on that.
We're also seeing, of course, the VanX semiconductor market. Just to give you an idea, look at this. Look how many shares were actually traded on one day. That smashed the traditional 90-day volume. It was just massive. And to make things even bigger and wilder, China's state-backed memory chip company, CXMT, guys, surged 466% in the market debut. So, is speculation alive and well? Yes, but the problem is people are chasing stuff and they're doing so with leverage and that's what's leading to the Cosby and many other markets starting to get these kind of weird results.
So, if you like what you're seeing so far and you're interested in finding out a little bit more, build better market judgment. One of the things that we talk about, I'm actually redoing the newsletter right now, which really involves charts, stories, and market lessons that I've learned over the last 17 plus years in the market, talking to people that know what they're doing, learning things from them. And remember, one of the things, guys, that's so beautiful is we're always learning new things. If you're interested in finding out more about the newsletter, it's completely free. Check it out in the link comment down below.
All right, let's now check out the big reads here when it comes to leading indicators. First up, we have to say, is the market completely freaking out? Well, the actual percentage of semiconductor stocks above the 50-day moving average, I think, is zero. Yeah, it's pretty bad. So, that means that nobody is really loving semiconductors right now. So, they're absolutely flatlining. And that is historically been where contrarians start to come in. But at the same time, do we have a broad-based market sell-off? Well, according to the percentage of stocks above the 20-day moving average, it isn't. We're seeing things like the DAX over the last 24 hours. The German market is doing pretty good. There's nothing really wrong with it at this stage. The old economy is okay. Markets are turning defensive into that. But junk bonds are still a question mark. You can see here junk bonds have gone down. But what really has been surprising is the movement in corporate bonds. That is high quality investment grade corporate bonds are starting to get punished because that's where the hyperscalers are and the market's saying I need more return for the debt that you're writing and that could mean that of course these companies may not write more debt in the future. Debt is a big growth engine. Yeah, we could have a problem there. Again, things that we're just starting to think about. We've got them in the back of our mind and we've already been talking about them for months. Of course, price action data flows is ultimately where we want to be watching.
So, is the market even freaked out on the VIX? No, we're not seeing huge movements in the VIX. And nowadays, in 2026, we have to even look at the volatility of the VIX. Now, that has gone up, but it's not through points that need to be concerning. And therefore, we have to set alerts and we have to say, well, if we're not through those points, we don't have what we call a systemic failure in the markets. So, again, the bulls and the bears, there's a lot of people getting scared right now, but it seems to be that it's just in one sector. And although I think it's the most important sector, this is still not a market that's totally freaking out, which is important when you're thinking about are we going into a recession or anything else that could be even scarier.
The US dollar that's moved to a new higher high here. We're not quite through this point, but we did start to see a little bit of improvement. And again on the charts, what's it doing? It's consolidating, moving up, consolidating, moving up. It's kind of making a series of higher highs and higher lows, at least at this stage. When we go over to the dollar yen, it's kind of a similar story. Now, this is where I think things could get a little bit wild. The Japanese yen is, of course, devaluing. The US dollar is going up against it, and the Bank of Japan may need to step in relatively soon. If this happens, it could put pressure on the carry trade. And one of the levels I'm watching is the daily 20 moving average moving forward because if we start to see this losing ground again, it could be a bit of a warning sign about liquidity in the markets. And we saw how all of that played out last time with semiconductors.
What about silver, gold? Not much movement here in silver and gold. They're still in downward trends in terms of the higher time frames, lower lows and lower highs, but some structure is starting to appear on silver and gold at around these key levels. And you guys know that we follow both of those because we're very interested to know whether the market is hedging and whether the market has actually started to turn around. And gold and silver have been seeing a little bit more volume in recent times. So things like 4200 we'll be watching very closely for gold moving forward.
The Cosby though is pretty bad. Look at this. It's actually a beautiful technical. It's a series of lower lows and lower highs as it goes through basically a beautiful downward channel and continuously liquidates people. And the stories recently have been scary guys. They are scary. 1.2 million million accounts that went into leverage just the other day. It's wild. Almost 400,000 accounts getting levered out. And today's market action, it's down 10.3%. In fact, this is a pretty big move. It's going to lead into, of course, further semiconductor failure unless it starts to recover. And the issue is is that when you look at something like the cost beyond the charts and you go out to the weekly, we're not quite at what you would expect a technical support to look like. So most people would be looking towards, you know, the 5,000 level or something like that. And the issue is is that's still further down. What's that going to do to liquidations? What's that going to do to people's psychology? There's a lot to unpack here as we see it go through. But at this stage, of course, it is a series of lower lows and lower highs, which suggests that we haven't seen a change of trend just yet. And it's like what we mentioned on the weekend video. We have to actually see Wall Street do something about it.
TSM that's holding as best it can, but it's still down now in after hours. You can see here the weekly 20 moving average, the reaction initially, the fact that we set a little alert above this if it had happened and the horrendous looking candle from last week still looks really nasty and really negative at this stage.
Anyway, so so much to go into these markets. Semiconductors biggest trade volume obviously in almost 2 years. Yes, we've seen this before. Yes, previously we did see a bit of a bounce off it and it is at that put support. So if we're looking at the options, we've got kind of two major put levels. We've got the net expiration put level which is sitting around 520 important level should we go down underneath that and around this level here of 540. Now, we don't always use options levels on semiconductors, but the big important thing here is if we are going to see a rally from the street. We kind of want to see it around here because after that, yeah, if you put on some liquidity charts, you're not going to see much on the left hand side. I mean, look, it was pretty thin on the way up. It just went bang, bang, bang, bang, bang, bang, bang. The 3-month was an insane candle. So, the quarterly was an insane candle. And at this stage, of course, the markets are still technically weak. But we can start to put in certain alerts such as higher highs, change of trends. Remember, we did just see a lower low being formed on the markets. This type of stuff liquidates unfortunately people in positions that are overlevered and that's often what you look for in markets. When do people feel the most pain? Remember Warren Buffett has that when there's fear in the streets. Of course, you need to be thinking about it a little bit differently.
All right, let's have a look here at SpaceX. What's going on there? Well, SpaceX continues to fall 110. I just want to read this stat out to you for a moment here. If you'd unfortunately bought the top, it is now down 51% from that period. Whoa. That's that is that is not cool. That is not cool at all. But we're also seeing this in certain other stocks as well. Tesla came out. They started to talk about going into AI and the market has punished this stock moving down here into the 300s. And of course, each $100 is very important for Tesla. So, we're fast approaching a critical point for that as well. 300 still a series of lower lows and lower lows, lower lows and lower highs coming through.
Oracle, meanwhile, very, very similar. Again, continuing to get punished. It was up 4% the last 24 hours, but it's still falling kind of off a cliff. And what we're really seeing at the moment is a lot of speculation and questions being asked about certain MAG stocks. We've got Microsoft, you know, facing off on this resistance ahead of the big earnings this week. We've got Nvidia getting really hit and remember we had that little alert here for the possibility of some form of inverse head and shoulders that hasn't eventuated. We do not have that resistance kind of breakout yet and we've got Meta continuing to get pummeled as well while Apple goes off and makes higher highs. So the market is really choosing the winners and the losers.
And what we're seeing is a bit of a movement to the old economy. So if we take a look at healthcare here for a moment, healthcare, yeah, it wasn't up much, but it was up in after hours right now and was up .5% over the last 24 hours and it's been actually doing well since the beginning of June. In fact, it's actually been beating the spy. And one of the reasons we can say that is because if we actually have a look at healthcare to spy, you'll notice since the beginning of June, what's happened? It's improved. This is the way institutions start to think about things, guys. You got to re-synapse your mind in 2026. It's not the GameStop days anymore. Well, probably is in certain things like semis, but not generally, you know what I mean?
Now, let's have a look at the cues. They ended up closing on that weekly 20 at about 680. We've got puts kind of sitting all over the 680 at the moment. So, if we end up closing tomorrow, that is the next session down, we're going to be in pretty heavy negative gamma. Now, this could mean that the markets themselves have to actually start to recalibrate to the next level. And this brings up question marks of 640 even as it's the previous resistance and the 50 weekly moving average. This is actually a very important point here for the NASDAQ to hold. We lose this then we could be seeing a lot of things changing over daily market movements on the US 500 still trapped within a range. Totally different looking market. Again, the Russell, the Dow, the DAX, any of these other markets, the old economy seems to be okay, but the US 500 has started to see still more stocks moving down than up at this stage. It's been more of a defensive market.
Here are the updated options levels, guys. Still looking at around that kind of 7,300 for the major put support and the market itself is kind of sitting around 7,400 on the zero DTE at this stage. So, I thought I'd quickly load up Bitcoin from the option zones because we're at that kind of critical resistance point. 38 critical resistance. Bitcoin starting to struggle a little bit. Interestingly, if we actually go over to Bitcoin itself, you can see here that we're right on that bottom end of the trend line here. So, such an important kind of zone there for the markets. And if we take a look at Ethereum, it's still holding as well that daily 20. So again, kind of critical zone.
I think right now though the chart that we've been watching for quite some time and probably the most important chart in the markets has to do with semiconductors. It has to do with of course the backbone of the market semiconductor spy which is still holding up at this stage and the Cosby because guys what seems to be happening on the Cosby seems to be really directly impacting so many parts of the markets. Remember semiconductors is leading and hardware the picks and the shovels kind of trade that has led into most of the gains of the GDP in the US economy for the last kind of 12, 18 months. If we start to see them pull back, if we see IPOs such as Anthropic or Open AI getting cancelled, then we could have a real problem. And as we often say on the channel guys, it's earnings earnings earnings and IPOs IPOs IPOs. So I think the earnings calls this week are going to be so important and don't worry, we'll be covering them together.
If you enjoyed today's video, then please remember to subscribe, smash that like button, check out our newsletter in the links in the description down below, and of course, join us there weekly with extra insights that could help you as a trader and investor. It's great to have you here, guys. We've got the best community around, and I'll see you in the next one.