Market Outlook
It does seem like the bubble in Semi's continues to pop, but it isn't a stairs up, elevator down move. It more like filling up a ballon with air and slowly letting some air out for a moment then clamping back down on it, to preserve what's still inside.
The reason for that can be chalked up to the fact that this story didn't just come out of nowhere, Semi's have been on a half decade run, only with it most recently getting extremely overheated. 1,000% gain since Covid, 700% gain in 3 years or a 300% return since last year from a single sector are once in a lifetime returns.
Where we see the crash and burn in indivudal names a bit faster, the sector will stumble a bit slower as we have seen with Gold coming back to earth after blowing up and even with the blow off in Energy fall in a much calmer manner. The sector wide sell off will be slower but it is already in the works.
As a result of this, we have seen weakness lead in the Nasdaq names over the S&P names last week and a trend that should continue.
If we see a break of 680 in the QQQs this week, which after 5 weeks of lower highs, seems to be a higher likelyhood then a reversal from here. We should expect a move lower, if support breaks down towards 620.
If we see more weakness in Semi's and Nasdaq breaks 680 support then we should expect the next domino of the S&P to follow suit breaking 740 and heading towards the 700 to 720 area.
These are not major red flags but just overall price action taking a breather after 12+ weeks of bullish action in a row. Most of the sectors are showing us signs they want to take a break as well.
As Bio Techs, Healthcare, Consumer Staples and Consumer Discretion names are all for the most part just forming new bull flags. While there are not any sectors other then Semi's that are looking very weak or major avoids.
We have done a great job in this shifting market as Tatjana locked in a 2+ bagger in a biotech buy out last week, Freddy has been crushing it with his call outs and the tag team Martin and Yanick both had amazing, almost identical trades in HNGE. With all of these major winners coming from names outside the bubbly sector.
Even on my end, my trades have been working out more then they've been failing over the past few months.
Where 8 of my last trades in a row ended as winners. But on Friday, two trades of mine failed, which were NVDA (closed out as a gain) and WAT (a tiny loss).
Maybe, just maybe, we might need to expect some weakness or chop from the market in the week ahead. Maybe not, we'll find out as the week progresses, but I will proceed with a bit more caution and be ok with a cash position if we see the QQQs break support this week.
If the market decides to hold support and make a real go of getting back to highs, there are plenty of names bull flagging near ATHs for us to focus on.
From Bennett
Founder Big Picture Trading
P.S. Scanning sectors just got easier, links to each sector are clickable in the email. Simply click on SPY or VGT (examples) and the respective watchlist will open up to save you time!
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7/25/2026
Less than 1 week until the Dumb Money book will be published on 7/25!
Preorder the kindle before 7/25 and send me a screenshot of your pre order.
For all those that do so, I will send you a free copy of the soft or hard cover book (whichever you prefer) on the release date!
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Sensitive - sectors that have moderate correlations to overall market conditions.
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Cyclical - sectors that are more sensitive overall market conditions.
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Defensive - sectors that tend to outperforming during sub par market conditions.
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BLBD
BLLN
COGT
DVA
EWTX
HWM
WAT
WWD
XMTR
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