A simple recap
What I’m watching
Still tracking the same SOXX correction.
There is this divergence, broadly speaking, between the S&P index and the Nasdaq Index. Notice how SPX looks to be able to breakout to the upside while the NDQ is much more neutral.
This speaks about the overall health of the market, and that even the NDQ index might not really fall even if there is a rotation out of SOXX. Capital is rotating out of the SOXX but not out of the equity market as a whole.
This might change though with the upcoming Q2 earnings report, especially from the mega-cap hyperscalers, with the focus on their capex guidance.
Additionally, tracking the Iran war/negotiation progress, as this past week saw some flare-ups between the US and Iran again. So far markets have not been panicking or really putting much weight on the flare-ups, likely because the markets are convinced that TACO will be served.
This could become bigger than expected, however, as there have been plenty of calls pointing out the divergence between the futures and the spot market in oil, both in terms of tightness and price levels. If the tightness in spot reaches broadly into the market in the form of actual supply shortages and impacting company earnings, things might quickly take a turn for the worst.
But so far I think it’s reasonable to assume that TACO is on deck, given the mid–terms election that is coming up.
A position or thesis
Still holding the IGV.
I exited some of the SOXS on Tuesday and then re-added them on Thursday. The reasoning was that SOXX took a beating on Monday and Tuesday, around the Samsung preliminary earnings release. But with the SKHY IPO on Friday, I deemed it unlikely for price to continue falling ahead of that. When it rebounded on Wednesday and Thursday back to the daily 21EMA area, I deemed it unlikely for price to continue and flip back to the bull trend above the EMA, so I added back the SOXS short.
What I got wrong or updated
I exited some of my VOO holdings a few weeks ago. Now that it moved higher than where I trimmed, it’s calling into question somewhat whether SPX will just resume the bull trend and break out of the consolidation range made in June. Based on this week’s action alone, I’d say SPX looks pretty promising, but with the looming Q2 earnings on deck, with banks slated to report this coming week, I’m inclined to refrain from making any moves here.
20260712 9:16PM CDT
The Ephemeral Tourist 