The SPX is pricing more than a $200 move for next week. Very few weeks since 2017 come close.
Thursday showed you why. The Nasdaq broke 29,000 and turned into a black hole that sucked in everything, including financials sitting at an all time high.
Friday snapped back to a 50/50 advance decline line. The SPX parked right on 7411, the lower edge of its expected move.
The VIX dropped about 13% Friday. I wouldn’t call that an all clear.
Money has been fleeing the SMH since October 5th. It piled into the XLF, XLP, and XLV, along with Coke and Walmart.
If tech rallies, that money runs back to semiconductors. If tech keeps falling, the black hole pulls those names down too.
I’m selling the rip on the rotation winners. Tonight’s video lays out exactly where:
- The SPX moved only $50 Friday against $135 priced. My unofficial read for next week prices more than $200 of movement.
- SKEW closed near 150 Thursday night with VIX futures in backwardation from 12 to 40 days. Don’t read Friday’s bounce as safety.
- Micron is up 120%, AMD is up 100%, and the SMH is up 24% on the year. Plenty of room remains for more damage.
- Apple is up 27% and just reclaimed the largest market cap from Nvidia. Anyone hammering the whole market has to hammer Apple.
The market can rotate for a while. I think this eventually turns into liquidation.
