Something broke in the market today. Nearly every sector closed down for the first time in months.
I recorded this in the final 15 minutes of Friday’s session. The selling started swallowing the entire marketplace right in front of me.
The S&P 500 sits on a thin red line. It is stuck in the same range we entered on May 4th, still hovering near 7,500.
The NASDAQ is the real story. I gave everyone the 29,000 level on Wednesday night.
We crossed under it today. A bidless beast showed up and sellers kept hitting the bid over and over.
The chips carried this entire rally. Now they are getting their heads handed to them.
Here is the damage I walked through in this weekend’s video:
- The SMH semiconductor ETF is down about 18% from its high and touched bear market territory today.
- Micron sits down almost 35% from its record high, even after bouncing 1% on the session.
- SanDisk has collapsed more than 40% from recent highs.
- Intel is down 35% to 36% with no bid underneath it.
- The South Korean market is down almost 30% from its record high after running up 115%.
The QQQ is still up 13% on the year. The S&P is up 9%.
The semiconductors built those gains. Now they are cracking underneath the whole market.
For days the selling came with no reaction in volatility. Today changed that completely.
The VIX traded almost 1.2 million contracts on the session. Proprietary firms and portfolio managers piled into VIX calls.
I watch the VVIX for this exact signal. It jumped today, and the big money is bracing for something.
This is the number that matters most. Last week the expected move came in around $90. Next week it sits at $132.
That is a jump of nearly 40% in one week. We also closed this week outside the expected move.
The setup is heavily skewed to the downside. Upside runs to maybe 7,600. The downside is wide open toward 7,200.
Google and Tesla both report earnings next week. Any disappointment could light the fuse.
Be defensive. Define your risk when you can.
I break down every level, every chart, and the exact volatility signals in this weekend’s video.
