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Monday, August 17, 2026

Market's Trading Near All Time Highs - Trade It or Fade It?

Spoiler: I'm Fading it. When I see the $VIX being hammered to new recent lows - for no other reason than because low summer volume makes it easier to manipulate the $VIX... I get nervous.  

The rotation in and out of AI related micro sectors (chips -> mag7 -> $NVDA) continues. And when that trade isn't working money flows back into the drill baby drill trade (energy) - as we saw again on Friday. 

$DJSOEP (Dow Oil Exploration & Production Index) Trades to new all time highs. Bloomberg shrugs.


To be honest we haven't seen the Nasdaq lead stocks higher, since that 4 day rally - after the last FOMC announcement. 

$COMPQ (Nasdaq Composite) trades back to the top of the range. Struggling. Energy takes over. 

  


This morning we're seeing US tech being lifted by S Korea (again). Not interested in catching the next falling knife in chips.    

Now that earnings season is behind us - except for a few retailers (we don't trade): Watch for financials to unwind:  

Financials flashing warning signals on Friday, and the $VIX gap back to the 15 level - points to more manipulation for the time being, but like I said last week. You're better off enjoying the rest of the summer, and returning once the $VIX starts breaking out again.

My carpentry project is really coming along, and I'm hoping to have this wrapped up in time for the Labor Day holiday.   

We got the midterms coming up and Wall Street seems to be betting on another Republican win? That could be the catalyst for the next snap-back rally, but not until after we see retail hands shaken out. That offers a 2.5 month window for a sell off. 




 

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Friday, July 31, 2026

Historic Rally in Chip Stocks But What About The $SPX?

Yesterday's blog reads like a crystal ball:  

"1. $VIX to plummet - now that the FOMC is set to remain on hold. Same as the ECB (this morning). 

2. Microsoft to replace Apple - in an ongoing game of mag7 whac-a-mole.  

3. Oversold Sectors - Semiconductors, and Big Tech to snap back."  Link

South Korean $KOSPI snaps back 19.98% - in a historic short squeeze.  

What helped drive it:  

Korea to launch $13.9 b. sovereign wealth fund for strategic industries (koreatimes.co.kr) 

Asia is the star of the show:  

 

CNBC is already casting shade on this rally - calling the S. Korean market "bi-polar", even though they know exactly who got caught in the latest bear trap - leading into a historic Friday short squeeze.   

At the end of the day this looks like a bear rally in chips. 

Getting a read on US markets - still a sideshow 

This morning we're seeing some follow-through on yesterday's rally, led by  $AMZN Amazon.   

$BULZ (Microsectors 3X FANG Innovation Bull)  The only leveraged ETF I could find that has Amazon as one of its top holdings. I could not find a single recent tweet regarding this fund. Do your own due diligence. 

There's a decent chance the tech rally in the US continues on light summer volume. 

$COMPQ (NASDAQ Composite) - watch the 25k level like a hawk. 


Same goes for the 7400 level on the $SPX 

 



P.S. I thought bond investors were supposed to be smart, but what we just witnessed after the latest FOMC decision was bond investors grasping at straws (still hoping for inflation to go higher).  

money.usnews.com




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