SOX
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SOX
SOX I showed you the charts below a month ago, just as SOXX peaked, and laid out the exact path semiconductors followed during the dot-com unwind. Since then, SOX has tracked that path with remarkable accuracy.
SOX
601899·Closed@32.38 has shown relative strength over the past two weeks alongside the rally in copper. After failing to hold above 32.4, price is now backtesting the ascending trendline.
In late June, I flagged 25 as the line in the sand and said a bounce was very likely. The bounce came as expected.
601899 remains largely a function of gold and copper. Should oil stay elevated and keep yields grinding higher, equities should sell off, with gold and copper likely following. A sustained break below the ascending trendline would weaken the setup and shift the path back toward 25.
VIX continues to grind higher from the July lows. As long as oil stays elevated, I expect that trend to continue, with 21.6 as the next test.
XOP broke above the multi-month descending trendline and extended into 177.7 before pulling back. A sustained close above 177.7 opens the door to the prior high around 190. As long as XOP holds above the broken trendline and 161.6, the breakout remains intact. A sustained break below 161.6 puts 156 back in focus.
META followed through on last week’s rejection from the broken ascending trendline around 680-690 and has now fallen back toward 600. META’s entry into the LLM race failed to keep the stock afloat once the broader tape weakened.
As I warned two weeks ago, the premise for META printing a new ATH on the back of its entry into the race was that the broader semiconductor sector would not collapse. That premise is now breaking down.
Unless META moves back above 680-690, the path of least resistance remains toward the ascending trendline around 540-550. A sustained break below that support would confirm another leg lower.
XAUUSDGold and silver surged early this week as equities bottomed at key levels. Both sold off later in the week as equities rolled over again.
Gold has remained remarkably stubborn around 3.9K-4K even as yields across the curve have risen sharply. If we get a TACO soon, 3.9K-4K could mark the swing low for the months-long bear market in gold and silver.
If we do not get a TACO, a sustained break below 3.9K should trigger an exponential move lower. That would likely put 3.6K-3.7K in play for gold and send silver toward its generational support around 48.
GOOGL gapped sharply lower and broke below 343.7, confirming the breakdown I warned about in June. Unless it quickly moves back above 343.7, the path of least resistance remains lower, with 271.4 as the next marked support. A sustained close back above 343.7 would negate the breakdown.
RB1! is back at 3.30 resistance. A sustained close above 3.30 opens the door to 3.6-3.7. If it fails here, 2.93 remains key support.
000001 bounced from 3.8K, but the bounce lacks strength and price is already backtesting that level. A sustained break below 3.8K shifts the path of least resistance lower.
399001 is testing the ascending trendline. A sustained close below it would shift the path of least resistance to the downside.
06181.HK made another attempt at the descending trendline around 400 and was rejected again. Unless 6181 clears the descending trendline, the path of least resistance remains lower.
EWY
NDX slid lower this week and printed a new multi-month low on Friday. Unless it reclaims 28.6K over the next few sessions, there is an air pocket down to 26.1K.
I warned that last Friday's breakdown could be followed by a relief rally before heading lower. Key indices, sectors, and bellwethers then backtested their broken levels from below. As I laid out in the previous Tactical Positioning, those backtests were expected to fail. They did, with a sharp reversal in the second half of the week.
SPX is now sitting on ST trendline support. A confirmed break would likely send ES1! toward 7.35K, where horizontal support coincides with a low-volume node. The SPX equivalent is roughly 7.3K. Earnings or another geopolitical event could trigger that move next week.
AU10Y AU30Y CA10Y CA30Y DE10Y DE30Y FR10Y FR30Y GB10Y GB30Y
Global long-end yields are on an ominous trajectory.
NKD1!A sustained break below 63.8K confirms another leg lower.
JP10Y JP30Y
Global long-end yields are on an ominous trajectory.
KOSPI
NVDA has remained resilient over the past few weeks even as semis sold off. But the risk sits with the buyers funding the AI buildout. Off-balance-sheet vehicles and circular financing can keep capex flowing, but they cannot manufacture sustainable end demand. It is only a matter of time before NVDA joins the selloff.
A confirmed break below the ascending trendline opens the door to 167 and would complete the breakdown across the key semiconductor bellwethers.
DXY
DXY The dollar rallied as rates moved higher and equities sold off. DXY has now broken above the descending channel and is set to retest the prior high around 101.7. A sustained break above 101.7 opens a large vacuum above.
US02Y As noted previously, past TACOs have repeatedly coincided with yields reaching key levels. That is the risk we must monitor now. Fed funds futures now price roughly two 25bp hikes by year-end. That would put significant pressure on U.S. Treasuries and backfire on Trump’s attempt to suppress interest rates and ease the debt-service burden, with the national debt already on an unsustainable trajectory.
Technically, US02Y extended its advance to around 4.4% before pulling back. The ascending trendline remains the short-term support. As long as it holds, the path of least resistance remains higher. A sustained close above 4.4% confirms another leg higher.
NIFTY1!
NIFTY failed at 24.3K again and has pulled back to the ascending trendline, once again validating my 22.1K-24.3K range. As long as the trendline holds, another test of 24.3K remains in play.
A sustained break below it puts 22K-22.1K back in play. NIFTY still needs a sustained break above 24.4K to open further upside. Surging oil prices do not bode well for NIFTY. Unless oil rolls over, the index is likely to head lower.
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