Critical Week Ahead for Tech
Navigating the Semiconductor Crack and Magnificent Seven Bounce
The U.S. stock market closed a holiday-shortened week with gains across large-cap indices, sentiment was fueled by a cooler-than-expected June jobs report, which eased immediate fears of aggressive interest rate hikes and encouraged a rotation out of tech and into blue-chip companies.
The Dow Jones reached a new all-time high, gaining 2.0% for the week, the S&P 500 (SPX) rose 1.7% to close at 7,483.24, while the Nasdaq 100 (NDX) added 0.7%; our well expected decline in semiconductors kept the tech-heavy index underperforming.
The Federal Reserve, under new Chair Kevin Warsh, maintains a “higher-for-longer” stance. The federal funds rate remains in the target range of 3.50% to 3.75%, with the next FOMC meeting scheduled for July 28–29, 2026. Current market consensus leans toward a pause in July, and CME FedWatch data shows a roughly 33% probability of a 25-basis-point hike. Despite this, hawkish sentiment is rising; the June “dot plot” indicated that most officials expect rates to end 2026 higher than current levels to combat sticky inflation, which was recently reported at 4.2%.
Last week, I highlighted the high probability of a bearish move in semiconductors, including a bold call for SMH to fall to 587 for a -3.8% decline. That level was reached by Thursday 🎯. I also warned of a bearish reversal for MU when euphoria peaked immediately following its earnings report on June 24. In the same way, the bounce for the Magnificent Seven was considered as a serious possibility including a high probability bounce for MSFT to 388 (+3.4%) 🎯. Six of the the magnificent Seven recovered their Central Weekly Levels (CWL), validating the bullish thesis. The only one that failed to recover its CWL was NVDA, the semiconductor representative of the group.
Central Weekly Levels (CWL) are specific price points modeled and posted every Friday for the week ahead for all securities on our watchlist. These levels provide a clear advantage before the market opens on Monday, allowing you to plan your trades without the stress of assessing charts and distances in real time. The Weekly Compass gathers these levels on Saturdays, analyzes the charts, and provides a blueprint of the week's setups in a single report, allowing you to comfortably formulate your trading plan and risk management strategy over the weekend.
Our watchlist focuses on megacaps and instruments with high daily volume that are fundamentally transparent and varied across sectors, ensuring we can capture opportunities as capital rotates:
Indices & Futures: SPX, NDX, DJI, IWM, ES=F, NQ=F
ETFs: SPY, QQQ, SMH, TLT, GLD, SLV, DIA, VXX
Major Stocks: AAPL, MSFT, GOOG, AMZN, NVDA, META, TSLA, SPCX, LLY, WMT, AVGO, COST, JPM, XOM, PLTR, NFLX, V, AMD
Crypto & Related: Bitcoin, Ethereum, ETHA, IBIT
Leveraged ETFs: TQQQ, SQQQ, UDOW, SDOW, UPRO, SPXS, URTY, SRTY
The S/R Levels for next week are here:
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Today’s Agenda
Every Saturday, we dive into chart analysis and target setting using our updated weekly levels:
Market Context: Charts+levels for SPX, Indices, ETFs, VIX, Breadth, and Crypto.
Momentum Map: Analyzing the stage of every security in a single view.
Setups Blueprint: Entry levels for short and long setups with price targets and invalidation levels for all the securities in the watchlist prioritizing stronger setups.
Deep Dive: Individual analysis with charts and targets for Mag Seven and setups.
Let’s begin with the High Probability Setups review before the ones for next week:
Last week, I highlighted a bounce in the SPX as a high-probability setup targeting 7,419 (+2%); the index reached a weekly high of 7,540 🎯, BRK.B achieved its extended target of 506 (+1.7%), closing the week at 507.8 (+1.8%) 🎯.
For MSFT we expected a bounce to 388 (+3.4%); the stock surpassed that level, closing at 390 🎯. PLTR, another high-probability setup, targeted 125 for the week (+11%) and closed above at 129 🎯. Consistent with the divergence between the software/Magnificent Seven bounce and semiconductor weakness, I noted high odds for MU to visit 1,083 (-4.5% from June 26); the actual selloff reached -13.8% 🎯. Similarly, for AVGO, our target of 349 (-4.5%) remains a work in progress, as the stock closed at 360.
As mentioned above SMH was expected to fall to 587 for a -3.8% decline. That level was reached by Thursday 🎯.
A trade idea was shared also last week for Bitcoin (BTC) given its technical conditions: a buy targeting 63K with stop loss at 59.4K; BTC has bounced this week +4.5% already, sitting currently at 62.8K 🎯.