Divergences in Tech - The One Chart You Need to Watch
The Magnificent Seven and crypto remain strong following our bullish call two weeks ago, while semiconductors continue to decline, also as anticipated.
Market volatility remains elevated, with semiconductors continuing to drive the major swings we are witnessing. This highlights the ongoing internal divergence within the technology sector: while semiconductors lead the decline, the Magnificent Seven have acted as a buffer, holding the NDX and XLK from falling with more conviction.
The Semiconductor Struggle: Micron (MU) continues to slide, down -21% this month and -28% from its June peak (when I highlighted the elevated risk of chasing the after earnings euphoria). As I have noted in recent weeks, this is a classic correction following overextension, similar to past patterns in Gold, Silver, PLTR, MSFT (2025), and NFLX (2025). Interestingly, while SMH fell -1.6%, AMD -3.5%, and TSM -3.4% this week, NVDA closed flat (+0.3%), remaining resilient amidst the sector storm.
The Tech Divergence: Today, the Magnificent Seven were mostly bullish, preventing a broader tech decline. AAPL (+4%), MSFT (+2.8%), AMZN (+3%), GOOG (+3.6%), and META (+3.1%) all outperformed, with TSLA the only outlier (-0.4%).
Trading Recap & Strategy: Yesterday, I provided a tactical hint on how to anticipate premarket ‘traps’ that vanish at the open. That setup played out perfectly today for the SPX and QQQ. People who set the timeframe and indicator I mentioned yesterday sow a live example of the likely reversal, and if using the daily levels anticipated yesterday for today, the navigation of the retrace was smooth until the price reached our Central Daily Level (CDL), where the market reversed. Today, the SPX 7,538 level acted as precise support at noon, while the 7,562 level served as our bullish recovery target.
Subscribe to the paid plan and receive daily market updates, including anticipated institutional-grade support and resistance levels for the S&P 500. Plan ahead your trades with this golden tool.
Below, I have analyzed the most critical chart for this week, the one that will dictate the next leg for the NDX and SPX. I have also provided updated daily levels for the SPX, QQQ, SMH, IWM, DIA, IGV, as key ETFs, alongside high-probability setups updates for AAPL, MSFT, XOM, ETH, WMT; all of them moving in the expected direction, and others, all studied in the latest Weekly Compass.
When the indices are choppy, it pays to navigate individual names.
Let’s begin.
Market Direction - The One Chart You Need to Watch
This is the updated chart we began to track since Monday: