Overextended: Tactical Bounce or a Sustainable One?
Daily plan for the SPX and key levels for mega-caps reporting earnings this week: KO, V, META, MSFT, AMZN, AAPL, XOM, and QCOM.
Investors continued pulling capital away from AI-driven semiconductor darlings and rotated into consumer, healthcare, and industrial sectors. The semiconductor rout worsened as the Semiconductor ETF SMH tumbled for a fourth straight day, with individual memory leaders Advanced Micro Devices (AMD) and Micron Technology (MU) each plunging over 8%.
Meanwhile, robust Q2 results fueled a massive surge in the Dow. Paint maker Sherwin-Williams (SHW) jumped over 8%, Coca-Cola (KO) rose 5% after raising its full-year guidance, and Boeing (BA) added more than 4% on positive free cash flow data. You could truly call this an earnings extravaganza in value corporations.
High Probability Setups Update
It is only Tuesday, and the targets shared over the weekend in the Weekly Compass continue working exceptionally well. Apple (AAPL) defied the broader hardware slump by climbing to become the first company in history to hit a $5 trillion market capitalization, hitting my first bullish target of 338 and gaining 2.1% this week 🎯.
Yesterday, I highlighted AMD and SMH as high-probability bearish setups from the Weekly Compass that successfully reached their targets. Today, AAPL, WMT, COST, and NFLX have joined them by hitting their bullish targets. This demonstrates how my setups remain objective and neutral (not only bearish or bullish), with every chart analyzed strictly on its own merits:
AMD: Exceeded its extended bearish target of 469, falling -12.9% this week 🎯.
SMH: Exceeded its extended bearish target of 534, falling -5.6% this week 🎯.
WMT: Exceeded its bullish target of 113, up +3.8% this week 🎯.
NFLX: Reached its bullish target of 73.1, up +4.4% this week 🎯.
AAPL: Hit 338, bullish +2.1% this week 🎯.
COST: Exceeded its bullish target of 962, up +3.3% this week 🎯..
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Consistency
This is the main attribute every investor and trader must possess, which is why I publish special studies in the market intelligence section on SmartReversals.com and revisit them constantly. Today, I am recalling a key point from the Weekly Compass: the -1.3% move in the NDX at the beginning of the week.
After the analysis, get access to the daily levels not only for the SPX, but also for META, MSFT, AMZN, AAPL, SPCX, XOM, V, QCOM, and KO.
Oversold Conditions Reached: What to Expect
The chart below illustrates what I outlined over the weekend regarding the rapid sell-off scenario for tech.