Market Thoughts
Low-volume bounce; indices remain below the 21-day EMA.
I hope you are all well.
As stated over the weekend, June got off to an interesting start, with the Nasdaq closing down 4.2% on Friday the 5th and the SMH dropping over 10% during the session.
I believe there were several catalysts for the sell-off: a hot jobs print (interpreted as an increased chance of rate hikes), Broadcom’s earnings, over-crowded positioning in semiconductors, and the fact that the SMH top-10 ranking implied volatility was in the 80%-plus zone for essentially every name except NVIDIA. That is not to mention the impact of leveraged Korean traders on specific semiconductor names plus cautious commentary by firms such as SemiAnalysis.
My quick thoughts on the market below:
