U.S. stocks after hours on July 2nd
【Semiconductors Plunge Again, Is It Time to Add Positions?】
Today, the SOX fell another 5.44%, dragging the Nasdaq 100 down 1.6%; the S&P performed well, with over 70% of individual stocks rising, trading sideways; the Dow was least affected by semiconductors, rising 1.14%, hitting a new high again.
The movements of the three major indices show that capital is still shifting to other sectors, with a clear short-term risk-averse trend.
SOX
Cumulatively plummeted 12% over two days, retreating 15.5% from its peak. So, can we add positions in SMH and SOXX now?
Conclusion first: No!
Do you still remember the reason for recommending buying SMH and SOXX during the previous surge?
It was to alleviate FOMO sentiment, not a good position for long-term investment.
Although semiconductors have retreated 15%, compared to the previous surge, it's not even considered a drop. Adding positions now, in my view, is still chasing the rally!
Short-term bets on a rebound are another matter, outside the scope of this discussion.
SOXX's Appropriate Replenishment Point
Initially, it was 490-515. SMH can be bought accordingly once SOXX reaches its target. These two indices have shown some divergence recently, but it doesn't affect the overall direction.
If you don't understand the price points, you can simply buy based on the S&P's pullback magnitude. Only when the pullback approaches 5%-10% is there value in replenishing positions. The S&P hasn't moved at all yet.
The semiconductor short ratio given by the big short seller Burry, who is shorting semiconductors, is 30%, meaning SOXX could fall to 460. If it really falls that far, don't miss the chance to add positions!
Individual Stock Status/Positions:
NVDA, AVGO: Two old-timer stocks, no action.
TSM, ASML, AMD, INTC: Strong positions, still far from weakening.
MU: Watch after breaking below 900; not finished running yet.
ARM: Breaks below 300, target 230.
MRVL: Broken, target 200.
QCOM: Broken, target 150.
Factors for Today's Semiconductor Decline:
First, the continuation of Meta's compute power sale yesterday (detailed interpretation provided yesterday);
Second, Anthropic initiated self-developed AI chips and is discussing potential manufacturing cooperation with Samsung Electronics.
The goal of self-developing chips is to save money. The narrative of TPU vs. GPU last year, I believe everyone still remembers. The market is concerned that even the strongest large model manufacturers are starting to slow future compute spending. However, influenced by this news, Samsung's rebound in the Korean stock market is quite good now.
Overall, although semiconductors have loosened, market sentiment has not completely dissipated, and the uptrend has not been broken. A major bearish trend is not visible for now.
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