<figure class="wp-block-image size-large"><img src="https://imageproxy.pbkrs.com/https://thearorareport.com/wp-content/uploads/2026/05/2026-05-19_08h56_21.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://thearorareport.com/wp-content/uploads/2026/05/2026-05-19_08h56_21.png"/></figure>



<h4>Semi Mania Takes A Breather</h4>



Please click here for an enlarged chart of Direxion Daily Semiconductor Bull 3X ETF (NYSE:SOXL).



Note the following:



<ul>
<li>The chart shows the largest red candle yesterday since the semi mania started that led to a 366% gain to the peak from March 30.</li>



<li>The chart shows that in the early trade today semiconductors continue to sell off.</li>



<li>RSI on the chart shows semiconductors have lost internal momentum, but RSI is at a point where the semi mania can easily reignite.</li>



<li>The big red candle shown on the chart was triggered by the following:
<ul>
<li>An ex-Samsung executive in South Korea said China was ramping up memory production.  In our analysis, memory is easier to make than advanced AI chips and production from China can potentially cause memory prices to collapse.  </li>



<li>Seagate Technology Holdings PLC (NASDAQ:STX), a disk drive maker, said it would take too long to buy new machines and build new factories.  In our analysis, the Seagate statement implies Seagate does not see demand continuing at this rate beyond two to three years.  </li>
</ul>
</li>



<li>We previously shared with you that the demand for semiconductors will slow in 2028.  Markets typically look 6 – 12 months ahead and sometimes 18 months ahead.  We also previously shared with you that a great short selling opportunity may be ahead. </li>



<li>NVIDIA Corp (NASDAQ:NVDA) will report earnings after the market close tomorrow.  Nvidia can easily reignite the semi mania.  On the other hand, if Nvidia disappoints, semiconductors can see a steep sell off.</li>



<li>There is merit to hedging and/or taking partial profits on semiconductor positions.  Here is the key question: Is it better to hedge and/or take partial profits today or is it better to wait until after Nvidia earnings?  The answer is to do some today and wait for Nvidia earnings to do more.</li>



<li>In addition to Nvidia earnings, we will be paying careful attention to the following:
<ul>
<li>Announcement of a massive buyback</li>



<li>Nvidia positioning against Alphabet Inc Class A (NASDAQ:GOOGL) TPU and other custom silicons</li>



<li>Timing of Vera Rubin, the next generation AI chips</li>
</ul>
</li>



<li>Home Depot Inc (NYSE:HD) is the largest home improvement retailer.  This is the reason Home Depot earnings matter.  Home Depot reported earnings better than consensus but slightly less than whisper numbers.  EPS came at $3.43 vs. $3.41 consensus. Revenue came at $41.77B vs. $41.51B consensus.  The company sees FY26 revenue up 2.5% – 4.5% and EPS up 4% from $14.69 vs. $15.04 consensus.</li>



<li>President Trump has bought more time to solve the thorny Iran problem by saying that on request from Middle East leaders he postponed a massive attack on Iran that was scheduled for today.  Immediately after President Trump's statement, stocks rallied, oil fell, and yields retreated.</li>
</ul>



<h4>Magnificent Seven Money Flows</h4>



Most portfolios are now heavily concentrated in the Mag 7 stocks.  For this reason, it is important to pay attention to early money flows in the Mag 7 stocks on a daily basis.  When there is significant news in the Mag 7 stocks that rises above the threshold of noise and impacts your entire portfolio, it is covered in the main section above.



In the early trade, money flows are positive in Alphabet Inc Class C (NASDAQ:GOOG) and Microsoft Corp (NASDAQ:MSFT).



In the early trade, money flows are negative in Apple Inc (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), Meta Platforms Inc (NASDAQ:META), Nvidia (NVDA), and Tesla Inc (NASDAQ:TSLA).



In the early trade, money flows are negative in SPDR S&amp;P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust Series 1 (NASDAQ:QQQ).



<h4>Momo Crowd And Smart Money In Stocks</h4>



Investors can gain an edge by knowing money flows in SPY and QQQ.  Investors can get a bigger edge by knowing when smart money is buying stocks, gold, and oil.  The most popular ETF for gold is SPDR Gold Trust (NYSE:GLD).  The most popular ETF for silver is iShares Silver Trust (NYSE:SLV).  The most popular ETF for oil is United States Oil ETF (NYSE:USO).



The momo crowd is buying gold in the early trade and is especially aggressive in gold ETF (GLD), silver ETF (SLV), gold miner ETF (GDX), and silver miner ETF (SIL).  Smart money is inactive in the early trade.



<h4>Bitcoin</h4>



Bitcoin (CRYPTO: BTC) is seeing selling.



<h4>What To Do Now</h4>



Consider continuing to hold good, very long term, existing positions and add tactical positions based on signals.



The Arora Report is known for its accurate calls. The Arora Report correctly called the big artificial intelligence rally before anyone else, the new bull market of 2023, the bear market of 2022, new stock market highs right after the virus low in 2020, the virus drop in 2020, the DJIA rally to 30,000 when it was trading at 16,000, the start of a mega bull market in 2009, and the financial crash of 2008. Please click here to sign up for a free forever Generate Wealth Newsletter.



Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.

NVDA

FTXL

The semiconductor market is experiencing a pullback due to concerns over increased memory production in China and comments from Seagate Technology indicating a potential slowdown in demand. Nvidia's upcoming earnings report could reignite interest in the sector, while Home Depot's earnings slightly exceeded expectations. Additionally, President Trump has postponed military action against Iran, impacting market dynamics. Investors are advised to consider hedging or taking partial profits ahead of Nvidia's results.

- Semiconductor stocks experienced a significant sell-off following comments about increased memory production from China, indicating potential price drops.  
- Investors are advised to hedge or take partial profits before NVIDIA's upcoming earnings report, which could dramatically affect market sentiments.  
- In broader markets, money flows show a divergence among major stocks, with notable activity in gold and silver ETFs as investors adjust their positions.

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Semi Mania Takes A Breather On China Fear And Seagate Comment, But Nvidia Can Reignite It; Trump Buys More Time