Good morning,
I hope everyone had a great Fourth of July weekend.
I, like Iām sure a lot of you, had a great weekend filled with sun, beer, hot dogs, pools, and fireworks.
Unlike a lot of you, however, I had a report to do over the weekend. So I was drooling on Wednesday night at the prospect of covering a short, quiet week in the market, where almost nothing happened, ahead of another week with almost no earnings and no major events on the economic calendar.
Whether or not Thursday delivered depends on how your portfolio was positioned.
If youāre still overweight tech and semiconductors, it didnāt feel quiet. After falling 10% on Wednesday, DRAM (the memory ETF) fell another 7.9% Thursday, and broader semi ETFs like SOXX werenāt much better, registering two straight negative alert days to start July, after four in June.
These stocks remain vulnerable, and I wouldnāt dismiss the possibility of broader volatility if the downside action continues. DRAM heads into this week just above critical support, which is featured as our ālevel to watchā.
However, the good news for investors is that opportunities abound. The memory ETF peaked two weeks ago and many individual names peaked before that. But since then, breadth in both the S&P 500 and Russell 2000 has been getting better, not worse.
The S&P 500 ex-Technology ETF, the Vanguard Extended Market ETF, midcaps, and small caps all hit all-time highs late last week, and I can tell you that anecdotally, going through hundreds of charts for the Hot List last week, there are good charts everywhere.
It doesnāt mean we couldnāt have a pullback. Earnings start next week, and current bullish seasonals fade the week after that. But investors should rest assured that any weakness would be coming from a place of strength, and that suggests it would be buyable.
This weekās report will review:
Key support on DRAM, the S&P 500, and technology
Improving breadth
Rotation into healthcare and financials
One sector investors shouldnāt give up on
1st half performance
and more!
