Simjo
Fundamental Equity Analyst, Geopolitics
Nasdaq-100 stocks and NVIDIA look like a dip to buy because a 1%-plus gap down over a tweet doesn't add up given how resilient the market has been to data. Hotter-than-expected payrolls, slightly warm PPI and an 80% chance of a rate hike did not bring the market down, though yields did on Thursday, and stocks rose on in-line CPI. This is an initial read ahead of Wednesday's FOMC decision. x.comÂ
Shorting the Nasdaq-100 looks unwise here. The McClellan Oscillator is at levels not seen since the tariff lows, yet with oil and yields surging the index sits inches from all-time highs. Good news on top of PCE, such as from Micron or the jobs report, could push it higher. x.comÂ
QQQ's remaining earnings, macro and election hurdles set up one more dip to punish late chasers. The index looks good and is pricing in some good news today, but Amazon, Intel and SanDisk earnings plus PCE and GDP arrive tomorrow, followed by AMD earnings and elections Tuesday. Expect one more, probably modest, dip Wednesday or Thursday next week before November's upward seasonality takes effect. x.comÂ
The dip in Micron, Intel and TSMC is a clear buying opportunity because it was driven by baseless talk of three rate hikes, not new macroeconomic data, which arrives Thursday. If institutions believed the BofA sell-side call for three hikes, they would profit from it in CME and prediction markets, which still price a 74% chance of no July hike. x.comÂ
Buyers rushing into Micron's gap-down open show fear is still too limited for a sustainable low. They bought hand over fist, while the equity put/call ratio stood at 0.75; significantly more pain and fear are needed. x.com x.comÂ
Nasdaq-100 downside could accelerate if QQQ falls below $712: dealer positioning at $700 and $690 would fuel the move unless the index reclaims its moving averages and breaks upward. July and September FOMC lows remain untouched, something that has not persisted across two consecutive meetings; taking out at least one in the next week would not be surprising. x.comÂ
The Nasdaq-100 is more likely to avoid a selloff after tomorrow's Fed decision than markets expect. A 25 bp hike is priced in; what isn't is whether more follow. A hike with a neutral tone, or no hike with a hawkish tone, would bring a choppy rally into the weekend; no hike with a neutral or dovish tone would bring a face-ripping rally; only a hike with a hawkish tone means a selloff. The lean is toward no hike, with the caveat that this could be very wrong. x.comÂ
The Nasdaq 100's drop on OpenAI's scary news is an overreaction, and mega caps remain very healthy. AI bubble fears let market makers scare retail and buy behind closed doors. Once the index tests 736-738 as its 21-day moving average catches up, it should take off again toward 800, led by Meta, Alphabet, Amazon, Broadcom, Nvidia, AMD and TSMC. x.com x.comÂ
The Nasdaq-100 looks set for a roughly 7% drop over the next month and a half, driven by expected election turmoil. The 10-year Treasury yield is at 5.2% and the dollar index at 101, and the setup rhymes with October 2018. The main risk is a flip higher from here or a move 3% above the previous all-time high; a short-term rip before the decline is possible amid month-end flows. x.com x.com x.com x.comÂ
Micron faces a severe crash risk from CXMT's current threat and apparent investor complacency after a euphoric high. If the Wall St Cheat Sheet fits, most of Micron's gains across 40 years, amassed in just one year, could be erased soon. Earlier, Elon Musk said Micron had been reasonable on future memory prices; memory stocks were not yet to be faded. x.com x.comÂ