Thursday’s gap lower was a continuation of last Friday’s gap down, and all week I’ve been on high alert for what I believe could be the final flush in this correction.

Thursday was a good start, but looking at the overall pattern, I don’t think we’re quite done yet.

Personally, I’d rather just get it over with than keep grinding sideways and lower in this choppy environment. The encouraging part is that this slow, overlapping decline still looks a lot more like a standard corrective move inside a bull run than the start of a larger bear market.

The probabilities continue to favor a classic ABC correction. If that’s right, we’re now in the final C wave of the move that began on June 5, one that has managed to frustrate bulls and bears alike for nearly two months.

QQQ Daily Chart

If SPY, QQQ, SMH, and SOXX can all make one final flush into their respective 100-day SMAs, that may be enough to reset sentiment and set up the next leg higher into the fall.

Wednesday’s earnings may have also given us an early read on the theme of this season. So far, the market seems willing to punish the companies spending enormous amounts on AI while rewarding the ones benefiting from that spending. In other words, the hardware side of the AI trade still looks like the stronger place to be. AMD, MU, TSM, AAOI, SITM, ASML, and DELL remain some of the biggest potential beneficiaries of the capex boom.

SOXX Daily Chart

GOOGL’s History Below the 200-Day SMA

After Thursday’s earnings reaction, GOOGL closed down roughly 7%, and more importantly, below its 200-day simple moving average.

Whenever a stock closes below its 200-day SMA, I pay attention. It’s one of my primary dividing lines between bullish and bearish trends.

So I went back through GOOGL’s chart all the way to its IPO to see what has historically happened after earnings gaps below the 200-day SMA. The results were surprisingly consistent.

January 2008. GOOGL gapped below the 200-day and formed a bearish candle beneath it, almost identical to Thursday’s setup. The next day it rallied back above the moving average and the prior candle, then quickly failed. Once it lost the 200-day again, it rolled into a substantial decline.

April 2011. Another gap below the 200-day, down roughly 8%, close to the current move. One more day of selling, a modest retest, then a continued slide lower.

August 2011. Just a few months later, same setup. Gap below the 200-day, rally back into it, failure at resistance, sharp selloff over the following weeks.

July 2015. This one played out differently and looks much different than todays set up. GOOGL consolidated sideways for about a week after the small gap, then reclaimed both the 100-day and 200-day with a gap and launched into a sustained uptrend.

June 2016. Gap below the 200-day, bearish candle, break lower over the next several sessions. It dropped another 8% below the moving average before finding support and starting a new advance.

October 2018. Same pattern. Bearish candle below the 200-day, failed retest from underneath, continued lower before eventually building a durable bottom.

May 2019. More of the same. Gap below the 200-day, relief rally and retest, failed the 200-day SMA once again and another meaningful leg down.

March 2020. During the COVID crash, GOOGL gapped below the 200-day, briefly retested it, then collapsed into the panic lows. Same pattern, different story.

What Does It Mean Today?

This history backs up my read on Thursday’s close. The most likely near-term outcome is a relief rally. GOOGL could reclaim the 200-day and start filling part of Thursday’s earnings gap. If it closes back above both the 200-day and Thursday’s bearish candle, I think there’s a tradable short-term swing back toward the 50% gap fill around $333.

That said, history suggests traders should remain cautious. In nearly every example above, reclaiming the 200-day SMA was eventually followed by another leg lower before GOOGL established a durable bottom. If GOOGL bounces but finds resistance at the 200-day SMA, I would expect more immediate downside.

Bottom Line

The 200-day SMA is the line in the sand. If GOOGL reclaims it, I think there’s a high probability short-term swing trade back into the earnings gap, with the 50% fill near $333 as the first logical target.

But if history repeats, that rally is more likely to be a relief bounce than the start of a new uptrend. A close back below the 200-day would significantly raise the odds of another leg lower.

If GOOGL can’t reclaim the 200-day at all, watch the open gaps around $305, $287, and $261 as downside targets. As long as it stays below the 200-day, all three remain in play.

GOOGL Daily Chart

I have to admit, I don’t love earnings season.

Having the direction of the entire stock market hinge on the reactions of a handful of companies is not much fun. Then there’s the sympathy gap problem. Even if one of your stocks isn’t reporting, another name in the same sector can miss and drag your position down with it anyway.

It’s one of the reasons I enjoy trading Bitcoin so much. No earnings, no surprises, just price.

That said, the biggest downside of earnings season is also its biggest upside.

I love trading the gaps that come out of it.

Not before the report. After. A gap tells you an enormous amount about market sentiment. Until you actually see where a stock opens, it’s hard to get a true read on how strong or weak the reaction really is. A lot can change overnight after an earnings call.

Actually, let me correct myself. Gaps aren’t the only thing I like about earnings. The volume is also a key signal and a great place to find edge.

The session right after an earnings report usually gives you a clear picture of who showed up with conviction. Did big money buy the dip aggressively? Did institutions sell into the gap up? The combination of a gap and volume is often one of the best clues you’ll get about a stock’s next major move. Until that first session plays out, it’s mostly speculation.

GOOGL: Nearing the 200-Day

As I’m writing this, GOOGL is set to gap down nearly 5%, opening near its 200-day simple moving average.

If it opens around the 200-day SMA, I expect a bounce. Wednesday’s candle was bearish, closing near the lows, which means plenty of traders were shorting the stock heading into earnings. Those traders eventually have to buy shares back to lock in profits, and that short-covering can fuel a relief rally and create the initial retest.

The $320 to $323 zone is also a significant area of support, with both a major price gap and the 200-day SMA converging there. If GOOGL opens in that range, I’d expect buyers to step in fairly quickly.

However, if GOOGL breaks below the 200-day SMA, the next major support zone comes in around $311 to $305. That area is reinforced by the anchored VWAP from the Buffett gap, as well as the gap fill from the April 8 breakout gap, making the next area of major support below the 200-day SMA.

GOOGL Daily Chart

TSLA: Testing a Critical Level

TSLA is also gapping lower and is now getting dangerously close to breaking its 100-week simple moving average.

It already broke the major uptrend line that had held since 2025, and it’s spent all of 2026 carving out lower highs. A clean break below the 100-week SMA would be a real technical failure and could open the door toward the $300 area.

Between TSLA and SpaceX both taking hits lately, Elon Musk might soon only be the richest man in the world by a measly $500 billion. As Trump would say, “sad.”

On the bullish side, if TSLA can hold both the 100-week average and horizontal support around $360, there’s a real path back to $400.

Even so, TSLA is stuck in a wide sideways range and isn’t one of the market’s leadership names right now. Unless you’re building a long-term position or running a covered call strategy on it, there are better opportunities out there.

TSLA Daily Chart

Semiconductors Are Still Driving the Market

Right now, this market still lives and dies by chips and the broader AI trade.

Wednesday’s heat map was mostly red, but strength in NVDA, AMD, DELL, AVGO, and a few other AI leaders helped stabilize things and extend some of the market momentum that started earlier in the week.

The most encouraging sign for the bulls is that the bearish head and shoulders patterns on SOXX and its biggest component, MU, have so far been bear traps.

I missed my own bullish MU entry by about $4 after laying out the setup last week, so hopefully some of you caught that one.

As long as the bear patterns keep failing to confirm and key supports continue to hold, I don’t see a strong technical case for a major market breakdown here.

MU Daily Chart

Maybe the biggest story out of GOOGL’s earnings wasn’t even the stock’s reaction. It was the company’s continued commitment to AI infrastructure spending.

The capex race is still very much on, and that’s exactly what chip companies want to hear. As long as the big tech players keep pouring hundreds of billions into AI infrastructure, the companies supplying the chips, networking gear, memory, and optical components should keep benefiting.

The market may rotate from one AI winner to the next, but for now, the spending that has powered this bull run seems to still be flowing.

Earnings season is chaotic, but it’s also where edge for the next quarter can be found. Anyone can guess ahead of a report. It’s the reaction, the follow through, and the volume behind it that actually tells you something you can trade on.

Monday’s gap higher ultimately faded throughout the session. That price action can be viewed as a retest of Friday’s bearish retest gap on both SPY and QQQ. Each index rallied back to test its broken trendline before sellers stepped back in, leaving the market looking increasingly vulnerable to the final flush lower that we’ve been anticipating.

SPY Daily Chart

QQQ Daily Chart

Looking across the broader market, the short-term technical picture continues to favor the bears. DIA has now joined IWM with a bearish 10-day EMA setup and appears ready to resolve lower. RSP is showing similar weakness, while the semiconductor space continues to deteriorate. SOXX still looks likely to work its way down toward the 100-day SMA, which would represent roughly another 10% decline from current levels.

DIA Daily Chart

An Apple a Day Keeps the Bears Away

One notable exception to the weakness remains Apple. AAPL is the one mega-cap technology stock that has avoided getting caught up in the circular AI financing and capital expenditure spending race. If Apple can pull back slightly into its rising 10-day EMA and the prior all-time high breakout area around $320-$318, I’ll be watching closely for buyers to step in. As long as AAPL holds the $311 pivot, I believe it remains well positioned for another run to fresh all-time highs. For momentum traders, AAPL continues to be one of the cleanest charts in tech, making it far easier to trade than many of the names currently trapped in “Choptown.”

AAPL Daily Chart

GOOGL reports earnings this Wednesday after the close, and it will kick off of the key earnings for this season.

From an Elliott Wave perspective, the chart appears to have completed a five-wave advance into the recent highs, terminating almost perfectly at the 1.618 Fibonacci extension of Wave 4 and the psychologically significant $400 “grandma number.” This information says we should continue to pull back.

If earnings trigger a break below the 100-day SMA, I believe the odds increase substantially for a swift move toward the 200-day SMA or possibly for a retest of the $305 gap below.

On the other hand, if GOOGL gaps above the $375 resistance level and buyers show conviction, I would expect the stock to push into new all-time highs, with the $425-$430 area becoming the next logical upside target before momentum begins to cool.

If management continues to aggressively ramp AI-related capex, it’s difficult to see the market rewarding that strategy indefinitely. We’ve already watched investors punish several semiconductor names despite excellent earnings because future spending continues to outpace expectations. At some point, even exceptional revenue growth is no longer enough to justify ever-increasing capital expenditures, and GOOGL may soon face the same scrutiny.

GOOGL Daily Chart

Check out the Monday Afternoon Swing Room below, where I dive into these charts and many more, breaking down the technical analysis, key support and resistance levels, and exactly what I'll be watching over the next week or two.

The triangles on both SPY and QQQ broke lower on Friday with large gap downs. QQQ closed down 1.5% while SPY finished lower by 1%. QQQ wicked down into the $686 support level but still did not fill the gap below at $682 or touch the anchored VWAP sitting near $684.

From here, I see two primary scenarios playing out in the short term.

QQQ Daily Chart

Bullish Scenario

The first scenario is a quick flush lower early this week that fills the gap at $682, ramps up fear, and gets traders piling into puts and short positions before reversing higher. A move into that pocket of liquidity followed by a sharp bounce would be a classic bear trap.

QQQ has been grinding lower for nearly two months and would be roughly 8% off its highs if it fills that gap. That type of pullback could easily produce a relief rally back toward $700, with $712 becoming a realistic upside target if buyers step in.

Bearish Scenario

The second scenario is a decisive close below the $682 gap fill and support level without an immediate reclaim. I want to emphasize that I am talking about the short-term picture here.

I still believe the 100-day SMA should provide meaningful support for QQQ, which sits only about 4% below Friday’s close. The warning signal would be a daily close below $682 that is not reclaimed either intraday or during the following trading session. If that occurs, I would expect additional downside, to the 100-day SMA or as low as the 200-day SMA, before a more durable low forms.

QQQ Daily Chart

Medium-Term Outlook

Over the medium term, I believe any pullback into the longer-term moving averages on QQQ will present an excellent opportunity to increase long exposure, especially for those of us who spent much of June and July reducing positions and raising cash.

Simply looking at the price action on SPY and DIA, it is difficult for me to imagine that we are finished moving lower. Semiconductors have also broken below the necklines of a large head-and-shoulders patterns, suggesting there should still be more downside before they find lasting support.

SPY Daily Chart

If you trade the 10 EMA strategy that I teach at Real Life Trading, you know that IWM triggered a bearish entry on Friday by printing its third consecutive bullish candle that closed beneath the declining 10 EMA. If Friday’s low is broken, I could easily see IWM pulling back another 3-5%.

IWM Daily Chart

If we see a sustained break below Friday’s lows across many of the charts I am watching, I believe sellers will remain in control and we should finally get the type of pullback that creates attractive buying opportunities.

The Prosperity Portfolio is now fully in cash after a tremendous first half of the year, so I welcome the opportunity to buy QQQ and other leading stocks at lower prices. Patience has been rewarded so far, and now we wait to see whether the market gives us the entries we’ve been preparing for.

If you'd like to trade the Prosperity Portfolio in real time while learning the complete swing trading and position trading systems that I use, there are just three spots remaining in my 10-week Swing Trading Master Class beginning August 5th.

Click the link below for more details.

Ever since the June 5 bearish candle, the market has shifted from a bullish, trending, risk-on environment to a much choppier, corrective structure. Many high-flying momentum names have been crushed since then, and now semiconductors, the leaders of the April/May bull run, are finally starting to break down too.

For the past six weeks, SPY and QQQ have been consolidating inside triangle patterns, with price going virtually nowhere. Beneath the surface, though, there’s been significant sector rotation: money has flowed out of AI and semiconductor names and into financials, industrials, transportation, and software. Even within tech, capital has been rotating from semiconductors into software, which is one of the main reasons QQQ has underperformed SPY.

We’re now approaching the apex of these triangle patterns, which means the market should reveal its next major move before the end of July.

SPY Daily Chart

Given the recent price action, I think there’s a reasonable case the market resolves lower first. My ideal scenario is a swift flush lower that spikes fear, traps the bears into chasing the breakdown, and then reverses higher just as quickly. That’s my primary thesis and how I plan to approach the market over the coming weeks.

If you’ve been reading this newsletter for a while, you know I’m currently sitting on a large cash position while I wait for a better opportunity to deploy capital. Maybe that biases me a bit, but when I look across semiconductors, AI, and many of the larger tech names, another leg lower would make a lot of sense before a more sustainable rally begins.

Where should we bounce?

For QQQ, the first major support sits at the open gap fill around $683. At a minimum, I think any meaningful pullback should reach that level. Below that, the next major support is the 100-day SMA near $666.

SPY has shown considerably more relative strength than QQQ. The first significant support sits near $725, but ideally I’d like to see price briefly undercut that level and push into the $720-$712 area before buyers step back in.

It probably feels impossible today for SPY to fall that far, but it’s worth remembering it made a very similar move in just three trading days at the start of June. A quick volatility spike like that could easily happen again.

If we do get those pullbacks in both SPY and QQQ, it would represent a very healthy correction in both time and price. More importantly, it would reset sentiment and lay the foundation for another push to new all-time highs.

QQQ Daily Chart

It would also set up nicely heading into earnings season. I much prefer seeing stocks weaken before earnings, since that gives companies room to surprise to the upside and kick off new bull trends, rather than reporting after already extended rallies, which tends to invite “sell the news” reactions.

Semiconductors

SOXX, the semiconductor ETF and the market leader over the past several months, has formed a textbook head-and-shoulders pattern and looks like it is gapping below its neckline in Thursday’s after-hours session.

If SOXX ultimately flushes down toward its 100-day SMA, that would mark roughly a 30% correction from its highs, which is a decent reset. If we truly are entering another powerful bull market, I’d want to see semiconductors stabilize and start pushing higher once again.

I have no interest in catching falling knives. I want to see buyers actually step in at major support levels and key moving averages before I get aggressive, but I will start adding small size as strong names pull into their 100-day SMA.

So far, several AI names have sliced right through their 100-day SMAs, including AAOI, COHR, and LITE. Now I want to see whether the larger semiconductor leaders, SNDK, MU, and AMD, can hold their own 100-day SMAs and attract buyers.

AMD, in particular, continues to be one of the strongest semiconductor names right now. If it does pull back all the way to its 100-day SMA, I will be very interested. Strong stocks pulling back to major support often provide some of the best risk-to-reward opportunities, especially if buyers step in and defend that level.

Also, if AAOI reaches its 200-day SMA, I think the risk/reward becomes very attractive. The stock managed to hold and bounce for three days at its 100-day SMA before ultimately breaking lower. Maybe the 200-day SMA and horizontal support will prove to be the stronger level that finally draws in meaningful buyers.

SOXX Daily Chart

We’re now halfway through July, and the bullish historical tilt has held up so far, at least for the majority of names. SPY continues to hold up quite well as the banks have performed strongly during earnings season, with GS, BAC, and JPM all making new all-time highs this week.

Right now, the main reason QQQ has been underperforming is the same reason it outperformed in April and May: semiconductors. Both SMH and SOXX closed lower once again today and have developed fairly obvious head and shoulders patterns, essentially mirroring MU’s chart.

SPY 3 Day Chart

MU and the Semiconductor Setup

A few weeks ago we discussed NVDA’s head and shoulders pattern and how it was perhaps to obvious, making it less likely to play out as expected. NVDA did in fact pop bullish instead of breaking down for a nice bullish play off of the long-term averages.

Today MU has that same obvious head and shoulders pattern, and it has yet to close below the neckline, so the pattern hasn’t officially triggered. Even if it does, there’s a significant area of support between roughly $820 and $780. The Anchored VWAP from the March low sits near $793 and will be a key level to watch if price declines into that area.

When a head and shoulders pattern fails to break down and instead turns into a bear trap, the bullish reaction is often quite powerful. I’ll be watching MU very closely to see if it can pull back into that buy zone and then bounce. A 25-30% rally from that area back toward $1,000 wouldn’t be out of the question, potentially creating a B-wave and a lower high before a larger correction eventually develops.

Either way, if buyers step in around the gap fill and the Anchored VWAP, I’ll be looking to position long. If they don’t, a move down toward the 100-day SMA near $674 becomes much more likely.

The last time MU reported earnings, they crushed expectations and the stock still dropped roughly 34%. If something similar were to happen again, it would put price around $823, right into my key supports.

MU Daily Chart

QQQ Still Building Pressure

QQQ continues to move sideways inside its triangle pattern as software and semiconductors take turns leading and lagging the market. Once those two groups begin moving in the same direction, either higher or lower, I believe that’s the direction the broader market is likely to follow.

QQQ once again found support at the Point of Control from the March low and bounced today, continuing to build pressure while consolidating near the highs. Even on my bearish Elliott wave count, I can see it pushing up into the upper trendline and filling an overhead gap around $733 before it would break down. You know I like scenarios where both the bull and bear counts point to the same short-term outcome.

When markets move sideways, the directional edge becomes less pronounced, so I prefer to trade a bit more conservatively. Even so, I still believe the overall edge remains bullish, and the risk-to-reward on most charts continues to favor higher prices. Unless the lower trendline and then the $700 level break, I’ll continue looking for opportunities to add bullish exposure.

QQQ Daily Chart

Bitcoin: A Case for Higher Prices

As I mentioned in my July Fireworks newsletter, I believe there’s a compelling case for Bitcoin to move higher from here, at least over the short term, which is why I initiated a long position. BTC has now reclaimed the 200-week SMA and has continued to show improving relative strength.

I’ll be the first to admit that the larger structure hasn’t changed. We’re still seeing continued sharp moves lower followed by a choppy corrective rallies, which suggests that lower lows remain a high probability for now. Even so, I think a push toward $67,000, and perhaps even $70,000, before another leg lower remains the higher probability scenario.

If Bitcoin closes back below the 200-week SMA on a weekly chart, that would be an important warning that the next leg lower may arrive sooner than expected.

The markets finished the week on a bullish note as Friday extended Thursday’s strength with another solid move higher. While we’ve been trading in a choppier environment recently, the bigger picture on both SPY and QQQ continues to suggest that higher prices are likely ahead.

If we’re fortunate enough to see a pullback from the QQQ triangle pattern, I think that dip would be very buyable and could provide an excellent opportunity to add long exposure. Until then, the bulls continue to have the advantage. The primary trend remains higher, and trading with the trend is usually where the easier money is made.

QQQ Daily Chart

The NVDA analysis I posted on Thursday played out almost exactly as anticipated. Traders who were paying attention had the opportunity to rake in cash from Friday’s move as NVDA rallied through the gap fill and continued higher. It was a great example of how having a clear thesis with defined levels and a plan can put the probabilities in your favor.

NVDA Daily Chart

Since I’m still on Aerial BVI with my family, my bandwidth is a bit limited. I’ll be traveling home all day on Tuesday, but everything will return to its normal schedule once I’m back.

In the meantime, I asked Jerremy Newsome to put together a video covering the current market, where he thinks we are today, and where he believes we’re headed next. Be sure to check out the video below!

QQQ held its key support, so the bullish triangle appears to be playing out as expected. SPY also broke back above its upper trendline and looks ready to continue higher as the market rotation continues.

QQQ Daily Chart

Many of the mega-cap tech names had impressive bounces on Thursday, breaking out of consolidation areas and pushing into target zones. Thursday’s candle now becomes a line in the sand for many charts. For QQQ, the key level remains $700, or Wednesday’s low. However, Thursday’s low can also serve as a useful risk management level and provide trade setups across many individual names.

Since I was traveling on Wednesday and Thursday, I didn’t make any trades besides exiting XOM for a solid gain. That said, Wednesday’s candle on NVDA was extremely strong. It reached the targets from my initial trade setup while also creating a very attractive double-bottom pattern. If the market is going to make another strong move higher, it will likely need NVDA to participate.

Thursday’s candle perfectly retested Wednesday’s long bullish candle and closed as a bearish inside hammer, keeping that bullish setup intact. I won’t lie, it stings a little that I was not trading on Thursday and didn’t get to buy at the $200 neckline, but trading is about living life, not the other way around. When you travel, rest, and spend time with family, sometimes you’re going to miss a 10-out-of-10 setup.

At this point, a break above Wednesday’s and Thursday’s highs would provide another solid entry if we get it. On the other hand, if NVDA continues to consolidate, I will view it as buyable on dips as long as it holds the $190 level and the 200-day SMA. If that support breaks, especially in the near term, the chart becomes much more concerning. It would have filled its overhead gap only to confirm a massive head-and-shoulders pattern.

Part of the reason I’ve assumed we push bullish on NVDA, as I’ve mentioned before, is that the bearish head-and-shoulders pattern almost looks too perfect. The market has a habit of frustrating the greatest number of participants, and obvious patterns often fail when everyone is leaning the same way.

NVDA Daily Chart

Several AI names were also sitting at major support levels early this week, including COHR, AVGO, NVDA, VRT, and DELL and most held nicely and are pushing higher. GOOGL still looks like it has room to push toward $380. AMZN continues to look bullish yet has a battling double top and inverted head and shoulders with almost the same neckline. It also seems like MSFT wants to reclaim its 200-week SMA and continue higher.

AMZN Daily Chart

The AMZN chart pretty much sums up this market. It’s easy to make either a bullish or bearish case from many of these charts because there are legitimate technical patterns supporting both sides. That uncertainty, combined with the incredible rally we experienced this spring, is a big reason why we’ve transitioned into such a choppy, bifurcated market.

For now, it looks like we’re likely to remain in this rotational environment where leadership can change quickly. One key level breaking can either turn into a bear trap or confirm that a larger breakdown is underway. Right now, my read on the market remains bullish. As long as the price action from the past two sessions continues to hold across the major indices and leading stocks, I believe dips remain buyable.

That said, if those key support levels begin to fail, I’ll change that stance just as quickly. That’s one of the greatest advantages of being a trader. We don’t have to be right all the time. We simply have to recognize when we’re wrong and adapt. In fact, the better you become at being wrong quickly, the better trader you’ll ultimately become.

The QQQ showed additional weakness on Tuesday while SPY held up relatively well. QQQ is now back down to the lower trendline of the pennant pattern we’ve been tracking for more than a month, while SPY continues to trade near its upper trendline.

The bifurcation in the market continues, with semiconductors being the primary source of weakness within technology. When a sector rallies as aggressively as semiconductors did over such a short period of time, there is always an eventual payoff, either through a correction in price or a correction through time.

I’ve been cautious on semiconductors ever since MU reported excellent earnings, gapped to new all-time highs, and then immediately sold off, trapping the late buyers. That type of exhaustion gap often marks at least a temporary top, and we’re now seeing weakness spread throughout much of the sector.

SPY Daily Chart

Prosperity Portfolio Exits QQQ

QQQ closed below its 50-day SMA for the first time since the March lows, triggering an exit in the Prosperity Portfolio and leaving me with a large cash position.

The Prosperity Portfolio is my systematic QQQ trading strategy, and this trade closed with a 16.8% gain over the past 60 trading days while managing downside risk unlike a a traditional buy-and-hold approach.

This is one of the trading systems I share in my Swing Trading Mastery course, which begins on August 5th. Having a predefined, systematic plan removes emotion from the decision-making process and lets the market, not your feelings, determine when it’s time to get in and when it’s time to get out.

I love having this strategy for my long-term QQQ allocation because it allows me to stay invested during strong uptrends while providing a disciplined process for reducing risk when conditions begin to deteriorate.

QQQ Daily Chart

Summer Chop Continues

The summer chop is definitely here. Just because the Prosperity Portfolio exited QQQ doesn’t necessarily mean the market is about to plummet. It simply tells me that volatility is increasing and that risk management deserves a greater emphasis until something changes.

The next key level I’m watching is $702 on QQQ. If that support breaks, I believe the probability increases significantly that we retest the open gap near $682.

Raising Cash

Since I’m leaving for Aerial BVI this week, it actually feels great carrying a larger cash position. In addition to exiting QQQ in the Prosperity Portfolio, I also closed out all of my shorter-term swing trades for solid gains before leaving.

The one swing position I decided to keep open is XOM.

After patiently adding shares of XOM while it consolidated in a tight base around its 200-day SMA, I wanted to give this trade time to play out. I’ve been posting daily updates in the RLT Swing Trade Channel, and we finally saw the gap I was waiting for.

Once crude oil filled its gap near $67 and found support, I felt a relief rally was likely. That created an outstanding risk-to-reward setup in XOM, with the overhead gap serving as the primary target and a close below the 200-day SMA acting as my stop.

I think there’s a good chance XOM fills that overhead gap over the coming days, which would make this a very profitable trade.

If you haven’t already, take some time to study that chart. It’s one of the cleanest examples you’ll find of a moving average support trade combined with a gap-fill setup, exactly the type of technical pattern I look for when building swing positions.

XOM Daily Chart

The markets bounced back from last Thursday’s selloff after finding support at a key technical level. QQQ bounced almost perfectly off the point of control from the March low, as well as its 50-day SMA. While QQQ and the technology sector continue to show some relative weakness especially in semiconductors, we’re also starting to see constructive price action that suggests the historically bullish month of July may once again be playing out.

SPY is beginning to push out of its triangle pattern, while QQQ remains trapped near the center of its own consolidation, again due to semis. A strong close above the upper trendline and above Thursday’s high would be a big signal that buyers are regaining control and would increase the odds of a strong summer rally.

If, on the other hand, the breakout fails and we eventually break down from these triangle patterns, I would expect a larger retracement that could take price back toward the 100-week SMA or a retest of the prior all-time highs on both SPY and QQQ.

QQQ Daily Chart

One sector that continues to rip is financials. The double bottom in XLF has now played out, with the ETF filling its overhead gap as of Monday morning. After lagging the broader market through much of the spring rally, financials have finally caught a bid and now appear to be making a run toward new all-time highs.

AXP continues to look strong and is pressing higher, with the primary target remaining the overhead gap. COF and WFC are still sitting near their double-bottom necklines, making them attractive entries from a risk-to-reward standpoint. If financials continue to lead the market higher, both have plenty of upside potential.

Keep in mind that the big banks begin reporting earnings next week, officially kicking off another earnings season that will likely play a major role in determining the market’s direction for the rest of the summer.

COF Daily Chart

With most sectors still looking constructive and seasonality continuing to favor a strong July, the bullish case remains intact as long as key support levels continue to hold. My focus remains the same: buying pullbacks in strong stocks while also looking for opportunities in beaten-down names that appear to have completed their bases and are beginning to trend higher.

Check out the video below for a deeper dive into the major indexes, Bitcoin, and several of my favorite trade setups right now.

The selling in QQQ accelerated on Thursday as semiconductors cascaded lower for most of the session. If the start of 2026 was the SaaSpocalypse, then Thursday felt like the Chipocalypse for anyone heavily invested in semiconductors.

The QQQ pulled back to its lower trendline and point of control once again, where it should find support and bounce if this is indeed a corrective triangle pattern. A break below the $700 level would be the first warning sign that the correction is deepening and could open the door for a move down toward the 100-day SMA or even a retest of the prior all-time highs.

QQQ Daily Chart

Even after Thursday’s decline, SOXX is still only about 15% below its all-time high. With the ETF’s average daily range currently sitting at 6.19%, that is only about two strong trading days away from new highs. That said, SOXX has been giving us several warning signs that a period of consolidation or correction may have already begun.

The first warning came on June 23rd, when SOXX gapped lower from an all-time high after printing a third higher high accompanied by bearish RSI divergence. It then rallied back and filled that gap almost to the penny before selling pushed it below 24 days of price action.

The next major level to watch is the 50-day SMA near $544. If that support fails, there is some intermediate support around $523 before the 100-day SMA becomes the next major downside target. That moving average is currently sitting near $450, which would represent roughly a 30% correction from the highs. While that sounds dramatic, it would actually be a very healthy correction after the extraordinary rally we’ve seen over the past several months.

As I scan through the semiconductor charts right now, very few still look technically healthy.

SOXX Daily Chart

NVDA continues to hold key support, but it is also forming a large inverted head and shoulders pattern that still needs to resolve. INTC has formed a double top after what now looks like an all-time high bull trap. MRVL appears likely to fill its post-earnings gap lower. AVGO has now closed below its 200-day SMA. MU also appears to have produced an exhaustion gap following earnings that is acting as a bull trap, and it looks capable of filling the gap below, producing a move very similar to what happened after its previous earnings report.

Could Bitcoin Benefit?

Two of the fundamental reasons I have been bearish on Bitcoin may finally be starting to change.

The first has been my belief that investors simply had little incentive to move further out on the risk curve into Bitcoin while they could earn tremendous returns in AI and semiconductor stocks. When names like MU, AMD, and other chip stocks are producing outsized gains, capital naturally gravitates toward those opportunities instead of an asset that has spent months trending lower.

I’ve repeatedly said that until this dynamic changes, money is likely to remain concentrated in semiconductors while Bitcoin continues to bleed lower.

That rotation may finally be beginning.

Realistically, we are now within roughly three months of Bitcoin’s historical seasonal bottom, and there is a legitimate case that the bottoming process has already started. If money begins rotating out of AI and semiconductor names, Bitcoin becomes a much more attractive destination for investors looking for a high-upside asset that has already experienced a significant correction.

DXY Could Turn the Tide

The second reason centers around the U.S. Dollar Index (DXY).

DXY and Bitcoin have historically shown a strong inverse relationship. Recently, DXY broke above the important 100.00 resistance level. If that breakout continues higher, it would likely tighten global liquidity conditions and create additional headwinds for Bitcoin.

However, if DXY pulls back to retest 100.00 and fails to hold that level as new support, the breakout could turn into a false breakout. That would be a meaningful bullish development for Bitcoin and could provide one of the catalysts needed to complete a medium-term bottom.

DXY Daily Chart

Bitcoin Having a July Pop

Bitcoin is trading at an interesting technical level.

I still believe there is a relatively high probability that Bitcoin eventually makes one final low sometime this fall. However, it certainly does not have to.

Historically, every time Bitcoin has broken below its 200-week SMA during a bear market, it has continued another 30% lower before ultimately bottoming. So far, Bitcoin only traded about 8% below the 200-week SMA before finding strong support at the anchored VWAP from the 2022 bear market low.

That is an important level, and the fact that it held while bullish RSI divergence developed makes a meaningful relief rally a very reasonable expectation.

There is also some historical precedent supporting that idea.

In July 2022, during the middle of the last bear market, Bitcoin enjoyed a strong rally before ultimately rolling over and making one final low later in the year. July also tends to be a seasonally strong month for equities and has produced positive returns during each of the last four midterm election years.

While I still believe history favors one final low sometime this fall, I also think there is an argument to be made for adding Bitcoin exposure (IBIT) under $65,000 where risk reward is decent and where, collars and puts can help mitigate downside risk if we do get a nice July pop.

I’ve started doing exactly that. If Bitcoin continues lower, I plan to add more aggressively in the $54,000 to $49,000 region and then again near $38,000 if it ever gets that low. On the other hand, if Bitcoin rallies strongly through July, I plan to collar the position to lock in a guaranteed profit while still maintaining upside exposure.

If you’d like to learn how I use options to create these “can’t lose” position trades through collars, covered calls, LEAPS, and other strategies, check out my upcoming Swing & Position Trading Master Class, where I teach the complete system step by step.

BTCUSD Daily Chart

Today is July 1st, and we are officially halfway through the year. Time is flying, but the markets are not.

June was a month of consolidation, with both SPY and QQQ closing the month with bearish candles that featured large lower wicks. The “easy” up-only trade that dominated April and May seems to be behind us. We have entered a choppier environment that requires more patience, better stock selection, and a willingness to wait for high-quality setups.

Looking back at previous midterm election years, July has historically been a strong month. In 2010, 2014, 2018, and 2022, July produced solid gains for the broad market. Even in 2006, the month was essentially flat. You have to go all the way back to 2002 to find a truly poor July during a midterm year.

Seasonality continues to favor the bulls. Since its inception, QQQ has finished higher in July 68% of the time, making it the second strongest month of the year behind only November. This is because October often brings increased volatility and selling pressure, followed by strong recoveries in November and December. Based on the current chart patterns, Elliott Wave structure, and seasonality, I think there is a reasonable chance that this market follows a similar script once again.

QQQ Seasonality

The key levels I’m watching for risk management remain unchanged: $702 on QQQ and $725 on SPY. As long as we continue consolidating above those levels, the larger trend and momentum remain bullish. If either level breaks, however, I think we could quickly see a move down toward the 100-day SMA and potentially a retest of the prior all-time highs.

SPY Daily Chart

This week’s price action pushed both SPY and QQQ into last Tuesday’s gap fill before sellers stepped in on Wednesday. SPY continues to trade within a large triangle pattern right at all-time highs, which is exactly the type of environment where choppy price action tends to persist until the market finally resolves the pattern.

If this develops as a standard triangle, I would expect one more push lower in both SPY and QQQ that holds the lower trendline and Point of Control before buyers step back in. That would ideally set up the next leg higher and eventually a breakout above the upper trendline.

On QQQ, I continue to have a major Fibonacci extension target around $665. SPY, on the other hand, has very little Fibonacci resistance until the $800 area, giving it considerable upside potential if this turns into a true summer breakout.

QQQ Daily Chart

Right now, it still feels like capital is simply rotating between sectors, particularly semiconductors and software. When semiconductors sell off, software catches a bid, and then the rotation reverses. For this market to develop into a sustained uptrend, we need broader participation. Multiple sectors have to begin trending higher together rather than simply rotating leadership.

Financials are beginning to do exactly that, which is encouraging. It’s a group I’ve been watching closely since it formed a large double bottom on the weekly chart. Names like WFC, V, and AXP are all starting to look technically strong and could have significantly larger moves ahead.

AXP Daily Chart

The Trillion Dollar Titans are still struggling to regain momentum, but if these leaders can start attracting buyers again, there is plenty of upside runway in names like MSFT, AMZN, META, AVGO, GOOGL, and NVDA.

NVDA Daily Chart

Oil has now filled its February gap around $67.83 and has largely retraced back to where it was before the Iran conflict. I’m certainly not an oil expert or a geopolitical analyst, but I think it’s worth paying attention because XOM is sitting in a very tight consolidation directly on top of its 200-day SMA.

I don’t know which direction this consolidation ultimately resolves, but I do believe the eventual breakout will be worth trading. I initiated a long position near the 200-day SMA. If XOM instead gaps below both the 200-day SMA and the entire consolidation range, I’ll likely flip bearish for a short-term day trade and look to recover the loss. From a purely technical perspective, I think a bounce toward $142 is a very reasonable expectation.

XOM Daily Chart

RDDT is another name I’ve been discussing for quite some time. My focus has primarily been on accumulating shares because the chart has been messy and overlapping while still maintaining a longer-term uptrend.

Wednesday finally produced the type of breakout we’ve been waiting for, as RDDT surged through its 200-day moving average with a powerful bullish candle. I believe there is a high probability that the stock fills the gap near $212, which remains my primary upside target.

If I wanted to add additional exposure, I would use Wednesday’s breakout candle as my reference. A pullback into the 38.2% to 61.8% Fibonacci retracement zone that successfully holds above the 200-day SMA would, in my opinion, offer an attractive risk-to-reward opportunity for a move toward that $212 gap fill.

RDDT Daily Chart

After a week of bearish price action, Monday finally gave us a solid bullish gap at the open, and more importantly, it came with follow through throughout the session.

The broad market isn’t out of the woods yet. Both QQQ and SPY remain inside their current consolidation ranges and are still trading below last Tuesday’s gap. Filling that gap is the first short-term target for the bulls. If the market can push above that gap, the odds of a larger correction begin to diminish considerably.

The key levels to watch are now $703 on QQQ and $729 on SPY. As long as those levels hold, I remain bullish on the market in the short term.

SPY Daily Chart

Nvidia Bull Support Held

We saw some excellent technical levels get hit during Monday’s shake out. NVDA finally filled its lower gap and tagged the 200-day SMA. The risk-to-reward setup is pretty solid here. The next hurdle for the bulls is the 100-day SMA, which sits just above Monday’s candle.

For those who are not already long NVDA, this looks like a strong bracket trade candidate. If price breaks above Monday’s high, it is bullish. If it breaks below Monday’s low, it is bearish.

The stock has formed about as picture-perfect of a head and shoulders pattern as you’ll ever see. However, when large bearish patterns fail to confirm, they often create powerful bear traps as traders rush to cover short positions. If NVDA can reclaim and close above the 100-day SMA, I think a move toward $205 makes a lot of sense.

NVDA Daily Chart

QCOM Repeating History?

QCOM has a very similar head and shoulders setup to NVDA. After five consecutive bearish sessions, it also looks like it could be setting up for a bear trap. A move above Monday’s high, especially if it comes on a gap higher, would be an early signal that buyers are taking back control and that the stock could push nicely higher.

If we look back to the last time QCOM experienced the kind of massive bullish volume we saw in May, we have to go all the way back to 2019. At that time, the stock was also breaking out of a massive multi-year consolidation. It endured a sharp retest the following month, much like we’re seeing now, before finding support and grinding higher to new all-time highs.

If that same playbook unfolds again, the $184 level should become key support and the 100-week SMA should not be tested before QCOM resumes its move higher. Even if the stock only manages a lower high instead of a new all-time high, there is still enough upside here to make for an attractive swing trade.

QCOM Monthly Chart

Broadcom Buy Zone

AVGO is also looking similar to the other two semi names above. Monday produced a hammer candle directly off both the 100-day and 200-day SMAs. The $360 level represents major former resistance that should now act as support. If that level fails, I would expect a move toward $333. However, as long as AVGO continues to hold the 200-day SMA, a rally back toward $400 and potentially the open gap near $420 remains a very realistic target.

AVGO Daily Chart

SOFI Follow Up

SOFI, which I highlighted last week, is also trying to do something interesting. It printed a hammer candle right at the confluence of its 100-week SMA and 100-day SMA. The initial upside target remains the $20 area, offering roughly 11% upside from current levels.

Overall, Monday produced a long list of bullish reversal candles, not only in the major indices but also in names I have discussed recently like CIEN, SITM, AAOI, GOOGL, MRVL, and several others.

As long as the bulls can defend Monday’s lows and continue building on these reversal candles, I think this rally has room to continue. However, if those candles begin to fail, especially over the next couple of sessions, I would expect volatility to increase as we move into July. What’s great is we now have a great level to trade gains on so many charts. Check out Monday’s Swing Room below for even more detailed analysis on these stocks and many more!

Selling pressure continued on Friday as both SPY and QQQ closed near the lows of the week. SPY technically printed a gravestone doji, though TradingView is currently displaying a massive lower wick on Friday’s candle. Since all of that selling occurred in the final three seconds of trading, I am treating that wick as noise. It was most likely caused by market-on-close order imbalances or index rebalancing, which also explains why a huge amount of the day’s volume arrived in those final seconds.

Last week produced five consecutive bearish candles as technology continued to show meaningful weakness. That weakness, however, has finally brought many individual names, as well as SPY and QQQ themselves, back into or very close to important support levels.

SPY Analysis

If SPY gaps below or closes decisively below $725 at any point this week, I think that confirms we are in a larger C wave lower with downside toward my preferred buy zone between $695 and $710. There is an Anchored VWAP from the March lows sitting near $716.42, but I do not expect that level to hold if $725 breaks with conviction. The proportions of the correction simply do not line up for meaningful support there.

On the other hand, a gap above or strong close above $740 would suggest SPY is headed back toward all-time highs, where it either breaks out or forms a triple top ahead of a larger correction.

SPY Daily Chart

Semiconductors

Semiconductors may finally be pulling back after Monday’s bearish gap and go and the subsequent weakness off the highs. We have now seen RSI divergence across three separate all-time highs, yet the sector continued grinding higher through one of the strongest runs I have ever seen. The technicals are finally beginning to line up for a correction, particularly if the market starts taking seriously Apple’s renewed push to source chips from Chinese manufacturers, news that came out after Friday’s close.

The sector simply needs a rest. Since semiconductors have been doing the heavy lifting for the broader market, a pullback there could spark healthy rotation, most likely into software, with industrials and financials also well positioned to benefit. However, even with rotation if the market loses the semiconductors and the Trillion Dollar Titans, its going to be going lower, not higher,

SOXX Daily Chart

Software

Software names finally showed some life on Friday. NOW gained nearly 10%, MSFT bounced cleanly after finding support near $350, and IGV rallied over 4% after bouncing off both its Point of Control and the 200-week SMA.

As a pure software play, NOW remains my top pick. For traders looking for a less volatile option, IGV looks very attractive here. My bullish IGV trade worked extremely well back in early May when it formed a double bottom off the 100-day SMA, and it has now returned to test that exact same level again.

I am staying away from MSFT for now as the market appears to be turning against the hyper-spenders. That said, there is a legitimate bull case developing. MSFT has extended to roughly 61.8% of Wave A, which is the minimum length we want to see from a Wave C . Plus the chart appears to have completed a clean five-wave decline from the highs. Those factors together make a sizable bear market rally a very real possibility, and I covered that setup in detail during Friday’s Swing Room.

IGV Daily Chart

Financials

The double bottoms forming across the financial sector have caught my attention.

AXP is my favorite chart in the group. Its large weekly double bottom has found support at the 100-week SMA on both pullbacks. My biggest regret is not having it on my watchlist back in May. The stock printed four consecutive hammer candles off the 100-week SMA before breaking out, which is one of the strongest continuation bottoming patterns you will ever see, and it delivered exactly what that setup promised…gains.

That support remains intact below current price, and I do not think AXP breaks down without a significantly larger market correction.

There is an unfilled bullish retest gap from two weeks ago near $325. If price pulls back to fill that gap, it presents an outstanding buying opportunity. If it never fills and simply breaks higher, there is an open gap near $373 that makes for an excellent long-term position trade target. The neckline of the weekly double bottom sits around $334, and any pullback into that area is a level I am watching closely.

AXP Daily Chart

Prosperity Portfolio Update & 10 Week Master Class

If QQQ closes below its 50-day SMA, my cash position will increase significantly. The Prosperity Portfolio, my rules-based QQQ trading plan, will trail out of its current position for roughly a 16% gain since entering on April 9th.

That would put the portfolio up 104% since I started trading it at the beginning of 2023. Over that entire period, the largest drawdown was only 4%, and those returns came from just 18 trades.

What I value most about this system isn’t just the returns, but how they were achieved. It’s a strict, rules-based approach that removes emotion from the decision-making process entirely, and I teach the exact trading plan to every student in my Swing Trade Master Class.

Every student in this spring’s class had the opportunity to take this trade. On a $50,000 account, it would have generated roughly $8,000 in profits in the last 2.5 months, enough to cover the cost of the class with approximately $5,200 left over.

I’ll be the first to admit this type of price action isn’t normal, and I don’t expect every trade to perform like this. What I do expect is for the system to keep doing what it has proven it can do: stay consistently profitable while managing downside risk aggressively. At the end of the day, protecting capital is our main job as traders and investors.

QQQ Daily Chart

At this point, if SPY can gap above that level and show real strength, I think it has a good chance of pushing toward the $752 area. Keep a close eye on that resistance over the coming days for a potential bullish setup. On the other hand, if we continue breaking down and start closing below the $724 support level, I suspect we see a quick move back into my preferred buy zone between $715 and $695.

SPY Daily Chart

DIA also threw another upper wick into new all-time highs, stopping out my short before once again finishing with a bearish reversal candle. Thursday was characterized by sector rotation. A large portion of the market finished green while big tech, software, and consumer defensive names were mostly lower on the day.

Financials had a strong session, although much of those gains faded into the close just like the broader market. I still like the banking sector for potential swing trades. When DXY is strong and trending higher, banks can often benefit while money rotates out of technology. I am keeping an eye on some of these larger double bottoms on AXP, V, COF and WFC.

AXP Daily Chart

The Hyper Spenders

Many of the big tech leaders have now broken key support levels and are looking quite weak. I heard the term “hyper spender” today, and that pretty well sums up how the market is viewing these companies. The hyperscalers have become hyper spenders, and investors simply are not trusting the massive capital expenditures they continue to announce.

The only reason QQQ is not significantly lower right now is because the semiconductor stocks are holding up much of the technology sector. For now, I am perfectly happy waiting for better entries and cleaner setups within the big tech hyperscalers.

If NVDA closes below its 200-day SMA, the odds of the it making another new all-time high over the next few months drop dramatically. The same goes for AAPL and GOOGL.

AMZN had one of the more bearish set ups I have seen in quite some time, which is wild because on Wednesday morning I would have told you it was showing excellent relative strength. That relative strength completely disappeared by the close. It finished the day with a massive inverted hammer at the 200-day SMA, then opened the on Thursday below the 100-day SMA, the 200-day SMA, and the prior three days of candles that had been desperately trying to hold support.

That opening gap was a major red flag for the bulls and the point where risk management should have kicked in if it hadn’t already. From here, I think AMZN likely works its way back toward the $215 area and the 100-week SMA. If that happens, it will have given back essentially all of its April and May gains.

AMZN 3 Day Chart

MSFT has already erased all of its April and May gains and then some. From the looks of the chart, I do not think it is finished even though it is at a massive horizontal support level. The chart is completely broken, and I think there is a reasonable chance it eventually reaches the 100-month SMA near $284 before this correction is over.

META also continues to weaken, and I do not think it is finished either. I think it likely undercuts the March low and fills the gap around $506. From the way the chart looks today, META investors could be in for a lot more pain.

Robinhood Markets (HOOD)

One chart that I find particularly intriguing is HOOD. I go through a complete technical breakdown in the video above, but here is the short version.

HOOD is either in a larger degree fourth wave correction that could take it back toward $50, or it has already started a fifth wave that could eventually carry it toward $200.

As long as HOOD continues holding its 100-week SMA and produces overlapping sideways corrective price action on the way down, I will continue to assume we are in the fifth wave. However, if we start seeing clear five-wave declines off the highs, accelerating downside momentum, rising volume on the selloff, and key support levels begin breaking, I will assume we are instead in a larger C wave. If that happens, I will step aside and wait for lower prices and a clearer setup.

If you want the full breakdown, including my wave count, key support levels, risk-reward analysis, probabilities, and trade plan, watch the video above.

HOOD Daily Chart

SPY hit its head once again on the exact resistance I outlined yesterday, and the selling continued throughout the day. Most of the selling came from tech and energy, and we did see some green shoots in the market as consumer cyclical names performed fairly well, including Home Depot and Booking.com. I suppose everyone is going on vacation because they are sick of trading a market that doesn’t go straight up every day, which is fair. Things were a lot easier when the market only moved in one direction.

However, we can still find great levels to base trades off of, keep our losses small when they happen, and find edge in any market. MU is gapping higher which may be saving the bulls for now. Watch tomorrow’s price action closely to see if that bullish gap can hold. If it does, there is still resistance overhead that it will need to work through, but it would be a good first step toward a recovery and could delay the larger drop that I am still watching/hoping for.

SPY Daily Chart

Today I want to review two charts: Bitcoin and Gold. Let me say something plainly before I get into the analysis. I am a Bitcoin bull. I’ve put thousands of hours into understanding this asset and its chart, made seven figures trading it, and have been on top of its twists and turns as well as any analyst out there. This is not a bear doom and gloom piece. What follows is an honest reading of price action and history.

Key discipline: When price action and history conflict with a narrative, even one you believe in, price and history win.

When the equity market goes up, Bitcoin goes down. When the equity market goes down, Bitcoin goes down. That has been the price action of 2026 and every Bitcoin bear market ever, and yet the some people still seem surprised when it happens.

If you have been here for awhile you know I sold my Bitcoin in November 2025 when price crossed below the 120 SMA on the 3-day chart. A few weeks later I was at a party where a Bitcoin bull was walking through every standard talking point. I already knew every one of them, because I’ve made them myself. But I wasn’t about to HODL a position based on a narrative that price was actively contradicting.

The Saylor Variable

At that same party, I flagged Michael Saylor and Strategy as the largest risk to Bitcoin’s price. My reasoning was simple: borrowing aggressively at scale to buy a volatile asset works until it doesn’t, and when it stops working, the unwind tends to be disorderly.

Seven months later: STRC is in freefall, Saylor has sold Bitcoin (only 32 BTC, but directionally notable), and Strategy is putting U.S. Treasuries on its balance sheet rather than adding to its Bitcoin position. Strategy has stated it has 32 years of dividend coverage through its Bitcoin reserves, but that also implies it may need to sell Bitcoin to service those obligations. The market is pricing in that possibility. STRC, STRF, STRK, and MSTR have all been under sustained pressure.

The October 2025 Bear Case, Revisited

In my October 31, 2025 newsletter, I outlined seven reasons for growing caution on Bitcoin. Eight months later, here is an brief look at where each stands:

What I wrote in October 2025:
“A fully formed Elliott Wave count has pushed into new all-time highs”

Where it stands today:
This signal played out nicely and now we have yet to complete a full corrective wave.

What I wrote in October 2025:
“A 550-day bull market since the halving, right on schedule for cycle exhaustion.”

Where it stands today:
That timing played out once again. Now we are 263 days from the top. Historical bear market bottoms have formed 363 to 406 days after the peak, pointing toward an October or November 2026 bottom.

What I wrote in October 2025:
“A correlation with MSTR that looks eerily similar to the 2021 top.”

Where it stands today:
In 2021, MSTR peaked nearly a year before the Bitcoin market top, then declined 90%. That pattern has been spot on so far and if it continues, MSTR trades near $50 before all is said and done.

What I wrote in October 2025:
“A bull trap at the all-time high, which has historically led to at least a 22% drawdown.”

Where it stands today:
This played out precisely. Bitcoin repeatedly lures traders into breakouts and then reverses. This behavior is consistent with topping structure that leads to bear markets.

What I wrote in October 2025:
“DXY (which has an inverse correlation with BTC) looks like it’s bottoming”

Where it stands today:
This was and still is one of the most important signals on the list for me. Just this past week DXY has broken out from a year-long base and the uptrend appears to be resuming. DXY bottomed in January 2026 and has since broken out above 100, a key level. Every prior BTC bear market bottom has coincided with a DXY peak. Until DXY rolls over, the historical record gives no reason to expect a durable Bitcoin bottom.

DXY Daily Chart

What I wrote in October 2025:

“No meaningful price discovery in 2025, every breakout has been sold.”

Where it stands today:
Every rally was sold and continues to be. In 2026, the pattern has shifted to vertical drops followed by weak, overlapping rallies that fail into resistance, which is textbook bear market behavior. Until we see a capitulation low followed by strong momentum and vertical price action off the bottom, there is no reason to get aggressively bullish.

What I wrote in October 2025:

“BTC is getting dangerously close to its historically perfect Bull vs. Bear line: the 120-SMA on the 3-day chart”

Where it stands today:
Still the cleanest bull/bear dividing line I’ve found. It currently sits near $90,000. Given where price is, it likely won’t serve as a reentry trigger this cycle the way it has in prior cycles, so I’ve shifted my focus to other signals at least on the buy side of things.

BTCUSD 3 Day Chart

Where Does This End? Support Levels and Historical Targets

Bitcoin almost always tests its realized price during a bear market. That level currently sits near $54,000. I expect it gets tested fairly soon, and I would not be surprised to see a move as low as $48,000 if fear accelerates.

That zone represents a reasonable accumulation area for long-term investors. A purchase near $50,000 offers attractive risk/reward if you believe Bitcoin can eventually push toward $250,000 in the next 5 years. At that level, the potential 5:1 reward-to-risk profile starts to become comparable to buying Bitcoin at $10,000 in 2020 or $20,000 in 2022, both of which I did and both of which worked out exceptionally well over the long run.

That said, I think there is a legitimate path to $37,000 to $43,000, and here is the case:

• When Bitcoin has broken below its 200-week SMA, it has subsequently fallen an additional 30% in every instance (three occurrences, perfect record). A similar decline would target roughly $43,000.

• Every Bitcoin bear market has retraced at least 78.6% of the prior bull market advance on a linear scale. That level currently sits near $39,000.

• The 100-month SMA is also near $39,000 and continues to rise, providing a longer-term technical floor in that zone.

• The IBIT ETF low near $22 corresponds to approximately $38,000 Bitcoin. A move below that level would put every ETF buyer underwater and could produce the kind of capitulation that historically marks major bottoms. Many major technology IPOs have followed an similar pattern, breaking below their offering price before beginning a sustained advance.

• A decline to $38,000 to $39,000 would represent roughly a 69% drawdown from the peak, slightly less severe than the 77% decline of the prior bear market, consistent with the observed trend toward less extreme cycles. Plus its the internets favorite number.

• Finally, as long as AI-related equities are generating asymmetric returns, there is less incentive to reach further out on the risk curve into Bitcoin. The demand dynamic may be suppressed for longer than consensus expects.

Entry framework: If Bitcoin trades into the $43,000 to $36,000 zone during the fall time window, particularly if accompanied by a DXY reversal and a genuine capitulation move, I will be quite excited to buy a sizable position once again.

BTC Daily Chart

Gold: Rock Bottom or Still Mining Lower?

Gold and Silver both experienced parabolic moves earlier this year, and anyone who studies charts and these markets knew deep corrections were the likely aftermath. That correction has been underway for months. The question now is whether it is approaching its conclusion or just getting ready for another lower high push.

Markets need time to reset sentiment before a new sustained advance can begin. The excitement has to fade. Traders have to become discouraged and stop watching. I think that process likely completes somewhere in the $3,400 to $3,600 zone, a range that represents both major chart support and the location of the 100-week SMA.

The most probable path, in my view:

• Gold undercuts support near $3,888, producing a short-term bounce that generates a decent swing trade for those paying attention and trading quick swings.

• Price then makes one final move lower toward the prior all-time high area, roughly $3,500, completing a clean corrective structure.

• That would set up an attractive risk/reward for the next leg higher, particularly if Gold is in the early stages of a larger fifth-wave advance.

From the $3,400 to $3,600 zone, Gold would have approximately 60% upside to new all-time highs. That is meaningful return potential with a well-defined risk level beneath it, the kind of setup that rarely stays available for long.

Gold Daily Chart

Digital Internet Money & Shiny Rocks

Gold and Bitcoin share many properties while being extremely different in others. But one thing they have in common is very solid and very tradable charts, unaffected by earnings or profits and driven purely by supply, demand, and sentiment. That makes candlestick and technical analysis work exceptionally well in both. What I look for is the same in each: a clearly defined level where the risk/reward is asymmetric, a historical framework that supports the thesis, and the patience to wait for price to come to me rather than chasing a narrative.

Right now, neither is a screaming buy. But both are getting closer to levels where they will be. When that moment arrives, the preparation done today is what makes it possible to act decisively.

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Big tech got hammered on Monday, with GOOGL and AMZN leading the selloff. GOOGL closed down 4.99%, while AMZN finished the day lower by 4.75%. Software continued its brutal descent as well. MSFT closed down 3.18%, ORCL fell 5%, and PLTR dropped another 6.98%. Software remains firmly out of favor, and the market is punishing investors who own it.

SPY Daily Chart

Weak Stay Weak, Strong Stay Strong

Meanwhile, the story of 2026 continues. The weak are getting weaker and the strong are getting stronger. Software has struggled all year while semiconductors have continued to lead, and that trend remains firmly intact.

Investors appear increasingly concerned about the circular financing dynamic taking place among the large AI players. The massive capital expenditures being committed by big tech and the $700 billion being spent this year from the top five spenders has to have an eventual payday. If that dynamic begins to break down, it could become a serious problem for companies spending hundreds of billions on AI infrastructure.

The real beneficiaries of the AI boom continue to be the picks-and-shovels plays, namely the semiconductor companies. For now, that remains the dominant theme driving this market. The bigger question is whether semiconductors can continue carrying the broader market if the Trillion Dollar Titans keep lagging and, in some cases, falling out of the sky. MU’s earnings report on Wednesday could provide an important clue.

SiTime Corporation

One of my favorite charts in the market right now is SITM, and its technical structure tells a bullish story. Following its last earnings report, the stock exploded higher on a massive gap-up move. That gap could not hold, and the stock eventually sold off enough to fill it completely.

Once the gap was filled, buyers stepped in aggressively and established clear support. That behavior suggests the move lower was not an exhaustion gap, but rather a stock that simply became overheated and needed time to consolidate before moving higher.

Since then, SITM has formed an inverted head-and-shoulders pattern directly above support, anchored by a large bearish hammer candle. That is the candle I used as the basis for a trade when I first discussed SITM in the RLT Swing Trade Group.

As long as that candle continues to hold as support, the bullish thesis remains intact and SITM has a strong probability of pushing to new all-time highs. The 1.618 Fibonacci extension projects a target just above $1,000. If semiconductor leadership continues, SITM remains one of the strongest-looking charts in the market.

For now, all eyes are on MU Wednesday evening. The market’s reaction could tell us a great deal about the health of the most important sector in the market and whether semiconductors are prepared to keep carrying the torch.

SITM Daily Chart

Palantir Technologies

I almost didn’t share this chart because the trend is so terrible and the sector is so hated right now. However, PLTR touched its 100-week SMA today, making this a level worth watching closely to see whether buyers can establish at least some short-term support.

The stock has now logged four consecutive bearish sessions and has fallen roughly 27% in just 13 trading days. It’s safe to say PLTR is in a C-wave decline, which makes stepping in front of this train particularly challenging. C waves tend to be fast, vertical, and brutal.

That said, this is the first actual retest of the 100-week SMA. Because of that, I think there is a reasonable case for a short-term bounce that could produce a 5% to 10% move if the moving average can hold.

However, when I zoom out and look at the larger pattern, combined with how aggressively software stocks are being sold across the board, I still see a path for PLTR to trade below $100 before this correction is complete.

If the 100-week SMA does provide support and a bounce develops, the 100-day SMA would be my ultimate upside target.

PLTR Daily Chart

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The market recovered on Thursday from Wednesday’s FOMC-induced selloff, with technology and semiconductors leading the way. QQQ managed to push back above Wednesday’s candle, while SPY remained inside Thursday’s range. DIA, however, continued to weaken and actually closed lower, extending the selling pressure that began on Wednesday.

I discussed the DIA versus SPY divergence pattern on Wednesday, a signal that has consistently led to pullbacks of 4.5% or more. So far, that setup appears to be playing out once again. My stops on the DIA short are straightforward. If SPY pushes to a new all-time high, the divergence is effectively negated. Alternatively, if DIA breaks above Thursday’s high, I will exit the position. Until then, I plan to hold it as a hedge against the downside risk and choppy price action that still seems likely ahead.

DIA Daily Chart

The DXY Breakout

One of the more important developments last week came from the DXY. On Thursday, the dollar broke out decisively above a year-long base, closing above a major resistance level that has capped price for more than twelve months. If this breakout holds and DXY remains above 100, it could become a significant headwind for risk assets including stocks and Bitcoin.

Bitcoin has not participated in the 2026 equity bull market. Instead, it has remained in a bear market since topping in October 2025. I have maintained a bearish stance on Bitcoin since November 2025 when it broke below the 120-day SMA on the 3-day chart. Since then, the trend has remained decisively lower.

One of the signals I was watching during Bitcoin’s topping process was the potential bottoming pattern in DXY. While DXY spent months chopping sideways, Bitcoin steadily moved lower. If the dollar now begins a sustained move higher, it would not be unreasonable to expect another significant leg down in Bitcoin that ultimately carries it into my primary target zone near $38,000.

For now, stocks appear unconcerned with the dollar’s strength because enthusiasm surrounding A.I. technology remains extremely strong. However, if DXY continues to trend higher, it could eventually become a headwind for equities as well. Historically, a sustained DXY above 100 has not been friendly to risk assets. When QQQ peaked in March 2000, DXY was just beginning a larger breakout above 100. We also saw DXY bottom in 2021 before breaking above 100 in 2022, a move that coincided with a 37% decline in QQQ.

History suggests a strengthening dollar has often created challenges for growth stocks. Given how extended many technology names have become, particularly the memory stocks, a period of consolidation or correction would not be surprising.

DXY 3 Day Chart

MU Earnings

MU has been one of the market leaders throughout the year and one of the biggest beneficiaries of the current technology spending cycle. It reports earnings on Wednesday, and both the report and the market’s reaction to it will be extremely important. Fundamentally, the company remains very well positioned. Technically, however, the chart has become extremely stretched. That does not mean it cannot continue moving higher, but I am watching closely for signs that a larger retest may finally be approaching.

MU has now printed its third significant bearish divergence on the daily chart. Despite those warnings, remaining bullish has been the only profitable strategy so far. The stock regularly produces 10% up days, making shorting it simply because it appears extended a dangerous game. Earnings on Wednesday will answer the question: another leg higher, a short-term pullback, or the beginning of a larger correction that ultimately becomes an excellent long-term buying opportunity.

MU 3 Day Chart

SOFI Basing

One chart that has caught my attention right now is SOFI. For much of the last year, SOFI traded almost in lockstep with HOOD. HOOD recently broke out and delivered a strong move higher, rewarding traders who participated in several of the swing setups I highlighted. SOFI may now be setting up for a similar move.

The stock recently reclaimed its 100-week SMA after spending months below it following the April earnings gap down. During that period, it consolidated beneath the moving average before eventually closing above the large bearish earnings candle, creating a volume trap. Since then, SOFI filled its earnings gap, reclaimed the 100-week SMA, and is now battling with the 100-day SMA.

If it can reclaim and hold the 100-day SMA, a move toward $20 and potentially $22 near the 200-day SMA looks very possible. As long as SOFI remains above the 100-week SMA and the key pivot at $15.64, I like it as an accumulation candidate with the potential for a slow, steady grind higher. A break below $15.64 would invalidate the bullish thesis and force a reassessment of the chart.

SOFI Daily Chart

Tuesday’s price action gave us the retest that I was expecting, with the major indices and most of the key names I follow successfully holding their important support levels. However, Wednesday’s open and early price action started to flash some warning signs that more bearish price action was coming.

With the FOMC meeting scheduled for Wednesday afternoon, quadruple witching on Thursday, and the market closed on Friday, I decided to lock in gains at Wednesday’s open on most of the swing trades I entered on Friday.

Would it have been better if I had sold everything at Monday’s close? Of course. But nobody consistently sells the exact top, and there was nothing in Monday’s price action suggesting that the bullish momentum could not continue for a while longer. Wednesday morning’s action was the first meaningful signal that something had changed.

I sent out several messages early Wednesday morning, including the one below. If you’re not already a member of Real Life Trading Swing Trade Room, be sure to check it out. That is where I provide real-time market analysis, even more trade ideas, charts and risk management updates as price action unfolds.

There was simply too much risk heading into the FOMC meeting. Combined with the fact that price action was showing early signs of weakness and the possibility that the entire rally from last week was merely a B-wave bounce or bear flag, I had no interest in watching profitable positions turn into losses. Protecting gains was the priority.

I had no way of knowing the market would sell off following the FOMC meeting, but the setup was certainly there. Since my number one job is to mitigate risk, that is exactly what I chose to do. I always try to maintain the mindset that I can re-enter later once uncertainty clears, even if it means buying back at higher prices.

SPY Two Paths Forward

GOOGL: Managing Risk

Take GOOGL as an example. I have been waiting for a breakout above the massive resistance level at $374, and so far it continues to fail there. On Tuesday, the stock briefly pushed above that level before rejecting once again. Then Wednesday morning opened with a bearish gap and go, which prompted me to exit my position ahead of the FOMC announcement.

If GOOGL eventually gaps above $374 and confirms the breakout, I can always re-enter the trade, define a new risk profile, establish a new stop, and target higher levels. Until then, I expect continued sideways consolidation and the possibility of a breakdown that could provide an even better entry opportunity.

GOOGL Daily Chart

What FOMC Actually Told Us

The FOMC meeting delivered a lot for markets to digest. For me, one of the most important takeaways came when Kevin Warsh stated, “The Fed has missed inflation targets for five years, and we are going to fix that.”

That statement, combined with what we know about Warsh’s policy views, suggests he is positioning himself as someone willing to aggressively address inflation and its root causes. At a minimum, it signals a willingness to maintain a more restrictive monetary policy.

The bond market certainly took notice. The 2-year Treasury yield surged back toward 4.2%, effectively pricing in the possibility of two rate hikes. Earlier this year, markets were pricing in roughly two rate cuts!

We also saw the U.S. Dollar Index (DXY) rally higher into the critical $100 level, an area that has acted as major resistance for nearly a full year.

Historically, tighter monetary policy tends to strengthen the dollar. Higher interest rates increase Treasury yields, which attracts foreign capital into U.S. assets and increases demand for dollars. Additionally, if the Federal Reserve tightens policy more aggressively than other central banks, the widening yield differential tends to push DXY higher.

We saw exactly this dynamic during 2021 and 2022 as the Fed aggressively tightened policy and DXY surged.

While the Fed is not explicitly signaling rate hikes today, the fact that nine of the eighteen voting members now project at least one rate hike this year suggests that “higher for longer” remains the dominant policy stance for now.

DXY Daily Chart

One More Signal Worth Watching

One final signal that I have to point out is that the DIA versus SPY Divergence Indicator I have used to great success int the past triggered once again this week.

Historically, every occurrence of this signal has led to at least a 4.5% pullback in DIA. A move of that magnitude today would simply bring DIA back to last Wednesday’s lows. However, the majority of historical occurrences eventually saw DIA revisit its 100-day SMA or lower which would represent a much more meaningful correction and would align with the downside targets I outlined when this correction first began on June 5th.

If you want a deeper explanation of the indicator and its historical performance, be sure to check out my newsletter below where I break down my DIA versus SPY Divergence Indicator in detail.

DIA Daily Chart