Bullish Positioning Shaken Please click here for an enlarged chart of Direxion Daily Semiconductor Bull 3X ETF (NYSE:SOXL). Note the following: Semiconductors reflect the AI trade, and SOXL is the momo crowd’s favorite.
75% after opening below the low band of zone 3 and continuing to go lower during the day. The chart shows SOXL is attempting to bounce this morning but is still well below the low band of zone 3.
Investors should carefully watch today to see if SOXL can rally above the low band of zone 3. The chart shows that volume was heavy on the SOXL plunge.
If this interpretation is correct, there is more downside. Heavy volume indicates a clearing event, and thus indicates a temporary bottom.
However, when combined with the positioning, a sequence of over ten negative events, RSI, and forced selling due to margin calls in momo crowd accounts, there is a significantly higher probability that Friday was a clearing event, at least temporarily. For those who want to become exceptional investors, the foregoing is a great illustration of an important Wall Street secret.
Going forward, front and center are three earnings and results of the midterm elections. Here are the key earnings: Money has been flowing out of the AI trade and into Apple Inc (AAPL) stock as many investors see AAPL as a safe stock to weather the AI storm.
Advanced Micro Devices, Inc. We will be carefully analyzing AMD earnings to see if the issues are industry wide or Intel specific.
How PLTR stock and the AI react to Palantir earnings will be an important clue looking forward. This morning, oil is dropping like a rock and gold is seeing buying on a report that President Trump favors negotiations with Iran over striking Iran.
com, Inc. (NASDAQ:AMZN), Alphabet Inc Class C (NASDAQ:GOOG), Microsoft Corp (NASDAQ:MSFT), NVIDIA Corp (NASDAQ:NVDA), and Tesla Inc ((NASDAQ: TSLA).
In the early trade, money flows are neutral in Apple ((NASDAQ: AAPL) and Meta Platforms Inc ((NASDAQ: META). In the early trade, money flows are positive in SPDR S&P 500 ETF Trust (SPY) and Invesco QQQ Trust Series 1 (NASDAQ:QQQ).
The most popular ETF for oil is United States Oil ETF (USO). Bitcoin Bitcoin (CRYPTO: BTC) is range bound.
What To Do Now 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.
Most recently, we correctly called the rally from recent stock market lows and the 2026 semiconductor decline before a 25% drop in the Semiconductor ETF (SMH). In gold, we bought at an average price near $1,105, close to cycle lows, and took partial profits near $5,400, close to cycle highs.
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