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SUMMARY
Amit Kukreja and guest analysts provided an in-depth review of market action on July 28, focusing on major earnings reports from companies such as Bloom Energy, Visa, Enphase, Seagate, and Ford, alongside technical analysis of leading tech and semiconductor stocks. The discussion covered macroeconomic headwinds, sector rotations, and the impact of recent geopolitical and policy developments on market sentiment and positioning.
MAIN POINTS
- Semiconductor stocks continue to decline, with SMH marking its longest losing streak since December, while defensive names like Philip Morris and Coca-Cola hit all-time highs.
- The Trump administration announces moves to spare space companies from environmental reviews and plans to ban Chinese humanoid robot imports, with limited immediate market impact.
- Sam Altman's comments about a potential compute supply glut spark market concerns, adding to the negative sentiment in tech and AI-related stocks.
- Earnings anticipation builds for Bloom Energy, Seagate, Enphase, and Visa, with market participants speculating on which will outperform amid a challenging macro backdrop.
- Bloom Energy reports a significant earnings beat, with EPS up 680% and revenue up 165% year-over-year, while Seagate and Visa also post strong results.
- Seagate's earnings and guidance impress, with record free cash flow and strong gross margins, leading to positive after-hours moves in memory stocks.
- NXP Semiconductors beats on revenue and EPS but still sees its stock decline, highlighting the market's cautious stance on semis despite strong fundamentals.
- KAC (semiconductor equipment) posts beats on EPS and revenue but drops 8% after hours, as guidance fails to excite investors amid sector-wide drawdowns.
- A summary of earnings shows Bloom, Seagate, and Ford outperforming, while Visa and KAC face muted or negative reactions; attention shifts to upcoming technical analysis.
- Technical analysis of the S&P 500 and QQQ reveals heavy price action, with potential for further downside but also the possibility of a short-term bounce around FOMC.
- Discussion centers on the consensus AI trade, market deleveraging, and the risks of being fully invested at market highs, with caution advised ahead of key events.
- Short-term trading strategies are debated, with a focus on using key technical levels as pivots and the importance of patience amid heightened volatility.
- Options strategies shift from selling calls to selling puts as the market appears extended to the downside, especially in AI and tech sectors.
- Pterodine's strong earnings and Reuters headlines on Iran-US negotiations are noted, while oil's sharp decline is discussed in relation to broader market moves.
- Micron's technical setup is analyzed, with support at 791 and resistance at 950, but concerns remain about the strength of support and potential for further declines.
- Nebius and Coreweave are reviewed, showing high volatility and large percentage moves, with recommendations to wait for clearer signals before adding positions.
- Rocket Lab and other high-beta names are expected to trade sideways, with selling premium suggested as a preferred strategy in the current environment.
- Palantir's broadening formation and resistance at 135 are discussed, with caution urged until a decisive breakout occurs.
- Tesla's sentiment deteriorates amid unmet promises and declining earnings growth, with technical support at 290-300 and risk of a sharp move lower if broken.
- Corning's drawdown is attributed to multiple compression rather than poor execution, reflecting a broader trend in AI and semiconductor stocks.
- Google's post-earnings technicals show support at 315 and resistance at 340, with potential for sideways movement in the near term.
- The challenge of recovering from large drawdowns is highlighted, with the math of percentage losses and required gains discussed in the context of AI and memory stocks.
- ASML's sharp intraday decline is used to illustrate the impact of risk repricing and the lack of risk discount in high-multiple tech stocks.
- Microsoft and Meta are analyzed ahead of earnings, with technical resistance levels identified and expectations for volatility around FOMC.
- AMD and Nvidia are reviewed, both sitting on support, with Nvidia expected to benefit from the upcoming earnings cycle of the Magnificent Seven.
- Zeta and Qualcomm are discussed as potential post-earnings movers, with Qualcomm seen as having removed much of its data center premium.
- SK Hynix's earnings miss triggers a sharp after-hours selloff in memory stocks, raising questions about the sustainability of the memory trade and the impact of leverage.
- The implications of SK Hynix's miss are debated, with concerns about the commodity nature of memory and the risks of high leverage in the sector.
- A broader discussion unfolds about whether capex spenders and beneficiaries can rally together, with skepticism about the sustainability of simultaneous gains.
- Amit's bearish rant is humorously noted as a potential contrarian bottom signal for memory stocks, while the cyclical and commodity nature of the sector is reiterated.
- Attention shifts to non-tech trades, with gold miners (GDX) identified as a short opportunity amid expectations for higher oil and a topped gold market.
- Bitcoin's technicals are reviewed, with support holding but a potential dip to the 50,000s possible before a move higher.
- Market participants prepare for a volatile FOMC day, with expectations for a roller coaster of moves and the importance of position sizing and patience emphasized.
DETAILED ANALYSIS
The July 28 market close session was marked by heightened volatility, sector rotation, and a series of pivotal earnings reports that shaped sentiment across technology, semiconductor, and high-beta growth stocks. The session opened with a discussion of the ongoing selloff in semiconductors, as the SMH ETF recorded its longest losing streak since December. Defensive, low-beta names such as Philip Morris, Coca-Cola, and Johnson & Johnson reached all-time highs, signaling a shift in investor preference toward stability amid macroeconomic uncertainty and concerns over further Federal Reserve rate hikes.
Geopolitical developments added to the complex backdrop. The Trump administration's moves to exempt space companies from environmental reviews and to ban Chinese humanoid robot imports were seen as incremental rather than transformative for the affected sectors. The potential for a new US-Iran agreement, reported by multiple sources, provided a glimmer of hope for reduced geopolitical risk, but no definitive resolution was reached during the session.
A key theme was the fragility of the AI and semiconductor trade. Sam Altman's remarks about a possible compute supply glut, amplified by media headlines, contributed to negative sentiment and underscored the market's sensitivity to any suggestion of oversupply in high-growth sectors. This was compounded by Gavin Baker's analysis attributing the recent semiconductor selloff to concerns over hyperscaler debt and widening credit spreads, as well as the risk of overleveraging in data center buildouts.
Earnings season brought both relief and disappointment. Bloom Energy delivered a standout quarter, with EPS up 680% and revenue up 165% year-over-year, far surpassing consensus estimates. Seagate also posted strong results, including a 120% increase in EPS and robust free cash flow, which helped lift related memory stocks such as Western Digital and Micron in after-hours trading.
Visa and Ford reported solid beats, though their stock reactions were muted, reflecting broader market caution. In contrast, KAC, a semiconductor equipment firm, fell sharply after hours despite beating on both revenue and EPS, as its guidance failed to meet elevated expectations. This pattern of strong fundamentals being overshadowed by macro or sector-wide concerns was evident across several names, including NXP Semiconductors, which declined despite double-digit growth in both revenue and earnings.
Technical analysis played a central role in navigating the volatility. The S&P 500 and QQQ were described as 'heavy,' with key support levels identified at 734 for SPY and 627 for QQQ. The risk of a further breakdown was balanced by the possibility of a short-term bounce, particularly around the upcoming FOMC meeting.
The consensus among analysts was to exercise caution, avoid adding aggressively to positions, and consider selling premium—either calls or puts—depending on the sector and prevailing sentiment. The AI trade, once a consensus long, was now viewed as overextended, with many participants likely overleveraged at the highs and now forced to reduce risk.
Individual stock analysis highlighted the challenges of timing entries and exits in a volatile environment. Micron, for example, was noted to be down 35% from its highs but still not at a 'deep discount' when viewed on a longer-term chart. Support at 791 and resistance at 950 were identified, but the lack of strong support and the risk of further downside made aggressive buying unattractive.
Similar caution was advised for Nebius, Coreweave, and Rocket Lab, all of which exhibited high volatility and the potential for further declines or prolonged sideways action. Selling short-term puts or put credit spreads was recommended as a way to generate income without requiring a sustained rally.
The discussion also addressed the psychological impact of large drawdowns, particularly in high-beta and AI-related stocks. The mathematics of recovery from 50% or 75% losses were reviewed, emphasizing the difficulty of regaining previous highs and the need for realistic expectations. The cyclical and commodity-like nature of the memory sector was underscored by the reaction to SK Hynix's earnings miss, which triggered a sharp after-hours selloff across memory names.
The miss, though not catastrophic in absolute terms, was significant in the context of high leverage and elevated expectations, leading to concerns about the sustainability of the memory trade and the risk of further forced selling.
Broader market dynamics were explored, including the relationship between capex spenders (the hyperscalers) and capex beneficiaries (semiconductor and infrastructure suppliers). Skepticism was expressed about the ability of both groups to rally simultaneously, given the likelihood that increased free cash flow at the hyperscalers would eventually lead to reduced spending and pressure on suppliers. The conversation also touched on the importance of distinguishing between trades based on temporary bottlenecks and long-term investments in companies with durable moats, such as Nvidia.
Non-tech trades were briefly discussed, with gold miners (GDX) identified as a short opportunity amid expectations for higher oil prices and a topped gold market. Bitcoin's technicals were reviewed, with support holding but a potential dip to the 50,000s possible before a move higher. The session concluded with a look ahead to the FOMC meeting, where a roller coaster of volatility was anticipated, and the importance of position sizing, patience, and adaptability was emphasized.
Throughout the session, the analysts stressed the need for discipline in the face of uncertainty, the value of waiting for clearer signals before making large commitments, and the importance of understanding both the technical and fundamental drivers of market moves. The interplay between earnings, macroeconomic developments, and technical levels created a challenging environment, but also one ripe with opportunity for those able to navigate the volatility with a clear plan and a steady hand.
LINKS
- Amit Kukreja's Twitter/X profile for market commentary and updates.
- Amit's Deep Dives Substack for in-depth stock and market analysis.
- Free news terminal and market data resource.