[Chart courtesy of MarketWatch.com]
- Moving the market
U.S. stocks started off on shaky footing as the chip rally quickly ran out of steam. After a strong bounce the day before, semiconductor names lost momentum, and the dip in oil prices wasn’t enough to keep the broader market afloat.
The iShares Semiconductor ETF slipped 1.4% after Monday’s impressive 6% rebound. Micron gave back 1.8%, coming off a sharp 10% recovery the previous session. That follows a brutal stretch last week, where the stock plunged about 20% in just two days—including a 13% drop on Friday alone.
Earlier, markets had caught a tailwind from falling energy prices, as investors hoped tensions in the Middle East might ease. Iran paused its strikes against Israel but made it clear it could resume if Israeli operations in Lebanon continue.
Not long after, Israel signaled the situation is far from resolved. In other words, the headline-driven back-and-forth isn’t going anywhere anytime soon.
While AI and chip stocks have been the main drivers lately, it’s fair to wonder how much longer that theme can keep carrying the market. By the closing bell, Monday’s bounce had clearly lost its energy. Still, the major indexes managed to climb off their intraday lows, with the Dow even squeezing out a small gain.
One ongoing challenge for the market is this tug-of-war between good economic news and its side effects. Stronger data—like improvements in housing—can actually pressure stocks by fueling expectations for higher interest rates, which isn’t exactly friendly territory for already expensive valuations.
Bond yields edged lower during the session, helping stocks recover somewhat. The dollar bounced around but ultimately finished a bit weaker. Even so, gold didn’t benefit this time, as liquidity needs once again took priority, pushing both gold and bitcoin lower.
Despite the choppiness, this didn’t feel like a full shift into “risk-off” mode—but one thing stood out: dip buyers were noticeably missing in action.
So, the question is: if buyers aren’t stepping in on pullbacks, who’s going to keep this market propped up?
2. Current domestic “Buy” Cycle (effective 5/20/2025); International “Buy” Cycle (effective 5/8/25)
Our domestic bullish cycle that began on November 21, 2023, concluded on April 3, 2025, following a market downturn triggered by President Trump’s tariff policy announcement.
This development caused significant declines across major indexes and broader market indices. However, markets subsequently rebounded, culminating in a new domestic “Buy” signal taking effect May 20, 2025.
Concurrently, our International Trend Tracking Index (TTI) experienced parallel volatility. On April 4, 2025, it breached critical thresholds, prompting a “Sell” recommendation. This position reversed as global markets recovered, with the International TTI regaining sufficient momentum to issue a new “Buy” signal effective May 8, 2025.
3. Trend Tracking Indexes (TTIs)
The markets got off to a strong start, but that momentum didn’t last long. Early gains quickly faded, sending the major indexes into negative territory.
Around midday, buyers stepped back in and helped trim the losses, even nudging the Dow back above the flat line for a bit. Still, the Nasdaq took the biggest hit and lagged the rest.
The metals sector followed a similar path, heading lower overall. Copper was the lone exception, holding onto its early gains while the rest drifted south.
As for our TTIs, they moved in opposite directions. The international index mostly spun its wheels, showing little change, while the domestic index turned in a solid gain.
This is how we closed 06/09/2026:
Domestic TTI: +7.40% above its M/A (prior close +6.59%)—Buy signal effective 5/20/25.
International TTI: +7.73% above its M/A (prior close +7.74%)—Buy signal effective 5/8/25.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
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