Froth Flushes, Tech Rolls Over, The Bull's First Real Test
Weekly Outlook 06/08/26
Market Recap
The nine-week winning streak ended, and it ended hard. The S&P 500 dropped roughly 2.8% on the week and the Nasdaq logged its worst week since the April 2025 tariff shock. We opened at record highs and closed in a tech-led rout, a clean character change from the grind we’d been riding for two months.
The tell was there early. Coming off last week’s $DELL gap and the software rally, froth was already building, and the open made it obvious. Monday, $IBM ripped almost 20% in the overnight session off an old Trump video clip talking up the stock, then bled lower the rest of the week. $MRVL surged 25% after Jensen called it a potential trillion-dollar company at Computex.
$HPE jumped 25% on a beat and raised guidance as traders ran the $DELL playbook straight into it, before it faded back to nearly fill its earnings gap.
When names are running 20 to 25% on a clip or a comment rather than the fundamentals, that is chasing, and that flavour of euphoria tends to mark a short-term top.
The indices still printed fresh highs into the froth. The S&P closed above 7,600 for the first time on Tuesday at 7,609, and the Dow tagged a new all-time intraday high. That was the peak.
Then it started. $GOOGL slid nearly 4% on news of an $80B stock sale to fund its AI buildout, and $AVGO led the chip selloff after earnings disappointed, dragging the whole semiconductor complex lower in afterhours.
Friday was the real crack, as the former undisputed leaders SNDK 0.00%↑ MU 0.00%↑ rolled over, and once they went, the rest of the tape followed them down.
The semiconductor ETF $SOXX closed the week down 10%, and South Korea's $EWY, levered hard to the global chip trade, finished down 14%.
Watchlist
This is shaping up to be more of a macro week - with volatility picking back up, the focus shifts off individual stock charts and onto the indices and big tech, since they drove the selloff and they will lead whichever way we resolve from here.
Indices / Big Tech
I posted a full study on X of every QQQ -4% drop, and it’s worth reading here:
The short version: the two windows that rhyme most closely with where we sit now are January 2000 and the summer 2020 pullback, both strong uptrend regimes that absorbed a hard -4% hit without it being the end of the rally.
$QQQ / $SPY | In both analogs, price went on to make new highs roughly a month later, but it took a few weeks of chop to work out the volatility before the clean uptrend resumed. For that read to hold, I want the 50sma to hold as support. Lose it and the analog weakens.
Monday open | Much of the gameplan keys off where we open. The further we gap down, the higher the odds of a snapback rally. A flattish open gives less of an edge either way.
Korea / Semis
The epicentre of the damage, and the cleanest tell for whether the AI trade stabilises or keeps bleeding.
$EWY | Down 14% on the week. Korea is a heavy player in the AI trade, so the KOSPI futures open Sunday night is an early read on risk appetite before the US even gets going.
$SOXX / $SOXL | $MU / $SNDK | Semis and memory names that trade similarly with Korea, all part of the same trade. Watching them as confirmation alongside the KOSPI.
Crypto
Crypto has been one of the weakest assets in the complex since the ceasefire rally began, drifting sideways for two months while stocks went vertical. The moment broad weakness showed up, it broke.
$BTC / $ETH | Both printed fresh lows last week. However, BTC seems to be holding the prior low of $60,000 for now. Time will tell whether that is a lasting bottom.
MSTR 0.00%↑ $BMNR | Crypto treasury stocks were also in focus last week as BMNR adopted a similar preferred shares offering, similar to Strategy. MSTR also sold Bitcoin for the first time in many years, prompting some to question if they would sell further.
Metals
Metals also broke some key levels on Friday.
$GLD | Broke its 200ma for the first time in three years, with GC futures cracking earlier. A genuine character change in a higher timeframe trend.
$SLV | The high-beta metal, broke down in sympathy.
$GDX | Also lost its 200ma, but left a clean consolidation range to trade from.
Volatility
$VIX / $VXX | The VIX spiked almost 40% Friday, jumping out of low territory to a 21.50 reading. The question this week is whether that vol sustains and feeds further downside, or bleeds off as the market digests.
SpaceX IPO
$SPCX | The SpaceX listing prices Friday, the biggest IPO of all time. Regardless of how the broader tape trades, an event this size should throw off plenty of opportunity.
Closing Thoughts
This was a week where situational awareness of the market’s subtler shifts paid off. The early froth was a tell, and I had already started to talk about some attractice tactical short ideas on Wednesday. When the Nasdaq and semis reversed and the technical structure broke down Thursday into Friday, I came in with minimal long exposure and a short bias already built, positioned to capture the move down rather than wear it. The shorts kept the portfolio at highs with minimal drawdown, now ready for whatever sets up next instead of digging out of a hole.
Zooming out, the regime may be shifting. We’ve had an easy two-month grind, low volatility, swing longs and breakouts paying out in textbook easy-money conditions. That kind of environment never lasts forever, and it may need to take a breather for a few weeks while this pullback works itself out. We’re also heading into the summer months, which historically tend to run slower and choppier.
The play from here is to stay nimble and open-minded without losing sight of the bigger picture. For all the damage, this is still the first real pullback of an exceptionally strong trend, and that trend is a long way from being proven broken. Respect the volatility, trade smaller and faster while it’s elevated, and let the market show its hand before betting on which way it resolves.
If you enjoyed this read, please consider leaving a like on the post, and let me know in the comments if I missed anything or what you’re watching for this week!
P.S.
If you haven’t checked out the Valhalla Portal yet, it’s where I track catalysts, setups, and market activity in real time - a live feed of everything that moves the tape, built for the community. I’ll be doing a dedicated post soon walking through all the features in detail, so stay tuned for that. In the meantime, you can check it out here: