Critical Week Ahead for Tech
Navigating the Semiconductor Crack and Magnificent Seven Bounce
The U.S. stock market closed a holiday-shortened week with gains across large-cap indices, sentiment was fueled by a cooler-than-expected June jobs report, which eased immediate fears of aggressive interest rate hikes and encouraged a rotation out of tech and into blue-chip companies.
The $Dow Jones(.DJI)$ reached a new all-time high, gaining 2.0% for the week, the $S&P 500(.SPX)$ rose 1.7% to close at 7,483.24, while the $NASDAQ 100(NDX)$ added 0.7%; our well expected decline in semiconductors kept the tech-heavy index underperforming.
The Federal Reserve, under new Chair Kevin Warsh, maintains a “higher-for-longer” stance. The federal funds rate remains in the target range of 3.50% to 3.75%, with the next FOMC meeting scheduled for July 28–29, 2026. Current market consensus leans toward a pause in July, and CME FedWatch data shows a roughly 33% probability of a 25-basis-point hike. Despite this, hawkish sentiment is rising; the June “dot plot” indicated that most officials expect rates to end 2026 higher than current levels to combat sticky inflation, which was recently reported at 4.2%.
Last week, I highlighted the high probability of a bearish move in semiconductors, including a bold call for $VanEck Semiconductor ETF(SMH)$ to fall to 587 for a -3.8% decline. That level was reached by Thursday 🎯.
I also warned of a bearish reversal for $Micron Technology(MU)$ when euphoria peaked immediately following its earnings report on June 24. In the same way, the bounce for the Magnificent Seven was considered as a serious possibility including a high probability bounce for $Microsoft(MSFT)$ to 388 (+3.4%) 🎯.
Six of the the magnificent Seven recovered their Central Weekly Levels (CWL), validating the bullish thesis. The only one that failed to recover its CWL was $NVIDIA(NVDA)$ , the semiconductor representative of the group.
Central Weekly Levels (CWL) are specific price points modeled and posted every Friday for the week ahead for all securities on our watchlist. These levels provide a clear advantage before the market opens on Monday, allowing you to plan your trades without the stress of assessing charts and distances in real time.
The Weekly Compass gathers these levels on Saturdays, analyzes the charts, and provides a blueprint of the week's setups in a single report, allowing you to comfortably formulate your trading plan and risk management strategy over the weekend.
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