r/options
Specs were already net short the Nasdaq at a 1-year extreme before Tuesday's crash.
Specs were heavily short Nasdaq and VIX before Tuesday's crash, driven by Korea selloff and Fed hike signals, not just MU earnings.
- Large speculators were already net short Nasdaq at a 1-year extreme.
- Insiders were trimming positions, with NVDA insiders selling $40M in a single day.
- Macro headwinds including Korea selloff and Fed flipping to a hike signal.
Found this digging around in the COT data. Going into Tuesday (KOSPI −9.99%, MU −13%, SK Hynix −12.5%) the big speculators were already net short Nasdaq futures at the 5th percentile of the past year. They'd been short for like two months while the index kept making highs.
Funny part: the same crowd was also net short VIX, basically betting on calm. So they got the direction right and the vol completely wrong. Short the index and short the insurance at the same time.
Insiders were trimming too. NVDA had 5 insiders sell $40M on a single day (6/17), including Huang and the CFO, though that's probably just a scheduled 10b5-1 thing.
Anyway the move wasn't even a Micron miss, MU reported the next day. It was the Korea selloff plus the Fed flipping to a hike signal on the 17th.
SOXX will crash, it is propped up by retail maxing out margins and taking personal loans, selling other assets, etc - it's the top my friends
maybe it will be flat with huge volatility til september when the first fed hike comes, also a hyperscaler will say it's time time to decrease capex and semis go back to at least january levels but probably lower
big ol nothin burger
If you look at SOXX using any of a variety of analysis tools, the turn south came last week while it was still going sideways.
SOXX was already diverging while price was still flat. Momentum had left the building before the headline gave everyone a reason to sell.