Daily Market Report: Levered Unwind Continues
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Analysis by Alex King, CEO, Cestrian Capital Research, Inc.
Chips are back up in pre-market trading. We can think about a bounce here but since so much of the inflow to memory stocks was either directly or in sympathy with the boom in South Korean equities - remember SK Hynix and Samsung represent some 50pc of the KOSPI index - then we also have to think about the very thin volume in equity futures there. Because it implies not very much support for quite some way down yet!
As always we have to go ticker by ticker and not assume that because index A is doing this, then stock B will do that. So let’s get started for the week.
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Now, to work. Below we analyze the S&P500, Nasdaq, Dow, crypto, bonds, gold, oil, key sectors and more.
US Government Bond Outlook
Absent a cessation of hostilities in the Gulf or easing by the Fed, yields are going to hover up here awhile.
Longer-Term Treasury Bonds (TLT / TMF)
Hardly any volume in TLT since the 2020 highs, save in that $85-$95 accumulation zone.
That .786 retrace continues to hold.
25Yr Zero-Coupon UST ETF - ZROZ
As does the .886 for $ZROZ.
Commodities Outlook
Gold
Support continuing to prove out around $4000 I think.
Disclosure: I am long $MAI and long $GLD.
Oil (USO / WTI / UCO)
This 50-day SMA is a good test of whether there is a to be a resolution between the physical oil market (short supply) and the financial oil market (prices under control).
Resistance at the 50-day SMA.
2x Levered Long (UCO) / Short (SCO)
Note - Leveraged ETFs. Read the fund documentation if you are considering using these instruments.
UCO right at its 50-day SMA too.
Disclosure: I am long $OBE, and $JOY.TO
Crypto Outlook
Bitcoin
I don’t suppose anyone outside the True Believers is likely to notice, but that is an actual price recovery going on in BTC at present. The 200-day SMA is overhead at $72k and likely provides formidable resistance.
Ether
Also a solid recovery pattern. Expect resistance at $2000.
Disclosure: I am long $ETHA, $ETHT, $SBET, $BMNR.
US Equities Outlook
Equity Volatility
Carnage in high beta names has not made its way to the SPX.
Disclosure: Long Vix $17 strike calls for December.
S&P500 / SPY / UPRO
The weakness continues; until there is a new ATH it is prudent to assume that rips will be sold.
Well, the topside breakout failed but the rising support line held. Bullish for now. Must reclaim the 21-day EMA to confirm.
3x Levered Long / Short ETF - UPRO, SPXU
Note - Leveraged ETF. Read the fund documentation if you are considering using this instrument.
If I had to guess it would be that we are going to see a bounce in UPRO from here, because that upward-sloping support line is holding well even in the face of provocation.
Nasdaq-100 / QQQ / TQQQ
June to July have seen most of May’s gains eroded. Any run up from here that fails to make a new ATH is going to see some selling by the tourists.
That remains a breakdown in the Nasdaq.
Levered Nasdaq - TQQQ Long / SQQQ Short
Note - Leveraged ETFs. Read the fund documentation if you are considering using these instruments.
Dow Jones / DIA / UDOW
The path to $582 on the DIA continues.
Back over the 21-day EMA for now.
3x Levered Dow - UDOW Long / SDOW Short
Note - Leveraged ETFs. Read the fund documentation if you are considering using these instruments.
Disclosure - I am long $SDOW, with a stop that will execute should the Dow make a new ATH.
Sector Rotation
If the levered unwind in SOXL (US) and South Korean index holdings (SK) slows, we may see a real bounce in semiconductor. Friday looks like it may have been the lows; a big gap down bought back up all day, on a big volume spike.
Disclosure: I am long $SOXL.
International Equity Indices
$EWY bounced at the .382 retrace of the move up from the 2023 lows to the June highs; a 30% drop from those highs. Given the stories of how many retail investors have been hit with margin calls in this market, it would be entirely unsurprising to now see it move back up with conviction!
If you want to take advantage of international markets, take a look at our global ETF rotation service, here.
DISCLOSURE - I’m long country ETFs per our SignalFlow Global service.
Alex King, Cestrian Capital Research, Inc - 20 July 2026.