My article from June 28 outlining the M-A-N-I-A trade was either a warning signal to heed or a case of that broken clock being right twice a day.
In this case, MANIA refers to these uber-popular stocks, all of which are among the biggest holdings of the iShares Semiconductor ETF (SOXX), which made quite a move earlier this year:
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Now, I don't make up narratives. I just look at a lot of charts using the great, time-saving, and effective way that Barchart presents them.
Here is how I closed that article less than three weeks ago:
From a purely objective charting perspective, the momentum indicators have entered a dangerous exhaustion window. The semiconductor sector has effectively carried the entire burden of keeping the cap-weighted averages out of the red this year. But when an index relies on a single, concentrated theme to sustain its entire performance, it is an accident waiting to happen. Make sure you have insurance.
What's the performance been like for these stocks in July? In a word, scattered. More recently, they are each having a mini-meltdown. Since that June 28 article published, and not including Thursday's drubbing, MU and INTC had each given back 20%. But NVDA resumed its market leadership position as part of the Magnificent 7, bouncing 10%. AVGO rallied 8%, and AMD gyrated in both directions. It gained 10% in just two days, gave back that rally and others, and through Wednesday's close was up 1.5% since June 28. "Nothing to see here, right?" Wrong.
There's a lot to see. SOXX, the exchange-traded fund (ETF) that has these five stocks at the top of its capitalization-weighted semiconductor index, allocates about 40% of its 30-stock portfolio to this handful of names. So the math is like this: 40% to five stocks (8% each on average) and 60% to 25 other stocks (2.4% each). MANIA has a lot to say about how the market's hot industry in 2026 is faring.
Source: Yahoo Finance Top News — This article was automatically imported from the source. Read full article at original source →
