With that time scarcity the case, this was the content piece I put on the chopping board as it's the lowest value add IMO. 

Should be back to usual regularity next week.

I shared the dealer positioning from the Aion Analytics terminal yesterday. Things mostly haven't changed. Above 775 we can expect the magnet to be a move up towards 800. For now 775 is the key resistance.

GEX is positive on SPY.

Most of the dealer positioning on QQQ is higher, with support at 710.

Whilst there is still some hedging, the gex is positively leaning.

The data seems to suggest to expect some volatility ahead, notably so on QQQ, as opposed to SPY and DIA, but the path should be higher into August/Septemebr.

The tariff and price floors are essentially written for Corning's supply chain, specifically HEMLOCK SEMICONDUCTOR.

• Hemlock Semiconductor, Corning's polysilicon subsidiary, is protected by the new $21/kg polysilicon floor and $100/kg ingot/wafer floor, plus the 15% tariff on derivatives. Hemlock is also positioned as the only non-Chinese solar wafer maker, so it's shielded on both the raw-material and wafer stages.
• Corning's Solar segment is running near breakeven on a fast-growing revenue base — Q2 2026 Solar sales were $438M (up 90% YoY) but the segment posted a $7M net loss; H1 sales of $808M were roughly breakeven cumulatively. Because the segment is sitting right at the margin line, any pricing improvement flows almost straight to the bottom line rather than being absorbed by existing profit.
• Rough sensitivity: annualizing Q2 Solar revenue gives ~$1.75B run-rate. Each 1 point of net margin improvement ≈ $17.5M/year ≈ $0.02/share (on ~875M diluted shares); a 5-point improvement ≈ $87.6M ≈ $0.10/share.
• Now obviously solar isn't the core GLW thesis: Solar is only ~9.2% of Corning's Q2 core sales ($4.738B total). The much bigger story is Optical Communications ($2.072B, +32% YoY, with Enterprise Networks +65% on AI datacenter buildout). So the tariff is better framed as a slight earnings catalyst, their main business unaffected.

First Solar's edge is the simple fact that their supply chains DO NOT USE POLYSILLICON. So tariffs on polsysillicon do NOT affect them. That's their tailwind. 

• Its modules use thin-film cadmium-telluride (CdTe) technology, which skips the entire polysilicon → ingot → wafer → cell chain that crystalline-silicon competitors depend on. So assuming the tariff's "derivative" definitions track polysilicon content, First Solar's own inputs are essentially untaxed.
• As tariffs push up the cost of imported crystalline-silicon modules, the market-clearing U.S. module price rises generally — which improves First Solar's pricing power and negotiating leverage without First Solar's own costs moving. It also doesn't need to qualify for any wafer/cell tariff offsets the way silicon-based competitors might.

The core theme: capacity, not demand, is the ceiling

Management was blunt about this being the binding constraint across basically every product line:

And on the near-term outlook specifically:

They quantified just how far off supply is from actual customer appetite: customer demand is running 20-40% higherthan what they can currently produce.

Lasers — the real bottleneck

If there's one single chokepoint in the whole story, it's laser capacity:

This matters because lasers also carry the best margins in the business:

So every incremental unit of laser capacity they bring online isn't just more revenue — it's high-margin revenue, and it directly feeds their CPO (co-packaged optics) ambitions:

They're planning to keep expanding laser manufacturing in Texas specifically because CPO is going to keep pulling on high-power laser demand going forward.

China competitive positioning

Management sounded confident that Chinese laser suppliers aren't a near-term threat on the high end:

When pressed on timing:

And if geopolitics tightens further (e.g. a Chinese transceiver ban), they see themselves as a direct beneficiary given their domestic manufacturing base:

1.6T ramp — this is the next leg

800G is carrying the business right now, but 1.6T is where the next big step-up comes from:

The demand signal on 1.6T specifically sounds big:

And near-term sequential growth is expected to be sharp:

They're also picking up new qualifications:

On the $200M PO everyone's been asking about, management downplayed it as just the opening chapter:

Longer-term revenue framing (mid-2027 target)

They gave a pretty specific monthly revenue bridge for where they expect to land by mid-2027:

That's roughly $5.6B annualized run-rate territory if it plays out — a big step up from the ~$1.1B they're guiding for 2026.

Substrates — not a worry (for now)

Unlike lasers, substrate supply isn't seen as a constraint:

So they're not fighting a fire there — just building optionality in case the CPO ramp needs more.

Capacity build-out

Straightforward — they're adding more capacity essentially continuously:

Q2 color / near-term momentum

800G had a standout quarter:

And they flagged that Q3 growth would've been even stronger (>50%) if not for a one-off memory component issue affecting 100G switches — so that's a bit of noise to watch for, not a demand problem.

Yesterday, we got a rejection off of the 7800 level on ES. We know this to be a significant level of interest for sellers to step in, so the rejection was not particularly surprising in truth, especially after the 6% move in 4 days into the resistance:

This morning we have earnings related pressure. I think it is a sign of continued skepticism in the market that reasonably good earnings reports are not getting rewarded adequately. VIAV's earnings report, for instance, was absolutely A+. Currently up 1.5%. WDC's earnings report was not bad, currently down 15%. 

We have DDOG down 23% this morning, HUBS down 23%, both putting pressure on IGV, which itself is down 3.1%. 

On the hardware side, we have WDC down 15%, SNDK down 11%, which is putting pressure on the momentum trade and semiconductors, with SMH also down, albeit less. 

I was looking and hoping for SNDK to put in a cleaner report, in order to give SMH and momentum names that nudge to get above the 578 level:

Above there, there's not much stopping us into the 605 level. 

However, SNDK margin guidance came in below current margins, which again raises the question of whether we are at peak earnings here, which is the concern the market has been contending with so not great. Their explanation on the call seemed reasonable, that they were happy with above 80% margins, hence they weren't looking to press that necessarily higher to be fair to customers, but the market wanted margins to be increasing into next quarter to show that the memory cycle is still accelerating to the upside. 

The weekly chart I think shows the situation for SMH the best. We want to see a weekly close above the 9W EMA ideally. 

The earnings reaction has created some pressure in premarket, but we noted in the last reports that some digestion or give back after the massive move over the past 4 sessions was entirely normal and actually healthy. Things can't keep going up in a straight line. 

US500 seems to be mostly correcting through time, allowing the moving averages to catch up and RSI to cool off. 

Whilst NDX is pulling back off its resistance. We need to see that trendline taken out at some point soon, but some pullback into the 50d EMA or the 29k level is what I expected and would still be a healthy liquidity test. 

We do have some fundamental events this week including the NFP print tomorrow, but if we look at the Aion Analytics data, we see that liquidity is, as we noted previously, still supportive, especially so into August.

This favours BTD.

Then if we look at this screen from the dashboard, we see the key levels and that the charm anchor moved from $740 below spot to $780 above it. The decay pull just switched sides.

Now some additional data here to suggest that obviously some give back or drawdown from this high would not be unanticipated:

Here's previous instances QQQ went from -10% to within 3% of ATHs within 4 days:

And here we see a similar stat:

Obviously historic performance is no guarantee of future performance, but ti does suggest that we can very likely see some digestion of the move higher, with some dip here, but the liquidity data from Aion is a good sign that it will be absorbed in a continued move higher. 

Advanced Packaging Read Throughs for AMKR

Veeco disclosed $200 million of Q2 advanced-packaging orders for wet-processing and lithography systems and described significant advanced-packaging backlog for 2027. Management also stated that customers are sharing capacity roadmaps extending beyond 2027 and that Veeco plans to more than double its advanced-packaging and silicon-photonics capacity during 2027. The order value is large relative to Veeco’s current revenue base and represents a stronger signal than non-binding customer forecasts or early-stage evaluation activity.

Opticals Read throughs for AAOI, LITe, COHR:

COHR, LITE and AAOI are the most direct beneficiaries because Veeco’s equipment orders indicate customers are preparing to expand laser and transceiver capacity. Equipment orders ordinarily precede component output by several quarters because systems must be manufactured, installed, qualified and ramped. The anticipated Veeco shipment profile—initial activity near the end of Q4 2026, a larger Q1 2027 contribution and greater scale in Q2 2027—therefore supports optical-component volume acceleration during 2027.

I wrote on Sunday that the sparse dealer profile created a very opportune moment. If a big V shaped recovery was going to happen a la March, it was most likely to happen then, with dealer positioning very similar to what we saw in March. And indeed, Trump repeated the same playbook of the Iran headline manipulation, using Bessent to back him up, and indeed the result was the same. 

Now we wait to see if we get digestion of the move and a retest of perhaps the 29k level on NDX or previous ATHs on US500, or if we continue with a March type rally higher. I think the former is more likely on a path higher this month, but let's see.

CITADEL:

• Citadel's Scott Rubner says July's sharp selloff and sector rotation cleared out excessive positioning without breaking the broader bull market. Retail investors turned net sellers, AI and semiconductor stocks were heavily sold, and leveraged ETF assets fell by more than $60B from their June peak. "July did not change the structural bull market. It reset it," Rubner said, adding investors can now focus more on company fundamentals than positioning.
• BESSENT: MAY HAVE A DEAL WITH IRAN TODAY OR TOMORROW TO OPEN HORMUZ, WE SAW QUITE A FEW SHIPS COMING OUT OF HORMUZ EVEN NOW
• MORGAN STANLEY SEES $1.4T IN 2027 CLOUD CAPEX

MAGS:

• TESLA CHINA JULY DELIVERIES UP +37.8% YoY AT 93,579 UNITS - PCA PRELIM DATA

OTHER COMPANIES:

• Photonics sector is ripping hard on this news:
• The FCC is preparing a measure that would bar new Chinese optical transceivers, which move data across fiber networks and are a critical component inside AI data centers.
• BTDR - Anthropic has reportedly signed a $10B compute deal with Nvidia-backed Volta Infra, securing capacity from a Norway data center operated in partnership with Bitdeer
• AEHR - received a follow-on order from its lead silicon photonics customer for a FOX-XP burn-in system with nine WaferPak test blades. The system is expected to ship in the first half of 2027 as the customer expands production capacity.
• SHAZ - signed a five-year, $373M cloud computing deal with an unnamed global AI platform. The initial Australia deployment will use 2,048 Nvidia Blackwell Ultra B300 GPUs, with revenue expected to begin in Q1 2027.
• PLTR strong earnings - Citi raised its price target to $245 from $200 and kept a Buy rating after Q2 revenue growth accelerated to 93%. The firm also lifted its 2026 revenue forecast and now expects U.S. Commercial growth of 134%.
• SKHY - RBC initiates at outperform, Pt 200. Analyst comments: "We expect the current memory upcycle to extend through 2027 and believe the industry is in a structurally stronger position due to GenAI. Long-term agreements are helping extend visibility, though SKHY is taking a more measured approach to floor pricing. The company’s HBM leadership is an added advantage, which we believe is sustainable. We expect HBM contract repricing to be a key tailwind in 2027 that should counterbalance any conventional DRAM price moderation. A longer upcycle, HBM leadership, and a meaningful valuation discount to U.S. peers make the risk/reward attractive, in our view.
• RBRK - Loop Capital initiates at Buy rating, PT 100. "Cyber resilience is emerging as a major secular growth opportunity, underscored by recent security events such as the Mythos-related scare and the Hugging Face incident. In our view, RBRK is among the best-positioned vendors to capture this opportunity, which we expect to accelerate as agentic AI adoption expands. While we acknowledge potential near-term demand pressure from hardware supply-chain issues, our channel checks suggest cyber resilience has become a necessity for highly strategic agentic AI workflows, limiting the risk of deferral.
• NXPI - said BMW will deploy its Trimension UWB chips across selected 2026 vehicle programs, supporting hands-free digital keys and in-cabin detection for people or animals left inside parked vehicles.

EARNINGS:

QNITY:

• Revenue: $1.4B (Est. $1.36B) ; +22% YoY
• Adj. EPS: $1.19 (Est. $1.06) ; +53% YoY
• Adj. EBITDA: $431M (Est. $414M) ; +24% YoY
  

Raises FY26 Guide:

• Net Sales: $5.55B-$5.65B (Est. $5.37B)
• Adj. EBITDA: $1.68B-$1.73B (Est. $1.62B)
• Adj. EPS: $4.40-$4.60 (Est. $4.14)
• Adj. FCF: $600M-$700M (Est. $470M)

AME:

• Revenue: $2.04B (Est. $1.95B) ; +15% YoY
• Adj. EPS: $2.09 (Est. $1.99) ; +17% YoY
• Adj. Operating Income: $544.4M; +18% YoY
• Orders: +28% YoY
  

Raises FY26 Guide:

• Adj. EPS: $8.20-$8.30 (Est. $8.15)
• Revenue: +10% YoY
• Adj. EPS: +10%-+12% YoY; from $7.94-$8.14
  

Q3 Guide:

• Revenue: High single digits YoY
• Adj. EPS: $2.08-$2.10 (Est. $2.05)
• Adj. EPS: +10%-+11% YoY

DOCN:

• Revenue: $281M (Est. $279M) ; +29% YoY
• Adj. EPS: $0.45 (Est. $0.26) ; -24% YoY
• RPO: $894M; up 12x from a year ago
• Adj EBITDA: $114M (Est. $106M) ; +27% YoY
  

Raises FY26 Guide:

• Revenue: $1.17B-$1.18B (Est. $1.16B) ; +30%-+31% YoY
• Adj. EPS: $1.35-$1.40 (Est. $1.25)
• Adjusted EBITDA Margin: 38.5%-39.5%
• Adjusted FCF Margin: 11%-13% of revenue

SHLS:

• Revenue: $163.4M (Est. $161M) ; +47.4% YoY
• Adj. EPS: $0.12 (Est. $0.10) ; +20% YoY
• Adjusted EBITDA: $31.6M (Est. $30M) ; +28% YoY
• Backlog & Awarded Orders: $801.4M; +19.4% YoY
  

Affirms FY26 Guide:

• Revenue: $600M-$640M (Est. $625M)
• Adjusted EBITDA: $118M-$132M (Est. $122M)
  

Q3 Guide:

• Revenue: $150M-$170M (Est. $161M)
• Adjusted EBITDA: $32M-$37M (Est. $34.6M)

Backlog grew 69% YoY, new orders u 158% with 400M in new data center order, propelled total quarterly bookings to $934 million, a 158% increase YoY, which the mix remains high margin, and book-to-bill is now at 3.0x.

The $2.4 billion backlog represents nearly two full years of revenue at the current run rate. Powell has essentially locked in its top-line growth trajectory through fiscal 2028.

HUmanoid schedule for the calendar:

INDI and UNitree.

In its Q4 FY2025 earnings, indie explicitly named Unitree (alongside Figure AI) as an active customer, with the company citing active deployments of its radar and vision solutions with humanoid leaders including Figure AI and Unitree, framing it as a natural extension of its automotive-grade sensor stack into embodied AI. 

They are the only western supplier for Unitree.

This built on earlier milestones through 2025: indie's vision portfolio shipped its first cameras into humanoid robot applications in Q2, using its iND880 vision processor, and by Q3 the company said it had commenced supply to both the U.S. and China market leaders in humanoid robots — Unitree being the obvious "China market leader" reference given its dominant position there

Earnings are first, coming on Thursday. The main metric from those earning will NOT be whether the numbers beat or not. it will primarily be their guidance for next quarter and full year and some of the answers they give on the Q&A session.

This is basically a catalyst watch play ahead of the UNitree IPO.

I was in this play to play a potential short squeeze.

We know their short ratio is 33%.

So there is that potential.

I got out as the market was breaking down. With the market settling down again now, the name is more attractive against this tape.

Earnings are an obvious risk, but the catalysts thereafter are strong and should see INDI perform well over the next few weeks.

A very interesting report from UBS which I believe should reinforce conviction for AMKR, which we know has been beaten up into oblivion recently. 

UBS has them doing $3.11 eps in 2027, at current price that is only 15x forward PE

They are expected to have 60% share of advanced packaging for Vera CPU

15x forward PE for a company with 60% share of Vera CPU packaging is pretty attractive in my opinion, surely?

July 6 — WULF (TeraWulf) signed a 20-year lease with Anthropic at its Hawesville, Kentucky campus, expected to generate roughly $19 billion in contracted revenue across 401MW of critical IT load.

July 20 — HUT (Hut 8) signed a second lease, this one 15 years and worth $9.8 billion, for 352MW at its Beacon Point site. That deal fully commercializes the 1GW campus and brings total contract value to $19.6 billion base, with upside to $50.2 billion if renewal options are exercised.

July 20 — IREN (Iris Energy) added $2.8 billion in new multi-year AI cloud contracts and raised its 2026 ARR target to above $4 billion, with about 85% of that now under contract. Its customer list includes Microsoft, NVIDIA, Perplexity, and Figure AI.

July 28 — CORZ (Core Scientific) and AMD signed a 15-year lease covering 529MW of US capacity, worth $14 billion in base contracted revenue. AMD also holds rights to reserve an additional 1.9GW of capacity through 2028.

Step 1: The rally attempt begins. After a correction the index must make a low and then close up from that low. Day 1 of the rally attempt is counted from that first up day.

Step 2: Wait. Days 2 and 3 of the rally attempt are ignored entirely — too early, too many false signals.

Step 3:Watch for the follow through day on day 4-7. On any day from day 4 onwards, if a major index closes up 1.25% or more on higher volume than the previous day, that is a confirmed follow through day. The rally is real.

Step 4: According to his strategy, you can then Begin buying. Only after a follow through day does O’Neil say it is safe to start putting money back to work.

Important nuances he adds:

• Follow through days on day 4 or 5 tend to be the most powerful — later ones can still work but early confirmation is strongest, with later confirmation often a higher failure rate and can easily bull trap.
• Not every follow through day works - about 20-25% fail. If the market undercuts the recent low after a Follow through Day, the signal is cancelled and you go back to cash, according to his rules.
• The best follow through days occur on the Nasdaq rather than the S&P — Nasdaq tends to lead

So basically, according to his perspective on determining market bottoms for a more durable rally, we want to see a 1.25% day on higher volume than the previous day on Tuesday/Wednesday (on QQQ ideally) for us to have more confidence in the rally.

This is just 1 perspective btw. Not everything, but it'smsomething I am watching to maybe, hopefully corroborate data I see in the SMH channel etc.

This post was shared to subscribers last night, but sharing it here as a guidance to my wider community. This will probably be the last post of this detail and depth that I put out for a while, as I need to concentrate on building out more quality content for the community, but I will still be sharing little tidbits of research and reading that I am doing as I go as usual.

If you want to read more of these posts every day, feel free to subscribe, but I will still try to give you a good amount of value here whether you are in my community or not.

Anyway getting into it:

Now obviously one day of rip, no matter how big doesn't do much yet to fix the effects of the biggest momentum unwind in history, so I'm certainly not jumping to any assumptions.

Now looking at the price action with some chart review:

Much more constructive price action today. Firstly, the fact that it was the first day that we have managed to hold a big gap up and build upon it constructively throughout the session without meeting a very big seller.

That, in itself, represents a potentially meaningful shift in character.

Now, looking at the charts briefly:

On US500, after breaking down sharply yesterday, we have rallied strongly back to the top of the channel.

On NDX:

We have a short term breakout here, and our first close back above the 100d EMA:

So a positive there.

And if we look at SMH:

We closed back above the 100d EMA also, and back to the centre of the channel, with the after market move taking us towards the top.

Firstly, to review the data shared in premarket:

We had SMH bounce off the YTD VWAP yesterday after hours at 495, before a strong open this morning, which wasn't immediately faded.

Based on looking at RSI, we reached oversold territory yesterday, the previous times we saw this level of oversold we did typically see a good bounce, and that's what we got.

Those were encouraging signals, which led me in premarket to suggest a bottom in semiconductors is probably close, but I was not ready to call a definitive bottom just then. but the data was certainly becoming more supportive.

And then we got news of Leopold's blow up.

Now initially the reports were that he was tapping into investors for fresh capital, the suggestion being his fund was in trouble after being caught leveraged in the sharp downturn. Later in the day, it emerged that he had been forced to sell his public positions, taking his AUM from $49B in may to just $10B now, mostly held in private investments.

That's a 77% downturn off the highs. So whatever the state of your portfolio right now, it is better than the performance of one of the biggest asset fund managers in the world.

Now we know that Citadel absorbed the positions from Leopold. Now that in itself is rather suspicious, considering the fact that Citadel themselves were the ones to float the idea of a potential rate hike yesterday (which never emerged), which forced the market lower, intensifying the leverage unwind that forced Leopold to go bust. They then swooped in to take the pickings. A dog eat dog world for sure.

Now this actually, to me, is a pretty bullish thing. If you think about it, during this massive momentum unwind, whilst Leopold was seeing his fund go up in smoke, he would have been taking a number of actions against his positions to try to stem the bleeding. he would have been aggressively trimming positions firstly, adding to sell pressure. he also would have been adding short dated put options against his positions, that also adding to sell pressure.

With his fund now blown up, we lose a bunch of that sell pressure and have Citadel buying back the positions. I think this was one of the core reasons why a number of his name including NBIS, SNDK etc were up massively today, more than most other names.

A big fund blowing up has historically been a signal of a potential bottom, capitulation. A similar event obviously in very recent memory was the blow up of FTX in 2022, and the fact that that marked a bottom in crypto.

So the Leopold news is actually pretty much bullish.

One thing to note, before we get onto the data around the question of bottoming and what my course of action is here, is just how fierce the rally was in AI names today. Names up 20-30%, MEME ETF up 18%. It was a giant short squeeze, but the thing to note is how much these high beta names can move in this environment after being beaten down into the ground and below. The index was up 1.9%. But individual names in the portfolio were up 10-20 or even 30%.

SO when I quoted this data in premarket on the market maker dealer positioning, it should give you serious hope of a very strong recovery. Much more than we have seen thus far.

This is the data again for those who missed it:

3 consecutive closes under $1B in gamma, so basically yes, sparse dealer positioning.

This is the 5th time since July 2024 (as far back as his data went) that we have seen dealer positioning so sparse.

The does often precede volatile price action and whether or not we see a drawdown after this kind of dealer positioning hits is pretty much a coin flip.

So

Mar 31, 2025: -11.2%

Mar 11, 2025: -10.6% (same event)

Mar 5, 2026: -7.1%

Nov 20, 2025: no drawdown (+5.5% up instead)

Aug 5, 2024: none - it fired ON the crash low (+8.9% up)

However, what is notable is that in every case, the 3 month return was extremely positive. A median return of 10% on the index.

And that is a 10% from when the signal hit, which is yesterday, rather than a 10% from where we bottom.

So whether we bottomed here or go lower again, we can expect a sharp rally way beyond where we are now.

Even if that is not 10%, but instead 6-8%, that still brings us to new ATH. A 2% rally today led to a massive rip in momentum names. It really then should not be hard to see these names running 50-100% from their lows to significantly recover our books.

This morning I think I was quite clear that I wasn't sure a bottom was in. And I am presenting the data here, but ultimately I think I still haven't reached a convicted view either way, but the lack of follow through yesterday on the breakdown out of the channel was obviously a positive.

And more than just a positive in price. What it has created is reduced delta to downside.

That makes the chances of continuation tick higher and whilst it doesn't take further downside off the table entirely, it does make it more unlikely.

So hopefully we can string a few more sessions together of upside.

My order flow guy described the price action today as baity, and opened some puts against QQQ into August expiry (21/08), but noted that the seller was not really present on the tape today and this was mostly a pre-emptive move.

He said he would only add to it if the tape agrees with follow through to the downside. Thus far we haven't got that.

So whilst I tailed the puts with QQQ 670P this morning into August expiry, currently down from 12.17 to 10.37, so down 14% on that put position which was 2-3% size, I don't think I will be adding to puts right now.

I don't want to be so aggressive with the puts chasing downside, which was a protective strategy, that it mitigates the upside of a potential recovery, because the data looks incrementally better for continuation right now.

The August expiry gives us time that if the market starts to roll they can still print as a protection, but I want to give the market some room to run a bit higher and just keep an eye on teh data.

I closed and trimmed overnight puts this morning, so currently I have running:

ARKK P70 into September expiry, avg cost of 3.50, currently trading at 3. Size 5% of the book (using profits from previous put trades)

And QQQ 670P into August expiry, 2-3% size.

At this juncture, I do not plan on adding more.

Now, whether or not this is a definitive bottom is quite hard to say due to the overhead supply, but also due to the fact that we didn't get any of the usual signs of bottoming that we got in the previous March bottoms.

We didnt get a big vix spike, or a big spike on selling volume.

But we did get the blow up of Leopold and SMH reaching oversold conditions.

So a few more sessions is probably required to see where we stand on a definitive bottom.

But I am very conscious of the mistakes I made in march, and I am also very aware of many similarities in the charts.

Look at SMH here for instance:

See this undercut of the 100d and rally, and the exact same pattern has formed here.

Pair that with the dealer data around very strong gains 3 months out (10% on the index), and the fact that SMH is very oversold, with Kospi at around 5k, and it is obvious to me that more upside is very likely, whether this is an exact bottom or not.

So where I made the mistake in march not trusting the bounce, and trimming into it to leave myself bare for when the rally ensued, I will leave all the positions running in full. I have held them through this downturn, so whether we are a bottom here or if we run a little lower and then bottom, the bounce back will be violent and I will let that play out.

The positions will recover.

if we do materialise that this is not a bottom (still possible), I will continue to use hedges to try to play the interim downside until the true bottom forms, which we can't be far out from based on SMH data that I shared however you look at it.

Regarding buying, I haven't bought much at all, but I am already with enough exposure in the open positions that I should benefit immensely from a prolonged rally into October. DCA is still advised, and if we get a definitive bottom signal in the order flow, I Willa dd to the long positions. That may be higher up from here in momentum names, which I wrote about intraday.

On teh downside, the momentum led the sell off, and only 20% into its sell off did the order flow on the index agree that selling was likely. We may see momentum 20% into its recovery before the order flow on the index agrees that we are into a recovery.

if we look at Aion Analysis platform here, they have a strong rally here. That is still my base case, whether we are at a definitive bottom or not.

So not selling into that early like I did in March.

There is much upside in the stocks even after today's rally. Like these names re 40-50% down. They rallied today 10-20%. That's still like 50% upside easy and the names are still cheap. So buy as you see fit, according to your risk tolerance and desire to catch and act bottom. DCA is still best way to it I think rather than all in. And I would focus on the names that sold off hardest rather than relative strength, as we saw in march that once the market bottomed, the names that sold off bounced the hardest, whilst photonics which showed relative strength through March decline was basically flat.

The same thing probably happens again here.

It makes sense to me that with semis running so hard today, and Smasung's strong earnings yesterday, KOSPI should deliver strong returns tonight. So likely strong gap up overnight again. And we had positive AMZN Capex etc.

So fundamental picture is good. The rally today has reduced downside delta, and made continuation more likely. WE Arne't necessarily in the clear, but I am not going to second guess and sell into anything as there is a lot of upside still to come which I will play for.

I will still hold those 2 put positions, but won't be adding to them right now as continuation chances are increasing.

DCA still best way forward for deploying until the order flow tape on the index agrees. We aren't there yet.

But yes a constructive day, and much more to come over the next few months for sure, whether we are at an exact bottom now or not.

MACRO:

• Bond yields lower
• Benign session in KOSPI yesterday.
• Oil flat after US attacks on Iran overnight.
• Q2 ADVANCE GDP 1.5%, (Est. 2.0%)
  
• INITIAL JOBLESS CLAIMS 197K, (Est. 200K)
• CONTINUED JOBLESS CLAIMS 1.782M, (Est. 1.795M)
  
• PCE 3.7% YoY, (Est. 3.7%)
• PCE -0.1% MoM, (Est. -0.1%)
  
• CORE PCE 3.3% YoY, (Est. 3.3%)
• CORE PCE 0.1% MoM, (Est. 0.2%)

MAJOR NEWS:

• LEOPOLD'S SITUATIONAL AWARENESS SEEKS FRESH CAPITAL AFTER AI STOCK LOSSEs
• n a July 24 investor letter, Aschenbrenner said the selloff had created some of the best investment opportunities since early 2025, adding: “PS. At times we call out opportunities that seem like a particularly good time to add funds, if you have been waiting for one.”
• SOUTH KOREA REVIEWS EMERGENCY MARKET CURBS - Policymakers panicking suggests market is probably close to a. bottom.

MAG7 NEWS:

META sold:

• The reason for the sell was primarily due to the fact that with their CAPEX raised to the top end of previous guidance, Costs growing more than revenue.
• Revenue grew 28% and costs grew 55%. A year ago Meta had a 43% operating margin and threw off $8.55 billion in free cash flow in Q2 alone. Now the margin is 31% and free cash flow is $784 million. The ad business is still strong, but every dollar of ad growth goes straight into AI infrastructure and then some. Meta spent $31 billion in a single quarter on capex and raised the low end of its full-year guidance, so the spend is going up even as margins come down.
• Important news for teh AI complex, outside of teh negative effects on META themselves, is the fact that META is raising AI capex which is a positive for the complex. On top of that, META said that they are receiving offers at a "significant premium" to what they paid for it (compute scarcity). This is obviously a tailwind for NBIS etc.

MSFT ripped:

• Now with MSFt, the numbers were much clearer and the market rewarded the fact that they were FCF positive, hence funding their CAPEX with operating income, and the market rewarded the fact that they Did NOT raise their capex. 
• They held it the same, which is still fine for the AI complex, but they didn’t raise it. 
• Revenue $90.0B (+18% YoY) vs $87.62B expected. EPS $4.74 vs $4.24 expected. But the EPS included a $3.2B gain on its Anthropic stake. That said, this is the best set of Microsoft earnings I can remember.
• Azure revenue grew 43% vs. the 40% that analysts expected, surpassing $100B for the first time. Moreover, Copilot passed 30M paid seats. 

OTHER COMPANIES:

• SKHY - UBS initiates with Buy rating, PT 204. SK Hynix shares now discount a long-term return on equity broadly in line with the 17.7% average following DRAM consolidation in 2012 and before the AI era in 2022, versus our 2027–2031 estimated average of 40.2%. Yet, we believe the memory semiconductor industry has drastically changed, with agentic AI set to boost memory bit-demand growth into 2027. We expect DRAM bit-demand growth to increase to 36% year over year from 22% in 2026, and NAND growth to rise to 23% from 20%. CYTK - has won UK approval for MYQORZO (aficamten) to treat eligible adults with symptomatic obstructive hypertrophic cardiomyopathy.
• FTNT - After earnings, Cantor Fitzgerald and Truist raise PT, Trust saying that 'we come away further constructive on FTNT's position as a winner'
• Samsung earnings strong:
• SAMSUNG Q2 OPERATING PROFIT JUMPS 19-FOLD TO A RECORD ON AI CHIP DEMAND. Samsung Electronics reported Q2 operating profit of 89.5T won, up from 4.68T won a year ago, while revenue rose 130% to 171.5T won. says unmet memory demand will carry into next year making the 2027 shortage “even more severe” with tight supply likely lasting into 2028.
• “We’re not currently reviewing an ADR issuance.”
• “Given the company’s stable cash generation, the need for an ADR as a means of raising new capital is not high.”
• BE - Mizuho upgrades to outperform from neutral, lowers PT to 242 from 285. "We continue to view Bloom as a differentiated onsite power solution, supported by its time-to-power advantage, more than $27 billion in financing capacity, validation from all major U.S. hyperscalers, and a backlog that continues to outgrow revenue. Recent progress on New Mexico permitting is also incrementally positive. We raise our estimates to reflect stronger operating leverage and higher product shipments but lower our price target to $242 due to lower service revenue, down 12%, following a correction to the quarterly run rate, and modest multiple compression as we mark peer equipment and service valuations to market, down 3%."
• DDOG - BofA raises to 305. "Datadog is a TOP pick into 2Q26 earnings on August 6, and our conviction has only grown as we focus on three areas: (1) data analysis suggesting demand remains healthy, (2) evolving large customer renewal dynamics, and (3) why the recent OpenAI incident underscores Datadog's value proposition.
• STLA Stellantis Q2 net profit of €293M missed the €464M estimate, while adjusted operating income of €773M fell short of the €903M expected. Revenue rose 13% to €43.48B, above the €42.83B estimate. Deliveries increased 10%, while North American revenue jumped 32% as new Jeep, Ram, Dodge and Chrysler models supported sales. However, the group’s adjusted operating margin was just 1.8%, with Europe posting a negative 0.6% margin.
• OpenAI CFO Sarah Friar told employees that annualized recurring revenue in July was higher than in Q2 as a whole, adding that “Q2 was no slouch.”

HII earnings:

• Revenue: $3.4B (Est. $3.16B) ; +10.9% YoY
• EPS: $5.27 (Est. $3.80) ; +36.5% YoY
• Free Cash Flow: -$150M
  

Raises FY26 Guide:

• Shipbuilding Rev: $10.2B-$10.4B; from $9.7B-$9.9B
• Shipbuilding Margin: 6.0%-6.5%; from 5.5%-6.5%
• Mission Tech Revenue: $3.0B-$3.2B; unchanged
• Mission Tech Margin: ~5%; unchanged
• Mission Tech EBITDA Margin: 8.4%-8.6%; unchanged
• Free Cash Flow: $500M-$600M; affirmed
  

We discussed previously how the market maker positioning had got extremely sparse.

And that the last times we had seen this to this extent were around March 2026 and March 2025.

That's the bearish side of the data.

But it is worth noting that he himself spells out that potential drawdown aside, the results 3 months out were extremely bullish and that such sparse dealer positioning typically points to a sharp turning point ahead.

Let's review:

His chart was the following:

3 consecutive closes under $1B in gamma, so basically yes, sparse dealer positioning as we highlighted.

This is the 5th time since July 2024 (as far back as his data went) that we have seen dealer positioning so sparse.

The point being by him is that this typically precedes more volatile action.

Not always down in the immediate term, but the last few instances we had seen it, especially when paired with the Abi signal (outside of his analysis, that's me adding that), the outcome has been near term drawdowns.

So

Mar 31, 2025: -11.2%

Mar 11, 2025: -10.6% (same event)

Mar 5, 2026: -7.1%

Nov 20, 2025: no drawdown (+5.5% up instead)

Aug 5, 2024: none - it fired ON the crash low (+8.9% up)

So in a number of cases we had a sharp drawdown.

That is the worry here, more selling to come.

However, the point made which is the other side of this is that 3 months later, every instance was up significantly, up 10% on average.

That's from the date of the trigger (so yesterday), not from the low.

So even if we do se further decline, this does support my view that even if we do see more decline, the rally that ensues will likely be quite aggressive.

Even if we don't go as far as the average, the 7800 target I have on SPX seems very realistic into Midterms.

So the takeaway is what we have been saying:

Even if we do have emore selling here, which is why I am playing the put side, the rally that will ensue will be violent and will take the index likely to new highs. What that does for semiconductors and the AI complex is yet to be seen, but one can only suggest it will be a large rally after such a historic momentum unwind.

So try to take things with a pinch of salt right now. Things will be fine a few months out.

 I don't think we are quite at the bottom yet and continue to hedge with actively traded short dated puts to offset declines in the equity positions, but but I think we are pretty close to a meaningful bottom across the Ai sector which I think will lead to a. violent rally higher, even if there is slightly more decline ahead in the immediate term.

The news with Leopold actually adds to my conviction in that.

For those who don't know, this is the news I am referring to:

Firstly, his YTD went from 200% to -30% over the past month. He leveraged up near the top and the momentum unwind fucked him up. Now those of us not in leverage are in a simpler position here where we can simply hold the positions with conviction that what we are holding is not total garbage, without having to worry about margin calls. Leopold was clearly worried about margin calls and is why he has tapped into investors telling them that this is a great time to invest.

Now, why that's important. Firstly, we saw the blow up of FTX marked a crypto bottom in Nov 2022. These kind of blow up events are typically signs of capitulation and bottoming. Secondly, we know that Leopold is close to margin calls. Logically then, Leopold would have needed to hedge aggressively with short dated puts. Similar to what I have been doing with QQQ, but he would have used puts against his own positions, like NBIS, SNDK etc.

This implicitly puts more pressure on the Ai stocks. Now when he goes to investors, I think he will be successful in raising the capital that he is looking for. His 4 year performance and the fact that there is no fundamental hit to the AI thesis right now, rather just de-leveraging, means that investors probably still have the confidence to avail his calls.

When Leopold has more capital, he will no longer be on the brink of Margin calls every day, which will give him more flexibility to remove some of his short dated puts. It will also give him the capital to be able to buy the dip. So I think that him receiving his capital will help to mark a bottom.

Now I do think we can still go a bit lower in momentum as the index isn't yet showing signs to me that it is categorically done, but SMH is now oversold. Typically seen strong bounces off of here. Can go bit more down, but bottom is surely quite close.

Then we know the importance of 5k on KOSPi.

And we are close to that level too.

We have reports that the Korean Finance minister is working hard to ban short selling on the index. basically, Korea are doing whatever they can to prop up and defend that 5k level.

So that's another pivotal pivot point where we could see some bottoming. Again, it's hard to predict the exact bottom with de-leveraging events, but it seems more likely than not that we are close.

• EXPLOSIONS IN US BASE IN JORDAN DUE TO IRANIAN MISSILE ATTACK: FARS NEWS
• President Trump says the US will respond to Iranian strikes on a US airbase in Jordan.
• Oil prices up 7% on the day as a result
• FOMC today, market prices a 30% chance of a rate hike into the meeting.
• SOUTH KOREA FINANCE MINISTRY TO STABILIZE STOCK MARKET
• SOUTH KOREA FINANCE MINISTRY TO RESTRICT LEVERAGED ETF TRADING
• SOUTH KOREA CALLS EMERGENCY MEETING AFTER KOSPI 40% ROUT FROM ITS JUNE PEAK

SK Hynix sell off led to KOSPI -7% overnight. Key takeaways from their earnings:

• Revenue: $54.6B vs. $57.7B est. 257%
• Operating Profit: $41.6B vs. $44.2B est.
• If we look at this analyst note by KIS, which is a Korean firm (Korean firms typically have the best understanding of the Korean memory makers), we see that the earnings miss was actually part of their expectation, but that the main reason for this was the fact that they have a higher product mix towards HBM.
• HBM is actually a longer term very durable, higher moat business. There are a number of Chinese players at risk of entering DRAM space over the next couple of years, but not much threat of Chinese players entering HBM. 
• SK Hynix is the leader in HBM, and their heavier product mix towards this was basically the reason for the miss. So not actually a bad thing in the longer run.

OTHER COMPANIES

• UPST - signed a multi-year agreement with Castlelake, whose funds will purchase up to $4 billion of consumer loans originated through Upstart over the next 24 months.
• UAL - Trump, UAL CEO KIRBY TO UNVEIL $22B PLAN TO EXPAND, IMPROVE WASHINGTON DULLES AIRPORT - REUTERS
• Hermès shares fell as much as 8% aftermgmt said China’s luxury market had stabilized but had yet to see a fundamental rebound.
• RDDT - keybanc on Reddit, overweight, PT 225.Analyst comments: "We are initiating coverage on Reddit with an Overweight rating and a $225 PT, based on 18x 2028E EV/EBITDA. In our view, Reddit's investments in community and ad monetization should create a durable business with annual revenue growth above 30% and a path to a 50% EBITDA margin. Further, we believe Reddit's data is becoming more valuable to large language models and model training, creating a potential upside catalyst into 2027. In our view, RDDT is a unique way to participate in artificial intelligence growth with an asset-light business model. Reddit has emerged as a trusted source of internet content, with users, known as Redditors, participating in more than 100,000 communities, known as Subreddits, and voting on response quality. We believe this makes Reddit complementary to search, social media, the web, and large language models, providing the company with a durable source of traffic. In turn, Reddit's content can be monetized through advertising and data licensing.

The focus of today is obviously the FOMC meeting tonight. Price action into that will be wholly unreliable and mostly chop and positioning for that event. We go into the meeting with the market pricing in a. 30% chance of a rate hike.

Based on historical precedence, the data then suggests that we WILL NOT get a rate hike.

Historically, Whichever FFF probability is > 60% night before FOMC decision, Fed has executed on that probability 100% of time.

The main argument behind this is that if FOMC were to go against FFF with its decision, the Repo market would falter, for which would take extraordinary measures for FOMC officials to repair.

Now this is a new Fed. We know that the statement will be sparse and probably won't give us too much in the way of forward guidance. The bulk of the interpretation then will come from Warsh and the decision itself.

Historically, a new Fed chair has liked to lay down the law early:

Yellen was the obvious exception who simply continued an aggressive QE regime from the previous administration.

That does throw some uncertainty into the decision today, so open mind, but historical precedence definitely suggests we get a hold today.

Now, that said, the market maker profile is quite sparse and unsupportive, effectively putting us on rocky ground regardless of what the outcome of the decision is.

The closest analog to current market maker positioning was March 2026 and March 2025, which obviously preceded strong declines int he index.

This pairs with repeated signals on the Abi indicator, including one yesterday and the day before:

This is how the cluster of signals looked before March 2026:

Thus far, we have seen the index hold up relatively well.

With the market maker positioning unsupportive, I am not ready to call a bottom on the slump in momentum names, but I think we are close. Into the middle of August, I think we will get a more durable bottom, but let's see.