美股投资young
美股投资young
美股科技投资者 ai狂热者 分享每日快讯. all in ai
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After the semiconductor crash, everyone is watching the $SOXX candlestick chart. But I believe that just studying stock prices and technical indicators is not enough. Many of the risks currently affecting AI valuations actually come from the bond market, corporate cash flow, and future earnings expectations. $QQQ $SPY $NVDA $AVGO
Here are 5 websites I think are worth bookmarking for the long term.
FINRA｜Corporate Bond Trading Data
This is the market data portal provided by FINRA, which allows further access to fixed income related data.
The bond market helps us observe corporate financing risks.
For example, recent attention on AI data center financing can be assessed through corporate bond prices, transaction yields, and other information to judge whether investors are starting to demand higher credit risk compensation.
If stocks rebound but related corporate bonds continue to be under pressure, I would be more cautious.
FRED｜U.S. Financial Environment
The economic database of the Federal Reserve Bank of St. Louis.
Besides the U.S. 10-year Treasury yield, I recommend focusing on the high-yield bond credit spread.
If Treasury yields fall but credit spreads continue to widen, it indicates the market may still be worried about corporate financing and default risks.
These two situations have different implications for tech stock valuations.
Portfolio Visualizer｜Historical Drawdown Analysis
This website is suitable for long-term backtesting.
You can compare the historical performance of different ETFs and stock portfolios, study maximum drawdowns, recovery times, and risks of different asset allocations.
For example, compare the volatility endured historically by holding semiconductor ETFs, Nasdaq 100 ETFs, and S&P 500 ETFs during market corrections.
However, backtesting must pay attention to data periods, dividend policies, and sample selection; historical performance cannot be directly used to predict future returns.
Nasdaq｜Earnings Calendar
In extreme market conditions, earnings reports are often important catalysts affecting market expectations.
You can check which companies will announce results in the future.
Especially large cloud providers like $MSFT, $GOOG, $AMZN, whose capital expenditures, AI business growth, and free cash flow have significant impacts on the entire semiconductor supply chain.
Note that some earnings dates are forecasts; official schedules should be based on company investor relations announcements.
SEC EDGAR｜Corporate Balance Sheets
This is a tool I believe long-term investors must learn to use.
You can directly view company filings such as 10-Ks and 10-Qs.
When stock prices crash, I focus on four items: operating cash flow, capital expenditures, debt maturity schedules, and major operational risks disclosed by management.
Especially for companies relying on debt financing to build AI data centers.
Having a large number of future orders does not mean a company currently has enough cash, nor does it guarantee all projects will achieve reasonable investment returns.
I think this semiconductor adjustment needs to be studied on three levels.
Price level: observe whether $SOXX and $QQQ stabilize.
Macro level: observe whether U.S. Treasury yields and credit spreads improve.
Fundamental level: observe whether tech giants’ earnings growth, capital expenditures, and cash flow can continue to support AI investments.
Only if all three levels improve simultaneously will the foundation for market recovery be more solid.
I remain optimistic about AI’s long-term development but will not assume it has sufficient margin of safety just because stocks have dropped 20%.
Truly worthwhile long-term buying opportunities require considering price, valuation, and the company’s future ability to generate cash flow simultaneously.
After $SOXX's nine consecutive declines, I still remain optimistic about the semiconductor sector entering a new major rally. The current macro environment is indeed poor, but factors suppressing the market such as U.S. Treasury yields, oil prices, and the midterm elections may not necessarily remain in their current state for the long term. $QQQ $SPY $NVDA $MU
On March 30 this year, $SOXX closed at $309.79, rising to $640.76 by June 30, an increase of about 107% in three months. On July 29, it fell again to around $465, then rebounded to $589 by October 5, a gain of nearly 27%.
The market has already proven twice this year that semiconductors can regain capital support after extreme pullbacks. Of course, past rebounds do not guarantee future repeats, but there is no need to conclude that the long-term bull market is over just because of the continuous declines in October.
I am currently focusing on changes in three macro variables.
First is U.S. Treasuries.
The yield on the 10-year U.S. Treasury bond previously reached about 5.36%, but has now fallen back to around 5.1%. Even though the September inflation data was high, the bond market has not continuously hit new yield highs.
If inflation gradually cools down, employment and economic growth slow but do not fall into a severe recession, the pressure for the Federal Reserve to raise rates further may ease. The bond market might also start pricing in expectations of future monetary policy stabilization earlier.
For high-valuation tech stocks, this means discount rate pressure could ease, reducing financing pressure on AI infrastructure projects.
Second is oil prices.
Currently, Brent crude is near $110, mainly influenced by Middle East tensions and oil supply risks.
However, the geopolitical risk premium embedded in oil prices may not be permanent.
If Middle East tensions ease, the Strait of Hormuz shipping stabilizes, or global oil supply improves, oil prices have room to fall.
A decline in oil prices can reduce inflationary pressure and further ease the Federal Reserve's need to maintain high interest rates.
Of course, these changes need to actually occur and cannot be assumed in advance as certain outcomes.
Third is the U.S. midterm elections on November 3.
Historically, policy uncertainty before midterm elections usually suppresses some investors' risk appetite, but after the elections, uncertainty tends to gradually dissipate.
Goldman Sachs statistics show that since 1974, the median return of the S&P 500 in the three months following midterm elections is about 6%.
This does not mean the market will definitely rise after this year's election, but at least it indicates that the election itself is not necessarily a long-term suppressor of U.S. stocks. Ultimately, the market will return to corporate earnings, interest rates, and economic growth.
This is also why I am reluctant to be completely bearish right now.
October faces a situation where high U.S. Treasury yields, elevated oil prices, policy uncertainty, and AI valuation compression occur simultaneously.
But as long as some of these pressures begin to ease, market risk appetite has a chance to improve; it does not require all negative factors to disappear at once.
Moreover, strong earnings from companies like TSMC and ASML have proven that real demand for advanced semiconductors has not suddenly collapsed due to stock price adjustments.
If upcoming tech giant earnings continue to confirm AI demand and profit growth, the bond market stabilizes gradually, oil prices fall, and the macro environment improves, then funds that previously exited could very well reassess the investment value of semiconductors.
I remain confident in AI's long-term growth over the next few years.
However, short-term and long-term must be separated.
Currently, $SOXX's downtrend has not yet been repaired. Even if a clear rebound occurs, as long as U.S. Treasury yields, oil prices, and capital structure do not improve, I still tend to use rebounds to reduce overly high positions.
When macro pressures truly ease, and $QQQ, $SPY, and $SOXX form higher lows again with stable earnings expectations, then I will consider gradually increasing risk exposure.
There is no need to be overly pessimistic now.
In October 2023, U.S. Treasury yields once touched 5%, then rates fell back, and semiconductors rose continuously in November and December.
In March and July this year, the market also experienced very considerable recoveries.
These historical cases show that market panic and long-term industry value do not necessarily move in sync.
I do not think the October adjustment is over, but there is no reason to completely dismiss the AI rally over the next few years due to short-term macro pressures.
The most important thing now remains controlling position sizes, holding cash, and avoiding forced exits due to leverage loss of control.
As long as the long-term profit logic is not broken and macro conditions gradually improve, semiconductors still have a chance to re-enter an upward cycle.
I am optimistic about the next bull market but will not bet full position on the exact day it starts.
This year, the semiconductor sector has experienced a more than 10% phased pullback for the fifth time, yet $SOXX has still risen about 64% year-to-date. This set of data is worth studying. The semiconductor market in 2026 is not without a bull market, but both the rise and pullback amplitudes are quite exaggerated. $QQQ $SPY $NVDA $MU
As of October 16, the Philadelphia Semiconductor Index has pulled back at least 10% from its phase highs for the fifth time this year, and $SOXX has recorded nine consecutive declines. In just a few trading days, many semiconductor stocks have lost gains accumulated over the past several weeks or even months.
However, looking back to March and July this year, such large pullbacks are not the first occurrence.
After the March correction, semiconductors subsequently experienced a very strong rally. July also saw intense sell-offs, followed by a clear price recovery.
Why has the semiconductor bull market been so volatile this year?
I believe the core reason is that the AI industry's profit growth is very rapid, but the market's pricing of future growth is equally aggressive. Whenever capital concentrates on buying and valuations expand rapidly, the entire sector accumulates a large amount of profit-taking and crowded positions.
Once macro expectations change and capital begins to reduce exposure, stock prices may adjust far beyond the extent of fundamental changes.
This has been especially evident this year. U.S. Treasury yields, oil prices, AI financing costs, and concerns about the return on massive capital expenditures have repeatedly changed the valuations investors are willing to pay.
But here, two issues need to be distinguished.
Continuous stock price declines do not mean that corporate profits are deteriorating at the same pace. Companies like TSMC and ASML still show strong operational performance, and the long-term demand for advanced processes, AI computing, and high-speed interconnects has not suddenly disappeared.
However, excellent corporate fundamentals do not necessarily mean that previous stock prices were reasonable.
I still tend to believe this is a deep correction within a bull market, but the current downtrend has not ended yet.
Historically, high-volatility bull markets can indeed experience multiple 10% or even 20% pullbacks and then continue to rise. But if profit expectations worsen and credit risks spread, such corrections may develop into a longer-term bear market.
Therefore, I maintain two judgments about the upcoming market.
In the short term, after consecutive extreme declines, a clear rebound is possible, but with U.S. Treasury yields, oil prices, and AI financing pressures not yet relieved, I remain cautious about a second round of declines after the rebound.
In the long term, as long as the AI industry continues to deliver profit growth and the core companies' competitive advantages do not significantly deteriorate, the market still has conditions to re-enter an upward trend.
For those with heavy positions, I tend to use rebounds lacking sustained buying support to reduce risk.
For those with ample cash, this repeated adjustment is actually beneficial for reassessing the reasonable valuations of quality companies and gradually building long-term positions.
This year, semiconductors have proven that long-term rises and short-term large pullbacks can coexist.
I will not conclude the bull market is over just because of nine consecutive declines, nor will I assume this time must repeat previous rallies after corrections.
What is needed now is to wait for capital to flow back, price structures to stabilize, and profit expectations to continue to be validated.
My long-term bullish view on AI remains unchanged, but positions must be able to withstand this level of volatility.
What truly needs to be avoided is having the right long-term direction but being forced to exit before the next market cycle due to short-term leverage and position management loss of control.
$AVGO's single-quarter AI semiconductor revenue reached $16.7 billion, a year-over-year increase of 221%, yet CEO Chen Fuyang publicly warned on October 12 that the biggest constraint on future AI development may no longer be wafers or memory, but capital. He even compared some AI investors' behavior to gambling in a casino. $NVDA $MU $SOXX $QQQ
These remarks deserve serious study. Broadcom is one of the most direct beneficiaries of AI infrastructure expansion, with custom ASICs and high-speed network switching chips benefiting from the massive capital expenditures of cloud providers. The company's latest quarterly revenue was $29.6 billion, with free cash flow of $13.7 billion. A company earning substantial profits from AI whose CEO begins to emphasize capital constraints indicates that there is a need to reassess the balance between strong industry demand and sustainable investment returns.
In the past two years, the market mainly worried about insufficient GPUs, limited HBM capacity, advanced packaging constraints, and power shortages in data centers. As long as these bottlenecks exist, upstream suppliers can expect high growth. But if the biggest future limitation becomes funding, the situation changes.
Building a large AI data center requires massive upfront capital to purchase GPUs, servers, network equipment, and to cover power and construction costs. Hardware vendors recognize revenue upon equipment delivery, but data center operators need to lease computing power continuously over several years to gradually recoup their investments.
The problem is that while AI computing demand is growing rapidly, the long-term economic returns on computing power investments have not yet been fully validated.
Especially in an environment where U.S. Treasury yields are high, increased financing costs directly compress project returns. If future computing power rental prices fall, equipment depreciates faster than expected, or customer revenue growth lags behind investment, some projects may need to adjust their construction schedules.
Recent credit stress in the $CRWV bond market already indicates that investors are beginning to reassess this business model. However, this does not mean that cash-rich companies like Microsoft and Google face the same financing risks.
I believe this is also an important background factor for the semiconductor sector's continued decline in October.
Currently, there is no sufficient evidence that AI orders have fully deteriorated, but the valuation expansion following September's rise is being reexamined. Existing bulls continue to reduce risk exposure, and new funds lack sufficient willingness to support, so even with strong earnings from TSMC and ASML, the sector cannot stabilize.
This does not mean the long-term AI bull market is over.
Broadcom's latest financial report also proves that AI infrastructure demand is still growing rapidly. The question is whether future capital expenditures can maintain the current pace and whether these investments can translate into sufficient revenue and free cash flow.
Next, I will focus on the earnings reports of Microsoft, Google, Meta, and Amazon, especially their capital expenditure guidance, cloud business growth, AI commercialization revenue, and free cash flow.
If these companies can prove that new investments are generating reasonable returns, market concerns about AI capital expenditures may gradually ease.
But if investments continue to grow significantly without synchronized cash returns, even if semiconductors rebound noticeably, they may again face valuation compression.
I remain optimistic about AI's long-term development and tend to believe the current phase is a deep pullback within a bull market. However, in the short term, I will continue to manage positions with oscillating adjustments.
For rebounds lacking sustained buying support, I prefer to reduce excessive risk exposure rather than chase gains directly.
Future competition in the AI industry will not only depend on who can buy more GPUs but also on who can build infrastructure at lower capital costs and truly profit from these investments.
This is the issue I believe the market needs to reprice in the next phase.
Semiconductor equipment stocks have fallen into a historically rare market condition, with some companies experiencing declines even more severe than the chip leaders. $LRCX has dropped for 10 consecutive days, with a cumulative pullback of about 22%; $KLAC also fell for 10 straight days, down about 17% cumulatively; $AMAT has declined for 9 consecutive days, with a total pullback of about 22%. These three companies almost monopolize the most important equipment technologies for advanced semiconductor manufacturing worldwide. $SOXX $TSM $ASML
Here’s the question: TSMC just reported a net profit increase of nearly 69% year-over-year, ASML’s Q3 revenue reached €11.66 billion, and they even mentioned that some customers have started discussing equipment demand for 2029 and 2030. Long-term demand for advanced processes, HBM, and AI chips remains strong, so why are equipment stocks being sold off so fiercely?
I believe the market is currently reassessing the capital expenditure growth rate beyond 2027.
The business models of semiconductor equipment companies differ from those of chip design companies. $LRCX depends on demand for etching, thin film deposition, and cleaning equipment; $AMAT covers materials engineering and multiple key manufacturing steps; $KLAC controls advanced process inspection, metrology, and process control technologies.
These companies have deep technological barriers, but their orders are still influenced by the capital expenditure cycles of wafer fabs.
The market’s concern is that if AI data center financing costs continue to rise and some cloud computing companies slow their expansion, will upstream wafer fabs still need to increase equipment purchases at the previous pace?
Even if orders remain strong in 2026, stocks may already be pricing in a slowdown in growth for 2027.
There is another easily overlooked issue.
These three companies have already experienced very significant gains. Even with the recent roughly 20% plunge, they still have considerable gains year-to-date. This suggests the market may be digesting previously overly optimistic earnings expectations rather than suddenly discovering these companies lack competitiveness.
High interest rates, oil prices, AI financing pressure, and capital withdrawal after the short squeeze in September are all accelerating this process.
However, I don’t think it’s necessary to be overly pessimistic about the entire equipment industry now.
TSMC maintains its capital expenditure plan of $60 billion to $64 billion for 2026, and ASML even expects that planned capacity for 2027 and 2028 may not meet customer demand.
This information at least indicates that long-term investment demand for advanced manufacturing has not collapsed comprehensively.
Moreover, the competitive barriers of $KLAC, $LRCX, and $AMAT will not disappear just because of ten consecutive days of decline.
If stock prices continue to fall but company orders, earnings expectations, and cash flow do not deteriorate significantly, I would seriously study the long-term valuations of these companies.
That said, I remain cautious in the short term.
After such extreme consecutive declines, equipment stocks could indeed see a noticeable technical rebound. But as long as U.S. Treasury yields, AI financing conditions, and the overall $SOXX downward trend do not improve, I tend to use rebounds lacking sustained buying support to reduce overly high positions.
For those with ample cash, this adjustment is creating opportunities worth researching, but there is no need to go all-in at once.
I remain optimistic about the long-term development of semiconductors and do not believe the bull market has definitively ended.
The market is currently repricing growth expectations for the entire AI industry chain over the next few years.
If advanced process demand continues to materialize and equipment stock valuations further return to reasonable ranges, this plunge may not be a bad thing for long-term investors.
But two things must be distinguished: the technological barriers have not disappeared, but that does not mean previous stock prices were necessarily reasonable.
I will continue to watch $KLAC, $LRCX, and $AMAT.
The truly worthwhile entry point is when valuations fully reflect risks while the companies’ long-term competitive advantages remain intact.
$SOXX has fallen for nine consecutive days, and the semiconductor sector has been hit to a historically rare extent. But I still believe the long-term bull market for AI is not over, and there are still opportunities for a new major rally in the future. Look at March and July of this year, and review similar adjustments over the past few years, and you'll know there's no need to completely lose confidence now. $QQQ $SPY $NVDA $MU
Let's first look at March this year.
On March 30, $SOXX closed at $309.79, and the market was also in a highly pessimistic phase.
By June 30, $SOXX had already risen to $640.76.
In just three months, it increased by about 107%.
Now look at July this year.
On June 30, $SOXX was still around $640, but by July 29 it had dropped to $465, a pullback of over 27%.
At that time, many investors were also worried about AI valuations, capital expenditures, and the sustainability of future growth.
From July 29 to October 5, $SOXX rebounded from $465 to $589.51, an increase of about 26.8%.
Although it did not fully recover the late June high, it proved that even after nearly a 30% crash, semiconductors still have considerable price recovery ability.
Let's extend the timeline.
In the first week of September 2024, $SOXX plunged 11.77%, but the following week it rebounded 9.28%.
In September and October 2023, U.S. Treasury yields continued to rise, with the 10-year Treasury briefly hitting 5%, and semiconductors adjusted for two consecutive months. Then in November, $SOXX rose 16.09%, and continued to rise 12.96% in December.
These market moves share a common feature: during adjustments, macro pressures and valuation concerns are amplified, but as long as corporate earnings continue to grow and capital flows back, stock prices have the chance to recover quickly.
Back to October 2026.
I have previously emphasized that the current situation is more like after the September rally ended, existing AI bulls are continuously exiting, incremental buying is insufficient, combined with valuation repricing triggered by U.S. Treasury yields, oil prices, and AI financing risks.
But this does not mean the long-term growth logic of the entire AI industry has been destroyed.
TSMC's net profit in Q3 grew nearly 69% year-over-year, and demand for advanced processes remains strong. Companies like $ASML, $NVDA, and $AVGO still hold extremely important technologies and customer resources in the industry chain.
I believe AI computing, advanced processes, storage, and high-speed interconnect will still have long-term growth potential. This is why I have not turned completely bearish due to the October crash.
Of course, I do not think this time will necessarily replicate the rebounds of March and July.
Currently, U.S. Treasury yields remain high, oil prices increase inflationary pressure, the November midterm elections are approaching, and AI infrastructure financing issues have not been fully resolved.
Especially this time lacks the obvious short-covering base seen in July, so capital inflows may take longer.
Therefore, my judgment remains divided into two stages.
In the short term, after consecutive extreme declines, a significant rebound is worth expecting, but the market may continue to adjust after the rebound. I tend to use rebounds lacking sustained buying support to reduce positions.
In the long term, as long as AI demand continues to grow, corporate earnings keep materializing, and the credit environment does not deteriorate systemically, I remain optimistic that semiconductors will stage a strong rally again.
From March to July, the market has already proven multiple times this year that sharp short-term declines do not necessarily mean the end of the long-term trend.
But to participate in the next rally, the premise is not to be forced out due to leverage and position loss of control during this adjustment.
For those holding quality stocks without leverage pressure, there is no need to be completely despairing just because of nine consecutive days of decline.
Market recovery may take weeks or even months. Some stocks may not return to previous highs, but companies with true moats and sustainable profitability are still worth long-term study.
I cannot guarantee when the next big bull market will come, but I will not deny the AI industry's opportunities in the coming years just because of the October pullback.
The history of March and July this year is worth remembering: the market can fall very hard in a short time and can also quickly resume rising once expectations improve.
Control risk in the short term, wait for the market to stabilize in the mid term, and continue to focus on quality companies in the long term.
I still believe the bull market has a chance to return, but there is no need to bet full positions and leverage that it will come back tomorrow.
$SOXX has fallen for nine consecutive sessions, marking the longest losing streak since 2006. What’s most worth studying now is what historically happened after similar concentrated sell-offs of this magnitude in semiconductors.
I found five market instances with valuable references. The results are clear: semiconductors often experience significant rebounds after extreme declines, but the timing and sustainability of these rebounds vary noticeably. $QQQ $SPY $NVDA $MU
First, September 2024, the closest to this time.
As of the week ending September 6:
$SOXX dropped 11.77%
$QQQ dropped 5.79%
$SPY dropped 4.14%
At that time, the market was worried about a slowdown in U.S. economic growth and overvaluation of tech stocks, leading to a concentrated sell-off in semiconductors.
The following week:
$SOXX rebounded 9.28%
$QQQ rose 5.94%
$SPY rose 4.01%
Afterward, semiconductors continued to rise for two consecutive weeks by about 0.37% and 4.03%.
This shows that even after a weekly plunge exceeding 10%, as long as macro expectations improve and selling pressure eases, the sector can quickly recover most of its losses.
Second, August 2024, with more volatile adjustments.
In the week of August 2, $SOXX fell 9.84%.
It then rose 2.40% and 9.18% in the following two weeks respectively.
Interestingly, although semiconductors experienced a clear rebound, they plunged again by 11.77% in the first week of September.
This is the situation I have been emphasizing: a large rebound does not mean the correction is over.
If one sees two consecutive weeks of gains and assumes all risks are gone, a new round of declines may still follow.
Third, October 2023, with a macro environment worth referencing.
At that time, the U.S. 10-year Treasury yield briefly touched 5%, and the market worried about the Fed maintaining high interest rates for a long time, putting continuous pressure on tech stock valuations.
$SOXX fell 7.54% in September and continued to drop about 6.8% in October.
But by November, as Treasury yields fell and market expectations for monetary policy improved, semiconductors showed significant recovery.
$SOXX rose 16.09% in November and continued up 12.96% in December.
Two consecutive months of correction did not end the subsequent uptrend.
This history is very relevant now. High interest rates can continuously suppress valuations, but once rate expectations change, growth stock valuations can recover very quickly.
Fourth, June 2022, a cautionary negative example.
At that time, the Fed rapidly raised rates, continuously compressing tech stock valuations.
$SOXX plunged 18.25% in June but rebounded 18.48% in July.
Looking only at July’s movement, one could mistakenly think the market had bottomed.
However, it fell again 8.59% in August and 11.05% in September.
By November, semiconductors rose 16.51% again.
The whole process is a typical downtrend: sharp drop, big rebound, another drop, followed by a strong recovery.
So a strong rebound alone does not directly prove the market has entered a new uptrend.
Fifth, March to June 2025.
In March 2025, $SOXX fell 10.92%, continuing down 1.93% in April.
This time, the market did not immediately recover after the first big drop month but continued to digest macro and policy risks.
Until May, $SOXX rose 10.18%; in June, it further increased 17.03%.
This indicates that corrections may last weeks or even months, but as long as the macro environment improves and earnings expectations stabilize, capital can still return to the semiconductor sector.
Back to October 2026.
This market movement is structurally similar in decline to September 2024, but I believe current macro pressures are more complex.
The U.S. 10-year Treasury yield remains around 5%, oil prices are high, the November midterm elections are approaching, and AI infrastructure financing risks are being reassessed by the market.
Meanwhile, valuation normalization after the September rise is still ongoing.
From the market perspective, I tend to think the current situation mainly reflects existing AI longs exiting rather than the largest-scale concentrated short attack. Insufficient incremental buying has caused semiconductors to break down continuously.
But this situation will not last forever.
History from August and September 2024 and October 2023 shows that semiconductors can produce considerable rebounds after extreme corrections.
Therefore, I remain optimistic about a clear technical rebound ahead and do not believe the long-term bull market has ended yet.
However, I now prefer to reference August 2024 and 2022’s downside.
After a rebound, another decline is entirely possible.
If Treasury yields stay high, oil prices do not fall significantly, and AI credit market pressures persist, short-term oversold recoveries will not be enough to reverse the mid-term correction trend.
Next, I will watch whether $SOXX can stop making new lows, break through the previous rebound high, and form higher lows on pullbacks. At the same time, $QQQ and $SPY need to stabilize, and semiconductor market breadth must improve.
If these conditions do not appear, even a short-term rebound of 5% or 10% will still be considered a bounce within a correction.
For those previously heavily invested, I prefer to use such unsupported rallies to reduce risk exposure.
For those with ample cash, there is no need to rush to fully invest on the first rebound.
History gives me a clear conclusion:
After a 10% plunge in semiconductors, the next phase can quickly rebound close to 10%, or it may first consolidate, continue to probe lower, and then take a month or longer to recover.
The current panic is not unprecedented, and a clear rebound ahead does not require a miracle.
But rebounds and trend reversals must be judged separately.
No need to be overly pessimistic short-term; mid-term still requires position control. As long as Treasury yields, oil prices, and capital structure do not improve substantially, I will not change my view of a choppy downtrend because of a few big bullish candles.
$SOXX has fallen for nine consecutive days, with semiconductors continuously breaking support levels, and retail investor sentiment is very poor. However, from the perspective of the options market, I believe there is no need to completely lose confidence at this point. Although the current trading structure is fragile, it also has the conditions to amplify a rebound. $QQQ $SPY $NVDA $MU
As of the close on October 16, $SOXX was at $493.39, with a Put/Call open interest ratio of about 1.86, indicating that put option holdings are significantly higher than call options. At the same time, third-party models estimate that the Gamma exposure has already entered negative territory.
This set of data deserves serious study.
A high put holding indicates that the market has many bearish or downside protection-related positions. However, this may include a large number of institutional insurance purchases on existing stocks and should not be directly interpreted as everyone shorting.
Negative Gamma implies another type of risk.
If market makers are overall in a negative Gamma state, they may need to continue selling the underlying assets to hedge Delta during declines, further amplifying the drop. The lower the price falls, the more apparent the selling pressure from some hedging trades may become.
But this mechanism works both ways.
Once the market starts to rise, the same hedging structure may force market makers to buy the underlying assets, further amplifying the rebound.
So don’t think that after nine consecutive days of decline, the market only has the option to continue falling.
The extreme moves in the past few days may include both the exit of existing long positions and the amplification of volatility caused by options hedging trades. The speed of price decline does not necessarily fully correspond to the deterioration of corporate fundamentals.
And October 16 happens to be the monthly options expiration date.
As some options expire, the original Delta and Gamma risk exposures will change, and market makers will need to readjust their hedging positions. The new options position structure will gradually form next week, and short-term price behavior may change accordingly.
Of course, options expiration does not mean selling pressure will necessarily disappear, nor does it guarantee an immediate market rebound.
But at least for now, the already formed speed of decline cannot be directly extrapolated to every future trading day.
I still have expectations for a subsequent technical rebound.
Nine consecutive days of selling have put semiconductors in an extremely weak state. As long as the speed of existing capital outflows slows, new buying begins to absorb, combined with some put position closures and hedging adjustments, it is entirely possible to form a considerable rebound.
However, I also do not believe there is enough evidence yet to prove that the market is about to experience a large-scale short squeeze like in July.
What is truly worth observing next is whether put protection demand begins to decline, whether implied volatility falls, and whether the rise can be continuously supported by spot trading volume and market breadth.
If these indicators improve simultaneously, the sustainability of the rebound will be more promising.
My previous judgment has not changed. This October adjustment looks more like a continued exit of existing AI longs, combined with a re-pricing after prior valuation expansion. U.S. Treasury bonds, oil prices, and AI financing pressures have not yet been resolved, so even if a significant rebound occurs, a secondary pullback still needs to be guarded against.
Therefore, there is no need to be overly pessimistic now, but also no reason to use high leverage and short-term options to bet on a rebound next week.
The options market can amplify short-term rallies but cannot guarantee any stock will return to its original price.
For those already holding quality underlying stocks, as long as fundamentals have not clearly deteriorated and positions are within tolerable ranges, there is no need to hastily abandon long-term judgments just because of several days of panic selling.
Those with heavy positions should prioritize risk control. If a strong rebound lacking sustained buying support occurs later, they can still use the rise to reduce exposure.
I still tend to believe the bull market is not over, but the adjustment may need more time to digest.
From the options structure perspective, the current high volatility is not only released downward. After selling pressure weakens, price recovery may also be rapid.
The most important thing now is to retain enough capital and patience.
There is no need to be completely despairing after nine consecutive days of decline, nor to bet all positions to prove you can catch the bottom.
It is uncertain when the rebound will happen, but the volatility risk already accumulated in the market warrants considering both upward and downward directions simultaneously.
$SOXX has fallen for 9 consecutive trading days, and many people have lost confidence in this round of the market. However, from the perspective of candlesticks and market structure, I believe there is no need to be overly pessimistic right now. The short-term downtrend is indeed very obvious, but continuous declines do not mean it can only keep falling in the future. $QQQ $SPY $NVDA $MU
Let's first look at the candlesticks of this decline.
On October 6, $SOXX closed at $589.45, and by October 16 it had dropped to $493.39, a cumulative decline of about 16.3% over nine trading days.
In just two weeks, semiconductors have hardly seen any sustained rebound, with highs and lows continuously moving lower. Especially on Friday, the intraday low touched $492.83, and it finally closed at $493.39, almost at the day's lowest point.
This closing structure indicates that sellers maintained a clear advantage until the end of trading. There is not enough basis to declare a bottom now.
But there is a detail worth noting.
On October 15, $SOXX's intraday low was $495.78, then it rebounded to $517.12 at one point, finally closing at $514.71.
Although it still fell compared to the previous trading day, the intraday candlestick shows a clear low-level support, and the closing price was higher than the opening price.
This at least indicates that the market is not completely without buying interest.
However, Friday's new round of selling broke the previous rebound structure again, showing that buyers are not yet strong enough to reverse the trend.
I think everyone should understand one thing now: the downtrend can continue, but the speed of decline will not always remain the same.
After consecutive large bearish candles, the market may first experience volatility contraction and sideways movement at low levels, or it may directly have a quick rebound. Some short sellers taking profits, weakening selling pressure, and funds rebuilding positions can all drive price recovery.
This is why I still expect a strong rebound to appear later.
From a technical perspective, I will focus on whether $SOXX can stop making new lows and climb back to the $510–$520 range, and whether the pullback after the rebound can form a higher low.
If it stops making new lows for several consecutive trading days and then breaks through the previous short-term rebound high, with more semiconductor component stocks strengthening simultaneously, the short-term market structure may begin to improve.
$QQQ and $SPY are also very important. If these two major indices can stabilize simultaneously, the foundation for semiconductor rebounds will be more solid.
Of course, even if these signals appear, I will not immediately conclude that the mid-term correction is over.
US Treasury yields, oil prices, and AI financing pressures still exist, and the market could continue to oscillate downward after a technical rebound.
Therefore, I still recommend that investors with heavy positions use rebounds lacking sustained buying support to appropriately reduce risk, rather than rushing to leverage up to recover losses.
But I also want to remind everyone not to assume that after nine consecutive bearish candles, there will never be bullish candles again.
The current candlesticks do look bad, and the market has not confirmed a bottom. But short-term price structure deterioration and the end of the entire bull market are two completely different judgments.
I still tend to believe that this is a deep correction within a bull market. As long as the long-term profitability logic of companies is not fundamentally broken, the market still has room for revaluation and recovery in the future.
You don't need to guess every day whether there will be a 10% rebound tomorrow, nor should you completely abandon your long-term investment plan because of one or two weeks of decline.
If you have leverage, first control risk; if you hold quality stocks, re-examine the fundamentals; if you have cash, be patient and wait.
Candlesticks reflect the current strength of buyers and sellers, not the final judgment of a company's value over the next ten years.
The current advantage of sellers does not mean buyers will never return.
The market has not given a bottom signal yet, but there is also no reason to believe this round of decline will never end.
Be patient, keep your position within what you can bear. Wait for the market to truly stop falling and for trend repair, then reassess opportunities.