Semiconductor Momentum Stalls After an 18-Session Winning Streak
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The four major indexes finished roughly flat, but semiconductor breadth weakened sharply. The Philadelphia Semiconductor Index ended an 18-session winning streak, with 24 of its 30 constituents declining. The group is clearly losing momentum. Even so, the intraday low was set within the first hour, after which the sector made progressively higher lows and recovered nearly half of the decline. That suggests buyers are still willing to step in. For now, this looks more like consolidation after an extended rally than a confirmed trend reversal.
The next move requires confirmation in either direction. For SOXX, watch 448.93. For SMH, watch 497.74 and Friday’s low. A decisive open or close below those levels would strengthen the pullback case. If the ETFs instead reclaim the day’s highs, momentum buyers are still active and the semiconductor rally could extend.
The largest macro tail risk remains oil and the Middle East. Brent has pulled back from roughly 109 to around 102, but it is still elevated and negotiations over the Strait of Hormuz have not produced a meaningful breakthrough. Persistently high oil prices will keep pressuring margins in traditional industries. Once profit-taking increases in semiconductors, sectors without strong fundamental support could weaken more quickly.
The flow backdrop is also less supportive than it was earlier in the rally. CTA long exposure has recovered to roughly 75% of pre-conflict levels. Global long positioning is around $111 billion, with about $32 billion in S&P 500 longs. Buying over the past week and month has already been substantial, which leaves less incremental demand ahead. Concentration remains high and breadth remains poor. CTA sell triggers are still some distance away, but systematic flows are no longer providing the same fresh support they did earlier.
For semiconductor ETFs, the focus remains SOXX and SMH. The signal is not whether they are up or down on a single day, but whether key lows break decisively or the recent highs are reclaimed. AMD has a similar setup. The short-term line in the sand is 328.81. A break below it would make a gap fill toward 309 more likely, implying roughly a 10% retracement and a clearer short-term downtrend. A move above the recent high would show that momentum buyers remain in control.
For MSFT, attention shifts to April 29 earnings and management’s comments on AI CapEx. Options imply a move of roughly $30 around a $425 reference price into May 1. A break below $395 would damage the recent bullish structure and return the stock to a range. A move above $455 could clear resistance near $452 and confirm another leg higher. NVDA has gained roughly 4% in each of the past two sessions and is outperforming AMD, but with the sector still testing support, chasing offers unattractive risk/reward.
For semiconductors, I would wait for confirmation rather than make an early call. A decisive open or close below the key lows matters; an intraday wick does not. If SOXX, SMH, and AMD lose their respective support levels, I would treat the current consolidation as a more meaningful pullback. If they reclaim the recent highs, I would stay with the trend rather than try to call a top in advance.
For MSFT, investors with larger positions can use the earnings-implied range as a risk framework and avoid repeatedly adding into short-term volatility. A bearish post-earnings move below $395 would weaken the setup, but it could also create a better entry for underweight long-term investors. For NVDA, existing holders can let the trend work. I would not chase after two strong sessions. Long-term buyers should also be prepared for normal drawdowns rather than mixing a long-duration thesis with short-term stop-loss logic.
Disclaimer: This article reflects personal market observations and a trading review only. It does not constitute investment advice. Markets involve risk; trade carefully.