$Direxion Daily Semiconductors Bear 3x Shares(SOXS)$ I got in a bit too early, and the recent drop was rough. I noticed that even though this isn't a stock and isn't supposed to move like one, it did hit a "double bottom" recently – the ~$3.30 range was tested once before on 6/22. The following day was a cooldown, similar to the previous pattern. At some point, though, the cooldown phase will need to last longer than just a day. I think we might be entering that part of the cycle.
I don't expect these semiconductor companies to lower their CAPEX anytime soon, as that's what's been significantly inflating their price targets. Banks and private credit are already slowing down on AI loans, and I believe those loans could start seeing defaults within the next 12 months. Other factors are likely to contribute to a broader cool-down much sooner.
The recent, exceptional run in semis caught many off guard. A lot of people kept trying to call the bottom and got burned. But based on the charts, at some point a bottom has to form, and from where I stand, this looks like it could be it.
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