Daily Market Analysis – MAG 7 Sell-Off, $100 Oil and Semiconductor Strength
Happy Friday, everyone.
Yesterday was a tough day for most stocks, excluding semiconductors, which remained my main focus. The MAG 7 was hit particularly hard. This is the excerpt fromyesterday’s analysis
MAG 7 Sell-off
Yesterday’s drawdown in the MAG 7 was the largest since the tariff shock in April 2025. You can see the rebound that followed that move.
TSLA contributed to this DD by falling 14% on earnings and CAPEX increase leading to their first cash burn in years (this is postive for the AI trade as they are agresively expanding the clusters in Texas).
Options however are supporting the thesis that we should see the names from the mag 7 pick up or atleast stableise for MSFT, GOOGL, META, AMZN and GOOGL tends to drop about 6-7 percent on earnings beats (see last post for the data).
Oil
On top of this sell-off oil moved to our $140 target for the USO ($100 for the Brend crude, 100.27 to be exact) as a result of the escalation in the Red Sea.
Traffic seems to be picking up and while slowly its likely to take some pressure of the oil market but it’s not out of the woods yet.
Market positioning and exposure are still v bullish with the first support at 135 for the USO
As previously mentioned rates repricing begins after we move above $100 on the brent so if oil starts moving above that, risk eversion is v important
SPY, QQQ Analysis
SPY is definitely nbot ou of the woods as positioning is turning more negative and falling bellow the major $740 level.
For now i’ll likely sit on my hands and play a bounce from $730 if we get there, but note that i will be going into the weekend with minimal risk. This is generally a good practice when uncertainty is high despite the odds of a TACO
Skew is also leaning slightly bearish meaning implied volatility for downside puts is increasing relative to upside calls and the market is pricing in a larger fear to a downside move.
For QQQ, I continue to be defensive as market positioning remains bearish and the market has lost the $700 level. For now $680 is likely to be the minimum target for the session with a potential for a bounce towards the $700 but risk remains high.
For SOXX, the main support is at $530, while the upside target remains $580. However, reaching that level will likely require confirmation from hyperscaler CAPE
VIX Analysis
The VIX is still not showing signs of immediate danger, despite the rise in oil volatility. However, the term structure has shifted higher across both the short and long ends. Ideally for a buy the dip the short end should increase while the longer end should stay relatively unchanged
Market-maker exposure and broader market positioning are also signalling a more bullish view on volatility, with options-market positioning concentrated around the 25 and 30 strikes
Intel’s massive earnings beat supports the AI-infrastructure trade:
Revenue: $16.1 billion vs. $14.4 billion expected
EPS: $0.42 vs. $0.11 expected
AI revenue: $6.3 billion vs. $5.5 billion expected
Gross margin: 42% vs. 39% expected
Q3 Guidance
Revenue: $16.4 billion vs. $15.1 billion expected
EPS: $0.38 vs. $0.27 expected
They also said that 2026 CAPEX is increasing from $18 billion to $20 billion, with 2027 CAPEX expected to be “up meaningfully.” Again, bullish for AI infrastructure
CXMT, China’s largest DRAM producer, is reportedly charging more than Samsung’s approximately $1,240 price for comparable 64GB DDR5 server-memory modules, meaning they are not going to flood the market with cheap memory.
This is supportive for memory stocks and the broader AI trade. It could also help support SPY, as semiconductors account for approximately 18% of the index.