• Russell 2000: +19.0%
• S&P Mid Cap 400: +14.3%
• Nasdaq Composite: +13.0%
• S&P 500: +10.6%

The market is up year-to-date, but rolling corrections make it feel like a down year, and recent haircuts have turned big winners into losers. Momentum (MTUM) continues to swing the other way, and it's painful.

Yesterday, momentum was -1.87%, and according to Goldman’s trading desk, volatility in the momentum ratio relative to the broad market has never been this high.

The wild swings are only adding to the decline in momentum this quarter. Year-to-date, it's by far the best-performing factor, and quarter-to-date, momentum is by far the worst-performing factor.

Momentum Technical View

The 17-day rate of change (ROC) for Technology (XLK) momentum has fallen by 35%, the sharpest decline on record.

Key Technical Test

Momentum is camped right on the 50-day moving average and must make a stand, as the 200-day moving average is a long way away. I don’t think there are any fundamental reasons for momentum to be under this much pressure, which makes it harder to know when it might stop.

Mag Seven Saves the Day

It was a wonderful session for the “Mag Seven,” with the group rallying by 2.34%.

Volume spiked.

The exchange-traded fund (ETF) closed above the 50-day moving average, and the rate of change is charging ahead.

Apple Shines

Things could get even juicier if reports that Apple (AAPL) is considering acquiring artificial intelligence (AI) chip companies to “boost its efforts to build server chips for running AI” are true.

Today’s Session

Semiconductor pressure continued this morning despite more amazing news and fundamental developments. 

Taiwan Semiconductor (TSM) posted a monster beat and raised guidance above consensus.

But selling begets selling; at some point, it triggers panic. In South Korea, measures are being taken to curb speculative fever and mitigate the wild gyrations in that market.

 

The new rules:

→ No new listings until conditions stabilize

→ Minimum account balance raised from $6500 to $20,300

→ Required training increased to three hours

→ Minimum trade size from one unit to 20

Semiconductors are oversold, but emotions and a series of margin calls now supersede fundamentals.

Initial Jobless Claims

Initial jobless claims declined to 208,000 from 216,000.

Continuing claims fell by 16,000 to 1,805,000.

Retail Sales

Retail sales came in at 0.2%, in line with consensus, and the trends were encouraging, especially given that non-store retailers are the most “discretionary” form of spending.

The control number +0.5% is plugged into the GDP calculation.

Comments

Should the US consider limiting single stocks and leveraged ETFs as well? as a former Financial Advisor/Portfolio Manager - Yes, they are financial kryptonite! at the very least there should be a means test and/or limitations of portfolio exposure to leveraged products and margin for that matter. Thomas Caffery on 7/16/2026 9:55:25 AM

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