South Korea dropped 11.5% in a single session. The contagion calls are already flooding in.
Gianni Di Poce thinks they are dead wrong.
He sees the opposite setup forming. The selling abroad is far heavier than anything happening here at home.
US stocks are down less than their global peers today. That gap is the real signal.
Tech and semiconductors led the drop. The NASDAQ took the brunt of it.
The Dow finished higher on the day. The Russell 2000 hit a fresh all time high just yesterday. Money is rotating underneath the surface.
Gianni’s bigger point lives in the currency market. The dollar/yen just hit a new multi year high. The euro broke to new lows.
This is a global rotation into the dollar. If that breakout sticks, it marks the late stages of this rally.
This does not mean a bear market is coming next month. It means we are entering a final blow off phase. Those phases turn violent to the upside.
Here is the mechanism. Foreign money wants into US stocks. Investors have to convert their currencies into dollars to buy them.
Gianni compared it to the parabolic runs in Korea and Japan over the past year. This time the money floods into the US.
In tonight’s video, Gianni maps out the rotation and where the next opportunities are setting up:
The dollar/yen hit a new multi year high while the euro broke to new lows, the clearest sign yet of a global rotation into the dollar.
The VIX future and VIX cash both sit below 20, even with all the hysteria over one day of selling.
Biotech is breaking out to new highs, with IBB clearing a multi year base. Gianni recently shared a Relay Therapeutics (RLAY) setup in the trade desk.
Uranium is carving out its next move higher, and quantum names like ARQQ are holding firm on a red day.
One day does not make or break a trend. The bigger story is where all that global money lands next.
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