Market Briefing For Monday, July 20, 2026

Correlation 'can' be causation occasionally; and in my view factors indeed contribute to some of this past week's rocky heaviness. Most catalysts, aside war or other suppressed 'real politics' and war implications, ranged unusually widely (geopolitics to AI to Asian selling); and most are not grasped I think by many analysts, investors, or pundits; although lip-service is sometimes heard.

Simply put: a) we had the excess 'CapEx' spending on data-centers and big AI hyper-scalers for months and thought people were chasing way too high in terms of price; b) believing that Quantum Computing (such as our D-Wave) 'and' forthcoming key linkages from optical interconnects (like Kopin trumpets arriving late this year) will simplifying the cost and size of 'AI compute' ahead; c) accordingly the memory stocks broke and that fed the big-cap tech exodus; plus d) you had much of that business concentrated in South Korea; with lots of (mostly young) traders there playing the overall sector, contributing to; d) a very incredible run on particular Korean ETF's; getting little attention here; but at the same time contributing to margin calls and mass compelled liquidation, a topic touched on in recent days. (Spillover hit crypto and U.S. markets too).

I could mention an 'e'); which would be July Expiration; 'open interest' in Calls was generally heavier than common for a non-Quarterly monthly Expiration, and you could see that the way some stocks churned around and then sort of finished away from rounding numbers with heaviest Call concentrations.

I think that was especially so with stocks like Ondas although others such as Unusual Machines also finished just shy of a round number (however smaller open interest due to high premiums and less volume overall). As an aside; an analyst increased (or initiated; unsure) price target for UMAC to 42. Presume a reason would be near-monopoly for U.S.-made small-drone motors such as the nearly ubiquitous quadrotors, for which UMAC supplies many makers.

Market X-ray: I'm not going to chime in on particular higher price targets; but do expect many tickers we follow to march higher, but it's a process especially given seasonal as well as news restraints; and Earnings Reports awaited with 'bated breadth' (pun); mostly in August. So it's a rocky roller-coaster that may or may not 'really' come off the rails; and hopefully not unless a wider war will shoot Oil over 100 and truly tank everything, just chilling the backdrop mood.

Bottom-line: I am not at all surprised to see this market heaviness; talked of it for weeks related to big-cap tech aside seasonal pattern flows. A decisive or terminal breakdown of S&P and so on hasn't really occurred; but risk is there 'if' matters deteriorate globally. More so in the big-caps than small-caps; many of whom are unlikely to erode much more (if at all); since they already did. To the contrary, if the backdrop tone is merely neutral; such tickers have potential to do quite well if deals and Earnings (for Q2 but more important guidance) of an impressive level are seen. However even for those the serious gains likely occur in 2027.

Sort of reminds me of our early 'Quantum ticker' buys back in 2024, where all horsed around and then finally just took off without more news; of course then shaking out when Nvidia tried to shut-down interest; then Jensen caved days later (and the same tickers soared anew). Got to have a sort of temperament to deal with that, or not play. Although now most agree both on Quantum (we are just in D-Wave now) and particularly with commercial and military demand for 'autonomous & drone' products, services (and 'parts'), that's embraced too.