Micron’s Rescue Hides A Trap

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Micron’s (MU) earnings ripped the semiconductors higher after the close. The pop looks like a rescue on the screen. The S&P (SPX) still sits trapped at the lower edge of the expected move.

That edge is a single number. It is 7380 in the SPX.

Your entire trading week comes down to whether that line holds.

We broke down hard on Tuesday. Every session since has hugged that lower edge.

The index closed slightly lower today. Then Micron reported after hours and lit a fire under the chips.

Here is the catch. A 40 to 50 point jump on that news still leaves the S&P boxed inside the lower edge of the expected move.

The expected move this week ran near 120 points. We already traveled the full distance to the downside.

There is only about 20 points of give on either side of that line. The market spent two full days boxed inside it.

The rally feels dramatic. On the chart, almost nothing changed.

The bigger story tonight is rotation.

Everything in this tape lately has been money moving from one corner to another. A move back into semiconductors has to be funded by selling somewhere else.

That selling already started after hours. Financials gave back ground while the chips ran.

Microsoft (MSFT) tells the same story. The stock is down 22% on the year and pressing toward three year lows.

Here are the numbers from tonight’s video that matter most:

The lower edge of the expected move sits at 7380 in the SPX. Holding it keeps the rally alive. Losing it drags the chips down by Friday.
The S&P is poised to move $83 through the rest of the week. Tomorrow alone carries a $60 expected move.
Microsoft is down 22% year to date and trading near three year lows around 350.
Broadcom (AVGO) is up about $10 after hours. AMD and Marvell (MRVL) are catching a bid next to Micron.
Financials sold off into the after hours session. They are the likely source for any rotation back into chips.