Wednesday, September 23, 2026
Hey traders!
The semiconductor complex just ran six sessions in a row. The semiconductors, memory, and the AI hardware names did the heavy lifting, and the Nasdaq printed fresh highs earlier this week. Today, that sprint is pausing. That is not a surprise after an explosive move. This kind of digestion is normal, and more of it will allow some consolidation ahead of the October earnings season.
Micron (MU)
There is another major catalyst on my radar before we hit October: Micron earnings. MU reports fiscal Q4 after the close on Wednesday, September 30. We’ve been trading MU in the Mastering the Trade room, as noted in the Sept. 4 Five Star Trader update, and we have discussed it regularly live in our trading room. Due to my technical and fundamental setup on MU, I got long MU with a $1,100 price target before earnings. While I took profits a little early on this ticker last week, it met the full price target of $1,100 today.
Sometimes I find it helpful to review winners like this to replicate the technical setup for the next entry on the next ticker. So, why did MU come through so well? It goes back to a confluence of factors, those 5 Stars I look for.
- MU has a history of beating EPS estimates, having beaten 8/8 quarters in a row.
- The company has experienced EPS growth in 6/7 quarters.
- The ticker is in a bullish trend as coded by my TrendStrength Turbo candles
- It’s gapped up 4/8 quarters post-earnings
- It’s rallied more than 5% in the Earnings Hot Zone in 6/8 quarters
From a technical standpoint, it also:
- The stock had reclaimed the 50 SMA, which is the zone I prefer for new longs.
- It had finally broken the $1,000 resistance area.
When MU pushed through $1,000, the Hot Zone bid showed up, and today the stock tagged the $1,100 target on the high (the session high was just above $1,100). It has since pulled back with the rest of the chip group. The pre-earnings momentum thesis did its job. From here, I am not chasing the last dollars of the run. On a major resistance and target hit like that, I generally take profits and move onto the next trade. The goal of that structure was the run into the report, not to hold the trade all the way into earnings, and certainly not through earnings.
Last Week’s Failed Breakdown
Last week’s index break below the 50 SMA was a fakeout. The Fed regime is not. Last week, in The Macro Event That Matters Right Now, I laid out the first hike since 2023 and noted that QQQ was capped below the 50-day SMA. I’m always ready to get short-term bearish when I get a high volume close below the 50 SMA. In this case, the indexes briefly broke down, and it looked like that was the move that may be coming through. I hedged just in case of a post-Fed downside follow-through, but instead we saw strong, high-volume buying post-Fed.
With bearish momentum, fundamental news, and a potential technical breakdown, I like to hedge… especially in September. But I’m more than happy to absorb a loss on a hedge to keep trading the upside, and that’s what happened here.
Losing money on a hedge is still lost money, but ultimately, as a long-term stock market bull, I’m more than happy to continue focusing on the upside. The policy shift was absorbed quickly, momentum shifted, and buyers came in. Sometimes, after a big news-related event, the put/call ratio spikes, opening the market to rocket higher. Going from a close call on a breakdown to new highs in a week is always such a crazy move when you’re a trader, but the Fed can do that to you!
While the initial technical downside signal turned out to be a fakeout, the fundamental regime shift after the Fed remains in place. Higher policy rates, inflation still described as elevated, and officials still talking about more hikes if needed. Yields are still hovering near 5%. That mix still matters for multiples, for financials, and for how far this tape can stretch without a pause.
Ultimately, there is nothing I love more than when the indexes correct higher, and the Nasdaq reversal goes on to print a record high! When the short-term technical damage is bought, and leadership comes back through in AI hardware, chipmakers, and memory stocks, it’s a fantastic sign of bullish stock market resistance.
I am still long the memory theme via DRAM, but I’m not adding more size just yet after this rally, and I’ve taken profits in MU. I’m also trading Microsoft, Nebius, SOXL, and more in the Mastering the Trade room.
Bottom line
The MU long from the 50 SMA / Hot Zone hit the $1,100 pre-earnings target today. The chip sector is pausing after a very extended sprint, but it is still my favorite area of focus due to relative strength and I’m eyeing more buys on pullback. Last week’s index breakdown already corrected higher. I am keeping the post-Fed regime analysis intact: tighter policy, still-elevated inflation, and a market that can run on AI demand while still needing digestion when the technicals are extended after a big move. I’m not chasing breakout moves, but eyeing some entries going into October, because it’s already time for another pre-earnings momentum season!
Trade smart, stay disciplined,
VP of Options, Simpler Trading
The information in this newsletter is for educational purposes and does not constitute investment advice. Trading involves substantial risk of loss.
