Hi Traders!
Today is exactly why I pay attention to which major companies are reporting earnings, including which sectors and industry groups they belong to. Meta Inc (META) and Lam Research (LRCX) are weighing on the Nasdaq together, with Nasdaq futures closing down more than 2.75%. A negative reaction to a key report in one stock that is a major index or sector name can change the trading environment for an entire group.
SpaceX’s earnings provided a fantastic boost on Tuesday, but that optimism has already been overshadowed as the market turns its attention to today’s selling. The Nasdaq is breaking prior support, and SMH closed down 5.99%, which is a substantial move for the semiconductor ETF, and the week still has one more trading day. Then, we’ll head into another major week of earnings.
I’m still bullish on semiconductors over the long term, but that is why understanding time frame in trading and investing is absolutely critical. In the short term, I’m adding bearish positions because I’m a trader and I’m definitely going to trade these bearish breaks! I trade short-term moves while holding long-term stocks. Right now, that means respecting the weakness while identifying the support zones that could set up the next opportunity to get back in. Oftentimes, the fall is a great time to trade to the downside in the options market, while adding long-term stocks.
If you missed Tuesday’s LRCX warning, you can revisit my earnings outlook here.
LRCX Expected Move: A Bigger Earnings Decline
The LRCX expected move on my Tuesday chart was ±$17.54. It opened today with a $26.31 gap lower, about 10.1%. That opening gap alone was 1.5 times Tuesday’s estimate.
By the earlier intraday chart snapshot below, LRCX had fallen to $231.25, down about $29.56, or 11.33%, from its previous close. That puts the total decline at approximately 1.69 times Tuesday’s expected-move estimate. The selloff has extended beyond the opening gap.
On Tuesday, I also pointed out that LRCX’s large July earnings gap had failed to produce sustained follow-through. I was concerned about how high expectations had become heading into this report. Today’s reaction is a follow-up to that discussion. Lam supplies equipment used to manufacture semiconductors, so I watch its reaction for what it could mean for the broader chip group. Its weakness is adding to the pressure on semiconductors and the Nasdaq.
But sometimes the reaction isn’t about the numbers; it’s about the technicals. LRCX went into earnings below the 200 SMA, which can be very destructive for a company heading into a report. Being stuck under resistance means a stock may need to rally 1-2x the expected move to the upside to recover, and without a massive catalyst, it just can’t happen, and the lack of enthusiasm takes hold.
META Earnings: Why I’m Targeting the 200 SMA
META opened at $676.35, a $21.17 gap lower than its previous close, about 3%. It ended up making a low on the day at $639.69 before closing at $648.08, which is a decent enough bounce but nowhere near enough to recover this downside move. This is critical because it demonstrates a company that continued selling off after the initial gap down, which is never a good sign.
At the earlier chart snapshot below, META was down $52.51, or 2.48 times the original $21.17 opening gap. By the close at $648.08, the loss was $49.44, or 7.09%, still 2.34 times the opening gap.
When a stock gaps down, I want to see buyers come in and start repairing that gap. With META, buyers haven’t been able to sustain a recovery. The opening gap is being sold further, creating a bearish post-earnings setup.
The decline has reached the expected-move area I was watching, which is typically a zone where I look for a bounce. But META has also broken critical support at the 50 SMA on high volume. Combined with the continued selling after the open, that keeps me bearish down into the 200 SMA at the $630–$635 price zone. Check out my META Instagram breakdown for an explanation of Meta’s earnings numbers.
We discussed META on Tuesday as one of the names that could influence the Nasdaq’s next move. Its reaction is now adding to the downside pressure. The size of the move, the support break, and the selling after the open all matter to my outlook.
Nasdaq Support and the SMH Selloff: Watching the 200 SMA
LRCX and META show why I look at both the size of an earnings move and what happens after the open. META’s weakness and the pressure coming from Lam Research and the semiconductor group are dragging the Nasdaq down hard. The post-earnings technical analysis gives me an idea of where price goes from here.
The Nasdaq was so close to a buy zone at the 50 SMA and was trading so well post-SpaceX earnings, but unfortunately, due to the negative and extreme reactions to the tickers that reported earnings today, we are seeing a Nasdaq reversal at the 50 SMA. This is going to require another major catalyst to reverse this technical destruction because at this point, we are teetering on the September lows. A break of this key level of support could easily send the Nasdaq careening lower. 
SMH closed down 5.99% and is headed toward its 200 SMA, the most critical zone on the chart. This is one of my favorite long-term buy levels (and I’m still a long-term semi bull), however, if this zone breaks, it opens up the flood gates to the downside. That would result in a substantial move, making the response at that support zone especially important. Ideally, buyers step in, and that area holds. If semis go, so does the Nasdaq, and that will happen directly into Magnificent 7 earnings.
The Stocks Getting Hit Inside SMH
The SMH selloff is widespread. As of approximately 12:11 p.m. PT, all 25 stock holdings were lower, and SMH was down 6.06%. Astera Labs, Lam Research, and Teradyne were each down more than 10%. The weakness extends across semiconductor equipment, processors, connectivity, and memory.
| Holding | Intraday Change | SMH Weight |
|---|---|---|
| ALAB · Astera Labs | −11.74% | 1.00% |
| LRCX · Lam Research | −11.67% | 3.84% |
| TER · Teradyne | −10.39% | 1.18% |
| MRVL · Marvell Technology | −9.82% | 4.52% |
| MPWR · Monolithic Power Systems | −9.51% | 1.24% |
| KLAC · KLA | −9.36% | 4.16% |
| AMD · Advanced Micro Devices | −8.62% | 5.49% |
| INTC · Intel | −8.05% | 4.07% |
| NVDA · Nvidia | −4.61% | 20.56% |
| TSM · Taiwan Semiconductor | −4.73% | 9.56% |
Intraday percentage changes are measured from the October 21 close, using Yahoo Finance quotes linked by ticker. SMH weights are from VanEck’s October 21 holdings. Quotes were captured around 12:11 p.m. PT on October 22; the LRCX, META, and NQ charts above are earlier intraday snapshots.
Equipment stocks are taking a particularly hard hit: LRCX, TER, and KLAC are joined by Applied Materials (AMAT), down 7.40%, and ASML, down 6.67%. Memory is under pressure too, with SK hynix (SKHY) down 7.61% and Micron (MU) down 6.09%. These are several parts of the semiconductor supply chain selling off together.
The largest weights matter as well. NVDA accounted for 20.56% of SMH at the prior close, so its 4.61% decline puts substantial pressure on the fund, even though other stocks are down more in percentage terms. TSM’s 4.73% drop and Broadcom’s (AVGO) 4.39% decline add to that pressure. This is why I use my Market Map to connect the earnings story with the holdings and exposure underneath an ETF.
When SMH Has Seen This Kind of Selling in 2026
To put today’s move in context, I reviewed daily prices from January 2 through October 21. In those 202 completed sessions, SMH traded at least 6% below its previous close on five dates: June 5, June 9, June 23, July 2, and July 7. The Nasdaq-100 also fell on each of those days.
| Date | SMH Intraday Low | SMH Close | Nasdaq-100 Intraday Low | Nasdaq-100 Close |
|---|---|---|---|---|
| Jun 5, 2026 | −9.22% | −9.22% | −4.86% | −4.77% |
| Jun 9, 2026 | −7.27% | −1.20% | −4.14% | −1.12% |
| Jun 23, 2026 | −7.72% | −7.01% | −3.53% | −3.29% |
| Jul 2, 2026 | −6.10% | −4.54% | −2.42% | −1.61% |
| Jul 7, 2026 | −6.20% | −3.78% | −2.44% | −1.77% |
All percentages are measured from the previous trading day’s close. “Intraday Low” shows each instrument’s worst level during its own session; those lows did not necessarily occur at the same time. The Nasdaq comparison uses the Nasdaq-100 cash index (NDX), while my chart above shows NQ futures.
June 5 and June 23 stand out because SMH finished down 9.22% and 7.01%, respectively, while the Nasdaq-100 closed down 4.77% and 3.29%. Those were the only two earlier sessions this year when SMH closed down at least 6%.
June 9 tells a different story: SMH fell as much as 7.27% but recovered to finish down 1.20%, while the Nasdaq-100 recovered from a 4.14% intraday decline to close down 1.12%. That is why I’m watching how buyers respond, rather than treating a large drop on its own as a reason to get back in. Today’s 5.99% closing decline leaves me watching whether support holds and a recovery develops.
What SMH and QQQ Did a Week Later
I also wanted to know what happened after those major down days. Using the same five dates, both SMH and QQQ were higher five trading sessions later. SMH gained between 3.16% and 8.82%, while QQQ gained between 1.45% and 3.19%.
| Selloff Date | Five Sessions Later | SMH Return | QQQ Return |
|---|---|---|---|
| Jun 5, 2026 | Jun 12, 2026 | +8.82% | +2.31% |
| Jun 9, 2026 | Jun 16, 2026 | +4.23% | +3.11% |
| Jun 23, 2026 | Jun 30, 2026 | +5.44% | +3.19% |
| Jul 2, 2026 | Jul 10, 2026 | +3.16% | +1.81% |
| Jul 7, 2026 | Jul 14, 2026 | +3.24% | +1.45% |
Returns run from the selloff day’s close to the close five subsequent trading sessions later, excluding the initial day’s loss. They are price returns, not dividend-reinvested total returns. July 3 was a market holiday, so the July 2 comparison ends July 10. Historical comparisons were calculated from daily price data and cross-checked against SMH and QQQ closing prices on ChartExchange, plus Nasdaq-100 closing data via FRED.
That rebound history is a reason for me to stay alert for the next bullish setup as SMH approaches its 200 SMA. It doesn’t mean the recovery starts immediately or erases the original loss: after June 5, SMH rebounded 8.82% over five sessions but was still below its close before that selloff. These are five observations from a small part of the year, and some of the five-session windows overlap. I’m using them as context while I watch whether buyers actually defend support.
This is where my trading time frame matters. I can remain bullish on the long-term opportunity in semiconductors and still add bearish trades as the group loses support. Often, short-term bearish moves present a great opportunity to buy. I’m watching for signs that the selling is exhausting itself and support is holding before looking to get back into bullish trades. Until then, I’m trading the move in front of me while continuing to hold long-term stocks.
WDC Is the Next Test for Storage Sentiment
Western Digital reported today after the close. Given WDC’s bearish trend, I went into the event suspecting its report wouldn’t provide the positive catalyst that the broader memory and chip space needs. The numbers are already out, and while they posted a strong beat ($4.64 actual vs. $3.99 expected), the stock initially traded up by $20 before immediately falling. This is the typical technical pattern I see on a company that is already stuck in a bearish downtrend.
WDC’s business is data storage, and I watch it for what its outlook and stock reaction could mean for sentiment across related hardware groups. With semiconductors already under pressure, another weak reaction could make a recovery harder. A stronger reaction would be worth reassessing, especially if it coincides with buyers defending support in SMH.
You can follow the upcoming reports and expected moves on my Options Earnings calendar.
Use My Five Star Market Map to See the Connections
This is why I built my Five Star Market Map. Knowing a company’s earnings date is only the first step. I also want to quickly visualize which group it belongs to, which ETFs hold it, and where the exposures overlap.
META and LRCX are different businesses, yet both matter to the Nasdaq setup I’m trading. I use the map to review QQQ and SMH holdings and connect individual earnings reactions with broader ETF exposure. I also watch for sentiment spreading to related companies, even when a stock isn’t a holding in the ETF I’m following.
That matters when several positions appear to be separate trades but depend on the same group holding up. Heading into next week, I want to know where those connections are before the reports arrive.
Explore My Five Star Market Map →
What I’m Watching Next
The indexes are on shaky ground heading into what I expect to be the most volatile week of the quarter. My watchlist includes Alphabet (GOOGL), Microsoft (MSFT), ServiceNow (NOW), Fortinet (FTNT), Teradyne (TER), Amazon (AMZN), Intel (INTC), SanDisk (SNDK), and Reddit (RDDT). Find my full Options Earnings calendar here.
I’m watching how the reactions connect across business groups. Microsoft’s October 28 report and Amazon’s October 29 report will put cloud demand and AI spending in focus. Alphabet is also on my radar, with its report expected October 28. Along with Reddit on October 29, it gives me another advertising and platform reaction to watch after META.
ServiceNow and Fortinet report October 28, bringing enterprise software and cybersecurity into the mix. For semiconductors and related hardware, I’m watching Teradyne on October 27, followed by Intel and Sandisk on October 29. Semiconductor testing equipment, chips, and flash memory each give me a different piece of the picture.
Microsoft and Amazon are among the companies I’m more bullish on, as I noted Tuesday. But a bullish longer-term outlook doesn’t remove the risk of a weak earnings reaction when the indexes are already losing support. I want to see whether next week’s reports can change that price action and give buyers a reason to step in.
For now, my META thesis remains bearish with the 200 SMA as my target, and SMH’s ability to hold its own 200 SMA is a key test for the broader market. I’m adding bearish positions to trade the short-term weakness while maintaining my long-term semiconductor outlook. Identifying support—and watching what price does there—will help me decide if and when it’s time to get back into bullish trades. The rebounds after those earlier selloffs keep me alert for bullish re-entry opportunities, while support and current price action will determine my next trade.
My Earnings Hot Zone: Five Star Edition brings historical earnings behavior, Five Star statistics, and expected-move references onto my thinkorswim charts so I can prepare for those reactions.
