Good afternoon, Five Star Traders!
Volatility has certainly picked up, though it’s interesting as the VIX is still below 17, and the put/call ratio is low as well, at .68 I’m reading this as normal consolidation and slow trading as people take vacations in June and the first week of July. However, there was some notable news from META that has hit Neocloud stocks, which I’ll discuss below. First, let’s talk about the daily Squeeze in the Nasdaq.
The Nasdaq Daily Squeeze
As shown on the chart, the Nasdaq is currently in a Daily Squeeze. Look at the ST_SqueezePRO:
The histogram has transitioned from strong blue bars (earlier momentum/expansion phase) into compression, shifting toward red with white dots and red dots, which has been ongoing since June 11th, 2026. These dots, plus the pullback and consolidation in momentum is the confirmation that we are inside the daily squeeze. Price has pulled back from the all-time high on June 3rd, 2026, of 31,321 while the squeeze has developed. This is a classic consolidation breakout pattern — volatility compresses during the pullback, setting up for a potential expansion move once the squeeze fires.
Key Levels & Targets
- Current price action is holding near the 50 SMA moving average after the pullback, which is my favorite spot to buy!
- The yellow arrows on the chart mark the logical upside targets on a squeeze breakout:
- 30,777 (resistance)
- 31,321 (previous high)
- 32,000 (1.272% extension & key psychological value)
Supporting Momentum
The ST_TurboVZO oscillator has pulled back and is hovering just below the zero line, which is typical behavior while inside a squeeze. We often see volume shift negative in a squeeze, until volume starts coming back in before a breakout. I’m always eyeing this for a potential volume reversal that can light a fire to the upside breakout. Or, conversely, take note if volume continues declining. Which, so far has not occurred.
July Seasonality Adds Conviction
This technical setup is landing right at the start of historically strong July seasonality for the Nasdaq. When you combine an active daily squeeze + price pulling back into support + favorable seasonality, the odds favor a volatility expansion move higher once the squeeze releases.
The trigger to watch for is when the white dots shift to green, meaning the squeeze has fired, and the begin to fade and the histogram shifts to the upside. That is usually when the next leg begins. The daily Squeeze historically fires in the direction of the trend, which is up, but on occasions where a bearish catalyst appears, it can fire short.
Nebius (NBIS) – A Smack Down
This has been one of my favorite tickers to trade, and it historically rallies very well pre-earnings, as noted in my last newsletter. However, this week, it’s getting hit, and it’s getting hit hard. What happened?
On July 1, 2026, Bloomberg reported that Meta is building its own cloud infrastructure business (internally called something like “Meta Compute”) to sell access to its excess AI computing power to other companies. In other words: Meta plans to rent out its own GPUs/data centers instead of (or in addition to) just using them internally.
This spooked NBIS so badly, along with many of the hot AI infrastructure names because Nebius Group is an AI cloud company (sometimes called a “neocloud”) that builds and rents out large GPU clusters for AI training and inference. Back in March 2026, Nebius announced a massive deal with Meta worth up to $27 billion over five years. This was one of the biggest contracts in the entire AI infrastructure space and made Meta one of Nebius’s largest and most important customers. Now, just a few months later, Meta is potentially becoming a direct competitor to Nebius in the exact business Nebius is in (renting out AI compute/GPU capacity).
While the pullback in NBIS has been less than ideal for my short-term options trades, I think it’s a great spot to pick up more long-term shares. The ticker is still holding support at the 50 SMA on the daily chart, and we had dip buyers coming in today. The volatility is more than what we have seen recently, but so long as the trend is intact, I will look at adding more long options into July. If we get two closes below the 50 SMA, especially on high volume, this is where I know I am wrong!
Happy 4th of July!
Wishing you and your families a happy, healthy, and safe 4th of July weekend! Enjoy the time with loved ones and we’ll reconnect after the holiday.
Trade smart and manage your risk,
Disclaimer: This newsletter is for educational and informational purposes only. It is not financial, investment, or trading advice. Trading futures involves substantial risk of loss. Past performance is not indicative of future results. Always conduct your own analysis and use proper risk management.
