Friday, June 5, 2026
Hey Traders,
If you’re feeling that sting from today’s Nasdaq drop, take a deep breath. We just saw the Nasdaq futures get hammered, and close down roughly -5.4% on the day, and it continued falling after the cash session closed. It’s this kind of move that I’ll be watching very closely on Sunday evening when futures begin trading again.
Today, a lot of names you and I have been watching got flushed. But here’s the truth I’m sharing with my Five Star readers right now: this move was completely inevitable. After the parabolic rally we’ve been riding – the kind of relentless strength that pushed AI, semis, and growth names to extreme overbought levels on the weekly and monthly charts – the market simply ran out of fresh buyers at these heights.
Hot Jobs Data = Market Pullback
Hot jobs data this morning lit the fuse (way stronger than expected, killing any near-term rate-cut hopes), but the real driver was exhaustion, and an extremely low put/call ratio indicative of everyone and their brother being long. When every dip has been bought for months straight, the historic rally eventually demands a reset, and it’s one I’ve been waiting on. That’s exactly what we got today. The swift fashion it came in is notable, but honestly I prefer this to a multi-day or week slow bleed that takes a while to reverse higher. These kind of moves reset the put/call ratio very quickly, as buyers sell and get short, which resets the market and opens up the potential for us to buy again.
And I’m not concerned – not even a little. This is the healthy, constructive pullback the market needed before the next leg higher. Earnings season is right around the corner, and history shows these kinds of sharp one-day flushes often mark the exact exhaustion point before a fresh rally. The weak hands are out, the over-leveraged positions got cleared, and we’re now sitting on a much cleaner setup with far better risk/reward for the names that actually matter.
Mag 7
The Mag 7 has felt more like the “Bag 7” for a moment, as tickers like Amazon, Microsoft, Netflix, Tesla, and Meta, have lost their once powerful strong trends and pre-earnings rallies, and shifted into volatile charts without strong bullish patterns. I personally feel that a lot of money has shifted into the AI revolution names, and while I’m not selling my Microsoft and Meta shares, my days of regularly trading these names are pretty much done. To trade tickers in the options market, you require strong trends and patterns, otherwise you just get chopped up, which is why they are mostly dead to me now! However, there are a few Mag 7 exceptions, and right now those are Google and Apple, which remain strong and are two of my top picks to trade for pre-earnings momentum going into July.
The exception to the Mag 7 turning into the Bag 7 is in the semiconductors, which remain my absolutely favorite place to focus, and remain the best spot to focus on these dips. But definitely keep in mind that the semi rally itself was insane. Don’t be surprised that the pullback is resulting in significant percentage based moves. Ultimately, the chart patterns are still completely in-tact, especially in NVDA.
Upcoming Semiconductor Earnings
What about semiconductor buys coming up? Taiwan Semi and Micron have earnings coming up, and both of these tickers historically rally going into their events.
The VanEck Semiconductor ETF (SMH)
SMH was down -9.22% today, but this was after a massive rally, and it only pulled back to the 21 EMA on the daily chart ($577). Even a pullback to the 34 EMA ($550) or a pullbackto the 50 SMA ($507) would still result in the semis staying in a bullish trend.
What I’m Eyeing for Buy the Dip Moments in Time
That’s where your Five Star edge comes in. Today’s flush created oversold conditions across the exact sectors we love: AI infrastructure, semis, cybersecurity, neocloud, and photonics. The Squeeze indicator is lighting up on several names we’ve been tracking (AVGO, NET, MU, PLTR, CRWD, LSCC, TSM, AAOI, LITE, COHR, NBIS, and a few others on our expanded watchlist).
Relative strength is starting to rotate back in favor of the leaders, volume profiles are showing early buy-side interest on the dips, and our Earnings Hot Zone tool is flagging multiple high-probability setups heading into July.
This pullback didn’t break the bullish trend – it refreshed it. We now have cleaner entries, tighter stops, and the kind of confluence that turns good trades into 5-Star winners. If you’ve been waiting on the sidelines or sitting on cash, this is the moment we’ve been preparing for. Screen your charts this weekend using the exact filters I teach in the 5-Star System: Squeeze + relative strength + upward EPS revisions + volume confirmation. The next rally is being handed to us, and it likely starts next week after the final flush.
Webinar Replay
Missed this week’s live 5-Star Trader Webinar? No problem – the full replay is ready for you right here:
Inside we walked through the exact setups that are now even stronger after today’s move.
Mark Your Calendar
A huge thank you to every single one of you – my 5-Star members, my X followers, and every trader who’s part of this community. Your questions, your wins, and your discipline are what make this journey so powerful. I’m grateful every day to trade alongside you. Let’s turn this pullback into opportunities.
Trade smart, stay disciplined, and I’ll see you in the charts,
