To The Moon

Back from the holiday, everything had changed. Sector rotation has reached semiconductors, which are now bleeding to feed tech giants and bank stocks. The bearish turn was very sudden.

From a pure chart-reading view, it means the part that jumped the gun in September gives back its gains, and then the stocks that didn't rise in September should rise. Of course, as some fall and others rise, the overall market keeps chopping higher near its highs.

With that idea, this week's two big earnings reports could look very different: financial stocks may bounce after earnings, while TSMC is more likely to keep drifting near lows after its report.

I won't pretend anymore: I peeked at the answer key. Before earnings, big sell put orders showed up in financial stocks, like $WFC 20261030 72.0 PUT$  $BAC 20261016 50.0 PUT$. Morgan Stanley even had a same-day-expiration bullish call: $MS 20261016 197.5 CALL$ .

TSM may not rise much after earnings because big players put on a 457.5–467.5 bearish call spread with $TSM 20261016 457.5 CALL$  $TSM 20261016 467.5 CALL$. Last week's bearish call spread had 465–475 strikes.

If TSMC's earnings don't give the stock a boost, semiconductors can at best bottom out this week; they won't be able to bounce.

In theory, many semiconductor stocks have fallen to buy-the-dip levels. But since this pullback is very strange, it may be safer to wait and see if TSMC's stock stabilizes after earnings before acting. My wild guess is it could be similar to Micron's earnings.

$Intel(INTC)$
Intel had a big sell call order: someone sold 35,000 contracts of the October 23 expiration 115 call, $INTC 20261023 115.0 CALL$ . That's a heavyweight trade. The old issue with big sell call orders is that INTC will likely stay below 115 this week, but if the position isn't closed, it's hard to say whether the stock can bounce next week.

If you don't own it, the current price is a good spot to sell puts. You could consider the 90 strike: $INTC 20261023 90.0 PUT$ . If you already own shares, forget it.

$NVIDIA(NVDA)$
For NVDA, consider selling the 240 call: $NVDA 20261023 240.0 CALL$  . Based on the open interest trend, it will likely pull back to 220. Once it hits 220, you can close the sold call and sell a put: $NVDA 20261023 210.0 PUT$.

Because GPU rental prices have really been rising, NVDA's stock trend is an uptrend with pullbacks, not bearish like INTC and SKHY.

Another guess about this pullback: at the end of September, Treasury yields surged, so money ran into chip stocks as a safe haven. Now yields have peaked, so money is flowing out to buy oversold sectors. We can see if that's true by watching whether semiconductors stop falling later.