Video summary

Summer Doldrums Or Something Much Worse?

Main summary

Key takeaways

Finance

Market & Macro Framing (July 24, 2026 close)

  • Theme: “Summer doldrums or something much worse?”
    • Emphasis on action bias: avoid changing strategy impulsively during unsettled periods.
  • Core claim: Pullbacks/corrections/drawdowns are normal within a longer-term uptrend—avoid overreacting.

Potential recovery time horizons

Higher highs could occur in:

  • Q4 2026
  • Weeks
  • Q1–Q2 2027 (Depending on how conditions evolve.)

Key Technical / Behavioral Framework (Applied Across Charts)

Retracement levels (A → B moves)

  • 38.2%
  • 50%
  • 61.8%
  • Also referenced: anchored VWAP lines

Anchored Volume Weighted Average Price (AVWAP)

  • Use anchored AVWAP bands anchored at prior high/low points.

Interpretation rules

  • If price remains above key AVWAP / retracement levels:
    • Trend is intact → expect consolidation / giveback.
  • If price undercuts lows / enters “white space” on charts:
    • Interpretation worsens (more downside risk), but not necessarily a full trend break.

Risk / position-management behavior

  • If gains erode during normal drawdowns, it may be necessary to stay invested to capture large upside.
  • Reference: Market Wizards “Question to the Market Wizard / Answer from the Wizard”.

S&P 500 / Nasdaq / Broad Risk Tone

S&P 500 (weekly chart context)

  • As of July 24, 2026 close:
    • Still above anchored VWAP lines (anchored to levels tied to a high prior to the “war drawdown” and to a low).
  • Implication: No “evidence in hand” of a trend change requiring major action.

Nasdaq / XLK / Tech drawdown risk

Nasdaq

  • Said to be back below a blue AVWAP line anchored to the low.
  • This implies openness to additional pain/underperformance in the short-to-intermediate term.
  • Potential to retreat toward prior reference zones aligned with retracements.
  • Caution threshold: If the market undercuts earlier 2026 lows, concern increases.

XLK (Technology sector relative context)

  • Noted: a “near vertical move” followed by consolidation/giveback.
  • Current state:
    • Still above anchored VWAP tied to the low
    • Still above another purple “gapping area” line
    • If that line is lost → more downside risk opens.
  • Conclusion: Characterized as a normal pullback within an uptrend so far.

Semiconductors (SMH): Position Management & Underperformance Risk

SMH (Semiconductors ETF)

  • Framework: “Long-term trend is still intact.”
  • Retracement specifics:
    • Retraced to about 38.2% of the recent A→B move (described as “since the low in April 2026”).
    • Still above other AVWAP lines tied to prior anchors.
    • 50% and 61.8% retracement levels remain ahead as potential consolidation zones.

Portfolio action

  • Trimmed/sold ~30% of the SMH position.
  • Purpose: diversify into other “buckets.”

Forward expectation / caution

  • After a move of this type, it’s possible SMH underperforms for a relatively long period.
  • Explicit disclaimer: not presented as a prediction.

Oil, Energy/Tech Relative, and Inflation Concerns

Oil (WTI vs S&P 500)

  • WTI spike (early year tied to “war”):
    • Currently not near prior stressed levels.
    • “Nothing particularly alarming” versus stocks/energy context.
  • Sensitivity:
    • Assessment would change if oil moves into indicated “white space” (earlier 2022-like inflation panic zone).

Energy vs Tech (XLE vs XLK; ratio)

  • Chart described with inflation-focused comparison back to January 2022.
  • Current interpretation:
    • No comparable “inflation-fear behavior” to early 2022.
    • Ratio remains in a downtrend and is below key historical reference levels (anchored to prior zones).
  • If the ratio breaks into “white space” → interpretation would change (greater concern).

Credit & Inflation Regime Check

Dow Jones Corporate Bond Index (Q1 2022 analog)

  • Past: Q1 2022 had a “significant breakdown” in the Dow Jones corporate bond index (inflation/credit stress analogy).
  • Current:
    • Described as bullish breakout → retest → higher high → consolidation above upward-sloping lines.
  • Warning:
    • Interpretation worsens if price moves into lower “white space” (not happened yet).

Gold (XAU-related)

Current state

  • Had gains but experienced significant giveback.
  • Currently near the 50% retracement of a move from November 2024 (described as the period when gold “really started to take off”).

Retracement logic

  • Uptrends often retrace to 38.2% / 50% / 61.8% and then resume higher highs.

Recommendation tone

  • Reasons to be patient with gold positions short-to-intermediate term.

Rates / Treasuries

IEF relative to SPY (deflation/recession fear proxy)

  • Question posed:
    • Are investors flocking to treasuries like in Oct 2007 (financial crisis prelude) or June 5, 2026?
  • Answer:
    • “Last time… answer was no” (June 5, 2026).
  • As of July 24, 2026 close:
    • Still no evidence of heightened “traditional deflationary or recessionary fear.”
  • Caveat: A counter-trend move is possible if the market falls.

ZIEF (7–10 year Treasuries) — “worth watching”

  • If ZIEF moves into “white space”:
    • Probability of higher drawdowns increases.
  • Currently:
    • Holding near a “logical area,” characterized as potentially a 100% normal correction rather than panic.

Defensive Equity Rotation Test (XLP vs SPY, plus historical analogs)

Historical analogs referenced

  • Dot-com:
    • S&P 500 peaked Mar 2000
    • Bottom Oct 2002
  • Financial crisis:
    • Portfolio managers favored XLP (consumer staples) vs SPY
    • Around Q4 2007
    • October 2007 peak also referenced

Current condition

  • No evidence that portfolio managers are rushing defensives.
  • Implication:
    • Any pullback likely resembles a normal correction, followed by higher highs (not “everything is great”).

Relative Rotation / Breadth / ETF Screens (Foreign vs US, Leadership Change)

Large ETF universe screening approach

  • Screened roughly 400 ETFs versus SPY across multiple time frames:
    • Weekly, 2-week, 3-week, monthly, and 2-month
  • Additional checks:
    • Ratios vs 200-week and 300-week moving averages
  • Purpose:
    • Identify whether leadership is improving/weakening relative to SPY and keep exposure flexible.

Foreign stocks improving (VEA mention)

  • Relative performance of foreign stocks vs S&P 500 is improving.
  • The 200-week MA (in red) is flattening around price.
  • Caution:
    • Some foreign-related ETFs were “not impressive.”

Example ETFs called out

Strong / attractive (high scores indicated)

  • SMH (noted as 9-for-9)
  • Multiple “tech” and large cap growth / tech related ETFs (mentioned repeatedly; not all tickers listed explicitly)

Weaker / caution areas

  • SCHG: explicitly “weakened considerably”
  • Gold: “weakened considerably”
  • VEA: “really not that impressive”
  • EEM: “not really that strong”
  • ITB (interest rates ETF): implies rates probably not going to plummet
  • Software: noted as not on radar (“software… zeros”)

Exposures mentioned / already held or exited

  • SPYG (S&P 500 Growth ETF):
    • Made new all-time high relative to SPY
  • IVE and RSPY (equal-weight S&P 500 context):
    • “1 point… looks okay,” but not full confidence
  • IWY:
    • Exited earlier in the year
  • SMH:
    • Position trimming reiterated

Breadth-style conclusions from screen

  • “Most likely” evidence suggests:
    • If large-cap growth exposure weakens, relative charts signal redeployment.
  • Bonds / deflation fear check:
    • Many “bond” ETFs scored poorly / did not show panic signals → participants not pricing major deflationary crisis conditions.

Data Center / AI & Infrastructure Relative Charts

Ratios vs SPY (tickers explicitly mentioned)

  • ZAIQ (Global AI):
    • Bullish breakout / near-vertical move; now retesting breakout
  • DTCR (Data Center / digital infrastructure context):
    • Similar breakout + retest behavior
  • ZIEF:
    • Reintroduced as a risk-monitoring instrument for drawdown probability

Conditional interpretation

  • If these ratios move into “white space” thresholds:
    • Interpretation changes significantly, especially if prolonged.

Key Explicit Numbers and Thresholds

  • Retracement levels repeatedly used:
    • 38.2%, 50%, 61.8%
  • SMH position change:
    • Trimmed/sold 30%
  • Volatility / drawdown statistics in secular bull market context:
    • 16 drawdowns > 6%
    • Average peak-to-trough drawdown: “hair under 12%”
    • Median peak-to-trough drawdown: “hair under 10%”
  • Timeline windows for possible higher highs (model-based):
    • Q4 2026, weeks, or Q1–Q2 2027

Disclosures / Disclaimers

  • Material is informational only, not investment advice.
  • Not a solicitation/offer to buy or sell securities.
  • Opinions may change without notice; no obligation to update.
  • CCM and affiliates may have interests in the securities/derivatives mentioned.
  • Recommend consulting a licensed and qualified professional before investing.

Presenters / Sources

  • Presenter / Company: Shivaco Capital Management LLC (CCM)
  • Sources cited:
    • Market Wizards (book reference)
    • The “Question to the Market Wizard / Answer from the Wizard” passage

Original video