The Correction Everyone Waited For Finally Came, and It Has a Name: SPCX.
For nine straight weeks the market rose without a single real pullback. Every week someone warned the run was stretched, and every week panic buying ran them over. Today the warning stopped being a warning. NASDAQ fell 4.18 percent, the PHLX semiconductor index collapsed 10.26 percent, and Fear and Greed crashed all the way to 42, crossing from Greed through Neutral into the Fear zone for the first time in this rally.
The focus this edition gives the drop is not a top, it is a name: SPCX. The SpaceX IPO is sucking cash out of the market before it lists next week, a temporary cash-flow drain Daniel Yue calls the cipher effect. Money is being parked to chase the largest IPO in history, the $1.77 trillion listing, and stocks are simply being sold to fund the order. Once the IPO clears, that capital floods back. The frame is blunt: this is a golden pit, treasure-hunting territory, not the start of a crash.
The second layer is the rate clock, and here the news is quietly good. The CME has pushed its first rate-hike bet back again, from January 2027 to March 2027, after previously sitting at December. A later hike is more room for stocks to breathe. The catch is that Friday’s jobs number ran hot, 172K against an 85K forecast with unemployment steady at 4.3 percent, and a strong labor market is the one thing that could drag that hike date back toward us. Good news for jobs is bad news for rates.
The warning sits on the chart. NASDAQ led the fall and is now set up to possibly carve a head and shoulders, with the May 5 gap at 25,361 the level to refill. The discipline holds: too risky to chase high, buy only what sits under its 250-day line or refills a gap. MRVL ran from $145 in April to a $252 gap and is not the entry now. NOK, blessed by Jensen Huang and already past its gap fill, is the cleaner hunt.
The focus today: the pullback is real but it has a name and an expiry date, so watch whether NASDAQ holds the 25,361 gap or builds a neckline instead.
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About the Author
Daniel Yue has been an active investor since 1980, with experience spanning stocks, currencies, futures, metals, and bonds. A scholar of the Chicago School of Economics, he holds a Certificate with Distinction from Cambridge University and a degree in International Trading from National Taiwan University. He served as Chief Analyst for over 30 years and Chief Mentor at Sincere Finance. In 2017, he received an award from the University of Arizona for financial internship leadership.
The analysis and opinions expressed in this article are for educational purposes only and do not constitute financial advice. Investing involves risk. Please consult a qualified financial advisor before making investment decisions.
About the Author
Daniel Yue has been an active investor since 1980, with experience spanning stocks, currencies, futures, metals, and bonds. A scholar of the Chicago School of Economics, he holds a Certificate with Distinction from Cambridge University and a degree in International Trading from National Taiwan University. He served as Chief Analyst for over 30 years and Chief Mentor at Sincere Finance. In 2017, he received an award from the University of Arizona for financial internship leadership.
The analysis and opinions expressed in this article are for educational purposes only and do not constitute financial advice. Investing involves risk. Please consult a qualified financial advisor before making investment decisions.