Below are highlights from the NDW Morning Update Video for the morning of 11/10. Access the video on the NDW Morning Update Video page. 

• US equity futures are mixed this morning the Dow is up ~30 bps while the S&P is roughly flat and the Nasdaq is down ~40 bps.
• US indices were up across the board yesterday posting their best day in months as they rebounded from last week’s sell off.
  • The Nasdaq-100 (NDX) led the market higher gaining 3.4% while the S&P 500 (SPX) gained 2.35% and the Dow (.DJIA) gained 2.15%.
  • Small caps also had a strong day as the Russell 2000 (RUT) gained 3.15%.
  • Semiconductors, which were hard-hit in last week’s drawdown, were among the best performing subsectors, as the iShares Semiconductor ETF (SOXX) gained 7.5%.
  • It was also a good day for international equities as the iShares MSCI EAFE ETF (EFA) and the iShares MSCI Emerging Markets ETF (EEM) were both up around 3%.
• Prospects for a peace deal in Iran helped lift stocks but were a major headwind for crude oil (CL/) which was down more than 4% on the day. Crude gave a second consecutive sell signal when it broke a spread triple bottom at $86.
• The 10 Week for the NYSE (^TWNYSE) which measures the percent of stocks on the NYSE trading above their 10-week (50-day) moving average reversed up into Xs yesterday, indicating some improvement in breadth. The 10 Week for Optionable Stocks (^TWOPTI) also reversed up.
• Yesterday’s research discussed recent changes in NDW’s Dynamic Asset Level Investing (DALI) tool. The focus of the piece was the decline of technology, which fell into the bottom half of the rankings last week. The weakness in technology has also driven some weakness in other areas – like emerging markets – as technology accounts for roughly 37.5% of the iShares MSCI Emerging Markets ETF (EEM).
• October CPI is due out this morning with the market expecting month-over-month headline inflation of 0.3% and core inflation of 0.2%, this will be the last CPI reading ahead of the Fed meeting next month. The market is currently pricing in about a 99% chance of a 25 bps rate increase at that meeting.

With how strong they have been over the last few years, many of us are probably living (or, more recently, dying) by the semiconductor space. Recent exhales like the one we have seen over the last few weeks pose quite a challenge for money managers. On one hand, the swift decrease for semis has left plenty of damage to the technical picture, damage “the book” would say necessitates the removal of the space from your portfolio in some capacity. On the other hand, decreasing semi exposure poses at least three main yellow/red flags. First, the magnitude of movement in the space could quickly lead to whipsaws or signal head fakes, which could quickly punish us for being “wrong” if things rally to close out 2026. Furthermore, despite the near-term exhale, trading out of some semi names could come with a hefty tax bill as many names still trade above levels you would have purchased them at over the last few years- a tax bill your clients might be less than pleased to plan for around the holidays. Finally, while several names have put together recent attempts to rebound, many different semi firms still trade in heavily oversold territory, making an exact selling process difficult to execute. In short, there are equally compelling reasons both to decrease and maintain exposure to the sector. We will take today’s featured article to talk about the situation.

We will start with a broad conversation of major representative SOXX. The technical picture has undoubtedly worsened over the past few months, heading into a range of resistance off all-time highs at $215. Since that point, the fund has reached a low of $132, a nearly 40% decline over the last few months. Most of the downside came over the last few weeks, seeing SOXX plummet back into a negative trend on its default chart. The trendline had been in place since the Tariff Tantrum lows, ushering the fund higher over the better part of the last year and a half. The Tariff Tantrum break ultimately ended up being a head fake but that isn’t to say we should take this break any less seriously. Now earning a subpar 2.65 fund score (as of 11/9), the fund has recently lost both near- and long-term strength against benchmark SPXEWI, a point to monitor going forward. A bounce out of heavily oversold territory back to ~$146 gives those of you looking to get out of sector an opportunity to do so. That said, this bounce could logically continue into the mid- $170’s before running out of steam. Any reversals down into O’s before that point would be a net negative.

Even with the decline, it might not be the “right” time to cut exposure quite yet. To quantify this, we can measure participation within the sector. While there are several different ways we could do that, in this case we will look at both ^BPSEMI & ^TWSEMI. Measuring the percentage of semiconductor stocks on PnF buy signals or trading above their ten-week moving average, these indicators give some insight into the near-to-intermediate-term participation rates as we move towards the close of 2026. As you would expect with these recent declines, these participation rates are at some significant lows. As of 11/9, just 12% of semiconductor stocks trade above their ten-week moving averages or on buy signals. The table below highlights ^BPSEMI as well as forward returns for SOXX across different levels. Notice forward returns from low field position, which suggest that near-term rebounds could be swift and intense for those of you looking for a better exit opportunity than the current washed out position. While things could certainly get worse from here before they get better, history points to a healthy rebound coming down the pipeline- a rebound which would allow us to reevaluate our opinion towards the broader semi space.

Of course, one of the largest influences on the broader semiconductor space has been NVDA. While no longer the only show in town, Nvidia continues to drive a lot of attention within the sector. Most recently, negative news headlines surrounding an alleged affair for CEO Jensen Huang sent the stock as much as 5% lower during trading on 11/9. This came on a day where SOXX advanced more than 8% with intraday action, marking a ~13% spread between NVDA and its sector benchmark. Moving back into a negative trend with market action to close out October, NVDA is now a low attribute name and is challenging a range of old support from $166 to $170. Similar to the broader semiconductor space, the magnitude of downside participation leaves the name in heavily oversold territory around current levels, so a bounce back up into the $180’s could be expected in the near-term. Note, NVDA reports earnings on 11/17. Heading into the call, the name will most likely be a low attribute option.

The skinny of this report should largely be that the semi space has deteriorated materially, enough so that further money shouldn’t be put to work into the area for now. While things are oversold and the prospects of a near-term bounce remain elevated, the real test will ultimately come when markets decide who the leader will be to try and get us back to new highs. If semis aren’t a contender, it will be intriguing to see what leadership emerges as we close out 2026.

The option suggestions featured here are pulled from the NDW Options Ideas tool. These are just a sample of the ideas that can be found there. The Options Idea tool contains numerous additional income and speculative plays. It also offers relative strength-based screens targeting the highest (and lowest) relative strength stocks and ETFs that have recently moved counter to their longer-term trend. To access or subscribe to the Options Ideas tool, click here.

Call

BP PLC (BP) Mar 19 $44 Call

Put

DoorDash Inc (DASH) Feb 19 $180 Put

Income

The Charles Schwab Corp (SCHW) Dec 11 $88 Short Put