Semiconductors haven’t had 3 straight red days in 108 days. Friday is a strong bounce setup

Semiconductors have now posted two consecutive red sessions heading into Friday. The last time they closed red for three straight sessions was March 30, exactly 108 calendar days ago. I ran the historical numbers from the past year: • After a new two-day red streak, the next session was green 16 out of 25 times: 64% • When the session after at least two consecutive red days fell on a Friday, it was green 4 out of 5 times: 80% • The current two-day decline is roughly 19.3%. There were four previous two-day declines at least this large in the dataset. All four bounced the following session, with an average gain of 11.9% None of this guarantees a green Friday, especially with the smaller sample sizes. But between the 108-day streak, the Friday results and the size of the current drawdown, July 17 looks like a very favorable mean-reversion setup. Yes, its reasonable to suggest that institutional investors are parking their money before hyperscaler earnings come out, but the dip has been pretty large at this point and it wouldn't surprise me to see some money flow back into some of these companies, which are amongst the most profitable in the world.