SMH Millionaire Breakout Setup: BuyTrigger $251 Opportunity First
SMH semiconductor breakout imminent, but systematic analysis shows $251 BuyTrigger could fire first. Why patience beats FOMO after 13 months of sideways action.
TABLE OF CONTENTS
Why smart money waits when everyone else celebrates.
By Dr. Alex Koh | June 30, 2025 | Family Investments
📊 VIX ALERT: 16.73 Fear gauge at dangerous levels - markets too comfortable for smart buying
The Good News: Markets Hit New Records
This week delivered historic milestones. The S&P 500 closed at a record 6,153 while the Nasdaq reached an all-time high of 20,219. Semiconductor stocks like NVIDIA finally broke through resistance levels we've been watching for months.
But here's what's really happening: institutions are buying back in. After retail investors (that's us) spent months buying the dips, professional money managers are now following our lead. This validates our disciplined approach.
💡 The catch? Only a handful of mega-companies are driving these gains. The "Magnificent Seven" tech giants generated over half the market's returns despite being just 30% of the index. That's narrow leadership - and it creates both opportunity and risk.
The Warning Signal: Fear Is Too Low
The VIX (fear gauge) sits at just 16.73 - still firmly in dangerous territory despite today's small uptick. When fear gets this low, it usually means one thing: it's expensive to buy, but dangerous to sell.
Think of it this way: the best shopping happens when everyone's panicking (VIX above 22). Right now, everyone's comfortable. That's not when you find bargains.
What's Coming: Summer Volatility Window
Multiple factors point to potential turbulence in July-September:
Policy Deadlines
- July 9: Major trade negotiations conclude
- Fed policy: Maintaining high rates with only 2 cuts expected this year
- Bond pressure: 10-year Treasury at 4.4% vs 3.6% in September
Market Mechanics
- Valuations: 22x earnings vs 18x historical average
- Earnings: Just 5% growth expected for Q2 - modest at best
- Positioning: Professional money managers sitting on more cash than usual
⚠️ Seasonal Patterns: Summer months historically show more volatility as trading volumes thin and risks amplify.
Sector Rotation: Where Money's Moving
Smart money is shifting toward defensive plays:
The Numbers Tell the Story:
- Utilities: +18.2% YTD (steady dividends, recession-proof)
- Financials: +26.1% YTD (benefit from higher rates)
- Technology: -0.4% YTD (despite headline gains - shows narrow leadership)
This rotation tells us institutions are getting cautious while still participating in the rally.
Stock Watch: What's Working Now
NVIDIA: Still has room to run despite the big move. Money flow indicators aren't overheated yet, and volume remains light (suggesting more buyers could emerge).
AMD: Finally broke out with a real golden cross pattern. Target: $158. Unlike previous false starts, this one has momentum.
Tesla: Reassessing after long skepticism. The cup-and-handle pattern plus AI robotaxi news makes it worth watching. Earnings July 29 could be pivotal.
Robinhood: Institutions like Ray Dalio are buying. Any 10-15% dips become opportunities for this long-term demographic play.
The Cash Advantage: Why Patience Pays
Here's the reality: having cash when VIX is below 17 is a superpower.
Professional research confirms what we're seeing:
- S&P 500 trades at only 3% discount to fair value (not much safety margin)
- Many of the world's largest money managers won't chase this rally higher
- Quality setups are worth waiting for when risk-reward is poor
💪 Translation: If you're sitting on cash, don't feel FOMO. You're positioned perfectly for what might come next.
🎯 Your Action Plan: Four Strategic Moves
1. Get Ready to Buy the Last Dip
Position your remaining cash for the next significant selloff. It may not be April 8th, 2025 drama all over again, but be prepared to deploy smartly on your favorite quality stocks. When that summer volatility window opens, go from cash-heavy to 99.9% equities - but only on the dip, not at current levels.
2. Do NOT Sell Your Winners
Unless you're trimming profits from high-risk positions, hold your quality stocks tight. Institutions are positioning to buy these same names on the cheap. Don't give them the discount by selling low. You've been disciplined through the tough times - this is your payoff period.
3. Make 2025 Your Portfolio Foundation Year
Ensure your current balancing and derisking sets you up for the entire run to 2030. Think of this year as building your core positions that will compound through the decade. Quality over quantity.
4. Hunt for New Long-Term "Bags"
Going forward, focus new cash on finding the next Shopify or Uber - not LV bags, but bullish market long-term bags. We'll be sharing more on identifying tomorrow's winners while they're still under institutional radar.
Risk Check: What Could Go Wrong
Immediate threats:
- Trade talks fail by July 9 deadline
- Bond yields break above 4.8% (would pressure stocks and dollar)
- Earnings disappoint vs modest 5% growth expectations
Bigger picture:
- Market concentration in few stocks creates fragility
- Consumer spending growth exceeding income growth (unsustainable)
- Geopolitical tensions simmering despite recent progress
The Bottom Line
Current conditions scream "hold what you have, wait for better entry points." The combination of:
- Record highs with narrow leadership
- Extremely low fear levels (VIX 16.73)
- Elevated valuations
- Seasonal volatility patterns
- Multiple policy deadlines
...suggests the next few months will test our discipline.
🧠 Remember our systematic approach: We buy fear and hold through greed. Right now we're in greed territory. If summer brings the volatility many indicators suggest, that's when cash becomes king and quality buying opportunities emerge.
Key dates:
- July 9: Trade deadline
- July 29: Tesla earnings
- August-September: Traditional volatility season
Your edge: You're positioned with quality holdings AND dry powder. Most investors have one or the other, not both.
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Next week: Q2 earnings begin. We'll track which companies deliver on those modest 5% growth expectations and what it means for sector rotation.
About the Author
Dr. Alex Koh is an engineer and systematic investor focused on helping young families achieve financial freedom. He runs the BuyTrigger platform and leads the Family Investments community of 5,000+ investors.
Disclaimer:
This blog post is for informational purposes only and does not constitute financial advice. The views and opinions expressed in this post are solely my own and are based on my personal analysis and experience. All information is provided on an as-is basis, and while I strive to ensure accuracy, I make no guarantees regarding the completeness, reliability, or accuracy of the information provided.
Investing in stocks and financial instruments involves risk, including the potential loss of principal. Always conduct your own research and consult with a qualified financial advisor before making any investment decisions. This blog is intended as a personal journal to document my thoughts and strategies, and should not be taken as a recommendation to buy or sell any securities.
By reading this blog, you acknowledge that I am not responsible for any investment decisions you make based on the information provided here. Please exercise due diligence and consider your own financial situation and goals before making any investments.
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