Weekly NASDAQ Model Update - July 18, 2026: +27% CAGR Since 1999 - Today’s Signals & Stance
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📅 Date: 18.07.2026
The week started with relief and ended with a real semiconductor rout.
Tuesday delivered the good news the market had been hoping for. June CPI came in cooler than expected, easing the hawkish pressure that has weighed on sentiment since the June Fed meeting. Big banks kicked off earnings season strong, Goldman Sachs surged 9% on an earnings beat, JPMorgan and Bank of America both gained. The Nasdaq jumped 0.9% on the day. Wednesday brought a cooler PPI print too, and rate-hike odds for September tumbled meaningfully. New Fed Chair Kevin Warsh delivered his first congressional testimony, doubling down on his inflation-fighting stance without providing much additional clarity on the rate path.
Then chips took over the narrative, and not in a good way. Thursday saw tech stocks slide as investors digested a mixed batch of earnings alongside growing unease about semiconductor valuations. That unease became a rout by Friday. The Philadelphia Semiconductor Index approached a 20% decline from its recent highs as concerns mounted that AI hyperscalers may pull back on infrastructure spending, directly reversing the investment thesis that drove this year’s entire chip rally. Nvidia fell nearly 4% Friday alone. The Nasdaq 100 (NDX) closed the week at 28,592.66, down 1.49% on Friday and down 4.45% over the trailing month, a sharp reversal from the 52-week high of 30,762 set just weeks ago.
For the full week: the S&P 500 fell 1.55%, the Nasdaq dropped 2.9%, and the Dow lost 0.93%. The VIX spiked 12% on Friday to close near 18.8, its highest level in weeks. But the selling was concentrated, not broad. Energy gained 4.7% on the week, REITs added 2.2%, and Consumer Staples rose 1.27%, as capital rotated firmly out of semiconductors and into financials, retail, and healthcare. The 10-year Treasury yield actually fell on the week, its first weekly decline in three weeks, as cooling inflation data offset the equity turbulence. University of Michigan consumer sentiment improved as gas prices eased, with one-year inflation expectations dropping to their lowest since March.
This is the most serious test the AI trade has faced since the late-June memory-chip crash, and it arrived during what should have been a constructive week on the inflation front.
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🧠 What This Selloff Actually Is
It is worth being precise about what happened this week, because it matters for what comes next.
This was not a broad market panic. The S&P 500 fell 1.55% on the week and remains within 1% of its record high. It was a concentrated unwind in one specific narrative: whether AI hyperscalers will keep spending at the pace that has driven semiconductor valuations to extreme levels this year. That is a real and legitimate question, and the selling in Nvidia, and across the SOX index approaching a 20% drawdown from highs, reflects genuine repricing of that risk, not indiscriminate fear.
The rotation data backs this up. Money did not leave the market, it moved. Energy, REITs, consumer staples, financials, retail, and healthcare all held up or gained on the week. That is a market digesting a specific overvaluation concern in one sector, not a broad deterioration in the economic outlook. If anything, the macro backdrop improved this week: cooler CPI, cooler PPI, falling rate-hike odds, and better consumer sentiment.
For a system built around TQQQ, which is entirely exposed to the Nasdaq 100 and therefore concentrated in exactly the names under pressure, this distinction does not eliminate the risk, but it does provide context. Module 1’s long-term trend filter is watching the broader trend structure, not any single week’s sector rotation, and it has not broken.
📌 What we are watching into July
The semiconductor complex is the entire story. Whether the AI-infrastructure spending concerns that drove this week’s rout continue to spread, or whether the sector finds stabilization after a sharp repricing, determines whether this becomes a deeper correction or a contained sector event. Watch Nvidia and the SOX index closely at the open.
Next week brings a heavy batch of earnings including Alphabet, Tesla, Intel, Texas Instruments, and IBM, several of which have direct bearing on the AI-spending question at the heart of this week’s selloff. Their guidance on infrastructure and AI capex will either validate or ease the concerns driving the chip rout.
For the system, the focus is squarely on Module 1’s stop level after a week that tested it more than any since early June. If the semiconductor weakness deepens further and the stop is breached, the system moves toward cash and the alert goes out before the next open. If the sector stabilizes and next week’s mega-cap earnings reassure the market, the position holds and the shorter-term modules get a cleaner setup to work with.
This is a week to watch closely rather than predict. The system will do exactly that.
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Have a good weekend.
Best,
Felix
Founder of The NASDAQ Playbook
Disclaimer
This newsletter is for informational and educational purposes only and does not constitute investment advice, a recommendation, an offer, or a solicitation to buy or sell any security, or to engage in any investment strategy. Any views expressed reflect the author's personal opinions and research at the time of writing and may change without notice. All backtested performance data is simulated and does not represent actual trading results — past performance is not indicative of future results. Investing involves risk, including the possible loss of principal. Leveraged ETFs such as TQQQ are complex instruments that carry significant risk and are not suitable for all investors. The author may personally hold positions in one or more of the securities mentioned in this publication. This should be considered a potential conflict of interest. You are solely responsible for your investment decisions. Before acting on any information in this publication, you should conduct your own research and consider consulting a licensed financial professional, tax advisor, or legal advisor.