Next week's market forecast 1、 Market: The index is beginning to diverge, but the trend has not yet gone bad QQ: Converge triangle, choose direction immediately (Figure 1) QQQ is still within the 4-hour convergence triangle, with the high point continuously decreasing (Lower High) and the low point continuously rising (Higher Low), and the market has entered a typical trend free consolidation stage. This structure will not last long, and there is a high probability that a direction choice will be made next week. I personally still lean towards upward breakthroughs. There are several main reasons: 1. The South Korean stock market has clearly recovered on Friday, with SK Hynix and Samsung both rebounding, and Nasdaq futures simultaneously strengthening. 2. There is a gap left above QQ, which in history has mostly been filled. July itself is a strong seasonal month, and I still believe that the index has a chance to challenge its previous high. Additionally, VIX is currently only around 15.8. From a historical perspective, this is already in a relatively low position, which means that market sentiment is still optimistic and short-term fluctuations may be amplified again. Therefore, I prefer to understand the current situation as a low volatility environment, a market environment of buying on dips. SPY: The trend is significantly stronger than QQQ (Figure 2) Compared to the Nasdaq, I think SPY is currently significantly stronger. SPY is currently more like a high-level flag consolidation and has not experienced a true breakthrough. The most important location is still around 739-740. As long as we stand firm here, the upward trend will still hold. I have previously stated that the true reason for the market's resistance to decline is industry rotation. In the past two days, funds have clearly flowed into healthcare (XLV), finance (XLF), consumer goods (MCD, Costco), and Apple. These companies with stable cash flow and higher defensive attributes have taken on the role of index stabilizers. That's also why QQ has fallen a lot, while SPY has never really lost control. If this kind of rotation can continue, I still believe that SPY has a chance to continue advancing towards the 7600 area and even challenge the 7700-7800 area in July. Russell 2000: Starting the Relay Another noteworthy one is Russell 2000. In June, small cap stocks closed with a very beautiful bullish candlestick and set a new high for the period. The big non farm payroll data released this week was lower than market expectations, further reducing market concerns about continued policy tightening. If future interest rate expectations continue to improve, small cap stocks are expected to continue receiving funding allocation. 2、 Semiconductor: Short term rebound, but high volatility will continue SMH has now reached the lower edge of the entire triangle arrangement. (Figure 3) It is also an important support near EMA50. This is a position where rebound is more likely to occur technically. If the recovery in the South Korean market can continue, the storage sector is expected to be the first to drive a wave of semiconductor recovery next week. The latest perspective is that I am more inclined to understand this as a technical rebound, rather than a return to a unilateral upward trend. It is estimated that it will shake at a high level and sharpen my mentality. What truly determines the direction is the financial reporting season that begins in July. If companies continue to deliver profits beyond expectations, the market's current concerns about the slowdown of AI CapEx will naturally fade again. For friends who have short-term calls, a rebound can reduce leverage appropriately. People who hold regular stocks for a long time don't have to pay too much attention to short-term fluctuations, just hold them patiently. I have always been inclined towards long-term investment and holding, but considering that everyone's holding cycle and risk tolerance are different, I will also share some short-term coping strategies for everyone to refer to based on their own situation. 3、 At present, July looks more like sector rotation, not a comprehensive general rise All sectors will not rise together in July. This is a typical Two Factor Market. In the past two days, it has become very evident that while hardware has fallen, software, healthcare, biotechnology, and finance have been rising. Conversely, when semiconductors rebound, these defensive directions are likely to enter a sideways consolidation. Therefore, for friends who are short-term traders, a better strategy in July is to maintain a certain balance of sectors. If it is a long-term holding, AI will still be the main line, and the final rise of the market will still be driven by AI, so patience is needed. 4、 About Meta Recently, the market has been discussing whether there is excessive construction of AI infrastructure around Meta. The biggest short-term change is market sentiment. After the news came out, the market began to reprice the valuation of semiconductors, resulting in significant fluctuations in the entire sector. Later, there were rumors of Meta partnering with Samsung on AI chips, further intensifying the financial game. Xiao Zha smashed the plate himself and pulled the plate himself 。 So I expect that semiconductors will continue to maintain a high volatility pace in the future, which is also the area where the current market needs to adapt the most.