The Momentum Reset and How to Trade it 7/9/26

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**Scott Wapner** (0:45)
I'm Scott Wapner and you're listening to CNBC's Halftime Report, the podcast, the most profitable hour of the trading day.
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**Scott Wapner** (0:59)
Welcome to the Halftime Report. I'm Scott Wapner, front and center this hour, the latest on the momentum trade. That space continuing to bounce. The committee doing some buying there as well. We'll get to that in a moment. Joining me for the hour, Josh Brown, Jim Labanthal, Jason Sniper in Talkington show you the markets here, green across the board. We do have that rebound, Asima was just talking about in the chip space. That's really the epicenter of the momentum trade. But it's been mayhem in that area. That's what we're calling it. Few days down, few days up. Just when you think it's collapsing, it rebounds. Just when you think it's about to rebound further, it falls.
Mike Santoli said earlier today that you've only had a couple days in the past month or so where the semis have had less than a 2% intraday move. That pretty much underscores it.
Micron's a good example of that. We'll show you the one month. I mean, you can see a fair level of volatility in that. So what do you make of where we are? It's very hard to draw conclusions on anything happening in the market these days, because it's been, as I said, up, down, up, down, and who knows where from here.

**Josh Brown** (2:02)
I made the point last week that you've got, maybe it was Tuesday, I don't know, the days are all blending together for me.
I made the point a few days ago that you've got $200 billion in leveraged ETFs. A lot of that is in single stop 2X vehicles. These have become mainstream. That $200 billion is equivalent to $500 billion notional exposure. That's half a trillion dollars. So what that means is on any given day, if there are natural, normal sellers of these stocks, the momentum players may or may not exacerbate that move and make it look even crazier than it would otherwise be. This has changed market structure. We all have to get accustomed to it. The good news is no one is forcing us to actually react to it. So if you're in these names and we own a whole bunch of these in our Porterhouse portfolio, the thing that you have to just understand is that what comes with the territory of being an uptrending, popular, great earnings growth story stock sometimes is that a lot of people are affecting buys and sells in the derivatives that don't really have a meaningful point of view. They're just playing for, all right, it went down 7% yesterday, maybe it'll go to up 7% today. And that's actually what's playing out right now. So you're zero 52 week highs in the SMH today.
But it is bouncing. And if you look at the average stock in the SMH, it's about 17% of those are at 50 day highs. So a lot of stocks have been knocked away from their highs, but what you got is a momentum reset judge to answer your initial question. The SMH RSI is now back to a very healthy and cooled off 49 The average 10 day rate of change for a stock in the SMH hit negative 15% during this last draw down. That means the average stock lost 15% in that 10 day window. And if you've been on the sidelines, you haven't been in these trades, you feel like you've missed out, well, you finally got an opportunity.
Some people won't want it anymore because they'd rather buy the stock that's green, but that's the reality of where we sit today.

**Scott Wapner** (4:08)
Which is why Bryn, if you like these stocks and you like this trade, your head's gonna spin 10 times trying to pick the exact right moment to get in. Jim demonstrated that by doubling his position in Micron yesterday. It's like if I liked it last week or two weeks ago and then it's lower today, well, how can I not like it today? I assume that's going through your mind as you buy the DRAM ETF.