Total Return Breakouts: Signals Weakening After Record Gains, Nvidia And Semiconductors Key

Jul. 20, 2025 12:27 PM ET, , , , , , , , , , , , , , , ,

Summary

  • Timing and momentum signals are crucial for outperforming passive benchmarks; relying solely on buy-and-hold can lead to missed opportunities and loss of valuable time.
  • Current market signals show strong but weakening momentum in technology and semiconductors, suggesting caution and potential for near-term profit-taking.
  • Record gains in SOXL semiconductors, Nvidia, and Industrials are highlighted with current selection signals and the latest market updates.
  • Diversifying across sectors and adapting to signal changes enables strong risk-adjusted returns; harvesting uncorrelated risk premiums is key to long-term success.
  • As Q2 earnings begin, the record volatility could rise again, as we have seen more +/- 2% daily moves in 2025 than in 2024 and 2023 combined.
  • This idea was discussed in more depth with members of my private investing community, Value & Momentum Breakouts. Learn More »

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Mykola Pokhodzhay

Introduction

"The power of momentum is the ability to generate outsize returns that dwarf returns associated with passive benchmarks. Unfortunately, outsized expected returns deliver enhanced risks." ~ Gray & Vogel, (2016)

Timing matters, and it matters greatly. I have spent



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This article was written by

19.01K Followers

JD Henning is a Finance PhD, MBA, investment adviser, fraud examiner and certified anti-money laundering specialist with more than 30 years trading and investing stocks and other securities. JD runs Value & Momentum Breakouts where he identifies identify breakout signals and breakdown warnings using technical and fundamental analysis.

Signals from his proprietary Momentum Gauges® not only alert subscribers of market changes, but the strength of markets for short term breakouts or breakdown warnings across 11 different sectors. Top stock and ETF selections use technical and fundamental systems in proven financial studies. Value & Momentum Breakouts is the place to build your own optimal portfolio mix with a community of like-minded investors and traders. Features include a Premium Portfolio, bull/bear ETF strategy, morning updates and an active chat room. Learn more.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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