Semiconductors stretched, dollar on the rise: the market stays alive, but grows more fragile

The operational message is not a blunt shift towards risk-off. It is more nuanced — and precisely for that reason, more significant: the market retains underlying strength, but the quality of the move has deteriorated. In such an environment, chasing highs becomes a mistake; selecting carefully, waiting for pullbacks, and distinguishing structural trends from tactical euphoria becomes indispensable.

On 29 June 2026, Domina's Monday Webinar centred on three analytical blocks: the risk of excess in the technology and semiconductor sector, the regime shift signalled by proprietary indicators, and cross-asset rotation across currencies, emerging markets and commodities.

The week opened against a backdrop of still-unstable geopolitical conditions. Tensions in the Middle East did not produce an immediate, sharp reaction in oil prices, but they remain an asymmetric risk: they cannot be modelled with precision, their timing is unpredictable, and they can transmit rapidly to financial markets.

Micron, AI and Semiconductors: A Real Trend at a Stretched Valuation

The first area of focus was Micron Technology. The quarterly results were strong and reaffirmed the centrality of the artificial intelligence theme within the current market cycle. However, the price reaction was less straightforward: Micron pulled back, dragging the broader SOX complex — the segment most directly exposed to semiconductors, chips and AI infrastructure — along with it.

The point is not to deny the trend. Compared with the dot-com bubble of 2000, artificial intelligence rests on more tangible industrial fundamentals: demand for computational capacity, data centre investment, chip supply chains, software and cloud infrastructure. Yet markets do not price only the long-term direction — they also price short-term excess. And when a chart turns parabolic, the question to ask is a blunt one: who is the buyer at these levels?

Flow analysis on Micron, via Dark Pool and Lit Pool data, reinforced this cautious reading. The platform flagged an exceptionally large transaction — classified at historical highs on a ten-year horizon — executed on 25 June. At such elevated price levels, a reasonable interpretation is that this does not represent institutional accumulation, but rather distribution or position lightening.

Canary System: From Risk-On to Caution

The most significant signal of the session came from the proprietary risk indicators. The Canary System, used as a reference within Domina's portfolio frameworks, has shifted from risk-on to caution mode. Within the model's logic, this implies halved exposure: 50% invested and 50% in cash.

The regime change does not equate to a bearish market call. It is, rather, a fragility warning. The Risk Appetite Index remains broadly balanced, but several sub-indicators are beginning to show stress: the X-Level is not fully in the green zone, the VIX term structure briefly touched meaningful backwardation levels, and the credit market is displaying relatively stronger demand for investment-grade instruments compared with more speculative paper.

Geographic rotation: Asian technology under pressure, emerging markets in construction

The WPI map has made internal rotation within global markets visible. South Korea and Taiwan, heavily exposed to the semiconductor and artificial intelligence value chain, have corrected sharply over the past week. This does not erase the trend, but signals that the market is unwinding excesses precisely in the areas that had led the rally.

The most interesting segment remains that of emerging markets in an improvement phase. India and Vietnam had already been flagged in previous weeks; Pakistan is added as a medium-to-long-term structure with high potential, featuring a Wyckoff configuration still in development and a very wide theoretical target. Brazil remains under observation, but is not yet one to chase: a pullback towards more technically efficient levels is needed.

Dollar: currency deleveraging underway

The currency space was one of the most important blocks of the episode. The week saw a very strong dollar and a move consistent with a deleveraging dynamic: selling of foreign currencies and buying of dollars. The COT Report reading confirms a significant increase in short positions across several currencies.

On EUR/USD, the chart structure has been read as distribution. The latest bearish impulse has broken key levels and opens the possibility of a pullback towards supply ahead of a new leg lower. The long-term theoretical targets emerging from the Wyckoff analysis are situated around 0.91 and, in extension, towards 0.89. These are not point forecasts: they are structural levels to be used as a map, not as certainties.

Gold: interesting area, but incomplete setup

Gold is suffering from two combined forces: dollar strength and the persistence of elevated rates. At this stage it is being treated more as a precious metal than as a pure safe haven. The situation could change if high rates were to begin producing more visible effects on the real economy.

From a technical standpoint, gold is in an interesting demand zone, but the setup is not yet complete. The COT shows a dynamic consistent with accumulation by commercials during the decline, while speculators have reduced their exposure and are only gradually returning as buyers. It is an area to monitor, not yet one to automatically convert into an entry.

Natural Gas: the useful seasonal window arrives after July

On Natural Gas, the reading was twofold: technical and seasonal. The bearish move expected from seasonality was not fully followed by price, a signal that the contract is deferring part of that move. The November expiry is particularly interesting because it incorporates a genuine seasonal component: industrial and commercial end-users begin planning their winter supply requirements.

The monthly statistic does not justify rushing into July, which remains weak in probabilistic terms. August, September and October offer a more interesting profile, with historically stronger profit probabilities. Here too, the same rule applies: seasonality is a bias, not a standalone trading signal. The chart must confirm.

Macrotrend videogames: ESPO enters the watchlist

The final part of the webinar introduced the theme of macrotrends — those secular trends capable of reshaping economic structures over time. Following railways, electrification, the internet and cloud computing, one of the segments to monitor is videogames: the entertainment industry, platforms, digital content, e-sports, in-game monetisation and convergence with AI and immersive technologies.

The VanEck Video Gaming and eSports ETF, identified by the ticker ESPO, displays an interesting technical configuration. The primary trend remains bullish, while the current phase appears to be a deep pullback towards a demand area. A Wyckoff reading suggests a possible accumulation phase, with a selling climax, a reaction and a potential spring below prior lows.

Price is also in proximity to the 78.6% Fibonacci retracement of the last leg — a statistically sensitive area, though not sufficient on its own. To convert the idea into a setup, strength bars are required, along with expanding volume on the rally and subsequent pullbacks characterised by smaller bars and contained volume.