The pre-holiday chip stock slump happened because semiconductor stocks do this every eighteen months like clockwork and retail traders act surprised every single time. The horror movie reference in the summary confirms what we already know. Nobody learns. Nobody adjusts. The same people who bought Nvidia at the top in 2021 just did it again in 2024 and will do it again in 2027.
Charts don't care about your feelings. The technicals screamed overbought for weeks. RSI divergence. Volume dropping on rallies. Classic distribution pattern. But sure, this time was different because of AI or whatever story CNBC sold you between commercials for reverse mortgages.
What to do about it? The article promises an answer. Here's the answer: you do nothing. You already missed the exit. You held through the top because some analyst on Twitter with 47 followers said semiconductors only go up. Now you're married to a position that's bleeding and you'll hold it until it goes green again sometime in 2028.
The "horror movie" comparison is perfect. Not because markets are scary. Because you keep walking back into the same house knowing exactly what's in the basement. The killer's not even hiding anymore. He's standing in the doorway holding the knife and you're still opening the door asking if anyone's home.
Institutional money rotated out before Thanksgiving. The smart money always leaves before the holiday. They do this every year. Retail thinks the dip is a buying opportunity. Retail thinks every dip is a buying opportunity. That's why retail is always holding bags while institutions are buying boats.
The pre-holiday chip stock slump happened because chips got expensive and people sold them. What to do about it is stop asking what to do about it after it already happened.
Photo by Brett Jordan on Unsplash
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