The recent washout of leveraged semiconductor ETF positions is one of the healthiest things that can happen for the market.
Josh and Michael point out that $63 billion of the $100 billion withdrawn from levered ETFs came out of semis (a 39% reduction), which cleared out speculative excess and allowed real buyers to step in at lower prices. ✦ AI generated
Josh · The Compound · 2026-07-20 · original ↗
starts at this moment · 24:46
The AUM of levered ETFs has dropped by over $100 billion. Thanks for playing. And of that $100 billion, 63 has come out of semis. To contextualize that 39% of leverage semi-ETF AUM has been reduced. This decrease is one of the healthiest things that can happen for the market. Amen sister. I totally agree with that. And the semis rallied hard. All that dumbass activity like got washed out and then real buyers came.
verbatim transcript · starts at 24:46
24:29>> Yeah. So, uh Cullen Morgan at Goldman Sachs, uh could not say this better myself. Chro on please. The AUM of levered ETFs has dropped by over $100 billion. >> Thanks for playing. And of that $100 billion, 63 has come out of semis. To contextualize that 39% of leverage semi- ETF AUM has been reduced. The this decrease is one of the healthiest things that can happen for the market. Amen
24:58sister. >> I totally agree with that. And the semis rallied hard >> hard. >> Like the all that dumbass activity like got washed out and then real buyers came. I mean, I'm sure the leverage buyers came back today, too, but real buyers bought these stocks 30 40% off their highs and bought them with conviction today. >> They sure did. I'm not sure what exactly is in this basket cuz I had a hard time
25:26replicating this, but whatever. Goldman has a high beta momentum. Um, which >> you know, this is all Korean chip makers and [ __ ] like memory stocks in here. >> Uh, it had its worst 21day p. I mean it just it got smoked like smoked smoked smoked. All right, this is uh this is a great chart from from Duality Research. >> Put this up please. So we are looking at
25:49the S&P 500 in black of course that was the peak on June 2nd and then he breaks down what was the relative sector performance and Josh to your point. So I think this is great. We've gone sideways. We've chopped sideways. It's been a choppy market, like not super fun to trade, but you lost technology. Technology has been dog [ __ ] By far the weakest performer since it topped. And
26:14yet, despite it's what is this 20% 30% of the index >> market hung in >> whatever it is, the market. >> What is more bull What on earth is more bullish than the leadership group chart off? What on earth is more bullish than a situation where the leadership group pukes is also the largest sector and also has the most speculative activity in it gets absolutely taken to the
26:44cleaners and the S&P 500 index doesn't budge because there's so much buying in all of the other almost all of the other sectors that the market holds up, the internals blow out in terms of broadening and we go through a margin wipeout and then come out of the other side with a rally in the former leaders. Once again, if I if I scripted it, you couldn't write a more bullish um resolution of