Market Direction Model - Note on signal change

Published:

24 Jun 2026 16:47 ET

The Market Direction Model switched from **Buy to Cash** near the close.

This move was driven by a rising number of distribution days and increasing signs of institutional selling pressure. The NASDAQ Composite had just violated its 50-dma on June 24 as well. However, the change was made with full awareness that Micron (MU) would report earnings shortly after the bell.

It was a deliberate risk-management decision. It was recognized that:
- A disappointing MU report would likely trigger further selling, reinforcing the distribution signals and validating our shift to Cash.
- A strong (or monster) beat from MU could spark a sharp rebound and potentially reset the short-term trend.

The model preferred to step aside into Cash rather than remain exposed into this high-impact event while the underlying technicals were deteriorating.

That said, the MU (Micron) earnings report was powerful enough to likely push the model back into a buy signal at tomorrow's open. This will be confirmed tomorrow before the open.

**Here’s a clean summary of Micron’s (MU) fiscal Q3 2026 earnings** (reported after close on June 24, 2026):

### Key Results (Massive Beat)
- **Revenue**: **$41.46 billion**
→ Beat estimates of ~$35.6 billion
→ Up ~346% YoY (one of the biggest revenue jumps in company history)

- **Adjusted EPS**: **$25.11**
→ Beat estimates of ~$20.60
→ Up over 1,200% YoY

- **Gross Margin**: Record levels (reported adjusted gross margin around **86%** in guidance commentary)

### Q4 Guidance (Also Very Strong)
- Revenue: **~$50 billion** (well above consensus ~$42.9 billion)
- Adjusted EPS: **~$31.00** (above expectations of ~$25.50)
- Adjusted Gross Margin: **~86%**

### Main Takeaways
- **HBM and AI memory** drove the blowout quarter. Demand continues to outpace supply, with HBM sold out for the rest of 2026.
- Pricing power remains extremely strong, especially in high-bandwidth memory.
- The company continues to see a multi-year AI memory supercycle with tight supply into 2027.

**Bottom line**: This was a **monster beat-and-raise** quarter. Micron delivered record results across the board, reinforcing the AI memory boom story.

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