Public trading strategy
AI bubble springs a leak — memory-chip glut and Mag 7 selloff spell trouble for
Created
Thesis
The chip sector is facing a sudden reversal of fortune after leading the market for the first half of the year. As Bloomberg notes, semiconductor stocks are off to their worst two-day selloff in nearly a month to start the third quarter. This broad weakness is being triggered by a specific panic in memory chips, with Yahoo Finance reporting a sudden supply-glut fear that crushed SanDisk, Seagate, and Micron. When you combine this technical supply glut with the broader market skepticism detailed in the Mag 7 article—where investors are questioning the ROI of massive AI spending—it creates a perfect storm for short-term downside in the very chipmakers that drove the previous quarter's rally.
Strategy approach
Build a rule-based strategy that enters short SMH on D1 when the ETF loses more than 4% over a 3-day window AND the 10-day average crosses below the 50-day average. Exit on a 5% bounce from the entry close, with a 21-day max hold.
Markets and timeframes
Entry and exit at a glance
These are the named rules in the shared configuration. Review the full conditions below before using a strategy.
- Entry: ROC/SMA/ADX Crossover Long (AMD@1d) (4 conditions)
- Exit: ROC Threshold Exit (AMD@1d) (2 conditions)
- Exit: Stop Loss at 2.5% (1 condition)
- Exit: Take Profit at 5.0% (1 condition)
- Exit: SL: Below Support[1] (AMD@1d) (1 condition)
- Exit: TP: Near Resistance[1] (AMD@1d) (1 condition)
Shared strategy rules
Rule configuration
{
"data_dependencies": [
{
"symbol": "AMD",
"timeframe": "1d"
}
],
"entry_rules": [
{
"conditions": [
{
"left": {
"chart_ref": {
"symbol": "AMD",
"timeframe": "1d"
},
"indicator": {
"name": "roc",
"period": 3
},
"type": "indicator"
},
"operator": "less_than",
"right": {
"type": "constant",
"value": -4
}
},
{
"left": {
"chart_ref": {
"symbol": "AMD",
"timeframe": "1d"
},
"indicator": {
"name": "sma",
"period": 10
},
"type": "indicator"
},
"operator": "crossed_below",
"right": {
"chart_ref": {
"symbol": "AMD",
"timeframe": "1d"
},
"indicator": {
"name": "sma",
"period": 50
},
"type": "indicator"
}
},
{
"left": {
"chart_ref": {
"symbol": "AMD",
"timeframe": "1d"
},
"field": "adx",
"indicator": {
"name": "adx",
"period": 14
},
"type": "indicator"
},
"operator": "greater_than",
"right": {
"type": "constant",
"value": 25
}
},
{
"left": {
"field": "close",
"type": "price"
},
"operator": "crossed_below",
"right": {
"rank": 1,
"type": "support_level"
}
}
],
"direction": "long",
"enabled": true,
"id": "entry_1",
"name": "ROC/SMA/ADX Crossover Long (AMD@1d)",
"priority": 1
}
],
"exit_rules": [
{
"applies_to": "both",
"conditions": [
{
"left": {
"chart_ref": {
"symbol": "AMD",
"timeframe": "1d"
},
"indicator": {
"name": "roc",
"period": 3
},
"type": "indicator"
},
"operator": "greater_than",
"right": {
"type": "constant",
"value": 5
}
},
{
"left": {
"field": "unrealized_pnl_percent",
"type": "position"
},
"operator": "greater_than",
"right": {
"type": "constant",
"value": 21
}
}
],
"enabled": true,
"id": "exit_1",
"name": "ROC Threshold Exit (AMD@1d)",
"priority": 1,
"purpose": "signal"
},
{
"applies_to": "both",
"conditions": [
{
"left": {
"field": "unrealized_pnl_percent",
"type": "position"
},
"operator": "less_than_or_equal",
"right": {
"type": "constant",
"value": -2.5203333333333333
}
}
],
"enabled": true,
"id": "exit_2",
"name": "Stop Loss at 2.5%",
"priority": 100,
"purpose": "stop_loss"
},
{
"applies_to": "both",
"conditions": [
{
"left": {
"field": "unrealized_pnl_percent",
"type": "position"
},
"operator": "greater_than_or_equal",
"right": {
"type": "constant",
"value": 5.040666666666667
}
}
],
"enabled": true,
"id": "exit_3",
"name": "Take Profit at 5.0%",
"priority": 100,
"purpose": "take_profit"
},
{
"applies_to": "short",
"conditions": [
{
"left": {
"field": "close",
"type": "price"
},
"operator": "less_than_or_equal",
"right": {
"rank": 1,
"type": "support_level"
}
}
],
"enabled": true,
"id": "exit_4",
"name": "SL: Below Support[1] (AMD@1d)",
"priority": 97,
"purpose": "take_profit"
},
{
"applies_to": "short",
"conditions": [
{
"left": {
"field": "close",
"type": "price"
},
"operator": "greater_than",
"right": {
"rank": 1,
"type": "resistance_level"
}
}
],
"enabled": true,
"id": "exit_5",
"name": "TP: Near Resistance[1] (AMD@1d)",
"priority": 100,
"purpose": "stop_loss"
}
],
"position_sizing": {
"max_position_percent": 25,
"method": {
"resistance_stop_rank": 1,
"risk_percent": 2.5203333333333333,
"type": "fixed_risk"
},
"min_position_value": 100
},
"trigger_timeframe": "1d",
"version": 1
}Indicator configuration
{
"indicators": [
{
"name": "sma",
"period": 10
},
{
"name": "sma",
"period": 50
},
{
"name": "roc",
"period": 3
},
{
"name": "roc",
"period": 5
},
{
"name": "adx",
"period": 14
}
]
}Parsed strategy
{
"data_dependencies": [
{
"symbol": "AMD",
"timeframe": "1d"
}
],
"entry_rules": [
{
"conditions": [
{
"left": {
"chart_ref": {
"symbol": "AMD",
"timeframe": "1d"
},
"indicator": {
"name": "roc",
"period": 3
},
"type": "indicator"
},
"operator": "less_than",
"right": {
"type": "constant",
"value": -4
}
},
{
"left": {
"chart_ref": {
"symbol": "AMD",
"timeframe": "1d"
},
"indicator": {
"name": "sma",
"period": 10
},
"type": "indicator"
},
"operator": "crossed_below",
"right": {
"chart_ref": {
"symbol": "AMD",
"timeframe": "1d"
},
"indicator": {
"name": "sma",
"period": 50
},
"type": "indicator"
}
},
{
"left": {
"chart_ref": {
"symbol": "AMD",
"timeframe": "1d"
},
"field": "adx",
"indicator": {
"name": "adx",
"period": 14
},
"type": "indicator"
},
"operator": "greater_than",
"right": {
"type": "constant",
"value": 25
}
},
{
"left": {
"field": "close",
"type": "price"
},
"operator": "crossed_below",
"right": {
"rank": 1,
"type": "support_level"
}
}
],
"direction": "long",
"enabled": true,
"id": "entry_1",
"name": "ROC/SMA/ADX Crossover Long (AMD@1d)",
"priority": 1
}
],
"exit_rules": [
{
"applies_to": "both",
"conditions": [
{
"left": {
"chart_ref": {
"symbol": "AMD",
"timeframe": "1d"
},
"indicator": {
"name": "roc",
"period": 3
},
"type": "indicator"
},
"operator": "greater_than",
"right": {
"type": "constant",
"value": 5
}
},
{
"left": {
"field": "unrealized_pnl_percent",
"type": "position"
},
"operator": "greater_than",
"right": {
"type": "constant",
"value": 21
}
}
],
"enabled": true,
"id": "exit_1",
"name": "ROC Threshold Exit (AMD@1d)",
"priority": 1,
"purpose": "signal"
},
{
"applies_to": "both",
"conditions": [
{
"left": {
"field": "unrealized_pnl_percent",
"type": "position"
},
"operator": "less_than_or_equal",
"right": {
"type": "constant",
"value": -2.5203333333333333
}
}
],
"enabled": true,
"id": "exit_2",
"name": "Stop Loss at 2.5%",
"priority": 100,
"purpose": "stop_loss"
},
{
"applies_to": "both",
"conditions": [
{
"left": {
"field": "unrealized_pnl_percent",
"type": "position"
},
"operator": "greater_than_or_equal",
"right": {
"type": "constant",
"value": 5.040666666666667
}
}
],
"enabled": true,
"id": "exit_3",
"name": "Take Profit at 5.0%",
"priority": 100,
"purpose": "take_profit"
},
{
"applies_to": "short",
"conditions": [
{
"left": {
"field": "close",
"type": "price"
},
"operator": "less_than_or_equal",
"right": {
"rank": 1,
"type": "support_level"
}
}
],
"enabled": true,
"id": "exit_4",
"name": "SL: Below Support[1] (AMD@1d)",
"priority": 97,
"purpose": "take_profit"
},
{
"applies_to": "short",
"conditions": [
{
"left": {
"field": "close",
"type": "price"
},
"operator": "greater_than",
"right": {
"rank": 1,
"type": "resistance_level"
}
}
],
"enabled": true,
"id": "exit_5",
"name": "TP: Near Resistance[1] (AMD@1d)",
"priority": 100,
"purpose": "stop_loss"
}
],
"position_sizing": {
"max_position_percent": 25,
"method": {
"resistance_stop_rank": 1,
"risk_percent": 2.5203333333333333,
"type": "fixed_risk"
},
"min_position_value": 100
},
"trigger_timeframe": "1d",
"version": 1
}Strategy instructions
Trading agent generated from recommendation idea 'AI bubble springs a leak — memory-chip glut and Mag 7 selloff spell trouble for semiconductors'. Thesis: The chip sector is facing a sudden reversal of fortune after leading the market for the first half of the year. As Bloomberg notes, semiconductor stocks are off to their worst two-day selloff in nearly a month to start the third quarter. This broad weakness is being triggered by a specific panic in memory chips, with Yahoo Finance reporting a sudden supply-glut fear that crushed SanDisk, Seagate, and Micron. When you combine this technical supply glut with the broader market skepticism detailed in the Mag 7 article—where investors are questioning the ROI of massive AI spending—it creates a perfect storm for short-term downside in the very chipmakers that drove the previous quarter's rally.
Performance
No trade count, win rate, or realized P&L figures are provided in this public preview. The thesis and shared rules do not establish a performance record.
What this public preview can establish
- The thesis and strategy approach describe a market view. They do not show whether an entry or exit condition is currently met.
- Technical strategy fields are shared above. Inspect the actual conditions and check when they were evaluated before relying on them.
- No trade count, win rate, or P&L figure is published in this preview. It cannot establish a performance record.
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