Short Squeeze in Semi Slump as NVDA Reclaims VWAP

The morning tape was dominated by aggressive selling in the semiconductor complex following the pre-market PCE release. NVDA opened with a massive gap down, testing the $128 support level before institutional buyers stepped in to absorb the overhang. The initial flush provided a textbook high-volume reversal setup for those watching the tape, as the bid-ask spread tightened and size began to lift the offer consistently through the first hour of trade.

Mid-day price action was characterized by a grueling grind back toward the flat line. TSLA showed relative strength early, acting as a leading indicator for the broader QQQ recovery. Traders who were stuck in short positions from the open were forced to cover as the index reclaimed its 20-day moving average, triggering a gamma squeeze in the final ninety minutes of the session. The tape showed significant block trades hitting the tape at the close, suggesting rebalancing flows are favoring large-cap tech heading into the weekend.

Rotation remained the secondary theme, with small-caps lagging the AI-led recovery. While the headline indices finished green, the breadth was deceptively thin, favoring high-conviction momentum plays over broad-market beta. Keep a close eye on the $135 level in NVDA for Monday's open; a sustained hold above this pivot could signal a fresh leg higher, while a failure to hold today's late-session gains would confirm a distribution pattern.

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