Jim Cramer warns semiconductor reversals are nearly impossible to recover intraday
As seen on the 24/7 Wall St. homepage on July 27, 2026.
Cramer signals that forced liquidations by leveraged semiconductor sellers could create headwinds for an intraday bounce.
When you have reversals like you have in the semis this morning, it is very difficult to reverse the downturn intraday as the sellers tend to be monstrous, motivated and often margined. So they have to get out
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Cramer's post zeroes in on a dynamic familiar to traders who have watched sharp morning drops in semiconductor stocks: once a significant reversal takes hold early in the session, the sellers driving it tend to be large, urgent, and often forced to act. His word choice — 'monstrous, motivated and often margined' — points specifically to leveraged investors who have no choice but to exit positions regardless of price.
The margin element is the key detail here. When traders are carrying semiconductor exposure on borrowed money and a downturn hits, brokers can issue margin calls that require immediate liquidation. That wave of forced selling compounds ordinary bearish pressure and makes it structurally harder for buyers to step in and reverse the move before the close.
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For anyone watching SMH, the broad semiconductor ETF, Cramer's observation is essentially a caution against trying to catch a falling knife on a bad morning. The implication is that patience may matter more than reflexes when semis open deep in the red and the selling looks relentless.
Mentioned: SMH