Chart Advisor: Why the biggest IPO in history is still sinking

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Everyone Is Waiting for Forced Buyers to Save SpaceX. They Are Not Coming.

Two days ago, SpaceX joined the Nasdaq-100. Every fund that tracks the index was suddenly required to own it.

That is supposed to be rocket fuel. When a stock enters a major index, passive funds have to buy it whether they like it or not, and that wall of forced demand usually props the price up.

So SPCX should have popped. Instead it fell about 7% into the news and broke below the level where the public first bought it. Wall Street had just stapled a $300 price target to the stock, and it sold off anyway.

If you looked at where it closed and wondered what happened, you are asking the right question. Something is wrong with the story everyone is telling, and the chart is where it shows up first.

The Forced Buying Is a Rounding Error

Here is what the index-inclusion crowd is missing.

Only about 4% to 5% of SpaceX’s shares trade. The rest are locked up. The company sold a sliver of itself to the public and kept the rest.

So when the Nasdaq funds “have to buy,” they are buying from a tiny pool. The forced demand everyone is counting on is real, but it is small. It is a garden hose aimed at a fire, and it is nowhere near big enough to hold up a $2 trillion stock on its own.

That thin float is the whole game here, and it cuts both ways. On the way up, a trickle of buying sent SPCX rocketing to $226 in days. On the way down, a trickle of selling drops it just as fast, because there are not enough shares changing hands to absorb the hits.

The Wave Nobody Is Positioned For

Now here is the part the market is afraid of.

All those locked-up shares do not stay locked forever. SpaceX built a staggered release schedule, and the first gate opens in late July, right after the company reports earnings. Nearly 20% of the locked shares come free at once.

More follow. Smaller batches unlock through August, September, and October, and the big 180-day tranche clears in December. Every one of those dates adds new sellers to a stock that already cannot find buyers.

The market can see that calendar as well as we can. That is why the selling is happening now, before the supply even hits. Traders are front-running the flood.

This is the disconnect in one sentence. The bulls are pointing at a $300 target and a passive bid, while the tape is pricing in a supply wave that has not arrived yet.

Why $150 Is the Number That Settles It

All of that pressure now sits on one line. $150.

That was the price where SPCX opened on its first day of trading. Not the $135 the insiders paid, but the first number the public ever transacted at. A whole cohort of early buyers measures their position against it, which makes it the emotional and financial line in the sand for the stock.

Our team is watching it as the decision point, and the read is clean.

If SPCX cannot reclaim $150 and hold above it, the path of least resistance points lower, straight into that oncoming supply. That is the setup that favors the downside, and it is the one the tape is voting for right now.

But if the stock reclaims $150 and holds, the story flips. The sellers betting on the flood get caught offside, and their scramble to cover can spark a squeeze, a fast move higher as trapped shorts are forced to buy back in. A thin float makes that snapback violent.

One line. On one side, the supply wave wins. On the other, the shorts get run over.

That is why $150 matters more than the $300 target or any analyst note.

The Honest Other Side

The bulls are not crazy, and this could still work out for them.

Starlink is profitable and growing, the launch business is dominant, and the AI and satellite optionality is real. If SpaceX reclaims $150 and absorbs the lockup supply without breaking, the same thin float that is punishing it now can send it flying in the other direction. The $300 target is a bet that the business is big enough to eat the selling.

None of this means SpaceX is doomed. What it means is that the reason everyone gave you to be bullish, the forced index buying, is the weakest part of the case. This stock will live or die on whether real buyers show up at the line, not on funds that were never buying much to begin with.

Watch the Line, Not the Hype

Here is the lesson worth keeping. Forced buying is a story. Supply is a fact.

When a stock is this thinly traded and this heavily hyped, you do not trade the narrative. You trade the level. $150 tells you which force is winning, in real time, with no opinion required.

That is the entire game right now for the most watched stock on the market.

The Bigger Signal Behind All of This

SPCX is one loud example of a quieter truth. The headline index is near a record, but the average stock is having a much rougher year, and leadership is rotating out of the names everyone owns into the ones they do not.

That gap is why a perfect chart keeps stopping people out. They are trading the story instead of reading where the money is.

Our own Grant Hawkridge built a system for exactly this problem. It starts with one daily reading, the Overnight Number, that tells you whether the market is paying you to take risk or charging you for it, then walks down to the sectors and stocks that are leading.

He is teaching the whole three-step method live and free on Wednesday, July 15 at 8 PM ET. If you want to stop trading the narrative and start reading the tape, this is where to start.

SAVE MY SEAT LINK

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Originally posted 6th July 2026