In NFTRH 351 we had an extensive look at the Semi sector including its nominal technicals, its market leadership status and a potential setup that could be in play if my read on its fundamentals proves out. FWIW, here is the status of the Semiconductor sector’s leadership.
Since Q4 2012 SOX has led the S&P 500, which makes sense since Q1 2013 was when we became alerted to the Semi Equipment sector’s ramp up (which in turn was an early economic signal). 3 times since the circus last October centered around Microchip Semi’s outlook brain fart SOX’ leadership became over done and now the question is, has it been over done to the downside yet again?
All trends end sometime, but as of now this one is completely intact.
Per this chart created several months ago, the Semi index hit the first target of 750 on June 1. I had not even realized it. “Essentially in the books” is now IN the books. Way before the Semi’s recently started gaining the M&A hype in the media NFTRH highlighted the sector for a coming bullish phase (January 2013) for fundamental reasons, and then in early 2014 when the big breakout came we added technical oomph to the case.
Dutifully, SOX has been pulling back, which is a good thing since I did my selling and am without exposure. I have my eye on some buy targets for a few items, which were mentioned in NFTRH 346. They are stocks that have been mentioned here as well at various times. As for the sector, SOX is completely unbroken.
Hey, I like Dr. Seuss.
The Semiconductors, which has been my favorite sector both for trading and for market indications (with the Biotech a close second) is merrily on its way to the 750 target. This chart and its target were created as the Semiconductor index was consolidating a ‘Handle’ out of the ridiculous October hysterics (cue Microchip Semi with its idiot management… ‘errr, we are a bellwether and we see a Semi slow down’… FF 2 mos… ‘oh, never mind, business is great!’). Amazingly, there are only 20 points to target.
The Russell 2000 obviously has an ugly topping pattern. It has long since nudged to a lower low to the August low and now has eased below March and January. If it holds below the line this thing will be in a bear trend. The bears should hope that TA geniuses do not come out and blow horn the DEATH CROSS!!! of the MA’s 50 and 200, which is a Red Herring. The chart is bearish enough without the help of that hype.
Anyway, RUT was a leader to the upside on this most intense bull market phase, which has been the post-2012 period and that leader is starting to lose its bull market.
Continue reading Market Leaders Abdicating
Frankly, by daily charts I think the Semiconductor index and several other US markets are too far above the 50 day moving averages and soon due for a breather. But a big picture signal we first noted in March continues apace. That would be the SOX similarity (Bollinger Band creep) to its state in 1999.
Per the chart’s question, SOX did indeed close March (and April and May) above decade-old resistance and it continues to creep up along the top B Band. This and the Tranny can be considered Gate Keepers to the potential for a manic market blow off.
Time for bulls to get out their Gox Box Sox because the Semiconductor index is negatively diverging and having an issue at the 50 day moving averages.
The US stock market is negative pre-open, but don’t be surprised if we get a strong bounce soon. It could be a trade-able bounce. I have bought a couple items in anticipation and am watching several more.
A bounce is a bounce; a trade. It is what happens on a would-be bounce that will be important going forward. What will the market do at resistance? That will tell us a lot about what this thus far mini correction will be, another quickie or something more lasting.
SPX has firm support at around 1800.
One of the leaders, NDX needs to bottom shortly and make a ‘higher low’ to February or it is going to activate a bearish intermediate signal.
Continue reading US Stock Market; Bounce Upcoming?
The SOX Semiconductor index is unbroken and still on the potential market melt up/blow off plan. The daily chart shows the support critical to this plan.
RSI is fine above support, but the shaded area shows the level it dropped to in early February in case this ‘correction’ (so far just one big, scary candle) bites deeper as I suspect it will.
Continue reading Red SOX?
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The reversal in US markets is coming after a period of under performance by large tech stocks and the momentum darlings like YELP, FB, TSLA, and of course, my personal whipping boys, the 3D Printers.
Continue reading NFTRH Update, US Stock Market
The Semiconductor index made a bearish engulfing candle after making a new high a couple days ago.
I shot first and didn’t ask questions, selling the Semi’s and in particular Silicon Motion (below) on the drop below former support (now resistance) and now going to long SIMO again with the 50 day moving averages as a tolerance line.
Continue reading Semi Bullish Again?