1+ years ago… that was when we became alerted to the positive projections in the Semiconductor equipment sector, which meant that Semiconductor companies were ramping new inventory builds. This had positive implications for manufacturing as a whole since the Semi’s are a canary in the coal mine.
Today the canary is at critical long term resistance. That is all; no grand statements about what it is going to do or not do. But we can say that if resistance holds a bear case on the markets and the economy will probably gain an ally. If it breaks out, the measurements are noted.
Here is the progress another leader is making toward a well defined target.
On Monday I put up a chart of the junk bond fund HYG, showing an impulsive drop in that garbage with the implication that speculative urges were bleeding out of the market. Then I looked at the same chart later and they had magically fixed it. There never was a decline… April Fools! Seriously, what was up with that?
Well, let’s see if they can paint the SOX.
SOX daily, click for full size
This chart sucks.
Party on Garth! I talked with my semiconductor contact 2 days and he says still D.E.A.D. But look at SMH go, will ya?
The target is 34 based on this breakout and assuming FOMC does not do or say something untoward tomorrow to reverse it. It is funny how gold is declining with USD and Long Term T bonds, while the regular market gets Garth good and plastered on what one would assume is QE punch.
Got to love the holidays.
Here is the chart I drew up a week or two ago.