Semi Bullish?

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As an email from [omitted] entitled “Cyclical Indicators Soar” hits my inbox, I thought I’d update a cyclical indicator of another kind. You know, the friggin’ cyclical indicator that preceded them all? Why, it’s none other than our Canary in a Coal Mine, the Semi sector and in particular, Semi Equipment. The progression and projection we used back in 2013 was Semi Equipment → Semis → General Manufacturing → Jobs → Completely bubble headed euphoric mania with a business friendly corporate stooge in the White House. Okay, well I just added that last part in, but you get the point.

The answer to the title question is no. We’ve put forth reason to believe that the earliest of birds, the Semi Equipment sector, may have issues in 2018. What’s more, this warning to ignore a MarketWatch article and the newly bullish fund manager it highlighted came exactly 2 days before the SOX index made its top.

sox

But now it may be coming time for a bounce. Semi vs. Big Tech is nearing such a point.

smh, qqq

Semi vs. SPX is as well.

smh, spy

If AMAT is not bouncing now, it will probably do so after a tap of support.

amat

Ditto LRCX.

lrcx

The above two are equipment manufacturers. Here is old chip making dinosaur, INTC flying a flag at the SMA 50. But it could hit 40-41 if it decides to fill the gap.

intc

The bottom line is that casino patrons will play as they will, but this sector has been flashing an early warning to the Mom & Pop sponsored, punch drunk party going on out there. It’s a turd in the punch bowl folks, regardless of whether or not the wise guys pump it again, short-term. Sentimentrader‘s graphic once again…

households

Timing as they say, is everything.