Perhaps the cleanest setup for a hard fall among all the indexes I am examining is the semiconductor index, symbol $SOX. It still has a little more potential upside before it hits its resistance trendline, but tagging this trendline is not a necessary prerequisite. The point is that there’s much more downside risk than upside opportunity at present price levels, and virtually all of the power behind the last two months of ascent is predicated on the continuation of AI Fever.
Looking at the longer-term $SOX, you can see how elevated we are and how, in spite of the past two months, we’re still well below lifetime highs and in a general downtrend.
Nvidia is also below its lifetime highs, although it has had a remarkable recovery from being absolutely pummeled. If NVDA keeps strengthening, all bets are offl
I’ve got to say, though, that they are plenty of intriguing short setups in semi-land, such as ON, MCHP, and AMD, shown below.
Hang in there, bears. We’re down, but we’re not out. Not yet, at least.
