A LEADING INDICATOR THAT IS ABOUT TO HIT BRICKS
SOX (Semiconductor Index)
Bull markets always have leaders. Those names that are leading the charge forward...sectors that shine just a little brighter than all others.
A majority of bull markets over the past 15 years or so have been led by technology. It is very true that when tech is shining, the bull feels that much more frisky and is able to take on challenges that it wouldn't be able to survive otherwise.
Last night, we went over how bullish the Nasdaq looked and how it was poised to move higher. Today it had a bit of a run, which is good to see. But as you all know, we like to dig a little deeper to see what the technical picture is like within the Nasdaq. Where do you look for that? The good ol' SOX (semiconductor index).
In any healthy Nasdaq rally and therefore, market rally...the SOX is leading the way. And you can see here, that if you would have just followed the SOX, which has been breaking out to new highs while the S&P, Dow and Nasdaq consolidated, you would have been able to see today's move higher coming from a mile away.
Just as the SOX was warning the bears that the markets are not done on the upside just yet...they are getting close to a point where they are warning the bulls that we may be close to hitting a shit ton of bricks and our horns may not be able to handle the damage.
It may get painful real soon. At a minimum we are in for an extended period of consolidation that begins at the earliest next week and at the latest towards the end of this month.
