Since Broadcom destroyed whatever hopes and dreams semiconductor bulls had last week with a cut to guidance and weak revenue numbers, the SOX has declined nearly 6% from its peak.
The pain, however, may not be over for SOX bulls. In fact, if one is bullish on the SOX it may be better for the index to reset by touching 1330 before any semblance of a recovery effort is made.
1330 on the SOX should become a hook for the entire tech sector on a positive reversal off this mark.
Of course, with the Fed meeting on the horizon, the destiny of investors will largely be in the hands of grey haired academics who think that being dynamic and adaptable is having oatmeal for lunch instead of split pea soup.
In any case, while there will be excessive volatility around some key technical points this week, the fact that both the S&P 500 and the SOX are sitting near key points will make navigating the markets that much easier following the typical post-Fed mayhem in the markets. At the very least, investors should take heart in this fact.
Zenolytics remains convinced that the current weakness in the SOX will be a buying opportunity for the best and brightest names in the sector.
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