SOX Semiconductors Daily Chart Tight Bollinger Bands

SOX 395.43 is a critical level early this week, identified by Keystone's algorithm, but the bulls never put up a fight. SOX price simply collapsed at the opening bell. MU and VECO were downgraded today and other companies in the chip sector such as INTC, AMD and TXN are negative. SOX has now fell under 390 far from the 395 plus the bulls need to regain their composure in the markets.  The tight BB's now want to squeeze out a strong move higher, or lower.  Note how the pink BB's are already flaring out at the ends indicating that the tight BB pattern for September is over and price is now making its strong move. By the looks of the action today, the bear's may finally win one of these with price perhaps moving sharply lower from here propelled by the squeeze of the BB's. The red line at 390 unfortunately covered up the lower pink BB so you will have to bring up the chart and study the BB without the other clutter. The black dots show how price moves from the upper BB to the lower BB and back again and for the SOX, the middle BB, which is also the 20-day MA, plays a role as well, with price bouncing off the middle BB at various times.  Price pierced the upper BB six days ago, now is near tagging the lower BB, but as the BB's now flare out, price can fall well into the 380's before catching up to a faster dropping lower BB.

The indicators are negatively diverged for the recent matching high move for price, thus creating the spank down move that now continues.  The histogram and stochastics are open to seeing a quick bounce occur but the indicators in general are weak and bleak indicating lower prices ahead.  There is a congestion zone at 380-388 which should surely be explored. There also several gaps underneath that will eventually require filling.  Trannies continue to place into question the strong markets, especially after bad FDX adn NSC news last week, the weak utilities are an ominous market signal, the low CPC adn VIX signal uber complacency, and now semiconductors appear to have failed today. If chips are weak, that means there is nothing being manufactured around the globe since chips go into near every product nowadays.  Broad indexes will remain weak as long as SOX remains under 395.43. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.