SOX Semiconductors Weekly Chart Sideways Symmetrical Triangle

The SOX is at a critical juncture right now, the top trend line of the sideways triangle, thus, push up thru, or collapse.  The indicators are flat to upward leaning which hints that price may want to explore this trend line area a week or two. The 20-week MA is under the 50-week MA which is bearish. The 200-week MA is sloping higher which is bullish. The ADX is at 16 showing that a strong trend is not in place and this is not surprising since a sideways triangle pattern is in play.

Semi's and copper are two key leading indicators for markets. There is a chip in almost any item you use these days. What you must ask, however, is the current strength in semi's due to actual strength in orders, a growing global economy and sustainable growth, which would indicate blue skies ahead for markets, or, is the tail wagging the dog and astute traders are simply running into semiconductors (and copper) because they are anticipating a recovery? The former describes a strong economy and market headed for great things, the latter describes traders simply trying to front run a perceived recovery. The move up will peter out quickly and fail if it is a simply a short-term momo trade by professionals.

If SOX punches up thru 400, the market bulls win moving forward.  If the SOX collapses thru 360, the bears win. The blue circle shows a false breakout that typically occurs about two-thirds of the way thru the triangle and hints that price will return to the inside of the triangle and collapse out the bottom. If the false breakout was a breakdown instead, out the bottom, then the projection would be a return to the triangle and out the top.  Simply watch the blue trend lines to identify if the market bulls, or bears are winning moving forward. 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.