SOX Semiconductors Daily Chart H&S

Semi's are the big story this week and the socks take a big hit of -4% from Monday through Wednesday creating much of the overall broad market weakness. Note that price bounces yesterday directly off the neckline of the blue H&S pattern. Head at 445 and neck at 415 targets 385 if the 415 fails.  The 385 target receives immediate street cred due to the price touches from October through December. The red rising wedge, overbot conditions and negative divergence forecasted the spank down. The purple inverted H&S pattern shows a head at 355, neck at 390 which targeted 425 which was easily achieved on the way up.

Keystone's algorithm, Keybot the Quant, identifies what sectors, in real-time, are affecting broad index movement the greatest. Currently, VIX 14.50 and SOX 425 dictate market direction. If the VIX moves above 14.50, the markets will be selling off, however, if the VIX stays under 14.50 today, watch the SOX 425 level since it will dictate whether the bulls are happy today or the bears. SOX 425 is a bull-bear line in the sand and more important than the actual move in the broad indexes today since, if the markets move higher, but SOX does not overcome 425, the markets will reverse and sell off. If the markets rise today and the SOX moves above 425, the bulls will rule into the weekend.  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.