Sunday, August 12, 2018

SOX Semiconductor Index Daily Chart; Sideways Symmetrical Triangle; Tight Standard Deviation Bands

The chips sunk the stock market on Friday, 8/10/18. The stock market bulls were celebrating last week as price was ready to break up through the upper channel line. Their heads were delivered on a platter on Friday. Note the tight standard deviation bands (pink arrows). A huge move is about to occur in the semiconductors. Tight bands forecast a big move but do not predict direction. Price began jumping higher but reversed on Friday so the big move may be lower.

The blue sideways symmetrical triangle illustrates the sideways chop that has been occurring over the last year after the neggie d top (red lines). The vertical side of the triangle is two hundo points (1250 to 1450). Thus, if the SOX breaks above 1400, it will likely be on its way to 1600 over the next year, or, if price breaks down from 1320, the chips will seek 1120. Note the support at the 1120-ish level from last Fall.

The chart is not tipping its hand due to the choppy sideways pattern. The tight bands and sharp reversal on Friday, however suggests that the path lower has a slight advantage. Bears would need the failure at 1320 before they could claim victory. The purple lines show the rock solid support at 1210-1245. If this level fails, it is over for the semiconductors and the stock market. The brown box shows gaps that need filled from last October. As the chips go, so goes the marrket. 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.

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