SOX Semiconductors ETF Daily Chart; Sideways Symmetrical Triangle Failure; Chips in Bear Market

If the chips are down, stockholders frown. SOX prints its record high at 1464.61 on 3/13/18. Price is at 1157.86, a drop of -20.9% in a bear market. SOX began the year at 1235.05 and is down -6.3% on the year.

Semiconductors collapse from the sideways symmetrical triangle. Keystone highlighted that pattern and situation as it played out this year. The vertical side of the triangle is from 1235 to 1460 call it 225 points. Thus, the failure from the triangle at 1360 targets 1135. Boom. It occurred in quick order on Halloween. The sideways triangle pattern is satisfied. (Interestingly, if price was bullish in October and broke up and out of the triangle at 1400 that would have targeted 1625 but instead the bears win.) As highlighted above, price is now at 1157 which is more than -20% off the March top in bear market territory.

Chips are in almost every product manufactured today. Housing, autos and chips are big-time drivers of an economy. All three are stalling. The death cross occurred for the chips in mid-October two months ago.

SOX bounced in November from the positive divergence (green lines) and tagged the upper standard deviation band. Price retreats back down to the lower band. SPX needs to come down to make another matching or lower low in price to officially create the positive divergence again for a bounce. SOX is pretty close right now and is at the lower band. The middle band at 1207 is in play going forward.

The purple box shows that the ADX was indicating a strong trend lower in price during late October and November but that strong trend has petered out. Hence, price staggers sideways without any commitment either way. The SOX weekly chart is setting up with possie d but is not yet ready for the substantive bounce in the weekly time frame, but close. The SOX is perhaps a couple weeks away at a potential bottoming at 1120-1160 where a rally on the weekly basis would begin. 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.