SOX Semiconductors Index Weekly Chart; Sideways Symmetrical Triangle; Big Decision On Tap; Bounce or Die

The semiconductors have carried the US stock market higher over the last couple years with AI leading the tech orgy. The chips are on patrol in the Big City making sure stocks stay up forever so the wealthy class can keep enjoying their lives. Like in life, however, a fork in the road appears, and a decision is required, and semi's must choose up or down.

The sideways symmetrical triangle has been forming for the last half year. Price is now squeezed into the apex and has to decide which side it wants to exit. There is no more space available to move sideways. It is time to sh*t or get off the pot as dear old Mom would say. The vertical blue line on the side of the triangle is from 4250 to 5760 eyeballing it. That is a 1510 difference. The vertical blue line inside the triangle is from 4480 to 5625 so that is 1145 difference.

Keystone sometimes prefers to use the vertical line where the second touch of price occurs since the triangle is firmly in place but both numbers can be used to identify ranges. The bull breakout higher would be from 5180 (when price exits the triangle). The bear breakdown lower would be from 4980.

So now we can get mathy. If the bulls can push price above 5180, and it is at 5175 now, price will target 6325 to 6690. The bulls will be throwing confetti, guzzling Fed wine, and singing "Rock and Roll All Night." Tongue action. The upside orgy in chips and the broad stock market will be so obscene that it will make Caligula blush. It will be party time for bulls.

If the bears can push price below 4980, SOX will target 3470 to 3835. Look at that. There's a juicy gap at 3800-ish that will need filling (orange circle). The bears will be slashing the bulls with the blood flowing at Wall and Broad. It will be death and destruction of semiconductors and the broad stock market. We will be on the "Eve of Destruction" like Barry sings. It will be mayhem and that means party time for bears.

There are a couple other gaps down at 2600-2800 so that will be on the docket in the future. It would be a -50% failure in chips over the next year or two.

For now, the markets await the semi decision to bounce from 5180, or die from 4980. What's it gonna be, boy? Well, now what's it gonna be, boy? Bounce, or die? Let me sleep on it, I'll give you an answer in the morning. "Paradise by the Dashboard Light." Choose your poison. Keystone is not holding any chip positions long or short right now.

If you want to trade the chips, you may as well wait for the SOX decision. If she breaks out higher, there is plenty of time to buy the chips. If she collapses, you will be glad you are not a bagholder looking like a jackass, and then you can enter at far lower prices in the future. 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.

Note Added Friday, 12/27/24, at 4:13 PM EST: The session ends the day and week with SOX at 5123 remaining inside the symmetrical triangle. SOX has not made the decision on which way to exit the triangle but it knows it must. SOX will think about it this weekend and arrive on Monday with the bounce or die verdict, as the peak in the new moon occurs. Bulls win at 5180 and higher while bears win sub 4980. The decision will knock your socks off.