Whoopsies daisies. It looks like the CHIPS have skidded out on the highway. Ponch! Ponch! The semiconductors have been the most popular girl at the dance but her fame is fleeting after it is discovered that she has two left feet. The chips move south after creating a textbook H&S pattern, at least so far.
The head is at 14630 and neck at 12200 so that is 2430 difference. Take that away from 12200 and you get 9770 as the downside target if the neckline fails. SOX is making that decision right now. It is bounce, or die, time.
Price comes down and fills that orange gap as it decides what to do. There are numerous other orange gaps that need filled down below so many that it looks like Swiss cheese. Did you know they started to put fake holes in the Swiss cheese? Next time you go to the deli counter, grab some Swiss and you will see the holes are perfect circles cut by a die-cutter blade. It probably takes too long to allow the cheese to form the holes naturally so do it the phony-baloney way. No one notices.
The 12200 support is key since it has held for a couple months and served as resistance in May. Will the chips fail right here and allow the H&S to play out and begin the popping of the AI bubble, or, will price simply bounce from here and say 'never mind' like Emily Latella? Gilda was great; she got screwed in life.
The entire fate of artificial intelligence going forward hinges on the chart above. Will it live, or die? The price drops to 12023, so this is a key number, and now rebounds to 12280 and more as the bulls try to pump the chips and stay out of trouble. Keystone is short the chips but the trade is flat after the choppy slop. State of Mind. 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 Thursday Morning, 7/16/26: The battle at the 12200 neckline rages on. That 12023 was the LOD yesterday and price recovered to 12418, then stumbled into the closing bell at 12399.
Note Added Friday Morning, 7/17/26: Whoopsies daisies. The chips take the pipe yesterday dropping to 11868. The neck fails so the downside target at 9770 is on the table. Keep an eye out for a back kiss of the neckline in the days ahead. Otherwise, the gap fill at 11.5K is next. SOX was at 14655 only 18 trading days ago (6/22/26) and collapses to 11.8K-ish. Within one month, the dirty SOX crash -19.5% a hair away from the media's metric for a bear market at -20%. Perhaps that threshold gives way today. SMH is dropping -3% and XSD -2% in the pre-market so that points to a loss in the SOX on tap today, at least in the early going. China says Moonshot will be the top AI dog and no one needs all those expensive US chips. The communists sing that it is a marvelous night for a Moondance.
Note Added Saturday, 7/18/26: The SOX drops to 11194 and ends the week at 11674 crashing -10% in the last 5 days and now down -20.3% in a bear market. The 20-wk MA is 10.8K and rising and may serve as support. The dirty SOX are in the bear market hamper.
Note Added Tuesday Afternoon, 7/21/26: The SOX rallies to 12356 with dip-buyers tripping over each other to buy, buy, buy. The 50-day MA is 12769. Price comes up to back test the neckline of the H&S at 12200 and floats a bit higher to the 12356. Price would roll over from here and drop if the H&S pattern plays out going forward.
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