$SOX Phili Semi Index not finished with Volatility
What a difference a few weeks make, things really have got very ugly very quickly, the POTUS is willing to use the tech industry as leverage against China in the escalating trade war. It may be a case that investors became complacent once again as when we now look in Hindsight at the indicators, they RSI, MACD and Stoch had all reached quite elevated levels and the Momentum indicator had started to decline quite drastically, and is now at a historic low.
One worrying element of the chart is that Gaps exist below, which is understandable given the velocity of the recovery from December lows, it is very likely that the decline will continue until those gaps are filled at a minimum. The outlook for trade is not good, so there is no stimulus but possibly more negative pre announcement from companies warning of earnings declines ,due to lost business in CHINA and Huawei in particular.
Broadcom, Nvidia, Amd, INTC and Xlnx have suffered horrendous losses in value since the beginning of May and it would take a brave or stupid investor to start buying while the sentiment is so poor.
The Semi stocks are often seen as leading indicators for the entire market, which was the case in 2018, from their January 2018 high they were bleeding lower while the market continued to rally until the october massacre set in.
We are Bulls but can only say, Proceed with extreme caution if you intent bottom feeding on these stocks.
One worrying element of the chart is that Gaps exist below, which is understandable given the velocity of the recovery from December lows, it is very likely that the decline will continue until those gaps are filled at a minimum. The outlook for trade is not good, so there is no stimulus but possibly more negative pre announcement from companies warning of earnings declines ,due to lost business in CHINA and Huawei in particular.
Broadcom, Nvidia, Amd, INTC and Xlnx have suffered horrendous losses in value since the beginning of May and it would take a brave or stupid investor to start buying while the sentiment is so poor.
The Semi stocks are often seen as leading indicators for the entire market, which was the case in 2018, from their January 2018 high they were bleeding lower while the market continued to rally until the october massacre set in.
We are Bulls but can only say, Proceed with extreme caution if you intent bottom feeding on these stocks.