7/31/19:  12:32 p.m. EST  SOXX To Test Higher?


It’s about 90-minutes before the Fed announcement and SOXX is in spring position.


Last update posed that SOXX would test the all-time highs; Looks ready.


Springs and up-thrusts can fail.  However, SOXX momentum (weekly MACD) is still posting higher.  Probabilities favor some kind of test.


Semiconductors Test And Reverse?


12:11 p.m., EST


The monthly chart of the semiconductor index (SOXX as proxy) shows potential for violent downside action.


Massive downward thrusts indicate SOXX may be under distribution … even as the index makes new highs.


The last session had SOXX in a breakout to new highs that maintained the upward advance nearly to the close.


Today is a different story.  A gap lower open and then (currently) a struggle to maintain upward momentum.


The monthly chart shows the up-thrust and then test.  It’s rare but possible the test actually occurs at a higher level.  The Wyckoff training materials available at this link, have at least one example of a test lower during a spring set-up.


Just reverse the conditions for up-thrust and one has the test posting just past the previous up-thrust.


SOXX inverse fund with high liquidity is (3X inverse) SOXS.


SOX in Danger. 


The weekly chart shows a clear spring to up‑thrust set up.


Note how little progress was made in the past week to make a new high.  The index barely budged above the high posted from the previous week.


While all eyes are focused on the S&P, attempting to analyze every squiggle, other indices such as the SOX are showing a clear set-up.


There is of course no guarantee of a reversal from this point.  The set-up only identifies the potential for a trend change.