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.