Further to the negative fundamental discussion about the Semi Equipment sector and the negative to neutral discussion about the SOX long-term technical situation, here is the view of SOX on a shorter-term daily and weekly basis.

I expect the chart jockeys who fell all over themselves in December to get bullish the Semis are now getting ready to help guide us through an H&S pattern and its downside targets. I’ll save them the trouble; the pattern measures 605 and handily enough there is a gap down there that can be filled.

The weekly gets even dicier. You can see it losing current support. If that holds up the next stop would be the 605 area noted above (shaded on the weekly), but the date with the neckline we talked about in the previous post is what I meant by noting people would start talking about an H&S and downside potentials. 540 to 560 (a long-term breakout point) is going to decide whether the Semiconductor index is going to make the big upside projections of the breakout or fail miserably as current degenerating fundamentals seem to imply. If it fails, there’s the measurement.

FWIW, I covered a leveraged short against the NDX this morning, but added another Semi equipment name short.  It feels right to look into sectors now and discriminate.