Every time SMH does this, it quickly pulls back. At least that has been the case each time it has popped upward from an already overbought situation over the last 8 months. Now, I am short the Semis (in a complete 180° from 10 months ago) and long the boring stuff, so I am talking my book.
But I am also talking this chart, and if the Semis prove that it is different this time I’ll have to cover in ignominy. But it cannot be argued that these types of moves – sucking in the last of the momos – have routinely preceded mini and not so mini pullbacks throughout the rally.*
* An aged rally, at that. It was appropriate to get bullish when we did. In my opinion it is inappropriate now… very inappropriate. But we’ll see what the market decides. If it is going to blow off, the Semis could lead. So there is obviously risk being short as well.
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