For years we have seen the semiconductors lead not just technology stocks but the overall market as well. Intel, Qualcomm and a few others have been top performers – but that may be coming to an end.
The SMH is the semiconductor index ETF, and its chart below shows a bearish bias in this group. There is no denying the pattern. Distribution has been heavy during the recent sell off, and indicators are flashing bearish signs. It may be too late to take some positions, but certainly any rally could be sold/shorted. The breach of the 100 ma and its relative strength are signs of weakness, and there may be more to come. I predict that 200 ma is likely to be tested (46+).
