Collision Course Friday:
We spoke earlier in the week how the semiconductors put up a very bullish pattern with the last 3 weeks CLOSING very tight. Breaks above that type of coiling action can be explosive, and this week so far the SMH is higher by nearly 5%. The semis at all time highs is a very positive development. That is basically double the advance that the IGV (software ETF) has put up heading into Friday. The chart of the Nasdaq below is showing the difficulty is has CLOSING above the 1800 level with a bearish engulfing candle there on 7/13, and another reversal there on 7/21 as PRICE action tested the top of the engulfing range. That is just what bears wanted to see, as it is common for a breakout or breakdown to be retested to confirm its validity. Now the bulls are salivating with overnight action regarding earnings reports, and a third time touching an area of caution in such a short space of time is NOT what the bears want to see. Bears will be twisting and turning tonight as this melt up could intensify, but if PRICE action wobbles into the CLOSE Friday, all bets are off. Buckle up.