Semis Showing The Way:
Toward the very end of 2023 and the beginning of 2024, technology was making the bad habit of CLOSING in the lower half of the daily range. It did so for 6 straight sessions although the last 3 candles suggested that selling pressure was fatigued. Looking at the chart below of the SOXX, which last week recorded its worst WEEKLY loss since the week ending 10/14/22 dropping almost 6%, it began this one on a high note. The ETF jumped more than 3% acting more forcefully than software as the IGV added 2.7%. As most of the attention today was focused on NVDA, rightfully so, finally putting the very round 500 number in the rearview mirror breaking above a bullish ascending triangle, notice it is still underperforming top SOXX holding AMD since the start of September. Others like INTC, which was brought down by the MBLY debacle, are rebounding powerfully. It looks to me that it is time to start overweighting semis versus software as I believe NVDA, if it holds above 500 in the coming days, will pull a lot of its rivals along with it. The ratio chart suggests this as it carves out a bull flag too. If semis are going to charge ahead it will be beneficial to technology obviously, and will translate to a healthy overall market. And for all the demeaning talk of the magnificent 7 remember there is just one semi-name among them.