The Leader (NDX) and the Leader’s Leader (SOX) Cracked, but…

In an NFTRH update this morning we reviewed the charts of the leader (NDX) and its leader (SOX).

Here we see the Semi leadership (to NDX) that kicked in a year ago, when we err… got bullish the Semis (amid an investing world full of apathy).

sox and ndx

The leader (to SPX) had led the market before turning down into the 2015 market top (that wasn’t) and then its leadership bottomed and turned up about a year ago.

ndx and sox

So that is a brief review about why I consider them important; the leader and his leader. Here are the nominal daily charts we checked out this morning as they were just hinting at a breakdown. Sometime during subsequent trading the market puked Semis to the 50 day moving average. I had shorted Semis yesterday (I know, way not to call it, Gary… ; I am portfolio managing, not hot shot stock trading so don’t mix me up with momo trader freaks). I covered the Semi short (SOXS) at the SMA 50.

sox

I also shorted NDX (tentatively still short TQQQ) after doing the NFTRH update. But it too is only tapping the SMA 50. I’d like to see whether we close heavy or recover.

ndx

The thing is, as noted in the update…

Yesterday’s bearish reversal candles need not have significance of more than a day or two. But of more significance would be whether or not SOX and NDX remain below the red dotted breakdown lines. Both of these indexes remain in massive up trends, so the above is just a short-term view. But for a bear, it would be a start.

The problem for bears is that the market has made a lot of these starts and seems to revel in reversing them and serving bear meat to casino patrons. We’ll see how it goes this time. Me? I am balanced, cashed and trying to relax for a while.

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