Semiconductor Leadership Has 1 Year Birthday

NFTRH has tracked the intact leadership chain for the US stock market for all of 2019 and indeed since Q4 2018, with the front end (SOX/NDX) and the back end (NDX/SPX) of the chain each trending up and a still-bullish indicator for the US market to this day.

sox ndx spx

We have also kept a close eye on the Semi sector’s own internals as the stocks that should lead, Semi Equipment (and Materials), are leading.

semiconductor index

Here, let’s add a Materials company’s ratio to the SOX to view the post-July out performance.

ccmp & sox

The companies that I think of as the nuts and bolts of the Semi sector, the suppliers of equipment and materials used in the manufacture of Semiconductors, have been gearing up for something. That something appears to be a global rebound in the advanced electronics industries.

The implication is that the world is not ending as global central banks have thrown the kitchen sink at all that debt and warmed it over yet again. If signals like the Semi sector reverse or drop like a souffle I will change my view. Simple. It would be an out of left field event that we will have known was possible because the entire interconnected world is ginned up on debt.

But despite the righteousness of a bearish and deflationary view (in my biased opinion) it is the central banks and those gaming them that are to this day… winning, duh. And a major industry appears to be making a cyclical business bottom in H2 2019, as expected.

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Featured image courtesy of Visualpharm