Arch, the SOX chart is showing one of those patterns referred to as a spinning top. The spinning top is a pattern of indecision. Neither the buyers nor the sellers have a clue as to what's going on, so they end up battling each other to a tie. A tie goes to the runner, er I mean the trend. The trend is still down.
The SOX showed pockets of strength today and did come up to meet resistance before pulling back. OTOH, it did hit a level of support, around 348, for the third time and held. This is encouraging.
If todays action showed anything, it showed that the SOX is willing to lead from the front, if the broader market is willing to rally. Mutual fund redemptions are killing us. The mutual fund holder is in the process of panicking, regardless of what CNBC tries to make of it. Most mutual funds aren't allowed to store lots of cash, due to their charters. If they're raising cash, it's because the mutual fund holders are cashing in. The blood is starting to trickle in the streets.
Anyway, back to the chart. If one were wanting to speculate, and anticipate a point of entry in this sector, this would be a good point, in my opinion, but I would keep a very tight stop loss in case I was wrong.
Personally, I'd rather trade what I see, not what I think, and I don't see confirmation of a reversal yet.
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