Good Morning John, I fully agree with all that you say, most definitely, your SOXS trade is only for a brief period of time, e.g., a few days or weeks... I just prefer shorting a 1X ETF, it's just a personal preference...
Definitely, the SOX appears to be in some trouble here... on the chart that you posted, take a look at the angle of rise in price since the beginning of July... we can see that the angle is not as northerly as all the previous angles which are more typical of a rising market...
Since the beginning of July we can see the angle to be flatter, this is typical of a struggling market...
Also, the SOX is typically the leader in both directions, so, if the SOX does in fact fail here, then it is likely to take the tech group and everything else with it... the SOX will also be the first one to rally at bottoms...
Considering the resilience of these markets recently, this may only be a one or two day dip, but I'll give it every chance to prove itself... this may run through late next week, we'll see...
The one thing I'm also going to watch closely today is the weekly NYSE Put/Call ratio... if it closes for the week into the negative, then that would be further evidence of a more significant decline...
Have fun today...
GZ |
