Semiconductor SOXX, is hanging by a thread.
Did SOXX just break away during the past week or is there going to be an attempt to close the gap?
When a market closes down for the week and near its lows, there’s usually follow-through action at the next open.
SOXX may never get the chance to fill the gap.
If we look at inverse fund SOXS, it’s showing a potential trend-line. Maintaining that line will double the price (at Friday’s close) sometime in early March.
The chart below also shows the firm’s entry point; not advice, not a recommendation.
In a way, semiconductors are similar to aviation; margins are razor thin.
When there’s an economic down-turn, both get hit especially hard.
At this juncture, I have positioned my firm short in both real estate (via DRV) as well as short the semi-industry (via SOXS). Not advice, not a recommendation.
The SOXS position finished in the green by the close. DRV is showing a loss but closing that gap quickly.
Separately, and in a report planned for tomorrow, we’ll cover the food supply. The ongoing (planned) shortage is proving correct, the approach it’s ‘corn first, then silver and gold’.
If Van Metre’s GDX forecast is on target (declining to 17, or even 14), gold bugs may find themselves liquidating their positions; just so they have enough money to pay for hyper-inflated food.
In effect, gold will be irrelevant; a very possible (short-term) event.
Charts by StockCharts