Narrowing Risk or Preparing For Higher?

In the pre-market, the SOXX is up about +1.29%, trading at 236.90.

As discussed in the ‘comment’ section of the prior update, if last Friday was short covering, the expectation was for a lower open.

So, far it’s not there, or there’s more ‘covering’ to go.

From a Fibonacci standpoint (shown below), pre-market action is near the 61.8% retrace.

Semiconductor SOXX, 15-minute

As of this post (8:15 a.m., EST) SOXX is trading at the Fibonacci level (small black ‘brackets’ on the chart).

We can see that area is also resistance.

In-n-Out

This is what working at ‘the edge of the lake’ is all about.

Price action has not shown decisively whether it will continue higher or if we’re in a reversal.

A decisive push past Friday’s SOXX high, 237.35, likely means it’s going to attempt to close the gap left from the May 29th open (not advice, not a recommendation).

Looking at it both ways, the risk on a short position is being lowered further, or we’re on to new summertime highs (like August 1987) before potential reversal.

Stay Tuned

Charts by StockCharts

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